Agenda item

Resolved to Recommend:

1.     that the financial analysis set out in the report to Cabinet be noted; and,

2.     to progress to formal designation of the Enterprise Zone on 1^st April 2017.

Decision

Resolved to Recommend:

1.     that the financial analysis set out in the report to Cabinet be noted; and,

2.     to progress to formal designation of the Enterprise Zone on 1^st April 2017.

Reason for Decision

For Cabinet and Council to consider the financial analysis of the Enterprise Zone business plan and to agree to proceed to formal designation.

Corporate Objectives

Ensuring economic growth

Monitoring Officer/S.151 Officer Comments

Monitoring Officer:

On the 29^th November 2016, Cabinet agreed for the Council to progress to formal designation of the Enterprise Zone (EZ) subject to a further report analysing the business plan for the EZ. 

The financial analysis is set out in this report, and therefore, subject to agreement of Council, the Enterprise Zone will proceed to formal designation on 1^st April 2017.

Cabinet also delegated authority to complete a memorandum of understanding (MOU).  The MOU has now been completed and sets out the strategic direction of the Enterprise Zone and the governance structure for the organisation and operation of the zone.

S.151 Officer

My comments are incorporated into the report.

Advice

J Deane explained that this was a follow up report to November 2016, which quantified the costs more clearly.

He highlighted that the council needed to consider the financial consequences as it was difficult to gauge them over the next 25 years. He added that it was recommended that Members approve the progression of the Enterprise Zone on the basis that the potential benefits available to Dacorum, in the form of increased local investment (up to £160m), outweigh the modelled costs to DBC in terms of potential funding forgone (around £6.2m). Whilst both of these figures are subject to change, depending on changes to government policy on business rates and development risk of the sites within the Enterprise Zone, the material consideration of the benefit being greater than the cost is highly likely to remain constant.

Councillor Marshall asked if the majority of the business rates generated within the EZ will come from businesses on sites within the St Albans boundary, then why does the scenario which models an EZ without St Albans show that only £80m of the total £160m will be lost to the EZ? This implies that half of the business rates will be generated within Dacorum’s boundary, and is therefore inconsistent with the claim that the majority is in St Albans.

J Deane responded that it was true that the majority of the business rates generated annually within the EZ will be on sites within St Albans. However, the majority of the sites within St Albans will not be developed and generating business rates until 11 years from now, whereas the sites in Dacorum will be generating rates much earlier, i.e. over the next 2 or 3 years. This means that whilst the total annual amount generated on St Albans sites will eventually be larger, the quicker start to development in Dacorum means that over the 25-year life of the EZ half of the total amount generated will be in Dacorum.

M Gaynor added that the memo of understanding explained that the first call on any resources was for infrastructure in the enterprise zone.

Councillor Williams clarified that the figures mentioned related to business rate income not others such as S106 payments or crown estate infrastructure funding; therefore there may be other funding contributions.

Voting

None.