Manufacturing and growth hotspots targeted for extra business investment
The government has today (30 April 2014) confirmed which parts of the UK have successfully won Assisted Area status.
The government has today (30 April 2014) confirmed which parts of the UK have successfully won Assisted Area status. The status makes local businesses eligible to bid for additional funding and tax breaks to create jobs, invest in new premises or machinery and grow.
Manufacturing centres including Derby, Huddersfield, Portsmouth and Scunthorpe have now been added to the Assisted Areas map, in addition to the large parts of north-east England, south Yorkshire, Merseyside, Strathclyde, the west Midlands and the Welsh Valleys, which were already benefiting from being on the map.
The government has also added Leeds and Manchester to the map to help drive business growth across the north of England. And coastal towns such as Arbroath, Blackpool, Hastings and Lowestoft have also been included on the new map to help promote regeneration.
Business Minister Michael Fallon said:
Assisted Area status can be a shot in the arm for growth and jobs across the UK. It makes local businesses eligible to bid for additional funding and support that can help them to create jobs, invest in new premises or machinery, develop and grow.
We listened carefully to local groups to identify places where regional aid can have the biggest impact and help to rebalance the economy. The regeneration of a range of industrial centres, coastal and urban areas has been given a boost today.
Assisted Area status makes businesses eligible to apply for regional aid, which is typically offered as capital investment for businesses in less prosperous local economies. Programmes in England that offer regional aid include the Regional Growth Fund (RGF) and the Advanced Manufacturing Supply Chain Initiative (AMSCI).
Assisted Area status does not guarantee regional aid funding. Businesses in other parts of the country can still receive support, including RGF and AMSCI, for a wide range of projects.
Eligible areas were selected based on a combination of economic need and economic opportunity. Places with the potential for business growth, particularly manufacturing, have been favoured.
There have been 2 consultations on which areas should qualify, with input from Local Enterprise Partnerships and local authorities ensuring that local intelligence was a key driver in the process.
The government’s Assisted Areas map is still subject to Commission approval and is expected to take effect on 1 July 2014.
Notes to editors
1. The new Assisted Area Status Map is due to come into force on 1 July 2014, subject to formal approval by the European Commission.
2. Under the Commission’s new Regional Aid Guidelines, issued in June 2013, the UK’s overall assisted area population coverage will rise to 27.05% from 23.9% from 1 July 2014.
3. Assisted areas are selected based on a combination of Commission guidelines, the potential to benefit from regional aid, and an assessment of economic need.
4. The government’s response to the second stage of the consultation, is also published today,
5. Regional aid is allowed under state aid rules to promote cohesion and convergence between poorer and richer parts of the EU. It is used to support capital investment in assets and to support new employment.
6. The map identifies ‘a’ and ‘c’ areas. Cornwall and the Isles of Scilly and west Wales and the Valleys are predefined as ‘a’ areas by the Commission, based on GDP per capita relative to the EU average. The UK government cannot define other parts of the UK as ‘a’ areas.
7. Parts of the Scottish Highlands are predefined by the Commission as a ‘c’ area due to sparse population. Other ‘c’ areas have been proposed by the UK government including Portsmouth and Ellesmere Port in Cheshire, and the 100% coverage already awarded to Northern Ireland for the medium term.
8. ‘a’ areas and ‘c’ areas are named after the relevant sections of the Treaty on the Functioning of the European Union, Article 107 (3) (a) and (c). These sections of the Treaty enable member states to grant state aid to promote economic development.
9. Assisted areas are those areas where regional aid can be offered to undertakings, typically businesses, under European Commission state aid rules. In the UK, the main examples of schemes offering regional aid are:
- Regional Growth Fund - operates in England and supports projects and programmes that are using private sector investment to create economic growth and sustainable employment
- Regional Selective Assistance - primary Scottish for regional aid and is administered by Highlands and Islands Enterprise and Scottish Enterprise. Grants may be given in conjunction with support under other aid frameworks, for example R&D or skills and training
- Welsh Government Business Finance - offers discretionary financial support to eligible businesses in key business sectors and certain strategically important projects outside these. It helps fund capital investment, job creation, research, development and innovation and certain eligible revenue projects throughout Wales
- Selective Financial Assistance - provides support for investment in Northern Ireland by indigenous and foreign owned companies that creates, maintains or safeguards employment. The scheme aims to achieve higher levels of business growth, leading to long-term high quality employment
10. Assisted Areas status can also offer certain tax allowances:
- Business Premises Renovation Allowance (BPRA) is predicated on Assisted Area status. It gives an incentive to bring derelict or unused properties back into use, by giving an initial allowance of 100% for expenditure on converting or renovating unused business premises in a disadvantaged area.
- Enhanced Capital Allowances permitted at some Enterprise Zones are reliant on Assisted Area status.
11. The government’s long-term plan is to build a strong, more competitive economy and a fairer society. Industrial Strategy gives impetus to the plan for growth by providing businesses, investors and the public with clarity about the long-term direction in which the government wants the economy to travel. See also first achievements and future priorities of the industrial strategy.