The introduction of accelerated development zones would be a vital boost for the West Midlands economy, property expert Glyn Pitchford claimed today.

And he urged the Government to give the concept its blessing, allowing the region to take the initiative forward.

Mr Pitchford, who is the elected West Midlands Business Council business representative on the City Region board, said: “ADZs, which come from the United States, may be the much needed gap funding device for regeneration in the region.

“These zones would be defined areas badly in need of investment. The City Region would be able to facilitate a loan to fund up-front infrastructure work that would otherwise not go ahead, for example, a new road or a railway.

“This would then encourage businesses to invest in the area. It would also allow the repayment of the loan via the anticipated income stream from new rates derived from the regenerated area.

“All in all it is a win-win situation.”

He told a meeting of the Royal Institution of Chartered Surveyors in Birmingham: “At the moment we don’t have a decent transport strategy in the Midlands, period.

“Birmingham City Council’s Big City plan hopes to address that, with the planned redevelopment of New Street Station and the airport runway extension, but no actual building work has started. Until we do Birmingham and the region will lag behind; it’s time to stop talking and get doing.

“ADZs can play a vital role in such a transformation. Without them either regeneration won’t happen or it will take place far more slowly.

“It would create new jobs and added value to the local economy. These are very real benefits.”

The City Region is well advanced with plans to persuade the Government to approve the introduction of ADZs in the UK.
Indeed, Mike Whitby, chairman of the City Region board and leader of Birmingham City Council, has described the ADZ concept as “radical and unique”.

The push is based on evidence from Chicago and work from the UK’s Core Cities group, which comprises Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield.

The idea is for the City Region to define an area for development which would attract new business investment. At the moment all business rates go straight to the Government. The aim is to agree with the Government that the City Region, or a local authority within it, would be allowed to retain a proportion of the new business rates generated in the ADZ area. This future income would then be used to borrow the money required to invest in infrastructure and economic development projects in the ADZ area, which would in turn generate the new business rate income.

Once the new business rates raised have been used to repay the original loan, government would enjoy that business rate stream thereafter, ad infinitum.

Mr Pitchford said the team was working on a “big ticket idea” to launch the scheme.

“We are talking about down-trodden areas which currently have little investment.”
And he insisted that ADZs could be progressed in a recession.

“Yes, it can be done,” he said. “It will help both skills retention and the hard-hit construction industry. Indeed it will be a Godsend for construction and we need to act before even more jobs disappear.”

And he suggested public/private partnerships would be at the forefront.

Financial consultants PricewaterhouseCoopers have been asked to prepare an ADZ submission to the Government.