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Freeports and investment zones governance ‘must be urgently improved’, say MPs

26 April 2024

A new report by the cross-party Business and Trade Committee demands the Government ‘urgently improve’ governance and transparency at freeports and investment zones.

Freeports and investment zones are important projects within the Government’s levelling-up agenda. They create a geographical area with preferential tax breaks and business rates for firms that operate inside them.

In its report, the Committee says that ‘long-term political commitment’ is critical to their success, but needs to be firmly founded upon public trust and clear accountability. It recommended that a single regional leader is needed for each freeport and investment zone after it heard that fragmented decision making has led to mixed messaging and difficulties in securing investment. The result would be a single political leader responsible for the projects and to be held accountable for their performance.

The Committee called out the Government’s failure to publish impact assessments for freeports making it ‘impossible to accurately assess’ whether they or investment zones provided the best value for money.  It demanded that the Government publish assessments, annual reports, evaluations with accompanying data, and the publication of the dashboards used to monitor them.

Evidence to the Committee demonstrated that although structures of scrutiny in mayoral combined authorities for the projects were sound, they suffer from low attendance and engagement, citing their low stature. In the West Midlands almost two-thirds of scrutiny meetings were cancelled in the three years to 2021-22. The Government must address this, and incentivising engagement with scrutiny bodies by linking additional funding for freeports and investment zones with high attendance could be a way of doing this, the report concluded.

In addition, the Committee listed five key improvements if freeports and investment zones are to achieve their full potential. These are;

  • prioritised access to energy;
  • extended planning freedoms;
  • access to enhanced skills;
  • improved customs arrangements in freeports; and
  • connection to wider government economic security policies, including the potential of relocation incentives for smaller firms.

Committee Chair Liam Byrne said:t

“The long-term success of freeports and investment zones rests on long-term political backing, and crucially, trust and confidence in the governance This can only be achieved by enhancing governance and transparency. It’s now up to Ministers to fix the missing link between the local and national leaderships to help deliver results.”

“We’ve heard evidence that we have some solid scrutiny structures in place to examine spending on Freeports, but they risk a deficit of the required attention.”

“Building and maintaining political and public confidence must be a priority for the longevity of freeports and investment zones, alongside prioritised planning freedoms, improved customs arrangements in freeports and a connection to wider government economic security policies.”

“Given that freeports and investment zones account for barely one thousandth of spend on economic affairs, on their own they will be unable to deliver levelling-up, but nonetheless with long-term backing they could make an important difference.”

Further information

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