Enterprise Areas can bring benefits
Irvine’s Enterprise Area has performed well compared with other Scottish Enterprise areas, bringing new businesses into the Irvine area and creating jobs.
The mid-point evaluation report earlier in the year identified that the Enterprise Area policy introduced in Scotland had been largely unsuccessful in attracting business and jobs, but the story in Irvine is different.
The evaluation, carried out by Highlands and Islands Enterprise for the Scottish Government, described the employment impact of the 15 Enterprise Areas in Scotland since their inception in 2012 as “minimal” and questioned their particular ability to attract businesses.
As part of the process of reporting the evaluation, Fergus Ewing, Minister for Business, Enterprise and Tourism, told the Scottish Parliament’s Economy, Energy and Tourism Committee in a letter that since designation 48 businesses and 1040 jobs have located into Scotland’s 15 Enterprise Areas.
It would appear that our experience in Irvine at our i3 Enterprise Area has been more positive compared to many others when it comes to these criteria – we have seen 361 new jobs (which would represent 35% of the Scottish total) and 11 businesses (just under 25%) located in i3. But the picture is actually brighter still at Irvine. The evaluation report period is up to December 2015, and since then there have been further investments from Culzean Medical and Robertson’s Fine Foods which are not included.
In total, and including contractors, total employment in i3, which includes the enterprise area designation, at March 2015 was around 2000 compared to around 1400 in March 2012 (the date of EA designation).
We believe that one of the biggest benefits from the designation as an Enterprise Area has been its galvanising effect. Since March 2012, Scottish Enterprise and North Ayrshire Council have worked closely to invest into i3, transforming the former Riverside Business Park and repositioning it as an attractive business location.
Irvine Bay Regeneration Company has run the development, management and delivery of the Enterprise Area at Irvine for our partners, and we have delivered a transformational programme that has seen hugely improved infrastructure, created new and refurbished space, and launched an innovative and engaging marketing and promotion campaign which has proven to be successful.
On another positive note, the streamlining of planning decisions in Enterprise Areas was found to have been "successful" by the evaluation report. Businesses found simplified planning processes a major benefit in EAs – and again, this is due largely to the partnership approach that EAs bring with them.
The report does accept and highlight that other significant factors had played a part in the lack of obvious success – notably the long and deep economic recession, its impact on business confidence and investment, and the fall-off in access to bank borrowing which all combined to make business and economic development much tougher. One key point made, and a very substantial one, was that the level of financial incentives offered, often through capital allowances or business rates relief, was insufficient to make a real difference. HIE's report concluded: "There is a general impression that the financial incentives are lightweight, and would not be significant in larger companies' location decision".
The report did recommend that the Enterprise Areas be given a chance to continue for five more years and provide an opportunity for the policy to be further developed.
Given our own experience, it would be fair to say that while there are undoubtedly lessons to be learned, these should include ways to identify and – if possible – measure some of the other very real and valuable benefits that Enterprise Area status can bring.
Given that tough decisions constantly require to be made by the Scottish Government, Scottish Enterprise and local authorities as they juggle competing demands on the public purse, it is right that we should take as wide and as balanced a view as possible.