Ministers in ‘empty rhetoric’ row over business

A FLAGSHIP Government initiative promising up to 300 empty public offices for entrepreneurs at cut-price rates is rapidly unravelling after it emerged fewer than half can even be considered for the scheme.

The Yorkshire Post revealed in January that Downing Street could not guarantee it had permission from any of the landlords to sub-let the 300 buildings, despite David Cameron travelling to Leeds to launch the policy at a high profile event attended by the region’s business leaders.

Now the Department for Business, Innovation and Skills (BIS) has been forced to slash its target, admitting they are “currently exploring” just 130 potentially suitable spaces nationwide.

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BIS Minister Norman Lamb said the department was yet to reach agreement with any landlords of the 130 properties, stating “discussions are ongoing”. Mr Lamb was also unable to specify where the buildings were as the responsibility for each individual space “rests with the Government departments concerned”.

The initiative was announced four months ago with much fanfare at a launch event in the former offices of the Government Office for Yorkshire and the Humber, in Queen Street, Leeds.

The location proved somewhat embarrassing for the Prime Minister, however, after sources told the Yorkshire Post there would be considerable legal difficulties sub-letting the building. It is understood it is one of the 130 still being considered.

Rachel Reeves, Leeds West MP and Shadow Chief Secretary to the Treasury, said: “Time and time again this Government has promised measures on growth that ultimately ring hollow. The economy is flatlining, but flagship schemes announced with much fanfare drift off into the ether.

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“This isn’t action on empty office space, it’s empty rhetoric, and that isn’t what businesses in Yorkshire need now.

“Labour would take action to get banks lending to small businesses and give a national insurance holiday to small businesses taking on new workers: real help in tough times rather than empty promises.”

The scheme would see Government offices that stand empty being made available for start-up firms for around a year, after which the Government aims to sell them.

Mr Cameron outlined a vision where entrepreneurs would not only be given free office space, but would be working in the same building as the policy makers whose decisions affect them.

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Property lawyers immediately raised doubts about whether such a project would be possible, as permission to change the lease agreements on each building would have to be secured.

Business leaders warned the initiative would put the Government in direct competition not only with private sector firms already running similar enterprises but also with publicly funded schemes, such as Innovation York or the “incubator” start-up units funded by the region’s universities and local councils.

Mr Lamb admitted that so far the Government could not provide details of where the buildings were, or how many businesses could benefit.

“We have no estimate of the number of businesses which will take part in this initiative,” he said.

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“The Government Property Unit and departments are undertaking due diligence and are in ongoing, confidential, discussions with landlords and it is therefore not currently possible to provide either the location of spaces or the number of contracts signed.”