Policy paper

Investment Zones

Published 6 March 2024

This was published under the 2022 to 2024 Sunak Conservative government

The government has today (6 March) announced further details of six Investment Zones: Greater Manchester, Liverpool City Region, North East of England, South Yorkshire, and West Midlands and Tees Valley.

The refocused Investment Zones programme, launched at Spring Budget 2023, gives areas a £160 million envelope to catalyse local growth and investment. Further to announcing details for the West Yorkshire Investment Zone on 1 March, the government has announced details of how Investment Zones in Greater Manchester, Liverpool City Region, North East of England, South Yorkshire, and West Midlands will use the funding envelope available. This includes offering tax reliefs to attract businesses to these Zones, and initial investments in a range of interventions including on skills, research and innovation, and infrastructure.

Greater Manchester will drive growth and innovation in their advanced manufacturing and materials sector. Funding will be used to accelerate the Innovation District Manchester, Salford Crescent, and Atom Valley developments, with support for research and innovation to grow the knowledge economy and infrastructure funding to unlock laboratory and manufacturing space. Additional funding will be provided for opportunities outside these three developments to strengthen the wider innovation ecosystem, including a multi-million pound revolving investment fund to provide debt and equity finance to local advanced manufacturing and materials businesses across the whole of Greater Manchester, and £5 million to support skills development. Taken together, local partners expect these proposals to create 32,000 jobs and leverage £1.1 billion investment over the next 10 years.

Liverpool City Region aims to position the area as a global leader in life sciences innovation, and drive forward a high-wage, high-skill, and high-productivity economy. Funding and tax incentives will leverage private investment to develop new world-class facilities and capabilities at Knowledge Quarter Liverpool, Sci-Tech Daresbury, Maghull Health Park, Speke Pharmaceutical Cluster and St Helens Manufacturing and Innovation Campus, helping drive breakthrough research in infection, therapeutics, mental health, advanced manufacturing, and the use of data and AI to lead healthier lives. Key investments are targeted in R&D, innovation infrastructure, skills and employment, business support and laboratory space. Initial investments will include £9.5 million to develop new category 2 lab and office space at Sci-Tech Daresbury, £10 million toward further enhancing the AI and robotics capabilities at iiCON to reduce the development time for infection therapeutics, as well as £2 million toward manufacturing equipment at TriRx, expanding the number of pharmaceuticals it delivers to a global market. Taken together, local partners expect the interventions to attract up to £640 million of private investment and create over 8,000 new jobs over the next 10 years.

The North East of England will support new investment and innovation in electric vehicle manufacturing, battery production, offshore wind and low-carbon materials, building on the region’s longstanding strengths in automotive and advanced manufacturing and increasing prominence as a hub for clean energy. A combination of tax incentives and funding will be used to attract investment, stimulate innovation, and support businesses to grow in these sectors. Tax incentives will be available at Blyth Energy Central in Northumberland and the International Advanced Manufacturing Strategic Site in Sunderland and South Tyneside, while a £20 million co-investment fund will unlock jobs growth along the Tyne Powered Economic Corridor and expand capacity at NETPark in County Durham. This will be complemented by £15 million for a skills package co-delivered with the private sector, as well as £15 million of infrastructure funding and £5 million to stimulate innovation and productivity growth across these sectors. The programme aims to secure major inward investors, encourage co-location of wider supply chains and support the growth of existing businesses. Together, local partners expect these proposals to leverage at least £3 billion investment and create more than 4,000 jobs over the next 10 years.

South Yorkshire will drive investment and support scale up of businesses in the advanced manufacturing sector, building on the region’s established strengths and significant existing business base. Close to £50 million of funding will deliver a flexible and responsive Capital, Infrastructure and Feasibility Fund to overcome viability gaps and accelerate development of strategically important sites between Sheffield and Rotherham and unlock investment opportunities on sites across Doncaster and Barnsley. This will include £10 million earmarked for two Co-Investment Funds to provide funding to early stage and scaling businesses. Additional funding for infrastructure and research and innovation activities will unlock laboratory and spin-out space in Sheffield city centre, complemented by wider business support activities to support adoption of innovation and expand the benefits of the Advanced Manufacturing Innovation District, and investment at Gateway East to accelerate development of the site and enable large manufacturing opportunities focused on decarbonising industries. Together, local partners expect these proposals to create more than 8000 jobs and leverage over £1.2 billion investment over the next 10 years.

The West Midlands Investment Zone builds on the region’s historic strengths in advanced manufacturing and will drive growth in battery, digital and sustainable construction technologies across three core sites. Tax incentives in Birmingham city centre will strengthen business partnerships with world-leading universities to create a multi-disciplinary innovation quarter with translational research and laboratory facilities. Tax incentives will also be used in Coventry-Warwick to help to secure investment for a new battery gigafactory and stimulate clustering of associated businesses and technologies. Up to £40 million of funding is intended for infrastructure measures to improve travel and power connections in these sites as well as bring forward developments at the at the Green Innovation Corridor in Wolverhampton. Alongside that, up to £19 million is being aimed at a package of support for business, research and innovation and skills will also grow the innovation ecosystem and skills base in the sector. Taken together, local partners expect these interventions to initially attract more than £2 billion of new investment into the regional economy and a further £3.5 billion over the lifetime of the investment zone, creating more than 30,000 jobs over the next 10 years.

The government will work with these places to confirm their delivery arrangements, ahead of releasing funding, and designation of tax relief sites will follow proper parliamentary procedure.

Alongside this, the government and the Tees Valley Combined Authority have jointly announced that the Tees Valley Investment Zone will focus on the digital and creative sectors, building on the region’s expertise and strengths in these sectors. The Investment Zone will boost inward investment, productivity, create jobs and help transform communities across the region, with focus on the cluster areas within Hartlepool and Middlesbrough. The government has also announced that Pneuma Group, the parent company of video games developer and publisher Double Eleven, has committed to making the first new major contribution to the Investment Zone. The group is investing at least £15 million to support Double Eleven’s growth, including investment in fit-out for commercial spaces and new, state-of-the-art offices for the games company to further scale its production capacity as well as increase its attractiveness to talents globally, while ensuring its teams have access to top-tier technology. Local partners expect the Tees Valley Investment Zone to potentially unlock up to £175 million of additional investment, and create more than 2000 jobs over the next ten years. The government will continue to work with Tees Valley Combined Authority, Teesside University and other local partners to co-develop the plans for their Investment Zone, with due regard to TVCA’s response to recent Independent Review, ahead of final confirmation of plans.