Following the announcement on Friday in the Autumn Mini Budget review – on Saturday the Government announced further details on the Investment Zones (IZ).
Basically, IZs are offered to all Mayoral Combined Authorities (MCA) and Upper Tier Local Authorities (UTLA) in England, the intention is that they will work in partnership with their relevant constituent or district councils, that would like to introduce an Investment Zone in their area.
How this concept works in Wales, Scotland and Northern Ireland are subject to the devolved governments.
To date 38 MCAs and ULTAs could potentially have Investment Zones, those authorities who have not expressed an interest will also be invited.
The government will look to introduce primary legislation in order to enable the offer on tax and simplified regulations. The final offer will be subject to the passage of that legislation through parliament.
What are Investment Zones?
- One or two sites in MCAs and UTLA where a variety of tax, regulatory innovations and flexibilities, and planning simplifications will apply within those site’s boundaries.
- The sites that come forward are those that are most likely to drive economic growth and significantly accelerate the delivery of housing.
- IZs are “expected to bring forward additional development” (“a mix of residential and commercial”)
- Sites “may be aligned with existing growth strategies and transport plans”
- However, “sites that already have a masterplan, development order or outline permission could be considered by MCAs and UTLAs as a potential Investment Zone, as could sites where planning consents are not yet in place.”
What is the process?
- For emerging proposals “there will be a new faster and more streamlined consent to grant planning permission”:
- remove EU requirements
- focus developer contributions on essential infrastructure requirements.
- reduce lengthy consultation with statutory bodies; and
- relax key national and local policy requirements.
- Approaches to the following remain:
- Green Belt policy
- Policies on protecting heritage
- Addressing flood risk
- Highway and public safety
- Building regulations
- For those sites which already have planning permission:
- Work to ensure planning is not a barrier to growth
- Investment Zones will have a mandate to boost growth; in Zones,
- Development Corporation or a dedicated delivery vehicle could be used to support IZs and assist in delivery (but paid for by the MCAs and UTLAS)
- MCAs and UTLAS also need to demonstrate that they have sponsorship from the business sector “to lead and drive opportunities”.
- Still awaiting detail on delivery arrangements
Time-limited tax incentives
Specified sites in England could benefit from a range of time-limited tax incentives over 10 years.
Infrastructure and development
The government are intending to support local leaders so the future potential of areas can be realised:
“Wider support for local growth: for example, through greater control over local growth funding for areas with appropriate governance. Subject to demonstrating readiness, Mayoral Combined Authorities hosting Investment Zones will receive a single local growth settlement in the next Spending Review period.
“Strategic direction over affordable housing fund: including how it is used, with flexibility to acquire and regenerate derelict and empty housing consistent with the strategic aims of the fund.
“Prioritised access to infrastructure funding: for example, this could potentially include the remaining circa £1.3 billion Brownfield Infrastructure Fund where additional development can be delivered at pace.”
Investment Zones and Freeports
The concept builds on what is already taking place at Freeports, the IZs and Freeports are designed to complement one another.
The next steps will be the detail on how these delivery mechanisms will work. The emphasis is very much on growth and action on the ground to achieve growth.
Further detailed criteria that sites need to meet are to be published when the launch of the Expression of Interest process takes place (no dates are provided at present). Several broad themes are identified which an Expression of Interest will need to address:
“Potential to increase long-term UK economic growth for example through addressing housing need, unlocking commercial sites, or attracting inward investment.
“Local capacity and capability for example (but not limited to) the presence of a Mayoral Combined Authority, willingness to use development corporations, and places which have the ability to trial new policies.
“Readiness to deliver Investment Zones in order to generate economic growth in short order and address the ongoing crisis.
“Alignment with other significant investments such as HS2 rail stations to ensure critical mass and greater growth opportunities.”
The government’s expectation for MCAs, and UTLAs where there is no MCA – who will work in partnership with their relevant constituent or district councils – coming forwards with proposals in this Expression of Interest period is that as an absolute minimum they will:
Agree that Investment Zone benefits will be conditional on MCAs, UTLAs and local partners honouring the commitments made in the EOI and subsequent negotiation and, and on local consent and Parliamentary approval of any legislation.
For more information about the contents of this article, please contact us.