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Confusion over PM's enterprise zone pledge

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The government’s enterprise zone policy has been thrown into confusion after David Cameron promised Staffordshire it would be given one, despite a competitive bidding process in place to determine where the zones will be located.

On a visit to Stoke last week, the prime minister told Staffordshire business leaders that the Stoke & Staffordshire local enterprise partnership (LEP) would be given a new enterprise zone when the government announces ten new ones later this year.

There had been disappointment in Staffordshire when the LEP was not included in the initial tranche of 11 enterprise zones announced in the budget in March. But on his recent visit, Mr Cameron told local media that Stoke & Staffordshire would not miss out.

He said: “You are not missing out on an enterprise zone. There will be an enterprise zone within the Stoke-on-Trent and Staffordshire LEP area, and we will be advised by the LEP as to where it will go.”

But the prime minister’s pledge was immediately undermined by the Whitehall departments responsible for managing the bidding process set up to determine the location of the remaining zones.

A Department for Business, Innovation & Skills (DBIS) source said the department was aware of the prime minister’s pledge, “but as far as we are concerned the competitive bidding process remains in place”.

A DBIS spokeswoman would not confirm that the Stoke & Staffordshire LEP would be awarded an enterprise zone in the next tranche. She said responsibility for the policy had now been passed from the business department to the Department for Communities & Local Government.”They were always going to lead on them but there is obviously a joint interest,” she said.

A DCLG spokesman said: “At the time of the Budget local enterprise partnerships were invited to develop their enterprise zone proposals. Once these have all come forward the next ten can be announced.”

Asked if the department was contradicting the prime minister, the spokesman said: “No, I’m saying … there is a process to be gone through that starts with Stoke submitting their proposal.”

The Stoke & Staffordshire LEP has identified the identified Etruria Valley, alongside the A500, as its enterprise zone.

Bryan Carnes, chief executive of North Staffordshire Chamber of Commerce, told local press that “following Mr Cameron’s visit we are confident we will have a zone that will bring in 3,000 new jobs.”

“We now have every confidence that we will get an enterprise zone and that it will be in Etruria Valley,” he said.

The confusion over competitive bidding follows concerns raised over the process undertaken by ministers to determine the locations of the first ten zones.

In response to a question from shadow business secretary John Denham about the criteria and evidence used to determine which LEPs received enterprise zones in the budget, local government minister Bob Neill said that seven of the 11 were “selected on the basis that they encompass one or more of England’s largest cities, ranked by population”.

“The remaining four … were selected on the basis of need, using the published location criteria used to assess bids to the regional growth fund.”

However, an economic development expert, familiar with the process, said that the award of the zones - particularly the four where the exact sites were announced (in Manchester, Nottingham, Newham and Merseyside) - could be subject to judicial review.

“It seems clear that process was hurried and was undertaken with little consultation. On the one hand you have seven LEPs now consulting extensively about the best location of their enterprise zone - on the other hand you had the chancellor simply announcing where four enterprise zones would be. If I was a business or property owner near one those zones, I would be wondering exactly how the decision was made,” he said.

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