Regenerated businesses fall victim to their own success
Fastest growing businesses priced out of the areas they helped to redevelop
Innovative small firms, helping to regenerate rundown areas of the UK, are being priced out by their own success, a new report claims. According to the New Economics Foundation (nef), companies listed on Inner City 100, an index of fast growing companies in deprived inner city areas, are being forced to relocate because of the ‘urban renaissance’ they have created.
The regeneration of previously rundown locations has created extra demand to move into the areas resulting in spiralling rental and property prices. These costs cannot be met by many small firms, forcing them to relocate.
Paradoxically, this has undermined regeneration and weakened the enterprise base, nef have said.
One example, Hackney Community Transport, an Inner City 100 award winner, has fallen victim to the problem. Expansion plans by the London-based organisation have been blocked because land they hoped to move onto has been earmarked for the capital’s 2012 Olympics bid.
Chief executive Dai Powell said: “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.”
The nef report recommended that land was held in trust in regeneration areas to enable the development of flexible and affordable premises for local firms.
A national subsidised voucher scheme giving growth businesses in disadvantaged areas better access to business support and an Enterprise and Regeneration Tax Credit should also be introduced.
Stewart Wallis, nef executive director, said: “We now need to ensure that the contributions [Inner City 100] enterprises are making to their local communities are safeguarded for those communities, now and into the future.”