Policy paper

Industrial Strategy Zones Action Plan

Published 23 June 2025

Ministerial forewords

You won’t be surprised to hear me say that we have a lot to offer in the UK. Our nations and regions each have their own unique strengths, talents and geographies and each one rightly wants and deserves sustainable economic growth and rising living standards. Delivering on this, in partnership with local leaders, is at the heart of the government’s growth mission.

We inherited a range of programmes – Freeports, Investment Zones and Enterprise Zones – that aim to drive growth in key industries in places across the UK, but which were being delivered in siloes. These programmes can and should be key tools for driving growth across the UK and we are committed to bringing them closer together as part of our modern Industrial Strategy, with shared delivery mechanisms and a stronger support offer from the UK and devolved governments. Investment Zones and Freeports in particular are perfectly placed to be a key element of this government’s Industrial Strategy, also published today. They cover many of the highest potential industrial clusters across our growth-driving sectors and the country. Today, 23 June, I am delighted to publish this Action Plan, bringing the two programmes together under a shared identity as “Industrial Strategy Zones” and setting out how we will deliver and support them to deliver on our promise to achieve truly transformative growth.

Our Industrial Strategy Zones are projected to generate over £50 billion of private investment in high-value sectors into some of our highest potential city regions and clusters. From expanding the strong advanced materials manufacturing cluster in Greater Manchester and deepening the formidable defence cluster in Plymouth, to building on the significant capabilities of Inverness and the Highlands in Clean Energy Industries and the compound semiconductor industry in South Wales, Industrial Strategy Zones are playing a pivotal role in gathering momentum on our critical path towards regional and national growth. This is clearly demonstrated in the Freeports Programme Report, also published today, which shows how Freeports have laid the foundations for long-term growth for their regions. Industrial Strategy Zones have undoubtedly created thousands of jobs, improving the prosperity and resilience of the UK and its people along the way – but there is much more to come.

I know that there is more that we as government can do to ensure that our Industrial Strategy Zones achieve their full potential. Freeports, Investment Zones, and Enterprise Zones should be more closely aligned, and they come with a powerful but incomplete set of tools, with gaps in areas ranging from planning and grid connectivity to skills and innovation support. This Action Plan shows how the government has already taken steps to address these limitations, and how we will go further to ensure we truly deliver for local areas.

Alex Norris MP
Parliamentary Under-Secretary of State for Building Safety, Fire and Local Growth
UK government

Scotland has extraordinary economic potential, with powerful existing assets including a highly educated population and a history of innovation and discovery. We also benefit from a unique position in the UK, and indeed the world, as a leader in green industries such as offshore wind.

Scotland’s Green Industrial Strategy, launched in September 2024, identifies areas of strength and opportunity for Scotland to grow globally competitive industries in the transition to net zero, and recognises Green Freeports and Investment Zones as opportunities to cluster activities to drive inclusive economic growth and incentivise the private sector investment which will be key to realising these opportunities.

It also outlines the work which we and partners are doing, and will do, to create an enabling environment for investment and growth. This includes our continued investment in City and Regional Growth Deals, our provision of up to £500 million enabling funding for offshore wind, enhancements in skills funding, and our commitment to innovation.

We have two Green Freeports in operation, in the Firth of Forth and Inverness and Cromarty Firth, and we have Investment Zones in development in Glasgow City Region and in North East Scotland – the latter delivered by our Regional Economic Partnerships. Investment has already started flowing into the Green Freeports, and they, and the Investment Zones, stand to leverage much more in the future.

Green Freeports and Investment Zones can be important vehicles in our drive to achieve a Just Transition to a better, cleaner economy. We are committed to bringing the powers of the Scottish Government to bear to deliver on their enormous potential, and we have set out in this action plan some of the interventions we have taken and will undertake to do this.

We have been pleased to work in partnership with the UK Government to deliver some of the interventions outlined in this Plan and to support our Green Freeports and Investment Zones.

The Scottish Government and our economic development agencies will continue to support these programmes, and to work with partners in the UK Government to ensure joined-up support is provided to Green Freeports and Investment Zones, a joined up offer is provided to investors, and that the jobs that are created as a result are high quality, and high value to local communities and to Scotland.

Kate Forbes, MSP
Deputy First Minister and Cabinet Secretary for Economy and Gaelic
Scottish Government

The establishment of Freeports and Investment Zones in Wales represents an ambitious step towards transforming our economic landscape for the future. These initiatives are designed not only to drive regional growth and productivity but also to spread the benefits of innovation, trade, and sustainable development across Wales. This Action Plan demonstrates the close working between the Welsh Government and the UK Government, to deliver on our joint mission for sustainable growth and jobs. Reflecting the Welsh way of working, we are doing this collaboratively with businesses, communities and trade unions to shape a resilient and inclusive Welsh economy.

Freeports and Investment Zones are more than just economic designations; they are platforms for change. By bringing together and harnessing different levers of the UK Government and Welsh Government we can have greater impact than acting alone. Through targeted tax reliefs, capital funding, and wider support these areas attract high-value investment, create skilled jobs, and support the transition to a greener economy. For Wales, this means supporting key sectors such as renewable energy, advanced manufacturing, and digital technology - sectors in which we already have strengths and potential for global leadership.

This Action Plan recognises that the success of Freeports and Investment Zones must go beyond economic metrics. They must deliver social value, environmental sustainability, and long-term resilience. That is why we have committed to embedding principles of fair work, community engagement, and climate responsibility at the heart of Industrial Strategy Zones in Wales. From decarbonising industrial processes to upskilling local workforces, these zones are an opportunity to demonstrate what a modern, purpose-driven economy looks like in practice.

The document outlines the short and long-term actions required to unlock the potential of Welsh Freeports and Investment Zones. It is a living framework, shaped by evidence and dialogue, and responsive to change. By focusing on innovation, inclusion, and investment, we have a real opportunity to shape a future economy that works for all of Wales.

We are proud to present this Action Plan with the other governments of the UK as a statement of intent and a call to action. Together, we can create thriving, sustainable, and globally connected zones that serve as catalysts for prosperity and progress across our nations.

Rebecca Evans MS
Cabinet Secretary for Economy, Energy and Planning
Welsh Government

My aim is to create a regionally balanced, net zero, highly productive economy that provides people with Good Jobs. The Enhanced Investment Zone can contribute to these objectives, particularly in terms of its focus on productivity. Good progress is being made on the development of the Enhanced Investment Zone, and recent engagement with the industry and sector experts will ensure that the opportunity to unlock potential is matched by significant private sector investment. I look forward to the successful implementation of the Enhanced Investment Zone and the positive contribution it will make to our prosperity.

Dr. Caoimhe Archibald
Minister for the Economy of Northern Ireland

Introduction

As the UK government’s Industrial Strategy, published today, makes clear, businesses thrive in successful places with the right talent, infrastructure, private sector networks, and long-term plans. Realising the potential of these places is integral to the success of our growth-driving sectors and to generating well-paid jobs across the UK. 

The Plan for Change highlighted the importance of devolution for delivering the government’s growth mission across the UK. It is essential for delivering an economy that works for the whole country and allows every nation and region to realise its potential. The government is working with the devolved governments and partnering with Mayors to ensure that power is moved out of Whitehall and closer to communities.

Investment Zones and Freeports have a key role to play in this. They exist to drive growth and create jobs in sectors which are central to the government’s modern Industrial Strategy, and in city regions and clusters with the potential to make some of the most significant contributions to our national growth mission. Before now, they have sometimes been held back by siloed delivery and support mechanisms, even where geographical implementation of the programmes overlap, and by limitations in the coordination and scope of support that government provides for both programmes.

This Action Plan explains how government will address these issues, embedding Freeports and Investment Zones in the UK Government’s Industrial Strategy with a three-pronged plan to drive their success. First, we will bring the two programmes together under a shared umbrella: Industrial Strategy Zones. Second, we will improve the coordination, oversight and accountability of the programmes. And third, we will, in collaboration with the Scottish and Welsh governments and the Northern Ireland Executive, provide more coherent support from across government, ensuring Industrial Strategy Zones reach their potential and drive the change needed in our city regions and clusters.

A shared identity under the Industrial Strategy

Realising the potential of city regions and clusters across the UK is a core objective of our new Industrial Strategy. These places have enormous untapped potential and are vital to our resilience and prosperity. Boosting their growth-driving sectoral strengths will help them become engines of growth in their own right – unlocking major private investment, generating good jobs, and safeguarding our national and energy security. The Industrial Strategy and its accompanying Sector Plans set out a package of sectoral and cross-cutting interventions to create the best possible business environment in these places.

Freeports and Investment Zones have had considerable success in supporting the development of city regions and clusters and have already attracted over £6.4 billion in private investment in many of the Industrial Strategy’s priority sectors. This includes:

• Siemens Gamesa’s £186 million wind turbine factory located in the Humber Freeport.
• Sumitomo’s decision to invest £350 million in building a subsea cable factory in the Inverness and Cromarty Firth Green Freeport.
• Nissan’s direct investment of up to £1.12 billion in the North East England Investment Zone, with further supply chain and infrastructure investments taking the overall investment in Sunderland’s automotive cluster to £2 billion.

These programmes can clearly play an important role in delivering the UK Government’s Industrial Strategy. To reflect this, and to acknowledge the many similarities between the two programmes, the UK Government is therefore bringing them together under a shared umbrella: Industrial Strategy Zones.

What are Industrial Strategy Zones?

Industrial Strategy Zones exist in 22 places across the UK: 10 with an Investment Zone, 9 with a Freeport, and 3 with both, as displayed in the map below. Each has its own specialisms and opportunities, considerable strengths on which to build, and opportunities for significant and sustained economic growth, but all Industrial Strategy Zones aim to deliver this growth through three stages of development:

1. Creating investible sites and places: bringing sites, facilities and infrastructure forward, ready for investors.

2. Landing investment and supporting local businesses to invest: promoting Industrial Strategy Zones, working with businesses to secure investment and support their growth.

3. Growing clusters and supporting local economic growth: capitalising on early investment to attract a wider supply chain and foster a cluster, while reinvesting in the local economy and communities.

Industrial Strategy Zones give local leaders a long-term funding settlement – through business/non-domestic rates generated over 25-years to reinvest in the growth of the city region or cluster, and through grant funding. Each Freeport receives an initial £25 million in capital funding and provides generous tax incentives to unlock business investment into sites that have not historically been viable, while Investment Zones in Great Britain receive up to £160 million over 10 years which can be split between tax reliefs and flexible spend. To recognise Northern Ireland’s unique economic landscape, bespoke arrangements are being developed for the Enhanced Investment Zone in Northern Ireland, which makes available an envelope of £150 million.

Freeports can also provide customs benefits, providing options for businesses trading in an uncertain world. This has been an important tool for building trade-orientated Industrial Strategy Zones, but the model fits less well for other types of business, so customs sites will become an optional component of Freeports, providing greater flexibility.

Industrial Strategy Zones can struggle at times to bring the full weight of government to bear to address the barriers to growth in their areas, particularly where policy responsibilities are spread across different parts of government. These barriers have included the delays Industrial Strategy Zones have faced to get their sites connected to the grid, delays in the planning system, or the difficulties growing small and medium-sized enterprises (SMEs) have accessing finance. To ensure Industrial Strategy Zones can deliver the transformative growth that their areas are capable of, government needs to add to the support available to these places and ensure that it stands ready to support their growth wherever it can. But before that, government must ensure that the structures in place to deliver Industrial Strategy Zones are ready to take on this vital role.

1. Thames Freeport (Advanced Manufacturing)
2. Solent Freeport (Advanced Manufacturing, Clean Energy Industries)
3. Freeport East (Advanced Manufacturing, Clean Energy Industries)
4. Plymouth and South Devon Freeport (Defence)
5. Humber Freeport (Advanced Manufacturing, Clean Energy Industries)
6. Anglesey Freeport (Clean Energy Industries)
7. Celtic Freeport (Clean Energy Industries)
8. Inverness and Cromarty Firth Green Freeport (Clean Energy Industries)
9. Forth Green Freeport (Advanced Manufacturing, Clean Energy Industries)
10. Wrexham and Flintshire Investment Zone (Advanced Manufacturing)
11. Northern Ireland Enhanced Investment Zone (in development)
12. Greater Manchester Investment Zone (Advanced Manufacturing)
13. South Yorkshire Investment Zone (Advanced Manufacturing, including green industry)
14. West Yorkshire Investment Zone (HealthTech, combining Life Sciences and Digital)
15. West Midlands Investment Zone (Advanced Manufacturing, including green industry)
16. Cardiff and Newport Investment Zone (Advanced Manufacturing, Digital and Technology)
17. North East (Scotland) Investment Zone (Clean Energy Industries)
18. Glasgow City Region Investment Zone (Advanced Manufacturing)
19. North East Investment Zone (Advanced Manufacturing, Clean Energy Industries)
20. Liverpool City Region Innovation Zone (Freeport and Investment Zone) (Advanced Manufacturing, Clean Energy Industries, Life Sciences)
21. Teesside Freeport and Tees Valley Investment Zone (Clean Energy Industries, digitally-enabled Creative Industries)
22. East Midlands Freeport and Investment Zone (Advanced Manufacturing, Clean Energy Industries)

Structures fit to deliver

The UK government has been clear that growth in places across the UK should be driven by local leaders, with key roles for Mayors in England and the devolved governments in Scotland, Wales and Northern Ireland.

Freeports and Investment Zones were created in a piecemeal way, and do not always reflect this wider vision, with a mix of different (and sometimes overlapping) governance structures. To take on their vital role delivering the Industrial Strategy, Industrial Strategy Zones in England will need to be consolidated under local leaders to allow for coordinated strategic development, and to be more accountable to the communities they serve.

In England, Mayors should use all the tools at their disposal to ensure the benefits of Industrial Strategy Zones are felt by local communities and working people. Learning from the example of Scottish and Welsh Freeports, Mayors should encourage businesses to sign up to fair work or good business charters where these exist to ensure jobs created are secure, fairly paid, and that employers engage constructively with trade unions. Industrial Strategy Zones outside of Mayoral Strategic Authorities (MSAs) should develop equivalent arrangements.

Enhancing accountability in Freeports

In England, the government has been clear that MSAs will drive the Industrial Strategy and local growth agenda. While Investment Zones in England are already within MSAs, most Freeports are not. We aim to ensure Freeports have strong, region-wide champions and are accountable to directly elected local leaders. As MSAs are established, they will have a key role in driving the delivery of Freeports in their regions.

To ensure that the voices of local workers are also considered in Freeport Board decisions, a representative of a relevant trade union should be invited to Freeport Boards in England and Wales. In Scotland, fair work, including effective voice, is already embedded in the Green Freeports Programme. The Green Freeports themselves have developed their own Fair Work Charters – which include commitments on effective voice.

To further support these moves towards increased local accountability, Freeport Boards across the UK will be required to publish the minutes of all meetings and hold at least 1 meeting publicly each year, bringing the community closer to decisions.

Consolidating a complex landscape

In some places, Freeports and Investment Zones exist in the same geographic areas, which can cause confusion and duplication. Liverpool City Region (LCR) have brought together the region’s Freeport and Investment Zone together under the same structure within the LCR MSA as the Liverpool City Region Innovation Zone. Learning from this example, the governance structures of the 2 entities should be merged.

Within England, the consequence of a fragmented approach to place-based policy over time has been a further layer of complexity: the 45 Enterprise Zones (EZs) scattered across the country; many of which also align geographically with Freeports and Investment Zones. The alignment between EZs and the Industrial Strategy is variable, and while many of the levers that they came with have expired, they have an important ongoing role to play in local development, both through their role covering important sites in strategic sectors, and also through their often substantial Retained Business Rates revenue streams. The government is therefore proposing that where EZs in England fall within the boundaries of an Industrial Strategy Zone, they should be incorporated into the overall governance of the cluster, providing our Mayors with an integrated set of tools through which to develop their areas and to coordinate our zonal interventions towards shared goals, amplifying their capabilities and impact. Relevant local and strategic authorities will be invited to adopt this consolidated model, and government stands ready to support them in doing so where required.

Enhancing government support

Freeports and Investment Zones have achieved significant success since the establishment of the programmes, but the UK and devolved governments recognise that in a competitive international context there is more that could be done to support them to reach their full potential. Working together, government will achieve this by making meaningful changes to accelerate all 3 stages of Industrial Strategy Zone delivery, as set out above.

The actions that we have taken to date, as well as the new actions in this Plan, focus on responding to the opportunities and constraints identified by Industrial Strategy Zones, ensuring that they can deliver to their full potential. Some of the most significant actions are summarised below, and a full list of actions from across the UK, Scottish and Welsh Governments can be found in the Industrial Strategy Zone Action Plan table.

UK Government will continue to work with the Northern Ireland Executive on the development of the Enhanced Investment Zone, where progress is being made at pace to determine the right interventions that capitalise on Northern Ireland’s unique strengths and context. As proposals are agreed, UK Government and the Northern Ireland Executive will update this Action Plan to reflect the commitments agreed between governments to maximise the impact of the Enhanced Investment Zone.

1. Creating investible sites and places

Industrial Strategy Zones aim to bring forward underdeveloped or undeveloped sites for development, often by regenerating brownfield sites, repurposing heritage sites, or upgrading existing sites such as office and laboratory space. This type of development can be complex and expensive, with key sites requiring substantial financial support to become commercially viable. Navigating lengthy planning processes and establishing connections to the grid are also common issues. It is therefore crucial that government does all it can to help.

1.1 Financial support

Freeports and Investment Zones receive substantial long term financial support to help create investible sites and places. This financial support has already driven important developments, including a £23 million funding package from the West Midlands Investment Zone to power up the Coventry and Warwick Gigapark with the installation of a dedicated energy supply capable of supporting large-scale battery production, and the joint £100 million credit facility provided by the Scottish National Investment Bank and the National Wealth Fund to support Haventus’ redevelopment of Ardersier port in the Inverness and Cromarty Firth Green Freeport.

However, Industrial Strategy Zones can face challenges financing transformative interventions in the near term. In England, government is addressing a regional gap in financing for key growth projects by launching a mayoral recyclable growth fund from 2026/27, devolving Financial Transations funding to mayors in the north and midlands with an integrated settlement. This will allow Mayors in key city regions to invest in game-changing growth projects, breaking down regional access to finance barriers, and creating new opportunities for businesses to grow.

We are also using the National Wealth Fund (NWF) to enhance our offer across all Industrial Strategy Zones. The NWF has £27.8 billion to drive investment and growth across the UK and can offer a range of financing options. The NWF is committed to working closely with all Industrial Strategy Zones to support their access to finance through seminars, bi-lateral engagement, and advisory support.

UK Export Finance (UKEF), the UK’s export credit agency, also has a role to play in supporting our Industrial Strategy Zones, UKEF has £80 billion in finance capacity to support exporters and provides access to working capital through government-backed guarantees. This helps to extend additional lending capacity to UK companies that are exporters, or overseas investors that have plans to set up in the UK and export in the future. UKEF’s flexible finance can be used by businesses to secure new export contracts or build and scale-up their UK operations to meet growing demand.

UKEF is uniquely placed to support the Industrial Strategy Zones through its network of regional Export Finance Managers (EFMs), who provide free and impartial consultations to businesses on their export finance needs. UKEF is expanding its network of EFMs to focus on city regions and clusters with strengths in the 8 growth-driving sectors of the Industrial Strategy.

Finally, the new Strategic Sites Accelerator, backed by over £600 million, will unlock an initial wave of sites for investment from the growth-driving sectors of the Industrial Strategy by the end of the year, with the aim of scaling up the programme over time. Industrial Strategy Zones across the UK could be potentially eligible to be selected in the first wave of sites.

1.2 Planning

The current approach to planning in Industrial Strategy Zones has focused on existing locally-led approaches, allowing Local Authorities to issue Local Development Orders (LDOs) to speed up planning, as successfully done in the Thames Freeport’s London Gateway Logistics Park where new builds receive final approval within 28 days.

Going forward, the new Planning and Infrastructure Bill will aim to reduce delays for major infrastructure projects, introduce cross-boundary strategic planning at the sub-regional level, and establish a Nature Restoration Fund to accelerate development. As set out in the English Devolution White Paper, MHCLG will set out a regulatory framework that gives Mayors development management powers to use Mayoral Development Orders to stimulate growth and remove barriers in Industrial Strategy Zones.

To further streamline the planning process for Industrial Strategy Zones in England, we will support Local Planning Authorities to better deal with large-scale planning applications and the use of novel planning approaches. Assistance will be provided to Industrial Strategy Zones to develop Master Plans and create planning forums to facilitate early engagement among stakeholders. The Environment Agency have been proactive in investigating the environmental capacity of industrial clusters for decarbonisation. It is this kind of evidence that needs producing and plugging into spatial planning for Industrial Strategy Zones so that environmental challenges can be addressed upstream of individual planning applications.

In Scotland, the Green Freeports Planning and Consents National Protocol is already in place, which commits all relevant partners to working closely together to support successful and swift delivery for Green Freeports, including identifying lead officers across public bodies for Green Freeport planning. On top of this and more broadly, the Scottish Government has committed to improving the quality, consistency and pace of the planning and consenting process through additional recruitment of planners, supporting additional training, delivery of Masterplan Consent Areas, and by making technical improvements to standardise processes and working with statutory consultees to improve efficiencies across the system.

In Wales the Significant Infrastructure Consent regime is set to come into force in 2025.  It is a new planning and approval framework that will streamline and decentralise the consenting process for major infrastructure projects. Infrastructure applications, planning applications and Marine Licences within Freeports and Investment Zones have been prioritised to help to deliver the Welsh Government policy to accelerate decisions. To support this policy, significant additional investment has been provided to Planning and Environment Decisions Wales and Natural Resources Wales. Local Planning Authorities in Wales will receive a substantial uplift in funding through a move to full cost recovery for all planning applications, enabling them to speed up decision making and play a full part in infrastructure consenting. Support will be provided for the regional delivery of technical and specialist planning functions. Welsh Government will continue to support dialogue between applicants and statutory consultees to ensure efficient consenting processes.

1.3 Grid connectivity

Grid connections are widely recognised as a national challenge with some projects facing delays of up to 15 years. To address this, the National Energy System Operator (NESO) is implementing reforms to the connections process which will deprioritise up to 500GW of projects that are not ready or not aligned with our strategic needs for clean power from the oversubscribed connections queue. This will free up capacity, significantly cutting down waiting times.

But there is more being done to speed up grid connections. New Regional Energy Strategic Boards across the UK will be encouraged to consider the needs of Industrial Strategy Zones in the development of the Regional Energy Strategic Plans (RESPs), with Mayors having a key role in delivering this in England.  Additionally, a new ‘connections accelerator service’ will boost connections support for demand projects that guarantee high-quality jobs and bring the greatest economic value, which will include key Industrial Strategy Zone sites.

2. Landing investment and supporting local businesses

Once Industrial Strategy Zones have created sites and places that are ready for development, they can work to secure the investment they need. To do this, they need the right resources to be in place, locally and within government, to effectively promote sites and land international investment as well as supporting local businesses in the wider regional economy to invest and grow.

2.1 Attracting international investors

The grant funding and tax offers have been powerful and effective incentives to attract international investors to locate in Industrial Strategy Zones. A proactive approach has been taken by Industrial Strategy Zones to target and realise investment, alongside support from the Department for Business and Trade (DBT), Scottish Development International (SDI), Invest Northern Ireland, and Trade and Invest Wales.

Going forward, the UK Government, through the Office for Investment (OFI), and devolved governments and their agencies, will double down on their support for the highest impact international investments, while also working with Industrial Strategy Zones to deliver a world-class investor journey, helping businesses to navigate government policy and provide bespoke solutions where government intervention is required.

The OFI will proactively support Industrial Strategy Zones to unlock, develop and tailor value propositions for major investment opportunities and capital projects, to promote to a global investor audience.

The Scottish Government has also committed to invest up to £500 million over 5 years to leverage private investment and anchor the offshore wind supply chain in Scotland and support development of the offshore wind sector, a key focus for Green Freeports.

Industrial Strategy Zones will also be able to benefit from the support of the Catapult Network, which has already supported Freeports to attract international investors, design bids for funding, and develop innovative new policy solutions in areas ranging from skills development to net zero.

2.2 Supporting local business

Nationally, the distribution of high growth firms does not align with the distribution of finance. Access to early-stage funding is a distinct challenge for many businesses located outside the ‘golden triangle’ and we have already seen examples of Industrial Strategy Zones supporting high growth businesses to overcome these. In South Yorkshire grant funding has supported FourJaw – a company providing plug-and-play machine monitoring technology used by over 140 manufacturers globally to assess and improve productivity, energy efficiency, and profitability –  to relocate to a larger office space to accommodate its expanding team and funded the hardware that underpins its platform. It has also provided funding to Suiso – a company developing breakthrough pyrolysis technology which removes carbon from commonly-used fuels (natural gas, liquefied petroleum gas, propane and biogas) before they are burned, with the potential to reduce or ultimately eliminate their carbon dioxide emissions – to provide a three-month demonstration of their innovative technology to industry in collaboration with the University of Sheffield.

Building on this early success, the British Business Bank will introduce a new Cluster Champions programme: individuals with deep expertise and local knowledge to coordinate investment-readiness programmes, strengthen financial networks, and connect high-potential firms to investors, will be deployed within ten places, including many Industrial Strategy Zones. But the Bank is going further still. An additional £100 million will be distributed through the existing Nations and Regions Investment Funds, and the Bank has committed to work with Industrial Strategy Zones and their high growth businesses across the UK to support them to access finance.   

3. Growing clusters and local economic growth

For Industrial Strategy Zones to achieve maximum impact over the long term and deliver for both businesses and local people, they need to build thriving and sustainable places specialising in growth-driving sectors. Successful city regions and clusters are self-perpetuating with deep, skilled local labour markets and vibrant business ecosystems, with companies coming together to innovate and tackle shared challenges like decarbonisation.

Government policy in areas such as skills, innovation, and net zero provide the bedrock for this, but responsibility for these areas is, rightly, split between different elements and tiers of government and this can sometimes make it challenging for businesses and Industrial Strategy Zones to navigate and access the support they need – government can and must do more to consolidate and coordinate across this landscape.

3.1 Local labour markets and skills

Industrial Strategy Zones are already investing considerably in their labour markets to prepare local people to thrive in the industries of the future. Examples include the £18 million Skills and Innovation Centre in Freeport East and the £9.7 million investment from the North East Investment Zone, partnering with Nissan, to develop MADE NE, a new training facility with a focus on the electric vehicle and battery technology sectors. However, there is more that government can do to strengthen the labour markets in these areas and enable more people to move into employment.

The Department for Work and Pensions (DWP) will strengthen collaboration across the UK by enhancing connections between Jobcentre Plus, Industrial Strategy Zones, and local employers. This approach aims to encourage more initiatives like the Babcock and Supacat partnership in the Plymouth and South Devon Freeport, whose social value plan has already created over 100 jobs. The partnership continues to focus on skills development and workforce capability, helping individuals build transferable skills. These types of projects will, in turn, expand the labour pool for Industrial Strategy Zones and support more local people into high-quality employment.

In England, Mayors are central to supporting labour market and skills needs and will have a key role in coordinating skills activity to address the needs of their Industrial Strategy Zones. Government is going further than this by embedding support for Industrial Strategy Zones in the development process for future skills programmes in England.

Skills England will provide comprehensive oversight of skills needs and increased coordination across the system, collaboration will be at the heart of how we work, co-designing new approaches with industry and regional partners to improve the skills of our workforce and power economic growth. Skills England will work in partnership with employers, Mayoral Strategic Authorities, and the Migration Advisory Committee to help to meet local skills needs, ensure alignment with clear national priorities and ensure there is provision in place to meet and grow the domestic skills pipeline, reducing reliance on overseas workers. In return, we expect employers benefitting from government support - including through Industrial Strategy Zones - to invest appropriately in skills, as set out in the Immigration White Paper and the Industrial Strategy.

A UK-wide Industrial Strategy Zones Skills Forum will be established to bring local stakeholders together with the UK, Scottish and Welsh governments. This will provide a setting for Industrial Strategy Zones to meet twice a year to discuss shared challenges and opportunities, enabling them to learn from each other and coordinate their skills interventions where appropriate.

In Wales, the Industrial Strategy Zones will work with Regional Skills Partnerships, Careers Wales, and Medr to identify skills priorities for Industrial Strategy Zones and align employment services towards these, while in Scotland, government has committed to deliver a new Scottish Government-led approach to national skills planning and strengthened regional skills planning. Scottish Green Freeports, with a focus on renewables, will also benefit from the establishment of an Offshore Wind Skills Programme in colleges, helping create region-specific training hubs, and the publication (in partnership with industry, the Scottish Trade Union Congress and the public sector) of a joint offshore wind skills action plan in autumn 2025.

3.2 Innovation and net zero

Industrial Strategy Zones have a key role to play in developing thriving innovative business ecosystems, where pioneering firms can collaborate to develop the industries of the future. We have already seen huge strides in delivering these innovation hotbeds with East Midlands Freeport, in partnership with the Universities of Nottingham and Loughborough, launching the East Midlands Zero Carbon Innovation Centre, while Liverpool City Region Innovation Zone has funded a nationally-significant high-performance computing, data analytics and artificial intelligence research facility at the Hartree Centre, part of the University of Liverpool.

Industrial Strategy Zones can therefore support the government’s ambition to become an AI superpower by supporting enabling research and advanced manufacturing facilities. Equally critical, however, is the necessary infrastructure; so, the government has separately introduced AI Growth Zones to attract critical large-scale AI infrastructure such as data centres by offering streamlined planning processes and enhanced access to resources.

Collaboration and knowledge sharing between Industrial Strategy Zones to deliver their innovation goals will be vital. Government already runs a network bringing together innovation leads in Freeports. Going forward, we will convene innovation leads from across Industrial Strategy Zones on a regular basis to facilitate collaboration and knowledge sharing. A new Net Zero Network will also be established to bring together Industrial Strategy Zones that focus on Clean Energy Industries to allow them to explore common challenges and opportunities.

And we have ambitions to go further. As set out in the Industrial Strategy, we will support local leaders to grow their high-potential innovation clusters through a new UK-wide Local Innovation Partnerships Fund. This will provide funding to 10 places, many of which already host Industrial Strategy Zones. It will also include a competition for places in other regions to bid for support to grow their innovation clusters.

In March this year, the UK government published our Action Plan for Regulation, with several measures to reduce regulatory burdens for all those who interact with regulation and regulators. This included a commitment to reduce the administrative costs of regulation for businesses by 25% by the end of this parliament. To further enhance this support, we aim to develop sandboxes within these clusters, enabling regulatory experimentation and facilitating the market entry of innovative technologies and services.

Conclusion

Taken together, our enhanced approach will ensure that our Industrial Strategy Zones can deliver to their full potential, building on the successes of the Freeports and Investment Zones programmes to date to ensure that these places are able to seize the opportunities presented by the Industrial Strategy and develop the industries of the future.