This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.
The performance of investment zones and freeports in England
Date Published: 26 April 2024
This is the report summary, read the full report.
Investment zones and freeports are defined geographical sites where specific economic regulations, such as tax reliefs and public investment, are applied. They receive specific support from central Government in policy areas such as planning, skills, investment and innovation. Those policies form part of the wider Government strategy to ‘level up’ UK regions.
We reviewed the evidence on the potential costs and benefits of freeports and investment zones. We heard from regional leaders and stakeholders on the challenges to building infrastructure and creating wider economic growth across England, including the barriers to building relationships between local government and Whitehall. Finally, we took evidence on the governance and transparency arrangements in freeports and investment zones. In particular, we reviewed the governance of Teesside Freeport. Our examination of that topic is set out in the Appendix to this Report.
Although freeports and investment zones require relatively small sums of public investment, they may attract additional investment and jobs to the areas in which they are located. Critical factors determining success will be long-term political commitment, delivery co-ordination between central and local government and the extent to which workers and firms are prepared to relocate to areas where clusters of businesses are developing. We recommended the following improvements to allow freeports and investment zones to achieve their full potential: (a) prioritised access to energy; (b) extended planning freedoms; (c) access to enhanced skills; (d) improved customs arrangements in freeports; and (e) connection to wider government economic security policies, including the potential of relocation incentives for smaller firms.
Our key recommendation is that the transparency and governance of freeports and investment zones must be urgently improved, if those important regeneration projects are to retain public trust. On governance, we recommended that all freeports and investment zones should be linked to a single regional leader, such as a Metro Mayor, who should be held accountable for those projects. We also recommended that the Government enhance scrutiny and audit of mayoral combined authorities as an important check and balance to ensure value for money is being achieved for the taxpayer.
On transparency, we recommended that central Government lead by example and publish: (a) ex-ante assessments of the impact of investment zones and freeports, (b) the dashboards created to monitor freeports and investment zones, (c) final evaluation reports and (d) binding guidance on how freeports and investment zones should communicate with the public.