BIG BUSINESS SIPHONS BENEFITS FROM SUCCESSFUL INNER CITY FIRMS SAYS NEW REPORT

LEADING LOCAL ENTREPRENEURS PRICED OUT OF INNER CITY BY THEIR OWN SUCCESS       

New research released today, Tuesday 16 November 2004, reveals that the small firms driving regeneration in the UK’s poorest areas are being priced out by the very inner city renaissance they are helping to create. This paradox is hitting entrepreneurs who are realising the competitive advantages of their inner city locations to become some of the fastest growing and most profitable firms in the UK.

The Inner City 100, dubbed the ‘Enterprise Oscars’ by Chancellor of the Exchequer Gordon Brown, is a project of leading think tank nef (the new economics foundation) supported by The Royal Bank of Scotland Group. The Inner City 100 is the only index of fast growing businesses in Britain’s most deprived inner city areas, and has transformed understanding the economic potential of the UK’s disadvantaged urban areas.

Yet as nef research reveals, the urban renaissance that these enterprises are helping to create threatens to drive a number of the companies from their inner city locations.  Spiralling rents and property prices are forcing businesses to re-locate, for example, from inner city areas, undermining regeneration and weakening the enterprise base. Half of Inner City 100 companies believe that if they left their current inner city location that it would have a negative or very negative effect on their business.        

Stewart Wallis, Executive Director of nef, said, “Inner city 100 firms that are driving local economic renewal now face being driven out by the urban renaissance that they are helping to create – nef’s research proves the huge contributions that these firms are making, but shows that the benefits to local people and small enterprises are under serious threat.”

London-based social enterprise, and Inner City 100 Award winner, Hackney Community Transport is a social enterprise that uses commercial bus contracts to fund PlusBus, a free transport service for the disabled. Their own expansion plans have been blocked because land that they had hoped to expand onto has been earmarked for the London Olympic bid. 

Chief Executive, Dai Powell recognizes the impact that rising property prices have for inner city entrepreneurs: "Rising property prices have two key impacts on inner city enterprise - it makes premises more expensive for existing enterprises hoping to expand, and makes start-up an impossibility for first time buyers or renters.  In both cases the end result is that inner city enterprise is forced out of the area".

To rectify this anomaly, in its new report, Impacts and Influences, nef recommends that:   

• Land should be held in trust in regeneration areas to enable job and wealth creation to benefit those that live and work locally. This would also better enable the development of flexible and affordable premises for local businesses.

 In addition, Impacts and Influences finds that inner city enterprise could be further supported by:

• A UK Enterprise and Regeneration Tax Credit to encourage more firms to have an even greater positive social and economic impact on their local area. This would promote positive activities such as employing local people, mentoring at risk young people or buying goods and services locally.

• A national subsidised voucher scheme for growth businesses in disadvantaged areas to provide better access to appropriate business support. This demand-led approach would help bridge current gaps in the quality and availability of provision, and promote business growth and retention.

• Inner city businesses need to be given a more formal role in the development and implementation of strategies to support local, regional and national economic development policy. The existing network of Inner City 100 entrepreneurs provides an excellent source of insight into what works (and what does not work) in their local economies.

Stewart Wallis, Executive Director of nef said: “Since the inaugural inner city 100 Awards in 2001, a policy revolution has begun in which inner city enterprise has been placed at the heart of regeneration initiatives and the drive to improve UK competitiveness. We now need to ensure that the contributions these enterprises are making to their local communities are safeguarded for those communities, now and into the future."

To the report in full, click here

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	related
	Publications The Inner City 100: Impacts and Influences nef Briefing: Locking in the benefits of enterprise led regeneration

	resources
	The Inner City 100

	contacts
	John Taylor