Head of Strategy, Investment and Business Development
It feels a long time since former chancellor Kwasi Kwarteng announced his Investment Zones policy last September – and save the name, you’d be hard pressed to find too many similarities between his model and the re-worked one that Jeremy Hunt brought forward as part of this year’s Spring Budget.
Previously there was talk of dozens or even hundreds of new high growth areas – which arguably ran the risk of undermining their special status. The revised model has a compelling simplicity and logic to it. The plan is to create Investment Zones within eight established combined authorities, which are home to some of the world’s leading universities and centres of research.
At time of writing, two have been confirmed – one each within Harworth’s heartlands of Yorkshire and the North West.
There’s lots to like about the policy. Some of the benefits promised last year remain: tax incentives including via business rates, SDLT and NI relief; an £80m funding injection from HM Treasury for each new zone; and support to streamline and speed up planning (though details on the latter are still TBC).
The theory is that investing in these places will create a multiplier effect – unlocking latent productivity around research institutions, where some of our brightest young people live.
The big risk (in my view) is that we inadvertently end up concentrating wealth among a smaller group of organisations and communities, who happen to live close to big city universities and successful businesses.
Fundamentally, I think the success of the model will ride on two things. First, a degree of flexibility – to allow for meaningful and effective public-private partnerships which take account of local context and need. Second, the ability to spread the benefits across a wider system of growth clusters – something which the government’s policy papers explicitly mention.
The South Yorkshire zone (announced earlier in July) is expected to generate over £1.2bn of private investment and support 8,000+ jobs across the region, via a partnership between leading employers and academic institutions.
There are some striking similarities with Harworth’s Advanced Manufacturing Park (AMP) in Rotherham, a site which has been two decades in the making and seen us partner with both Sheffield universities, along with the likes of McLaren and Rolls Royce, to transform the former Orgreave Colliery site into a high-growth, mixed-use sustainable community.
AMP is an example of how long-term planning and commitment can bear fruit, and can be a blueprint for how R&D-developer partnerships are able to foster growth in wider regions. Our partnerships at Waverley began in 2002, when our first key industry-university partnership was created with Boeing and the University of Sheffield Advanced Manufacturing Research Centre (AMRC) – both of which are involved in the new Investment Zone. Since then, the Nuclear AMRC (a Westinghouse, Areva, and Sheffield Forgemasters joint venture) has moved in and, today, technology developed at the AMP is being used in leading edge applications including Formula One, the military, and commercial aircraft.
Once complete, the site will deliver 3,900 new homes, a new district centre including a school and health centre, and over 300 acres of green spaces. This will contribute £1bn to the national economy – with benefits felt deeply within the community we’ve created, the places surrounding it, and the wider South Yorkshire region.
Crucially, at Waverley and with the Investment Zones model – it’s about not just how much growth is created, but how widely the benefits are felt.
The same is true in the North West, where recently it was announced that the Liverpool City Region will be at centre of its zone, working alongside the freeport which opened for business earlier this year. That’s great news for the region’s life sciences sector but also should strengthen communities in the ecosystem of surrounding towns along with the ancillary industries needed to support world-leading R&D. That’s exactly what our team has been doing at our 900-home development in St. Helen’s, Moss Nook, over the past five years, transforming a well-connected but complex brownfield site which had remained derelict for several decades.
So yes, we need to focus on local capability and the potential to maximise ROI from government spending in absolute terms. But we must also concentrate on local need, so that we can have the biggest relative impact within and across communities. To put it bluntly, not focusing on growth for growth’s sake. We need a better and more balanced model which creates and shares prosperity in equal measure.
The question is therefore how we spread skills and growth from successful city centres to wider regions. The answer might look something like a patchwork of high-growth zones as part of a hub and spoke model. Regional leaders, key institutions and anchor employers know their communities better than anyone – so let’s give them the ability to shape these new zones as part of their own devolution agendas, ensuring the benefits are felt widely and deeply across political boundaries.