Guidance

Investment Zones: technical document

Published 11 July 2023

Applies to England

1. Overview

The Investment Zones (IZ) programme has been designed to provide local leaders with a set of tools that can be deployed with flexibility and autonomy to boost the United Kingdom’s innovation potential, grow strengths in key industries to drive growth, and level up communities across the country. This programme is committed to supporting devolution - empowering local leaders to drive growth and levelling up in partnership with central government. For more detail, please refer to the Investment Zones policy prospectus.

Lead authorities are expected to ensure that proposals are designed in a way that delivers value for money and ensures accountability to their own local stakeholders. This guidance sets out the basis for this. This will require a holistic approach and must be rooted in partnership between central government, local government, research institutions and the private sector, to realise the potential of our cities and regions.

This document sets out further guidance to lead authorities on the approach to delivering Investment Zone proposals and is intended for use by lead authorities in England only.

This guidance will be updated and expanded later this year.

2. The co-development process

Principles of co-development

The government is committed to working closely with places to develop Investment Zone proposals. This will be a locally led process and undertaken in partnership with places and with agreement of government. The process will be guided by the following principles:

• Locally led: Investment Zones will be locally led, and all stages of co-development will allow flexibility and autonomy for each place to identify and select the best mix of interventions for their proposal.
• Partnership: co-development will be genuinely iterative and done in partnership with each place to maximise the quality, ambition, and impact of Investment Zones. Government will set the parameters and criteria, provide support and challenge to ensure plans are genuinely strategic, and identify opportunities to align with wider government policy and investment. Local knowledge on strengths, opportunities and the needs of the existing innovation base and business environment should drive each approach.
• Devolved delivery: building on the government’s wider devolution and funding simplification agendas, co-development, and the process for agreeing proposals will adopt a proportionate and criteria-based approach. This will allow places the flexibility to design and deliver their proposals, while providing the government with the necessary assurance that proposals are high quality and deliverable. We will set broad but clear criteria and agree specific outputs and outcomes against which to hold places to account for progress.

Gateway stages

The co-development process will be structured around a set of thematic gateways that will cover the core components of an Investment Zone proposal. The gateways will focus on five themes:

• Vision setting – covering the overall vision for the proposal.
• Sector and economic geography – agreeing a sector focus and spatial focus for the Investment Zone, understanding the broad approach to tax and flexible spend interventions, and reviewing evidence that the criteria have been met.
• Governance – agreeing the governance structure and assurance processes for the design, approval, and delivery of the Investment Zone and reviewing evidence that the criteria have been met.
• Interventions – agreeing the specific mix of interventions and levers to be deployed and where, ensuring a logical link from the vision to the key opportunities and challenges identified, the portfolio of interventions selected and outputs, intermediary and overall outcomes for interventions and reviewing evidence that the criteria have been met.
• Delivery – agreeing the delivery model or models, including any delivery vehicles for planning interventions, register of interdependencies and risks, finalising timelines and plans, and reviewing evidence that the criteria have been met.

Proposal criteria

The criteria set out what an Investment Zone proposal is expected to demonstrate at each gateway, before being allowed to pass to the next. The criteria have been designed based on several principles:

• The criteria developed are rooted in the evidence of what constitutes successful, sustainable clusters and strong local innovation ecosystems.
• The criteria are stretching to ensure all Investment Zone proposals are as strong as possible, allowing us to work together with a place in the spirit of co-development to reach that point.
• Each Gateway will be framed by specific associated criteria, which if not met will mean a place is paused at that gateway to work with central government to refine the proposal, to an appropriate standard, to ensure the policy delivers its stated outcomes and delivers value for money.
• Proposals with tax incentives will be assessed separately against how well they deliver against the Investment Zone objectives and sectoral focus. Proposals will need to justify why intervention is necessary and how any negative effects are accounted for and mitigated.

For supplementary guidance on business rate retention see Annex C and for supplementary guidance on tax incentives see Annex D.

Sign off and approvals

The Investment Zones programme is being delivered jointly by DLUHC and HMT and final proposals will be signed off by both DLUHC and HMT ministers.

• The proposal criteria, and how we will assess proposals (see Annex A), are broken down into 5 stages, one for each of the gateway themes set out above.
• This process has been designed to guide co-development in a logical way that allows space for discussion. At each stage, we ask, ‘What is it, why and what does it do?’
• All stages will include reviewing the proposals against the evidence and criteria and, where relevant, this will include seeking the views of other government departments. As a minimum, this will include HM Treasury – in relation to the sector focus, proposed interventions, and delivery model and plan – and other government departments where the proposed sector or policy interventions relate to them.
• The accountable body for each Investment Zone should seek the appropriate level of sign off at each stage to ensure accountability and buy-in across the constituent authorities within scope of the Investment Zone intervention and other interested parties.
• Progress to the next gateway only happens once the previous stage of the proposal has met the necessary requirements.
• As set out in the policy prospectus, the government reserves the right to not take forward proposals if agreement cannot be reached and proposals will only be formally signed off in full at the conclusion of the process. Signing off proposals is subject to agreement of delivery plans (final gateway) before funding will be released.

Match funding criteria

The policy prospectus set out that all proposals must include a degree of match funding from the private sector, third sector and local government. Where no match funding has been secured against an Intervention, HMG would expect a clear rationale to be set out.

We expect that each Investment Zone proposal will be matched or part-matched by private sector investment and co-funding from other public bodies where relevant. We strongly encourage places to go further with partners whenever possible, particularly when their interventions are focused on themes such as business support, research and innovation and local infrastructure. Based on similar programmes, we expect this to be in the region of at least 60%.

Investment Zones are aimed at catalysing the private sector and creating a shared approach between government and industry. Places should work with partners in business to secure their buy in and match funding for their Investment Zone proposals and specific interventions. Places should be ambitious and avoid using any expected business rates retention that would come out of a proposal as a source of match funding, unless there is a clear and justifiable reason why, for example, to help leverage further funding from the private sector.

As part of the development of Investment Zone proposals, government will expect to understand which proposed interventions will be match funded, at what scale and if not, why that is the case. Government also encourages places to work with local partners to ensure that conditionality is considered where possible, for example, skills interventions developed with businesses in the sector to deliver an offer to young people (16–24-year-olds) through engagement with local Jobcentre Plus Partnership teams.

Places will be expected to provide details of their plans to secure match funding in their Investment Zone proposal. As they move into delivery of their proposals and project design based on their approved interventions, they should begin to commission interventions in a way that meets their stated ambitions. Government will expect an update on this ahead of final sign off of proposals and release of funding.

3. Outcomes and outputs

Investment Zones objectives

Investment Zones will support the development and growth of clusters in order to increase local innovation capacity, attract investment and, above all, strengthen the private sector – which is the engine of economic growth. In turn, this will help to boost regional productivity and growth in areas where it is lagging, while a holistic approach will ensure that the benefits of that growth and investment are felt by local communities. These are not isolated objectives, and will support our overarching government ambitions, helping to deliver on specific missions in the Levelling Up White Paper:

• Mission 1 - by 2030, pay, employment and productivity will have risen in every area of the UK, with each containing a globally competitive city, and the gap between the top performing and other areas closing.
• Mission 2 - by 2030, domestic public investment in R&D outside the Greater South East will increase by at least 40%, and over the Spending Review period by at least one third. This additional government funding will seek to leverage at least twice as much private sector investment over the long term to stimulate innovation and productivity growth.

Introducing the place level logic model (flows from A to F)

The suggested place level logic model below sets out the framework for how Investment Zone interventions should hang together in a place. It introduces 4 of the 6 levelling up capitals which interventions should reasonably improve as part of delivering the programme objectives.

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A – Current state of target cluster in priority sector (setting out the binding constraints and opportunities at the selected geographical location)

Current State: Constraints or unrealised opportunities from:

• Human capital – for example, skills available and the local labour market
• Physical capital – for example, access to appropriate specialist premises, transport infrastructure and need for new plant and equipment
• Intangible capital – for example, opportunities to develop new technologies, equipment, processor or supply chains
• Financial capital – for example, availability of FDI, bank finance, private equity finance

B – Place inputs (general inputs such as funding and other resources that will be delivered at the selected geographical location)

• Central government input
• Local government input
• Non-government input

C – Place activities (interventions being delivered at the selected geographical location. Non IZ interventions should also be accounted for)

• IZ Activities:
  • flexible spend
  • research and innovation
  • skills
  • local infrastructure
  • local enterprise and business support
  • planning and development
• Fiscal Incentives:
  • Stamp Duty
  • business rates
  • enhanced capital allowance
  • enhanced structures and building allowance
  • employer national insurance contributions relief
• Non- IZ Activities:
  • for example, Freeports, local skills improvement plan, Skills Bootcamp etc

D – Place suggested outputs (the outputs of IZ interventions at the selected geographical location. If outputs of IZ interventions differ to non-IZ interventions, this should be accounted for)

• Regional outputs IZ - expected direct outputs from interventions (expect to be realised within the 5-year programme lifetime, for example:
  • number of training courses available
  • number of apprenticeships available
  • number of businesses receiving non-financial support
  • number of businesses receiving grants
• Regional outputs non-IZ (if different) - expected improvements from interventions, for example:
  • number of Freeport related trade activities

E – Place suggested intermediate outcomes (the impact of the IZ interventions at the selected geographical location on regional immediate outcomes, linked to the 6 capitals. Non-IZ interventions should be linked to the IZ intermediate outcomes)

• Improvement in Physical Capital, for example increase in:
  • floor space unlocked
  • investment in plants and machinery
• Improvement in Intangible Capital, for example increased:
  • time to market for R&D product
  • R&D activity undertaken by businesses
  • increased spending on from specific training
• Improvement in Human Capital, for example increase in:
  • learners enrolled in sectoral skills assessment (SSAs) in Local Skills Improvement Plans (LSIPs)
• Improvement in Financial Capital, for example:
  • increase in size of investment rounds

F – Place outcomes (the impact of the IZ interventions at the selected geographical location on place outcomes, linked to the national outcomes. This cannot be changed)

• Boost productivity in the FEA
• Increased real earnings for high and low skilled workers within the FEA
• Increased internationally competitiveness of companies within the cluster
• Internationally demanded new technologies

The long-term Investment Zone place outcomes (impact) are a statement of intention to guide places in shaping their interventions. It is an articulation of what we expect Investment Zones to ultimately realise in their region if, a) constructed well in and of themselves and, b) complemented or amplified by other non-Investment Zone related activity in a place as part of a wider local economic strategy. We will not be asking places to provide projections for these.

Then, as part of developing their Investment Zone proposal and logic model, places will need to set out in their response to the criteria and accompanying template what interventions (activities) they will pursue with the flexible funding available, and what intervention level outputs and intermediate outcomes each of these interventions will deliver. The intervention level outputs and outcomes are published in the ‘outcomes framework’ and places will need to pick at least one (but not all unless all apply) from Annex E.

This is so we know what public money is being spent on and with what outputs, and can form the basis of how we monitor progress and hold places to account for delivery. We will also ask places including tax and/or BRR sites as an intervention what outcomes (employment, land value and business investment) this intervention will deliver, and where multiple interventions will unlock an employment site, we will also ask for jobs numbers associated with this group of interventions.

This will help form a coherent place level logic model and mean that places can demonstrate how their chosen interventions will increase the relevant levelling up ‘capitals’ and drive Investment Zone intermediate outcomes that will contribute to the long-term impacts of the programme.

Future updates to the outputs and outcomes framework

Monitoring guidance will be published alongside the Evaluation strategy by the end of the financial year. This guidance will include which outputs/outcomes are required for reporting. This will be used when developing delivery plans with detailed outputs, outcomes, and indicators for a place’s interventions, and to agree the delivery milestones and quantum for these deliverables, which will be included in the Grant Funding Agreement before funding is released at the start of financial year 2024/25. We recognise these committed deliverables may evolve as the programme delivers and places will be expected to highlight this through the programme’s change control process. This will be set out in more detail in a later iteration of this technical document.

Interventions

This section sets out the different themes of interventions, their objectives, and the types of capital they are expected to deliver. These objectives and capitals set the framework for the outputs and outcomes in the attached framework in Annex E.

Skills

Specialist sectoral-focused skills programme where the local labour market need, as identified by the Investment Zone, is not being met by existing programmes – for example, sector-specific bootcamps or funding for local join-up of the apprenticeships system across providers and businesses. Investment Zone plans must demonstrate how interventions are targeted to specific needs and understand the local labour market. We expect skills interventions to deliver human capital intermediate outcomes as more employees and people in the local labour market move to higher qualifications.

Further guidance:

• In England, when considering potential skills provision, investment should support the work of the designated employer representative body (ERB) responsible for the development and subsequent reviews of a Local Skills Improvement Plan for a specified geographical area.
• This can be achieved through collaboration between:
  • the designated ERB for the specified area in which the Investment Zone cluster is located, including feeding sector skill needs into the Local Skills Improvement Plan process
  • businesses and existing FE and HE providers including Institutes of Technology (IoT) licensed in that area
  • relevant combined authority, local authorities, and Local Enterprise Partnership with their responsibilities for growth and skills. Places should ensure that Local Skills Improvement Plans reflect both the current and future skills requirements of the cluster supported by an Investment Zone.

Local infrastructure

Specific local infrastructure improvement projects (for example, local transport schemes, digital infrastructure schemes) linked to specific business investment opportunities or to unlock specific sites, for example, schemes to improve connectivity to support the local labour market’s ability to benefit from and access the sector or land remediation for lab space. We expect to see infrastructure interventions unlocking physical capital outcomes as sites and development are unlocked and access improved for local employees through these activities.

Further guidance:

• previous examples include DfT’s Local Pinch Point Fund and National Productivity Investment Fund to reduce traffic congestion and encourage growth, including some of the then Enterprise Zones.
• BSIP Guidance sets out what type of revenue interventions can be delivered for bus interventions.
• working in conjunction ATE on scheme design to deliver schemes that meet cycle infrastructure design guidance (LTN 1/20).

Research and innovation

Funding for R&D grants to support bringing products to market, commercialisation, improving uptake, streamlining processes, and supporting innovation. We expect to see these interventions delivering (depending on the focus) a mix of intangible, physical and human capital intermediate outcomes. R&D grants to businesses and stakeholders to invest in lab space and equipment, for example, will unlock physical outcomes. R&D grants to sponsor sectoral networks and knowledge sharing should be delivering intangible outcomes. Investment to support PhDs and other specialist qualifications will also contribute to human capital improvements alongside innovative activity.

Business support

Building on sector-specific tailored support for start-ups and businesses that leverage local research strengths and facilities (for example, Catapults), and is additional and complementary to the national offer. Like R&D interventions, business support interventions will also contribute to either intangible, physical or human capital intermediate outcomes (or a combination of more than one of these).

Further guidance:

• places have regard to alignment and engagement with other HMG-funded business support activities and provision that would be of relevance to businesses within the Investment Zone. This would include, for example, the Department for Business and Trade’s trade/export/inward investment services, the British Business Bank’s UK network, Innovate UK for support to innovative businesses, sector-specific support such as Made Smarter, the Department for Science, Innovation and Technology’s locally delivered digital initiatives, the Department for Education’s local skills partnerships.
• interventions relating to seed funding should ensure they are not duplicating existing British Business Bank programmes.
• where possible, Investment Zones should work in collaboration with the Growth Hub network and the Business Support Helpline, as these are the two main HMG-funded national and local entry points for businesses seeking advice and guidance, to convene and simplify the business support ecosystem for businesses and providers in their areas.

Planning

Areas should look to best practice and innovative approaches where they would add value. These could include the establishment of area-based teams, proactive master-planning, the use of LDOs and other routes to permission. We envisage each area using their core Investment Zone funding to support this planning offer.

We expect planning interventions to predominantly be contributing to physical intermediate outcomes as development sites are unlocked at a faster rate (and at a higher quality) through these activities to speed up the planning process.

4. Assurance and risk

In accordance with the Cabinet Office Government Grants Functional Standards, the assurance for DLUHC programmes provides three separate and defined levels of assurance, referred to as the three lines of defence.

First line of defence

The first line of defence should be delivered at an operational management level where the management responsibility is owned.

The grant recipient will be the lead local authority with funds allocated through a Grant Determination Letter and MOU, the first line of defence is provided by the accountable body’s Chief Finance Officer (s73 or s151 officer) as they act at an operational management level in receipt of the funding. The Chief Finance Officer is therefore responsible for the delivery of HMG investment, with propriety, regularity, and value for money.

We recognise the wider legislation and regulations governing local authorities throughout the United Kingdom and as such seek a proportionate approach to assurance. The assurance and performance management for the Investment Zones does not duplicate the accountable body’s statutory duties and rules to use public money well.

Reporting carried out by accountable bodies to DLUHC will be used to secure evidence of the effectiveness of the first line of defence. The Chief Finance Officer will be required to provide written confirmation that they have necessary checks to ensure that the accountable body and the programme specific project(s) have in place the processes to ensure proper administration of its financial affairs regarding the funding programme, and these are in place, effective and in active use. This is particularly relevant to financial administration and transparency of governance.

Second line of defence

Given the devolved nature of the fund, the second line of defence is informed by the wider Local Government Accountability Framework which scrutinises local authority activity. This aligns with the devolved nature of the programme in seeking assurance that Investment Zone activity will be delivered in line with statutory duties of the accountable body and the policy prospectus.

Third line of defence

The third line of defence should be undertaken by independent audit or a suitable independent/external body to secure an ‘objective opinion on the effectiveness of governance, risk management and internal controls’. This opinion should cover both the second and first lines of defence.

In respect of this assurance framework, the Government Internal Audit Agency (GIAA) will provide independent risk-based assurance over the design and operation of controls within the arrangements for the Investment Zones – as operated within DLUHC – and if required, other government departments.

The scope and timing of this independent assurance will be discussed and agreed with the DLUHC Audit and Risk Assurance Committee, the Accounting Officer and the respective Senior Responsible Officers. GIAA will liaise with internal audit teams operating within devolved administrations as appropriate.

Further first and second line of defence detail

First line of defence: Chief Finance Officer. To secure the first line of defence, the Chief Finance Officer will be required to complete two annual returns to DLUHC. As part of routine reporting, the Chief Finance Officer will give the following assurance updates:

• confirm that the Chief Finance Officer has assured themselves that the accountable body has in place the processes that ensure proper administration of financial affairs relating to their Investment Zone’s allocation
• respond directly to questions addressing the governance and transparency for aspects of their Investment Zone’s grant management including, procurement, conflict of interest, subsidy control, counter fraud, and risk.

Second line of defence: Reflecting the devolved nature of the programme, the second line of defence is informed by the wider Local Government Accountability Framework which scrutinises local authority activity. This sits within our commitment to continue to improve wider local government transparency and reporting, DLUHC’s specific Investment Zones performance reporting and departmental intelligence of local government.

DLUHC co-ordinates work across government departments that brings different analysis together on a common basis to understand the overall fiscal position of local authorities, and particular risks and opportunities. This will support and manage any risk emerging in the delivery of the Investment Zones.

Local government audit also plays a vital role in providing local authorities with accurate and reliable financial information to plan and manage their services and finances effectively. Local audit also ensures local authority financial arrangements, including whether value for money is being achieved, are transparent to the taxpayer, and facilitates assurance for the public sector.

This independent structure provides further oversight of the work of the accountable body’s Chief Finance Officers, whose assurance and work are essential to the delivery of the Investment Zones. If assurance risks or concerns arise from the Second Line of Defence, DLUHC may undertake additional desktop audit of Investment Zone delivery, in engagement with the accountable body.

We will keep this Second Line of Defence under review, as the department takes forward the objectives of the Levelling Up White Paper to improve transparency, the information and incentives available to local decision makers.

5. Reporting, monitoring and performance management

Reporting

Investment Zones have been designed to empower selected places in England to take the lead in shaping and delivering their proposal. To support our understanding of progress, we will also ask accountable bodies to develop and adopt an Annual Delivery Plan prepared in Q4 that both reflects on performance and describes activity / spend anticipated the following financial year.

Part 1 of reporting will respond to the following:

• spend to date against outputs/outcomes and forecast against each intervention
• project level summary under each intervention including location, description, how much it costs, its status in terms of delivery
• summary of progress with an overall Red, Amber, Green (RAG) rating of the progress and trend (using dropdowns). Plus, short narrative progress summary update (maximum 250 words)
• forecast underspend at the end of the financial year (capital and revenues totals)
• forward look to provide narrative highlighting any new projects, events, case studies and opportunities for Ministerial visits (maximum 200 words)

Part 2 will be to assess whether accountable bodies have provided enough information and assurance to spend DLUHC grant funding. Plans should summarise:

• amount of funds committed and the profile of that spend
• amount of funds allocated, but not committed to projects and the profile of that spend
• plan for the allocation of unallocated funds, key milestones regarding timing of calls, commitment of funds and spend profiles
• risk management, for example, confirmation that plans are in place to manage risks relating to project pipeline and capacity

Reports must be signed off by the accountable body’s Chief Finance Officer (s73 or s151 officer).

If places can provide sufficient information and evidence of progression against their proposals in their report, DLUHC will continue their funding support. However, if MCA plans relating to spend and delivery cause concern, DLUHC reserves the right to make appropriate adjustments to payments, potentially making them in staged phases, and may withhold payments altogether.

We have tried to limit the questions that we will ask accountable bodies in their reports, in line with the principles of local autonomy, decision making and accountability. DLUHC’s approach to performance management is that it should be proportionate, asking only for the information we need to understand delivery progress and satisfy our own duties.

What will we do with the data provided?

The questions and data requested from accountable bodies is intended to capture information for 3 purposes:

• a programme level oversight of the progress of the Investment Zones to assure DLUHC, the Accounting Officer, ministers, and Parliament
• support evaluation of the programme, the principles of which are set out in the evaluation section and are expanded upon in the evaluation strategy
• monitor that Investment Zones monies are being spent on the Investment Zones priorities, and that the outputs and outcomes delivered are in line with expectations detailed in investment plans

All data submission returns will need to be scrutinised and signed off by accountable bodies via their board governance.

Performance management and change process

The following section sets out the process for an accountable body to make changes to their proposals and their duties to inform DLUHC regarding changes. These sit alongside existing statutory duties of accountable bodies and rules to use public money well.

Triggers for change

Accountable bodies will have a degree of flexibility in changing local priorities and plans in line with the responsibilities delegated to them. This means that DLUHC approval will only need to be sought when material changes are made to proposals. More detail on the threshold for material changes and the process for seeking approval from DLUHC will be set out later this year.

Questions for accountable bodies to answer as part of change process

The following questions will be asked of accountable bodies as part of DLUHC’s consideration of any material changes.

• Has the accountable body’s Chief Finance Officer and their programme board approved the change is necessary and deliverable?
• Has the local partnership group’s view been sought prior to this change request and has it confirmed that they are content?

Further details on the format of and collection of this data from lead authorities will be set out in due course, in advance of the first formal reporting deadline.

The programme’s ethos and design are intended to give accountable bodies flexibility and responsibility in delivering. However, the department will not consider in-year requests to increase the amount of revenue funding (RDEL) and reduce the amount of capital funding (CDEL) to be used in that year. The annual grant determination letters accountable bodies will receive will set out an RDEL and a CDEL allocation. CDEL funding cannot be converted to RDEL, however the amount of CDEL can be increased by converting RDEL to CDEL.

6. Evaluation

Evaluation is central for generating learning which can improve future project design and delivery. This chapter sets out the proposed scope of the national and local evaluation and expectations from places to support this evaluation and learning.

Scope of national process evaluation

Process evaluations are necessary to understand how the design and delivery of a programme has worked in practice. This is reliant on monitoring and reporting information, supplemented by engagement with those involved in the delivery of the programme. The department will lead the evaluation work and will rely on the support of places to provide data and engage with evaluation activities.

Proposed scope of the national impact and value for money evaluations

The Investment Zone programme presents a unique opportunity to evaluate what works in research, innovation, business investment, and levelling up policy. The scope of the evaluation will be determined after a feasibility study is completed. A feasibility study may conclude that an impact evaluation of Investment Zones should be undertaken which could focus on assessing a wide range of outputs, outcomes, and impacts using a mixed-methods approach. An impact evaluation would assess the effects and outcomes of Investment Zones, whether these effects are intended or unintended. We would like to build up evidence on what works in levelling up, and subject to a feasibility study, an assessment of Value for Money (VfM) may also be undertaken to demonstrate the relationship between the costs and benefits of Investment Zones.

Requirements from places

Places are expected to participate in activities coordinated by the department to evaluate the programme. This could include facilitating access to sites, identifying stakeholders for study teams and/or participation in focus groups or interviews. All places are required to submit monitoring data to the department and its contractors in line with guidance, regardless of whether they chose to undertake their own local evaluation. A simplification process is currently underway, to consolidate, reduce and standardise monitoring and evaluation activities. The frequency and detail of the indicators related to Investment Zone activity will be informed by the outputs of this simplification exercise.

Monitoring and evaluation arrangements for general grants should also consider the requirements set out in Minimum Requirement 8 of the Government Grant Functional Standards.

Local evaluation

DLUHC will lead the programme-level evaluation, which will look at the programme. Places are encouraged to undertake their own evaluations to further their own understanding of what works, and why, in their local area. Evaluation is central for generating learning which can improve future project design and delivery. DLUHC strongly recommends that recipients undertake local evaluations due to valuable insights they can provide, but it is not mandatory for places to conduct evaluations. Where places do conduct evaluations, they will be encouraged to share evaluation outputs and data with the department, and to publish findings. DLUHC is in the process of developing and collating standard output and outcome indicators which places may wish to use for evaluation purposes when they have been developed. Plans for project evaluations should be proportionate to the scale of the project.

Feasibility study and detailed evaluation strategy

The exact scope of the national evaluation will be confirmed after a feasibility study has been undertaken, which assesses whether robust impact and value for money evaluations are viable, and if so, the most appropriate methodological approaches, methods, and datasets to conduct these. The department will conduct a feasibility study and the findings will contribute to the development of an overarching Investment Zones Evaluation Strategy, which will be published on GOV.UK.

The strategy will outline the policy aims and objectives, the questions the evaluations will answer, and the department’s approach to evaluating whether and how the Investment Zone policy has achieved its desired objectives. The strategy will also include the Theory of Change (ToC), demonstrating how the Investment Zones policy is expected to progress from implementation through to its desired outputs, outcomes, and impacts. The ToC will steer the Investment Zones evaluation approach and provide additional questions and hypotheses to be tested.

This guidance does not constitute legal advice and should not be used in isolation when designing subsidies. Those responsible for giving subsidies should always ensure that they fully understand the subsidy control requirements and satisfy themselves that their policies or projects are compliant. Public authorities should also seek their own legal advice if, and where, they are unsure of their legal obligations or the lawfulness of a proposed subsidy or scheme.

7. Subsidy control

The Department for Business and Trade (DBT) has published the Statutory guidance for the United Kingdom subsidy control regime. This should be the first point of reference for public authorities awarding subsidies. DBT has also published a Subsidy control rules: quick guide to key requirements for public authorities alongside this.

The Subsidy Control Act 2022 requires public authorities to consider the subsidy control principles and ensure that their subsidy or scheme is consistent with those principles before giving an individual subsidy or making a subsidy scheme. Public authorities should use the subsidy control principles assessment template to ensure that their subsidies and subsidy schemes are consistent with the subsidy control principles.

All accountable bodies must consider whether the Investment Zones proposals will involve providing a subsidy and, if so, will need to comply with Subsidy Control Act 2022 and the UK’s international obligations including the Windsor Framework.

This guidance provides information for accountable bodies on subsidy control in respect of the Investment Zones.

Subsidy Control Act 2022

All public authorities must comply with the Subsidy Control Act 2022 when giving a subsidy or making a subsidy scheme. Accountable bodies should refer to the Statutory Guidance for the United Kingdom Subsidy Control Regime.

What is a subsidy?

There are 4 key questions to answer to establish if proposals include any subsidy. If the answer is “yes” to all 4, then it is a subsidy. If the answer is “no” to one or more then it is not. For more information, please refer to the Subsidy Control rules: quick guidance at Step 1. The questions are as follows:

• is the financial assistance given, directly or indirectly, from public resources by a public authority?
• does the financial assistance confer an economic advantage on one or more enterprises?
• is the financial assistance specific? That is, has the economic advantage been provided to one (or more than one) enterprise, but not to others?
• will the financial assistance have, or is it capable of having, an effect on competition or investment within the UK, or trade or investment between the UK and another country or territory?

“Enterprise” means any entity (that is, any person, or groups of persons under common control) that is engaged in an economic activity, which means offering goods and services on a market. If the recipient is engaged in both economic and non-economic activity, it should be considered an enterprise only in relation to its economic activity.

Where accountable bodies pass an Investment Zones grant to a third party, non-public body and that non-public body intends to provide further grants to enterprises, the subsidy control requirements should be followed in full if the accountable body has influence over that non-public body’s decisions to provide financial assistance. Where there is an intermediary involved – that is, the public authority initially transfers the financial assistance to an entity which automatically passes on the benefit (apart from reasonable administration costs) and does not receive any selective advantage itself – the intermediary should not be considered the beneficiary of a subsidy. The entity that passes on the benefit will be treated as only an intermediary for the financial assistance if it receives no other economic advantage. That assistance should be given by the accountable body for the purposes of subsidy control.

Accountable bodies must consider whether any of the planned activities meet all four of the questions above.

If a subsidy is present, then accountable bodies must consider the principles of the subsidy control requirements set out in the subsidy control Statutory Guidance unless the funding can be given as Minimal Financial Assistance.

Minimal Financial Assistance

In most cases, Investment Zone subsidies will be very small. The Subsidy Control Act 2022 provides for Minimal Financial Assistance (MFA).

• MFA allows public authorities to award low-value subsidies (up to £315,000) without the need to comply with most of the subsidy control requirements.
• MFA will not need to be assessed against the subsidy control principles or energy and environment principles.
• MFA is capped at a threshold of £315,000, meaning that no individual recipient can receive more than this amount of MFA over the applicable period (three financial years which consists of the elapsed part of its current financial year and the two financial years immediately preceding the current financial year). Accountable bodies should consider whether other MFA subsidies financial assistance received by the recipient when combined with the Investment Zones support, would exceed this limit.
• Before awarding an MFA subsidy, accountable bodies should provide the intended recipient enterprise with an ‘MFA notification’. And when awarding the MFA subsidy, accountable bodies should provide the intended recipient enterprise with an ‘MFA confirmation’. Please refer to the Statutory Guidance for details on what must be included in an MFA notification and an MFA confirmation. This is a legal requirement.
• MFA subsidies over £100,000 must be uploaded onto the Transparency Database, as outlined in the Subsidy Control statutory guidance.
• Places need to be aware of cumulation rules – MFA subsidies cumulate with each other and with other low value subsidies (for example, any ‘de minimis’ aid given under the EU State aid rules and low value subsidies given under the TCA prior to 4 January 2023).

Where a subsidy will or may exceed the limits above (and does not fall within one of the exemptions permitted by the Subsidy Control Act 2022) or is not capable of being provided under a streamlined route (see below for more information), accountable bodies or other applicants will need to assess subsidies against the subsidy control principles and other requirements. There will be other requirements if subsidies exceed a certain threshold.

Subsidy design and assessment

The design of a subsidy or a subsidy scheme will also need to consider the prohibitions and requirements. Subsidies can be important and useful tools to help deliver policy objectives, but they need to be designed carefully so that their benefits outweigh any negative effects. Chapter 3 sets out the steps lead local authorities should take when making that assessment.

Accountable bodies cannot provide any subsidy that does not comply with the subsidy control principles.

Streamlined subsidy routes

The UK government has established streamlined routes for low value non-contentious subsidies, elements of which may be relevant to the Investment Zones. These schemes are pre-assessed by the government as compliant with the requirements of the subsidy control regime. They provide all UK public authorities with a way to award subsidies that is simpler than the baseline method of principle-by-principle assessment. Public authorities will only need to demonstrate that they meet the specific parameters for that scheme. This will ensure that they are able to deliver these subsidies with minimum bureaucracy and maximum certainty. Further Subsidy Control Act 2022: Streamlined routes guidance is available.

Application of the Windsor Framework and EU State aid law

For information on what public authorities need to consider in relation to the Windsor Framework, please refer to the guidance on the scope and application of Article 10 of the Windsor Framework.

The guidance on the scope and application of Article 10 of the Windsor Framework is intended to help public authorities to make a risk assessment, before granting a subsidy either individually or via a scheme, about whether this is outside the scope of the Framework. The guidance suggests ways in which this may be done to enable public authorities to grant subsidies with greater confidence.

How should accountable bodies consider information on subsidy control/State aid?

Accountable bodies must work with all their stakeholders to understand how proposed projects can be delivered in compliance with subsidy control / State aid law. Accountable bodies should use the assessment framework as well as drawing on their responses in the wider proposal (particularly any deliverability information) in assessing subsidy control / State aid risks.

Where an application presents an unacceptable risk of non-compliant delivery, then an accountable body may choose to either reject it or require adjustments to be made such that funding the project will not contravene subsidy control / State aid law.

What will happen if subsidy control or State aid law are not complied with?

Accountable bodies may need to recover funding from project deliverers where subsidy control or State aid law has not been complied with.

Therefore, accountable bodies should ensure that any project deliverers manage subsidy control or State aid in line with their agreed approach and take steps to monitor this. They should ensure that project agreements are designed to enable the recovery of subsidy / State aid if it has been misused.

It is also recommended that project deliverers ensure that project partners are aware of their obligations and that they can recover funding from them if it is not compliantly managed or is misused.

Recording and transparency obligations

All accountable bodies will be required to record and make public information on any Investment Zones subsidies awarded. We recommend accountable bodies use the assessment framework set out in Chapter 3 to record their consideration of the subsidy control principles. Subsidy awards including MFAs and SPEIs that are over £100,000 need to be recorded on the transparency database for which further details can be found in Chapter 12 of the UK subsidy control statutory guidance. The Department for Business and Trade has developed a new publicly accessible transparency database which public authorities should use for this purpose. For more information on what details are required for uploads onto the database, please refer to the statutory guidance.

For any measures that fall within the scope of the Article 10 of the Windsor Framework details of individual awards within scope of the State aid transparency obligations will need to be uploaded to the Transparency Award Module (TAM). To gain access to TAM, public authorities should contact subsidycontrol@beis.gov.uk.

8. Procurement

For England, Scotland, and Wales, all spend associated with the programme must be assessed by the lead local authority in advance to ensure that proposed investment is compliant with Public Contracts Regulations 2015 or Public Contracts (Scotland) Regulations 2015 where relevant and follows local constitution and grant rules, processes and procedures as and where relevant. For Northern Ireland interventions, all spend associated with the programme must comply with the Public Contracts Regulations 2015, where relevant. This will be assessed by the department prior to approval and subject to monitoring after approval, in collaboration with relevant organisations as appropriate.

Lead local authorities are best placed to decide the most beneficial approaches to maximise the impact of the Investment Zones interventions within their local area. Accountable bodies have the necessary experience and knowledge of delivering such projects in a legally compliant way. Accountable bodies should use any opportunities to undertake competitions for grant funding, commissioning, and procurement activities, or use in-house teams to achieve objectives if their Chief Finance Officer is assured that the minimum standards and legal obligations will be compliant in delivery of this programme:

• Constitution of the Authority including any local Grant / Contract rules, processes or procedures
• Public Contracts Regulations (PCR) 2015 or Public Contracts (Scotland) Regulations 2015 including any amendments or any subsequent legislation that replaces the Act
• all other applicable legislation to activity undertaken, such as Modern Slavery Act 2015, IR35 (Intermediaries Legislation), Equality Act 2010, Subsidy Control Act 2022
• the Government Grants Functional Standard with specific focus to compliance on following areas:
  • Fraud Risk Assessment (FRA) – pages 15-19
  • Due Diligence - pages 20-24

Lead local authorities should also consider and implement wherever possible:

• sustainability and green measures in procurement plans, aligned with the government’s net zero strategy
• innovative procurement, including the factoring in of social value into procurement
• government initiatives, guidance and policy such as the Sourcing and Consultancy Playbooks, Construction Playbook, the Outsourcing Playbook and government guidance on Resolution Planning.

It will be the responsibility of every accountable body to ensure that minimum standards stated above are applied, monitored, and maintained throughout the period of the Investment Zones grant.

Where non-contracting authorities are involved in Investment Zones project delivery, they should adopt such policies and procedures that are required to ensure that value for money has been obtained in the procurement of goods or services funded by the programme. This should include adopting the following minimum procedures unless different thresholds have been approved internally via the accountable body’s appropriate internal governance process and their Chief Finance Officer:

• if the value of contract is £0 - £2,499 then the minimum procedure is to directly award
• if the value of contract is £2,500 - £24,999 then the minimum procedure is three written quotes or prices sought from relevant suppliers of goods, works and / or services
• if the value of the contract us over £25,000 then the minimum procedure is a formal tender process

Accountable bodies will be responsible for ensuring that these policies and procedures are applied by non-contracting authorities as appropriate, reported upon and monitored.

Fraud Risk Assessment (FRA)

Accountable bodies shall be responsible for ensuring that fraud is a key consideration in all spend activity and that the following minimum standards are met:

• follow Grants Functional Standards on Fraud Risk Assessment (FRA) – pages 15-19
• undertake FRAs at an appropriate level to each individual project dependent on risk
• ensure that Investment Zones spend is undertaken in accordance with effective authority fraud prevention policy and procedure, and via engagement with colleagues specialising in this area
• ensure that relevant evidence and data to prevent fraud is gathered as part of due diligence undertaken ahead of releasing funds
• implement reporting and monitoring requirements that will identify irregularities or issues in use of funds which can be investigated further
• store and file all work undertaken on FRA in the event of any issues or audit requirements

Due Diligence

Accountable bodies shall be responsible for ensuring that proportional due diligence is applied to all Investment Zones spend and that the following minimum standards are met:

• follow Grants Functional Standards on Due Diligence – pages 20-24
• undertake due diligence at an appropriate level to each individual project dependent on risk
• ensure that Investment Zones due diligence is undertaken in accordance with effective authority rules and procedures through teams specialising in this area
• ensure that key areas of due diligence identified for projects in which you invest are reported on and monitored throughout the term of delivery
• store and file all work undertaken on due diligence in the event of any issues or audit requirements

9. Equalities

In Great Britain, the public sector equality duty (PSED) under the Equality Act 2010 (“Act”) requires public authorities in exercising their functions to have due regard to the need to: eliminate discrimination, harassment, victimisation, and any other conduct that is prohibited by or under the Act; advance equality of opportunity between persons who share a relevant protected characteristic and persons who do not share it; foster good relations between persons who share a relevant protected characteristic and persons who do not share it.

Accountable bodies in Great Britain are required to comply with PSED when carrying out their duties related to the Investment Zones.

As part of PSED, the government will conduct a programme level equality impact assessment on Investment Zones after proposals have finalised and the types of interventions to be delivered for each place are known. Accountable bodies will be responsible for their own compliance with the PSED duties.

10. Branding

Branding and publicity play a key role in ensuring effective promotion and acknowledgement of the wider Levelling Up agenda and as part of the Investment Zones programme.

The requirements relate to all communications materials and public facing documents relating to funded activity – including print and publications, through to digital and electronic materials. This includes any preparatory activity linked to the programme.

We will publish further guidance on these requirements.

11. Funding profile

	24/25 £m	25/26 £m	26/27 £m	27/28 £m	28/29 £m	Total £m
CDEL Programme	60	135	135	135	135	600
RDEL Programme	52	87	87	87	87	400
Total	112	222	222	222	222	1000

Administrative spending

We understand that Investment Zones will require support to administer funding. Each accountable body in England, Scotland and Wales will be able to use up to 4% of the full funding envelope (both tax and flexible spending interventions) to undertake necessary fund administration, such as project assessment, contracting, monitoring and evaluation and ongoing stakeholder engagement. Where an Investment Zone spends less than 4% of the funding on administration, the balance will be retained to support intervention expenditure.

Setting up the fund may need a larger administration budget in the first year than in later years. This is acceptable so long as the overall percentage (4%) is not exceeded over the full funding period. Any expenditure incurred prior to the release of funding is at the accountable body’s own risk, and how it is reimbursed is subject to local arrangements following the release of funding.

By exception, combined authorities which are recently or yet to be formed may need to use more than 4% of their allocation to successfully administer the funding. Where this applies, the combined authority must set out a case for a higher percentage in their proposals. This request will be assessed and, where approved, monitored to ensure that the benefits of a higher administrative budget are being secured.

Annex A: Criteria for Investment Zones proposals

Approach

This document sets out the criteria that an Investment Zone proposal would be expected to display at each gateway, before being allowed to pass to the next. The criteria have been designed based on a number of principles:

• the criteria developed is rooted in the evidence of what constitutes successful, sustainable clusters and strong local innovation ecosystems
• the criteria are stretching to ensure all Investment Zone proposals are as strong as possible, allowing government to work together with a place in the spirit of co-development to reach that point
• each gateway will be framed by specific associated criteria, which if not met will mean a place is paused at that gateway to work with government to refine the proposal to an appropriate standard

Throughout, we will consider the responses provided to questions with other relevant government departments (OGDs) to test whether they align with HMG’s understanding of the proposed sector, cluster, and key challenges/opportunities. Advice from other government departments could result in HMG requiring you to consider answers at each of the gateways, including:

1. based on government’s understanding of the sector, cluster, and its challenges/opportunities

2. to ensure Investment Zones are as aligned as possible with wider government strategies and investment, identify opportunities to go further or consider if the proposed options are feasible to address the issues

3. to properly drive private sector investment and research institution innovation

This information, alongside the answers provided by places will help to guide the co-development and appraisal process.

As previously stated, no Investment Zone proposal will be signed off until the co-development process has fully concluded, and we reserve the right to reject an Investment Zone proposal even after it has passed through all the gateways.

We would consider engaging ministers formally at the start of summer recess with an update on discussions and setting out if we consider agreement unlikely in good time ahead of the financial year 2024/25.

As places consider these criteria, they should bear in mind that the accountable body will be wholly accountable to government for ensuring the successful delivery of all Investment Zone policy interventions it chooses to pursue through the Investment Zone offer. Where the accountable body lacks direct power over specific levers, it must put in place appropriate and robust arrangements that enable it to ensure policy levers are used in line with the policy intent.

For grant funding, this will mean the accountable body receiving funding from the government, commissioning and procuring interventions to support the growth of their sectoral cluster.

If a place opts to propose tax sites, this will involve the accountable body working with partners to attract investment into the sites and ensuring that all investment on the site is appropriate and aligned with the Investment Zone sector(s) and the wider objectives of the policy. The combined authority or proposed combined authority must be able to demonstrate an ability to ensure this.

If a place opts to propose Business Rates Retention sites, this will mean the accountable body working with the relevant billing authorities to ensure that any growth in business rates relative to the agreed baseline is used exclusively to support the growth of their sectoral cluster, is guided by a clear strategy for reinvestment, and that decisions about the use of retained business rates are taken in an appropriate, transparent way that enables the combined authority or proposed combined authority to remain responsible to government for the overall Investment Zone programme.

Logic Chain (Theory of Change)

Outlined below is a place-level, strategic theory of change, framed around the levelling up capitals, as referred to in the Levelling Up White Paper.

The criteria have been designed to broadly align with the different sections of the logic chain. This means the final proposal should have a clear link to the constraints or unrealised opportunities in a place, which should guide the outputs, and outcomes a place chooses to deliver.

• Information from Gateway 1 will feed into Chain 1 and Chain 2
• Information from Gateway 3 and Gateway 4 will feed into Chain 3 and Chain 4
• Information from Gateway 4 will feed into Chain 1 and Chain 2

This is a broad template to:

• demonstrate how the information collected in the gateways builds the rationale for place-level interventions, and
• will serve as a template for places to complete their own place-specific logic model as part of Gateway 4.

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Chain 1 - Describe the current state of target cluster in the priority sector

• The existing strengths of your chosen priority sector
• The existing strengths of the wider eco-system
• the interaction of other live policy interventions and the Investment Zone

Chain 2 - Identify constraints faces by current cluster and the unrealised opportunities

• The constraints to boost the sector(s) growth potential
• The unrealised opportunities to boost the growth potential of the sector(s)

Chain 3 - Proposed interventions to alleviate constraints or maximise unrealised opportunities

• The list of proposed interventions and how they come together to address the constraints and opportunities for growth
• How the surrounding research institutions will support the Investment Zone’s interventions and objectives
• The role of an investment zone in crowing in private sector investment and support to further the programme’s objectives
• How skills/planning/tax sites and business rates can address constraints or unrealised opportunities, and contribute to the desired eventual outcomes of the Investment Zone programme
• How the sectoral focus and geography of the Investment Zone interventions support the overall Investment Zone programme objectives

Chain 4 - Proposed geographies for interventions

• Aligning additional non-Investment Zone interventions with Investment Zone proposals to ensure that they are coherent and complementary

Chain 5 - Outputs

• Set out the outputs expected for each intervention, linked to the intermediate outcomes
• Each output will need to have an accompanying metric

Chain 6 - Intermediate outcomes

• Set out the intermediate outcomes expected for each intervention to improve the levelling up 6 capitals. This will include at least one of the following:
  • human capital, for example, increase in people with specialist skills to work in priority sector, increase in cluster employment, higher average real wages for low and high skilled workers
  • physical capital, for example, increase in m² of space for sector production or R&D
  • intangible capital, for example, number of new patents generated, estimated value of new technologies developed
  • financial capital, for example, investment in new plant and machinery, Foreign Direct Investment

Chain 7 - Final outcomes (impact)

• Align the intermediate outcomes to the overall local economic outcomes (and the national economic outcomes). These are:
  • boost productivity in the FEA
  • increased real earnings for high and low skilled workers within the FEA
  • increased international competitiveness of companies within the cluster
  • internationally demanded new technologies
• Each final outcomes will need to have an accompanying metric

Gateway 1: Vision and Inception Meeting

This stage does not have associated criteria. Places will be expected to set out their vision for their Investment Zone so HMG can understand the early thinking on the sector they would like to support and interventions they wish to pursue through the policy offer.

Gateway 2: Sector and Geography

At this gateway, places are expected to identify the priority sector(s) they intend to support through their Investment Zone, the nature of this local strength, the geography of the existing target cluster, and then define a coherent spatial focus for the Investment Zone. It also asks for information on potential tax and business rate retention sites to understand how they align with the existing cluster and proposed spatial focus.

Proposed tax/BRR sites will be assessed in more detail at the Interventions gateway.

Sector Question

• What priority sector will your Investment Zone support and why is it a strength? (500 words)
• Places must set out the priority sector(s) they intend to support through their Investment Zone, considered against other options, with evidence to demonstrate that it is a significant local strength. We will consider proposals to support more than one priority sector, subject to evidence that these sectors intersect as part of a coherent economic cluster. Places must:
  • provide a qualitative exposition of the nature and strength of sector(s) in the region, including the existing business base from SMEs through to large companies and wider supply chains
  • provide evidence of an existing innovation base, for example universities, research & technology organisations, public sector research facilities with strengths in the priority sector
  • provide an overview of the scale of opportunity and potential for future growth. For example, this could describe the high value-added activities the sector produces or evidence of growing demanded for the sector’s goods and/or services

Where places are proposing to support sectors that overlap within a cluster, they must explain and provide evidence on how the intersecting sectors form part of a single coherent economic cluster, for example:

• economic linkages demonstrated by shared supply chains, specialist inputs or technologies to support the priority sector(s)
• common skills need
• physical co-location between companies in different sectors

The qualitative description must be complemented with the following local data:

• current number and growth rate of companies in the sector(s), over the last 10 years, in the region
• current and growth in employment in sector(s), over the last 10 years, in the region, size of companies in sector,  with discussion where not exact
• total revenue generated by the sector(s) for the region, over the last 10 years, in the region
• To proceed, a place must provide clear evidence to demonstrate that their chosen priority sector(s) is a local strength, alongside a detailed understanding of that strength supported by available data. We would expect that this aligns with existing local industrial strategies, economics plans and wider strategies. Proposals focused on clusters that support more than one priority sector must provide details for all sectors. Government will consider if the evidence provided on the intersection of sectors is credible and realistic.

Cluster Question 1

• Please describe the existing economic cluster your Investment Zone will support and strengths of the wider eco-system? (500 words)
• We expect places to provide a credible description of the cluster, its wider actors and economic geography.  Places should consider how the cluster aligns with wider HMG and local priorities and investments.

As part of this, places should include specific discussion on the location referencing the type of detail below:

• cluster supply chains
• knowledge anchors
• location of workers
• how the cluster aligns with wider priorities and central / local investments

This should include quantitative information, for example:

• commercial and/or industrial space created or developed, and any land redeveloped
• types of workers employed by companies in the intended cluster
• current average real wages in intended cluster, for low and high skilled workers
• related research to cluster in partner research institutions
• current research partnerships related to cluster in partner research institutions
• current patents generated by companies and research institutions related to the cluster
• Places must describe an existing cluster ecosystem capable of supporting the proposed Investment Zone and sustainable cluster growth.  Government will consider if the answer:
  • aligns with wider government strategies, priorities, and investment
  • is credible and realistic in the description of the link between the sector, the cluster, and its geography
  • has the scale or focus to support the programmes objectives

Cluster Question 2

• What are the constraints or unrealised opportunities that if addressed could boost the cluster’s growth potential? (500 words)
• This must include consideration of at least one of the following, linked to the sector and cluster:
  • constraints to or unrealised opportunities for human capital – for example, skills available and the local labour market
  • constraints to or unrealised opportunities for physical capital – for example, access to appropriate specialist premises, transport infrastructure and need for new plant and equipment
  • constraints to or unrealised opportunities for intangible capital – for example, opportunities to develop new technologies, equipment, processes, or supply chains
  • constraints to or unrealised opportunities for financial capital – for example, availability of FDI, bank finance, private equity finance

Qualitative evidence could include case studies where appropriate. Quantitative evidence must be provided, this must support the constraint(s) or unrealised opportunit(y/ies) identified. For example, these could include:

• current skills mix in a place
• evidence of a skills mismatch or shortfall
• research partnerships per researcher
• local versus national research partnership ratios
• evidence of challenges or potential opportunities for raising finance, including FDI.
• market failures associated with brownfield land / availability of sufficient commercially viable land
• To proceed, a place must evidence that it has a clear and credible sense of the challenges and unrealised opportunities, related directly to the sector/cluster. They must be grounded in at least one of the four examples of capitals set out in the evidence and supported by the relevant qualitative and quantitative information available. Government will consider if these challenges/ unrealised opportunities can be realistically realised through the Investment Zone policy offer.

Geography Question

• What is the proposed spatial focus of your Investment Zone? (500 words)
• Answers must describe the proposed spatial focus of the Investment Zone, with reference to the cluster ecosystem and barriers/opportunities. They must also set out how this will support:
  • Agglomeration – the types of support you discuss could include:
    • the collaboration of businesses in exchanging new ideas, best practice and building local supply chains
    • matching businesses to workers with the right skills and increasing opportunities for local people
    • encouraging the use of shared resources, such as facilities and lab space, to meet the needs of businesses
    • transport connectivity
  • Levelling Up
    • Places must provide credible evidence that their planned spatial focus can reduce levelling up need
    • This should be linked to quantitative information such as, with consideration of location:
      • Under skilled workers (Number of qualifications and at what NVQ level).
      • Level 3+ equivalent skills in the adult population.
      • Median gross weekly pay
      • Healthy life expectancy
• To proceed places must clearly articulate the spatial focus of their Investment Zone and how it will support agglomeration and Levelling Up.  We would not expect this to cover the whole Combined Authority. Government will consider this based on the economic coherency of the proposed Investment Zone geography.

Early indications of tax interventions

• How many tax sites are you proposing and where are you planning to locate those tax sites? (Map and up to 500 words)
• At this stage, places will be expected to confirm the number of tax sites they wish to propose, and they should consider the interventions they will deliver with the remaining flexible funding accordingly. The details on the tax sites should be provided as a list that clearly states:
  • name of the proposed site
  • its proposed ha
  • all postcodes that will be included across your tax sites
  • how the proposed tax site(s) meet the underdevelopment criteria

Who is/are the landowners and what is the planning status of the site? Alongside any postcodes, places should provide maps as per the tax guidance. Places should confirm whether landowners and other key stakeholders are on board with your Investment Zone proposal and how they will secure necessary agreements. We reserve the right to request further information as the proposal progresses and in advance of designation/release of funding. Please refer to the Investment Zones policy prospectus and separate tax guidance.

• Places can propose up to three tax sites as part of their Investment Zone, totalling up to 600 ha. HMG will not consider any tax site proposals:
  • that contain more than three sites in total
  • where the total hectarage of all sites in combination is over 600ha
  • that are on land considered developed
  • that do not meet the size and shape criteria
  • do not provide details on the landowners of the site and its planning status

Alongside any postcodes, places should provide maps as per the HMG guidance.

Early indication of Business Rate Retention (BRR) sites

• How many BRR sites are you proposing and where are you planning to locate those sites? (Map and up to 500 words)
• The details on the BRR sites should be provided as a list that clearly states:
  • name of the proposed site
  • its proposed ha
  • how the proposed BRR site(s) meet the underdevelopment criteria
  • all postcodes that will be included across the BRR sites – where part of a postcode is to be included, this should be highlighted, and an estimate of the proportion of that postcode area within the BRR site proposal should be provided
  • the landowner(s) and the planning status of the site

Explain the interaction between it and any proposed tax sites. If proposal includes tax sites and business rates retention sites that are not co-terminus, we would expect a clear explanation about the rationale behind that and how places expect to attract businesses onto the site. Please refer to the Investment Zones policy prospectus and separate BRR guidance.

• HMG will not consider any BRR site proposals:
  • that contain more than two sites in total (please note, a site spanning two LAs will count as two sites)
  • that span three or more local authorities
  • a combination of sites that are over 600ha in total size in total
  • that are on land considered developed
  • that do not meet the size and shape criteria

Alongside any postcodes, places should provide maps as per the HMG guidance.

Early indication of planning interventions

• How will your planning offer help accelerate the progress of the Investment Zone proposal? (500 words)
• The policy prospectus set out that Investment Zones must have a credible and ambitious planning offer to accelerate development needed to support the target cluster. Places should set out at this stage:
  • the planning proposal/offer for the Investment Zone
  • how the planning proposals can accelerate existing development or bring forward new development, including detail on how this will be delivered
  • where planning is likely to take place
  • the LPAs who will be responsible for planning decisions and which local authorities it will cover
  • key known planning issues (for example, infrastructure requirements, environmental constraints, land ownership challenges)

Places should also provide details regarding landowners and existing master planning status. Places should work to ensure better join up between strategic land use planning and transport planning, at the earliest stages of the funding and planning process.

• Places must include the following details to proceed to the next gateway or explain when they will be able to provide them by:
  • the major development sites within or linked to the Investment Zone
  • how this planning proposal accelerates the development necessary to support the cluster, beyond existing plans
  • status with respect to relevant development plans
  • an overview of the planning needs

HMG will consider the details and probe its alignment to the sector/and challenges/unrealised opportunities described to date. HMG planners are available to support places as they consider how to design their planning offer to support their Investment Zone target cluster.

Private investment Question

• How will the Investment Zone proposal help to secure additional private investment? (500 words)
• Places should set out how the cluster they are supporting has significant current strengths to build on, evidence of commercial interest and upcoming potential commercial opportunities and potential to support leveraging in investment.  Places should reference any key upcoming investment opportunities, including list of businesses, anchor tenants and emerging intel on the scale of potential investment.  This should include any information which can be provided on potential timings of investment, for example, when an organisation might make first spend, and when it might then move into an area. Places should consider how they will:
  • foster internationally competitive companies
  • generate new technologies for which there would be widespread demand (both domestically and internationally)
  • attracting significant domestic private or FDI investment, including anchor tenants

Places should include reference to potential indicators, such as:

• capital flow into the cluster/sector in the region
• the exportable products of the sector/cluster
• does the sector/cluster have a track record of producing exportable intellectual property
• Places must provide details to demonstrate that there is significant private sector interest in their target cluster, with specific link to the lead sector(s). Places must provide a list of business and investment opportunities related to their sector/cluster.

Strategic Assessment

• How will the Investment Zone interact with other live policy interventions? (250 words)
• Places must:
  • include evidence of how they have taken account of existing related policy interventions across the area when choosing the geographic location for interventions
  • provide a qualitative discussion of complementarities and steps to support additionality and mitigate risks of displacement
  • if there is a Freeport in the CA or proposed CA geography, reference how that relationship will be managed at this stage
• To proceed, places must clearly set out how they ensure the Investment Zone proposed considers potential displacement and is designed to be additional and complementary to other interventions.

Outcomes

• Taken together, how will the sectoral focus and geography of IZ intervention support the overall Investment Zone programme objectives? (500 words)
• We expect places to provide a credible narrative around how the cluster choice is appropriate to support the intended programme objectives. Places should also include available quantitative data to underline how supporting the cluster can support the objectives and make sure they support additionality. For example:
  • current average earnings in the intended cluster
  • commercial and/or industrial space created or developed, and any land redeveloped
  • types of workers employed by companies in the intended cluster
  • current average real wages in intended cluster, for low and high skilled workers
  • related researchers to cluster in partner research institutions
  • current research partnerships related to cluster in partner research institutions
  • current patents generated by companies and research institutions related to the cluster
• To proceed, places must clearly articulate how their chosen sectoral cluster can support the programmes objectives. This must include, at a minimum, how the Investment Zone will do at least one of the four:
  • boost productivity in the FEA
  • increase real earnings for high and low skilled workers within the FEA
  • increase international competitiveness of companies within the cluster
  • internationally demanded new technologies

Research institution co-sign

• Considering the focus of your Investment Zone, which research institution(s) will co-sign your Investment Zone proposal? (250 words)
• Places must identify a research institution(s) to be a co-signatory of the document, setting out why they are appropriate to do so based on the priority sector, the needs of the cluster and wider area.
• To proceed to the next Gateway, places must identify and name their co-signatory partner(s) research institution.

Gateway 3: Governance

Governance Question 1

• Set out if the governance structure that will oversee the Investment Zone is existing or not? (750 words)
• If No:
  • set out the proposed Governance structures and provide detail on how this will achieve Investment Zone objectives. Places must evidence interim structures as the proposed structures are developed
  • where setting up new governance, places should set out why new governance is needed, clear and implementable milestones for its formation and the proposed membership and frequency of meetings during design and delivery of the programme
• If Yes:
  • provide documentation to evidence the current structure, membership and how it will be able to consider the specific sector and innovation considerations of the Investment Zone
  • if using an existing governance structure, places should provide existing membership, proof of track record of delivery and how it has been adapted or will bring in sector/cluster experience
  • places must ensure existing governance structures will draw upon the expertise needed to grow their cluster, with a clear link to the priority sector and its needs
  • both must consider how the proposed Governance structure will engage their research institutions, innovation eco-system and should include the following types of partners:
    • sector specific businesses
    • supply chain businesses
    • wider research institutions, for example, local Catapults
    • cluster bodies
    • education, skills providers, employment experts and providers
• To proceed, places must have strong existing governance in place or a clear and implementable plan to form new governance.  This should be supported by evidence requested. HMG will consider if the governance structures appropriately engage cluster expertise from the sector, wider research institutions and stakeholders.

Governance Question 2

• If your Investment Zone is in an existing Freeport outer boundary, please describe how you will manage the governance and delivery arrangements. (500 words)
• Where an Investment Zone is proposed within a Freeport Outer Boundary and focuses on the same sector, local governance and delivery structures must be brought into single, unified governance structure and delivery vehicle, building on what is already in place to expedite delivery. This must be agreed jointly ahead of an Investment Zone receiving approval. Government expects Investment Zones to build on existing governance and delivery structures in their geographies where appropriate. Therefore, where an Investment Zone is proposed within a Freeport Outer Boundary, places must ensure alignment and should consider the merits of a unified set of structures. Independent structures should be justified and Investment Zone proposals that undermine partner commitments under a Freeport will not be accepted. If places are not proposing to integrate they should explain:
  • how the priority sector chosen is different to that of the Freeport
  • how the membership of Investment Zone Governance is not duplicative of existing Freeport structures
  • why the Investment Zone governance benefits from having a different membership to existing Freeport governance
  • how Investment Zone governance will work with alongside existing Freeport structures
  • where Investment Zones do not sit in the outer boundary, but are closely situated to other Freeport tax sites, set out how this will be managed
• If located in an existing Freeport Outer boundary and focused on the same sector, HMG would expect a place to develop a clear timeline for unification of governance between the Investment Zone and the Freeport, that supports delivery. To proceed, places must either:
  • clearly set out how they will integrate their Freeport and Investment Zone governance, or
  • explain how their alternative proposals do not undermine the Freeports plan

Places must provide evidence that sets out how they have engaged any Freeport they sit within the outer boundary.

Governance Question 3

• What is the team structure for design and delivery of the Investment Zone proposal? (500 words, plus file)
• Places must set out the proposed management arrangements for design and delivery of Investment Zone. Places should describe the accountability and assurance that will be in place for design and delivery of the Investment Zone, if this uses existing structures, places should detail arrangements here. Places must provide the following evidence:
  • a named senior responsible officer for the Investment Zone, listing their responsibilities and accountabilities throughout the stages of the Investment Zone
  • details and description of the planned team to oversee the Investment Zone, including timelines for appointments or details about existing structures, if in place

This should be provided in one of several formats:

• organogram
• list of roles and responsibilities
• if proposing tax or business rate retention sites, it must include specific details on their planned future management
• To proceed to the next gateway, places must provide the evidence requested, which will be considered based on its credibility.

Governance Question 4

• How will relevant research institution and private businesses be engaged and involved in the Investment Zone Governance? (500 words)
• Places should set out how partner organisations will feed into the process of Investment design and delivery. HMG will want to work with places to ensure proposals have clear plans and to engage relevant organisations, to consider what direct support they can offer to an Investment Zone proposal. Proposals should consider how they can be leveraged to secure direct support they can offer to an Investment Zone proposal.
• Governance proposals must engage research institutions and businesses beyond the simple co-sign off the research institution set out above. The programme governance must ensure they have a long-term role in the governance and delivery of it bringing to bear their own resources.

Governance Question 5

• How will you engage local planning authorities as you develop and deliver the planning offer as part of Investment Zones? (250 words)
• Places should explain the engagement to date with local planning authorities and how that has informed the design of their Investment Zone proposal and how it will enable future delivery. Places should also set out how they have engaged relevant transport and highway authorities.
• To proceed, Investment Zone proposals must:
  • evidence engagement with the relevant local planning authorities
  • have the support of their local planning authority for the planning being pursued
  • describe governance in place to work with the relevant local planning authorities moving forward
• HMG will consider this, based on feasibility when compared against the answers at Gateway 2.

Governance Question 6

• Do you intend to deploy any specialised delivery vehicles, for example, development corporations or corporate special delivery vehicles, such as Urban Regeneration, or joint development plans? Answers should reference Governance Question 5 and Early indication of tax interventions (250 words)
• This is a Yes/No question
  • if Yes, places should set out if this is an existing delivery vehicle or a new one. If new, the timelines and milestones for its formation. If existing, how it will incorporate and manage the Investment Zone planning offer into its current governance and work.
  • if No, places should set out why they have considered them to not be suitable for their Investment Zone proposal and how they will manage the delivery of the Investment Zone planning offer instead.
  • HMG will work with places to understand the specialised delivery vehicles available to them and consider if they are best placed to deliver the Investment Zone’s planning and development goals alongside other objectives.

Business Rates Retention

• Places only need to complete if they have chosen to take forward Business Rates Retention. Please confirm the billing authorities within site have been engaged and that they have:

i. seen and consented to this proposal (Yes/No)

ii. understood that the billing authority will continue to be responsible for collecting business rates locally (Yes/No)

iii. consented to local agreement, for example, an MOU between them and the accountable body detailing these arrangements (Yes/No)

iv. consented to any business rates growth retained as a result of the site being invested back into the programme in line with overall Investment Zone objectives (Yes/No)

• For questions (i) and (ii), this is a yes or no question. For question (iii), please provide details of who will be responsible for the re-investment of the BRR monies collected. If this is the constituent local authority, this should include detail on what arrangements will underpin that between the MCA and the constituent local authority. These arrangements should consider how decisions about the use of retained business rates are taken in an appropriate, transparent way that enables the combined authority or proposed combined authority to remain responsible to government for their use in line with the Investment Zone’s aims.
• Business Rate Retention sites which are not consented to by the billing authorities and where they have not consented to the collecting of rates will not proceed to the next gateway. This should include a description of the arrangements and how the reinvestment strategy will support the Investment Zone over the lifetime over the rate retention sites.

Governance Question 7

• Have you identified any key fraud risks that could affect Investment Zone delivery and what are your processes place to mitigate them? (500 words)
• Places should:
  • provide details of how they will identify, mitigate, and manage potential risk of fraud
  • cover any initial key risks identified
  • set out a plan to develop a risk management framework for government by early 2024 ahead of first payment of funding
• Places must provide a full plan for risk mitigation, based on the early interventions they are considering, for example, risks to commissioning services, tax sites or BRR sites. HMG will expect this to be updated as the Investment Zone proposal is iterated, as part of delivery planning.

Governance Question 8

• Set out details of how you have actively engaged local MPs. (500 words)
• Places should provide details of how they have engaged members of parliament as set out in the Investment Zone prospectus. Places should provide details of how they were engaged, for example:
  • writing to their local MPs
  • hosting briefing sessions with MPs on the development of their Investment Zone
  • if stretching over a large area, places should invite all MPs for the place to a convened engagement group

Places should provide the feedback from that engagement.  This should include specific details of any not supportive of the Investment Zone proposals and their reasons for opposition.

• We expect proposals to demonstrate that this engagement has taken place over the area affected by the Investment Zone with the clear objective of consensus. Central government reserves the right to discuss further with MPs regarding their feedback.

Gateway 4: Interventions

This gateway gathers information on the interventions to ensure that we are confident that they will genuinely boost the supply capacity of the local economy, to ensure that improvements are additive and do not simply displace economic activity from elsewhere in the region or elsewhere in the UK.

Match funding guidance

The policy prospectus set out that all proposals must include a degree of match funding from the private sector, third sector and local government. Where no match funding has been secured against an intervention, HMG would expect a clear rationale to be set out.

We expect that each Investment Zone proposal will be matched or part-matched by private sector investment, council borrowing and co-funding from other public bodies where relevant. We strongly encourage places to go further with partners whenever possible particularly when their interventions are focused on themes such as business support, research and innovation and local infrastructure. Based on similar programmes, we expect this to be in the region of at least 60%.

As part of the development of Investment Zone proposals Government will expect to understand which proposed interventions will be match funded, at what scale and if not, why that is the case.  Government also encourages places to work with local partners to ensure that wider conditionality is considered where possible.

Places will be expected to provide details of their plans to secure match funding at the Investment Zone proposal stage. As they move into delivery of their proposals and project design based on their approved interventions, they should begin to commission interventions in a way that meets their stated ambitions. Government will expect an update on this ahead of final sign off proposals and release of funding.

Subsidy Control guidance

The Subsidy Control Act 2022 requires public authorities to consider the subsidy control principles and ensure that their subsidy or scheme is consistent with those principles before giving an individual subsidy or making a subsidy scheme. Public authorities should use this principles assessment template to ensure that their subsidies and subsidy schemes are consistent with the subsidy control principles. Please refer to the published technical document for further details.

Interventions narrative

• How do the packaged of proposed interventions come together to address the constraints to and opportunities for growth for the cluster identified at Gateway 2? (1000 words)
• Places must:
  • demonstrate that the Investment Zone interventions are delivering outputs and outcomes will help to bring additionality to the R&D, productivity and innovation activity already occurring in the region
  • set out a coherent strategy over the spatial focus of the Investment Zone and should ensure that the interventions proposed are linked to the specific challenges and opportunities described at Gateway 2
  • places must provide a short-written explanation of how their intervention is creating social value that would not have existed in its absence
  • refer to the characteristics below as guidance for assessing the extent of additionality for each of the interventions
    • low additionality characteristics
      • displacement – the intervention leads to an increase in economic activity or social welfare in one area but causes a corresponding reduction elsewhere
      • deadweight – the outcomes resulting from the intervention would have occurred even without the specific intervention
      • leakage – the positive effects of the intervention do not extend significantly beyond the target area
      • substitution – firms or industries substitute one type of labour or activity for another without increasing overall employment or output
    • high additionality characteristics
      • displacement – the intervention generates a net increase in economic activity or social welfare without significant displacement efforts
      • deadweight – the intervention brings about outcomes that would not have occurred in the absence of the specific interventions
      • leakage – the intervention effectively generates spill over effects that positively impact neighbouring regions or communities
      • substitution – the intervention fosters genuine job creation
  • set out how they will use the interventions to support the Levelling Up and Agglomeration opportunities
  • produce a logic model, using the template provided, which sets out the constraints and unrealised opportunities to specific interventions outputs and intermediate outcomes, and how they link to longer-term place-level outcomes
  • clearly identify risks for displacement, and consequences for negative spill overs from each intervention, with either:
    • a proposed approach to monitor and mitigate such displacement or negative spill overs
    • how any displacement of activity to an area offers benefits for levelling up or agglomeration
• In the answer to this question, government will consider how places address the following points:
  • direct, clear and credible explanation of the link between their challenges and the proposed package of interventions
  • how the package of interventions interacts to increase investment, jobs and support the overall objectives of boosting productivity and levelling up
  • how the interventions will help to realise additional benefits and provide sufficient information on the additionality of their proposed package of interventions
  • how the Investment Zone helps to address Levelling Up challenges
  • identified risks for displacement and the consequences for negative spill overs from each intervention, a proposed approach to monitoring and mitigating such displacement/ negative consequences, or how any displacement of activity to an area offers benefits for levelling up or agglomeration

Interaction between interventions and wider policies

• Places should explain how they are aligning additional non-Investment Zone interventions with Investment Zone proposals to ensure that they are coherent and complementary (500 words)
• List of related interventions that could interact with Investment Zone proposals:
  • major transport programmes that will have an impact in the area
  • local infrastructure such as housing and regeneration schemes
  • any local labour market or employment interventions
  • wider local and national economic plans
  • wider local, regional or national freight strategies

Discussion of complementarities between interventions, and implemented choices made to support these complementarities.

• Places must set out where existing interventions can align with Investment Zone aims or where Investment Zone aims can maximise existing interventions linked to the programme’s objectives. HMG will consider if the proposed list properly maximises the Investment Zone proposal.

Interventions summary

• Please complete the attached document.
• Places must complete a document covering the following details:
  • interventions selected, matching the size of their flexible funding pot
  • the spending profile of those interventions over the five years: financial years 2024/25, 25/26, 26/27, 28/29, 29/30 (interventions might not need to take place for the full five-year period)
  • the outputs and outcomes associated each of these Interventions including the years in which they expect those to be delivered
  • the match funding against each intervention – if no match funding has been sourced an explanation of why this has been justified
  • a short description (50 words) of what the intervention is intended to do

A full list of outputs and outcomes will be published.

• Places must complete the spreadsheet. They must include the full funding profile for the 5-year period, when the estimated value of their proposed tax sites has been discounted. All interventions must include overall expected outputs and outcomes against them, (including any outputs/outcomes expected to materialise after the five-year period). HMG will look to understand the scale of the interventions proposed and any early thinking from places on potential projects. In particular, whether:
  • spending profiles are realistic and credible
  • the outputs and outcomes are deliverable but ambitious when compared to the scale of funding
  • the level of match funding is appropriate

Where completing interventions related to land remediation, places should provide details of the current land value, predicated value, estimate of future value and type of land.

Research institution led interventions

• How will research institutions support the Investment Zone’s interventions and wider objectives? (500 words)
• At a minimum, the research institution providing co-sign off must set out clear plans of work it will deliver to support and complement the proposed Investment Zone interventions, and the measurable impact they expect these plans, taken together, to have on research institution-led activity in the Investment Zone. Places should consider how:
  • the support described links to the Investment Zone specifically or helps to address the challenges more widely described at Gateway 2
  • complementary interventions could maximise outputs and outcomes described in a place’s logic model

This could include but is not limited to the examples below:

• research collaborations with cluster businesses
• conduct new or additional research that supports their Investment Zone’s sector and objectives
• amending terms and conditions on university participation in spinouts (for example, through introducing common terms on IP and equity) to maximise flow of new spinouts
• commitment to supporting the increase of lab space, as well as other productive spaces relevant to existing industries
• support to attract global talent to the university and smooth their transition
• partnering with SMEs, local government, and other research institutions to showcase investment potential and attract larger-scale investors
• partnering with regulators and stakeholders (for example, local healthcare system) to create test beds for new technologies in the target sector
• commitment to spend through local SMEs related to the sector wherever possible
• commitment to provide support for technology adoption and diffusion, and or business and management support for local SMEs in the cluster
• commitment to form and strengthen partnership with major local businesses, to increase their adoption of innovative technology and practice

Research institutions and places should also consider where they could go further in this support to the Investment Zone, and detail what extra support from central government or arm’s length bodies could help realise these ambitions.

• At a minimum, places must have clearly stated plans, with routes to implementation set out by the co-signatory research institutions and linked to the Investment Zone.

Role of the private sector

• How will you ensure businesses in your area, linked to the target cluster, support the Investment Zone objectives? (500 words)
• Places should think about how potential anchor businesses and representative SMEs potentially in receipt of support, via the tax offer or wider Investment Zone support offer, could provide additional funding or additional interventions to support the Investment Zone objectives. Places can also consider conditionality with businesses, for example, where sector linked businesses could provide apprenticeship schemes or in-work progression schemes for their current workforce in return for Investment Zone interventions which focus on skills. Help to unlock land for development where necessary or provide expertise to cluster organisations. At this stage we expect places to set out a clear plan to ensure private sector buy in, shared commitment and conditionality where possible. This should include any commitments already made by private sector partners to support the Investment Zone objectives.
• Places must set out how they plan to leverage the role of the private sector. Places must provide evidence of private sector engagement. This can be in the form of:
  • letters of support
  • minutes from engagement meetings
  • emails with stakeholders

Role of match funding

• Please set out a plan to secure match funding in support of the Investment Zone proposal. (500 words)
• As per the policy prospectus, places should endeavour to secure match funding in line with the interventions described earlier in this section. Places should set out:
  • how they intend to secure match funding against each intervention
  • the planned source(s) of match funding
  • what scale of match funding they expect to secure and to what timeline
  • why they are not proposing match funding if that is the case
• Government will expect to see that the level of match funding is appropriate to the interventions described and meets the match funding guidance published alongside these criteria.

Skills interventions

• Only complete if you have chosen Skills Interventions. How will skills interventions address constraints or unrealised opportunities, and contribute to the desired eventual outcomes of the Investment Zone programme? (500 words)
• If places have pursued Skills interventions, they must clearly explain how they:
  • relate specifically to the sector
  • take account of the local labour market
  • target existing skills gaps
  • facilitate access to high real-wage jobs for those of low and middle skill levels
  • are needed beyond existing national and local skills provision

In England, when considering potential skills provision, investment should look to support the work of the designated employer representative body responsible for the development and subsequent reviews of a Local Skills Improvement Plan, if in place, for a specified geographical area.

• · Investment Zone plans must demonstrate how interventions are targeted to specific needs and understand the local labour market.

Planning interventions

• Please set out how planning interventions will address constraints or unrealised opportunities, and contribute to the desired eventual outcomes of the IZ programme? (500 words)
• Places must set out a credible and ambitious planning offer to accelerate the development necessary to support the cluster. Places must include a single point of contact for investors to support proactive and constructive engagement on planning matters. Where places have pursued planning interventions, they should set out how these interventions:
  • directly/indirectly link to the planning vision set out at Gateway 2
  • how the interventions have supported development to bring forward the Investment Zones ambitions
  • how this utilises or maximises existing strengths of the sector and the knowledge anchor
  • how planning interventions can help to realise opportunities such as access to work, spill over benefits and attractiveness to Investors
  • align with wider local or national infrastructure projects
• Places must include planning interventions which are credible and support the acceleration or additional development to support the Investment Zone.

Off-menu interventions

• Where used - how will other bespoke interventions address constraints or unrealised opportunities, and contribute to the desired eventual outcomes of the Investment Zone programme? (500 words)
• Places must provide the following details associated with any bespoke interventions they wish to pursue:
  • what the intervention will do
  • why it is important to address constraints or unrealised opportunities within the Investment Zone
  • why these opportunities cannot be addressed with other listed interventions
  • why the intervention delivers VFM, ensuring appropriate and additionality displacement managed
  • the outputs and outcomes they want to deliver
  • how the intervention will align with the theory of change

Places should include in the excel in the same format as on-menu interventions.

• If places cannot provide the following details for bespoke interventions, they will not be taken forward. Government will consider if they are appropriate to resolve the challenges described. Places will need to show clearly articulated reasoning for the need for the intervention, and the reason that this cannot be met by other interventions in the standard policy menu. The effectiveness of this intervention will need to be clearly evidenced, drawing on previous examples and academic evidence where appropriate. The outputs and outcomes will need to be explicitly defined, and a place will need to show that these align with their logic model.

Tax site interventions Question 1

• You do not need to complete if you have not chosen to take forward tax incentives. Where used – how will tax sites address constraints or unrealised opportunities, and contribute to the desired eventual outcomes of the IZ programme? (500 words)
• Please outline this, including why the tax reliefs are necessary, using the best available data and analysis for each proposed site. Places should set out tax sites which are coherently linked to their overall Investment Zone proposal and that support new and additional private sector investment that is linked directly to their target cluster. Places must provide details of the site and its access to necessary infrastructure, for example, transport (both for potential workforce and freight), utilities, digital and housing. Places should consider if these can be resolved in the funding timeline. Places must provide any information they have on the additional value they anticipate being created by the tax site, in terms of:
  • additional jobs
  • additional capital investment
  • amount of money spent on the construction of new commercial buildings or existing buildings (and ideally their size) that will be expanded within the Investment Zone
• Places must:
  • clearly explain why the tax sites help to support the opportunities and address the challenges described at Gateway 2
  • demonstrate a clear and deliverable vision for the tax site, with a high degree of private sector interest
  • not create pressures on infrastructure route to resolution
  • provide information setting out the outputs and outcomes derived from tax sites, as per the excel format

Tax site interventions Question 2

• You do not need to complete if you have not chosen to take forward tax incentives. How will the tax offer will help to ensure additional development comes forward on the proposed site(s), that would otherwise not have? (500 words)
• When answering this question, places must consider how the tax offer will help to address the current market failure of each of their proposed site by supporting additional development or helping to accelerate potential development. Places should outline how they are going to account for and mitigate any negative effects of the tax site proposal, including displacement and more general UK and international trade and investment effects. Places can present this in a variety of ways, including:
  • viability gap analysis for each site
  • description of persistent challenges/difficulties the site has experienced and how the tax offer will help to address those, with supporting quantitative evidence
  • commercial modelling or internal rates of return
• Places must set out how the Investment Zone proposal is addressing a current market failure around development on the specific tax site(s).

Tax site interventions Question 3

• You do not need to complete if you have not chosen to take forward tax incentives. How will the proposed tax site be utilised within the next five years? (500 words)
• Places should provide a list of the businesses and companies who are interested in the site and intel. Answers to this question should address:
  • a list of businesses, investments, and organisations places hope to attract to the tax site, the scale of potential investment and the confidence in attracting them
  • how places envisage each tax relief available as part the Investment Zones offer to be used in each tax site over time, noting the programme’s five-year length
  • based on that, understanding of when the earliest investment eligible for tax relief may happen

Use this section to describe what work/if any needs to be done to prepare the site, for example, connecting it to utilities, transport infrastructure or land remediation.

• Places must demonstrate a clear and deliverable vision for the tax site, with a high degree of private sector interest. Places must describe the breakdown of the money saved that they expect the tax reliefs to amount to.

Tax site interventions Question 4

• You do not need to complete if you have not chosen to take forward tax incentives. How does your tax site proposal meet the underdevelopment criteria? (You must include final full postcodes with this) (500 words)
• Places should describe in detail any existing building and activity on proposed tax sites, including existing employment and already planned investment. If the site proposal includes any empty land, places should provide an estimate of the proportion of the proposed site that is currently empty land.
• Please provide full postcodes (where part of a postcode is proposed to be included, please highlight this and provide an estimate for the proportion of that postcode area within your tax site proposal).

Business Rates Retention sites

• You do not need to complete if you have not chosen to take forward Business Rates Retention incentives. Where used – how will BRR measures that form part of the Investment Zone policy address constraints or unrealised opportunities to cluster growth, and contribute to the desired eventual outcomes of the Investment Zone programme? (500 words)
• Places should consider BRR site guidance that has been issued alongside these criteria, as they consider where to place any potential tax sites. Places should use the best available data and analysis for each proposed site to complete this section and should use this section to describe what work (if any) needs to be done to prepare the site, for example, connecting it to utilities, transport infrastructure or land remediation. Places should explain the interaction between it and any proposed tax sites. If places have proposed tax sites and business rates retentions that are not co-terminus, we would expect a clear explanation about the rationale behind that and how places expect to attract businesses onto the site.
• Places will not proceed unless they clearly explain why the BRR site helps to support the opportunities and address the challenges described at Gateway 2. Places must demonstrate a clear and deliverable vision for the BRR site. Sites will not be taken forward which create pressures on infrastructure without clear route to resolution.

Business Rates Retention sites interventions

• You do not need to complete if you have not chosen to take forward Business Rates Retention incentives. How will you ensure development comes forward on your proposed BRR site? (500 words)
• When answering this question, places must set out how they will bring forward development on the proposed BRR site.
• This should include a description of persistent challenges/difficulties the site has experienced and how the business rates retention, wider Investment Zone offer, or other policy interventions will help to address those.
• Places must set out how they will bring forward development on the BRR site, setting out how they will use Investment Zone interventions or wider interventions to enable this.

Business Rates Retention Question 1

• You do not need to complete if you have not chosen to take forward Business Rates Retention incentives. How will the proposed BRR site be utilised within the next 25 years? (500 words)
• Places should outline a financial forecast of when they expect business rates income to increase over the agreed baseline and how they expect this to increase thereafter. Places should outline if, and how, they intend to borrow against these revenues. Places should provide a list of businesses, investments, and organisations they hope to attract to the BRR site, the scale of potential investment and their confidence in attracting them. Places must provide any information they have on the additional value they anticipate being created by reinvest of the BRR funds, in terms of:
  • additional jobs
  • additional capital investment
  • amount of money spent on the construction of new commercial buildings or existing buildings (and ideally their size) that will be expanded within the Investment Zone
• Places must describe the breakdown of the money saved that they expect the business rates retention to raise over the next 25 years. They will only progress if HMG considers this to be a realistic and deliverable amount.

Business Rates Retention Question 2

• You do not need to complete if you have not chosen to take forward Business Rates Retention incentives. Please describe the reinvestment strategy for rates retained and how it will support the Investment Zone. (500 words)
• You should set out clearly:
  • how the reinvestment strategy for rates retention described at this gateway aligns with the opportunities and challenges describe at Gateway 2
  • how the proposed approach will allow the Investment Zone accountable body to be accountable for the use of public funds
  • how decisions over the reinvestment rates will be taken
• HMG will not take forward rates retention without clearly setting out how they will be reinvested to support the Investment Zone’s objectives. HMG will consider if the rates retention reinvestment strategy described is credible and ambitious. HMG will consider if the answer provided helps to meaningfully address the challenges set out at Gateway 2 and relate to the governance described at Gateway 3.

Business Rates Retention Question 3

• You do not need to complete if you have not chosen to take forward Business Rates Retention incentives. Do your proposed BRR sites overlap with other increased BRR arrangements like Freeports or Enterprise Zones - Yes/No
• This is a Yes/No question. Sites can exist within existing 100% BRR arrangements spanning constituent authorities in WoE CA, GMCA, WMCA and Liverpool CA.
• Sites which propose an overlap will not be taken forward by HMG.

Business Rates Retention Question 4

• You do not need to complete if you have not chosen to take forward Business Rates Retention incentives. How does your BRR site proposal meet the underdevelopment criteria, you must include final full postcodes with this? (500 words)
• Places should describe in detail any existing building and activity on proposed BRR sites, including existing employment and already planned investment. Places should provide full postcodes (where part of a postcode is proposed to be included, this should be highlighted, and an estimate provided for the proportion of that postcode area within your BRR site proposal).
• Sites which do not meet the underdeveloped criteria will not be taken forward. Sites which do not provide full postcodes will not be taken forward.

PSED considerations

• Places should set out the consideration of their public sector equality duty in the design of their Investment Zone proposal.
• Places will be expected to set out the consideration of their public sector equality duty in the design of their proposals Interventions and in the implementation their investment plan, including in the selection of projects.
• Proposals which do not set out their approach to compliance with PSED will be rejected by HMG.

NZ50 climate and environmental considerations

• How will the location of your planned interventions interact with the surrounding environment? (250 words)
• Places should use this question to set out how the location of their planned interventions interacts with the surrounding environment, for example, any flood risks, potential detriment to wildlife rich habitats, water quality, biodiversity? Places should use this question to explain how they have accounted for this in their choice of locations, such as referencing:
  • flood risks
  • potential detriment to wildlife rich habitats
  • water quality, biodiversity
• Government will consider the proposed Investment Zone’s interaction with existing activities and places should provide evidence of how the Investment Zone helps to improve them, or if not, manage and mitigate negative impacts.

NZ50 climate and environmental considerations

• Demonstrate how they will support the UK’s legal commitments to cut greenhouse gas emissions to net zero by 2050 and achievement of the new legally binding environmental targets and be resilient to the effects of climate change. (500 words)
• A qualitative description of how the proposals will support legally binding targets on biodiversity, water quality, air quality and waste. This could include reference to:
  • overall carbon reduction of the site and / or wider impact area
  • Green Jobs created
  • buildings decarbonised if regenerating existing site (or low carbon build standard if new build)
  • amount of renewable energy produced
• Places should demonstrate how they will support the UK’s legal commitments to cut greenhouse gas emissions to net zero by 2050, legally binding environmental targets and how they have considered the need for climate resilience.

Gateway 5: Delivery

Criteria at this stage will ensure places demonstrate they are able to deliver the Investment Zone and effectively manage the risk present in delivery. Consequently, we will also ask for a further update on delivery progress and planning from places before the end of the financial year 2023/24 providing more exact details, ahead of releasing funding for 2024/25.

Delivery Question

• What is the delivery structure and its associated timelines? (500 words and space for one file)
• Accurately explains the delivery structure and associated timelines. We would expect these timelines to be high level and subject to further refinement and detail ahead of release of funding in 24/25. This must include one of the following products:
  • Gannt chart
  • timeline
  • alternative graphical representation of the timeline for delivery

If places have chosen to take forward the tax offer, they must also outline how specifically they are planning on delivering their tax site proposal? If they have chosen to take forward Business Rate Retention sites which are not co-terminus with tax sites, they must also specifically outline how they are planning on delivering this proposal?

• HMG would consider the proposed delivery structure to check if convincing and realistic. HMG would base this judgement on previous track record of delivery and wider intel on the delivery of the authority. This would be linked to capabilities of lower tier local authorities, depending on how much interventions engaged their responsibilities, for example, if local tier authorities were responsible for overseeing business rates retention. This must include one of the following products:
  • Gannt chart
  • timeline
  • graphical representation

Governance Question 1

• What risks are there to effective delivery of the interventions you have proposed? (500 words)
• Places should set out how what risks they have initially identified as they have considered the sector they have chosen to focus on and the geography they have decided to implement interventions across.
• This must include a description of any initial risks you have identified, which for example could include:
  • risks to realising anticipated benefits linked to tax sites and business rate retention sites
  • risks from commissioning and delivering chosen funding interventions
  • wider risks linked to both local and national interdependencies
• HMG will consider this section on the basis that the risks set out by a place seem to be rational and well considered; places who not set these out will not move past this gateway. HMG will look to risks if places have identified risks appropriately at this stage and considered them in the detail required to propose effective. HMG will consider wider national strategies and intel to consider if the risks are properly considering wider interdependencies, for example, national policy and strategies.

Governance Question 2

• How will you manage these risks and mitigate them, what contingency plans do you propose? (500 words)
• Places should present their strategy for risk management, at a minimum:
  • setting out the approach for mitigating these risks and managing the emergence of other risks.
• HMG would consider risks and if the mitigations set out are achievable and detailed. HMG’s judgement would consider if the proposed mitigations of risks were sufficient based on factors including:
  • the effect of wider national policy
  • how the risks relate to challenges and opportunities described at Gateways 2 and 4
  • whether the risk management approach described can be delivered by the governance structures set out at Gateway 3
  • the overall approach to accountability and assurance for risk purposes

Governance Question 3

• Confirm that they will collate data to provide central government with the information required to carry out national evaluation. (Yes/No)
• Yes/No
• DLUHC will provide conditions and standards for places to collect and report data to support national evaluation of Investment Zones. Technical guidance will set out the M&E requirements of the programme.

Annex B: Sector and economic geography template

Please note, this is an illustrative version of the pro forma document used by places to complete their Sector and Geography Gateway.

Information to complete this document

At this stage of the co-development process, we want to work together to choose the priority sector(s) the Investment Zone will support, the cluster you will focus on developing, and how this could support Investment Zone objectives. You should also consider how you might locate and use spatially specific interventions such as tax sites and Business Rate Retention (BRR) sites in your proposed Investment Zone.

You will be required to provide the detail requested at each question to proceed. Please refer to the draft criteria provided as you complete these questions.

We have provided word counts throughout the document - in the interest of proportionality, you should not exceed these word counts. We expect you may have developed much of the information required to answer these questions as part of your wider economic strategies and encourage you to draw on existing evidence base wherever possible.

The criteria set out the expectations for the detail of your response at each question, including the information/evidence it must contain. It also highlights potential examples of the types of information you should include where this would benefit the answer provided. To be clear, we do not expect you to provide information against all the examples listed in the criteria. You should be guided by the nature and focus of your proposal.

The responses to questions at this gateway should build upon the initial options discussed at the Investment Zone inception meeting and further develop that proposition.

Please note that information submitted at this point will be shared with other government departments (OGDs) as part of the co-development process to help DLUHC appraise proposals and consider how they could be strengthened. Advice from other government departments could result in HMG requiring you to revise and/or update answers during this process. We will consider proposals against:

• government understanding of local sectoral strengths, clusters, and specific challenges/opportunities
• alignment with central government policy, strategies and investment
• opportunities to go further or consider if the proposed options are feasible to address the issues
• opportunities to drive additional private sector investment and levelling up

We do not expect the answers here to be final, and places will have the opportunity to update and iterate returns as they advance through the Investment Zone gateway.

The guidance from the criteria document has been included in each of the text boxes below, please remove this when returning your first draft of this document.

We have set an expectation this should be returned, finalised or in draft form, by 24 May for HMG to review. We will accept submissions prior to this date. If you are not able to submit a copy in draft form by 24 May, can you please liaise with your place lead.

We will advise ministers as proposals develop, to allow them to consider the whole Investment Zone programme as it develops, and will provide feedback to places at regular intervals. Please bear in mind we would consider engaging ministers formally at the start of summer recess with an update on discussions and setting out if we consider agreement unlikely in good time ahead of the financial year 2024/25.

Questions

You must complete the following questions:

• 1
• 2
• 3
• 4
• 7
• 8
• 9
• 10
• 11

Please only complete 5 if you intend to propose tax sites. If you do not wish to propose tax sites, please simply include N/A in bold in that box. If you propose tax sites, you will be responsible for attracting investment to the sites and should work with landowners to ensure that investment on the site is appropriate and can demonstrably support growth of the cluster and the wider objectives of the Investment Zone. You must be able to demonstrate an ability to ensure this, for example, plans for MoUs with relevant landowners.

Please only complete 6 if you intend to propose BRR sites. If you do not wish to propose BRR sites, please simply include N/A in bold in that box.  If you propose BRR sites, you must work with the relevant billing authorities to ensure that any growth in business rates relative to the agreed baseline is used to support the growth of their sectoral cluster, that this is guided by a clear strategy for reinvestment, and that decisions about the use of retained business rates are taken in an appropriate, transparent way that enables you to remain responsible to Government for the overall IZ programme.

We have split the questions into thematic sections to help guide thinking and set them out in a structured way, in line with the programme’s Theory of Change. However, please do consider these questions in the round and how this gateway will influence the development of your proposal through future gateways. As we co-develop these proposals and proceed through future gateways, we expect that previous templates might need to be iterated to reflect ongoing and evolving discussions. As set out in correspondence to date, government will reserve the right to not take forward proposals if agreement cannot be reached and proposals will only be formally signed off in full at the conclusion of the process.

Sector and cluster

At this gateway, places are expected to identify the priority sector(s) they intend to support through their Investment Zone, the nature and geography of the existing target cluster, and the key challenges and opportunities IZ tools could address.

These questions set out the evidence a place will need to provide if it wishes to pursue a focus on more than one priority sector, to support a coherent economic cluster.

Question 1: What priority sector will your Investment Zone support and why is it a strength?

Please tick one of the boxes below. If you are proposing more than one priority sector, subject to evidence that these sectors intersect as part of a coherent economic cluster, please select all the relevant sectors:

• ​​Advanced Manufacturing
• ​​Creative Industries
• ​Digital and Tech
• ​​Green Industries
• ​​Life Sciences

Your answer should not exceed 500 words. Places must set out the priority sector(s) they intend to support through their Investment Zone, considered against other options, with evidence to demonstrate that it is a significant local strength.

Where places are proposing to support sectors that overlap within a cluster, they must explain and provide evidence on how the intersecting sectors form part of a single coherent economic cluster, for example:

• economic linkages demonstrated by shared supply chains, specialist inputs or technologies to support the priority sector(s)
• common skills need
• physical co-location between companies in different sectors

Places must:

• provide a qualitative exposition of the nature and strength of sector(s) in the region, including the existing business base from SMEs through to large companies and wider supply chains
• provide evidence of an existing innovation base, for example, universities, research & technology organisations, public sector research facilities with strengths in the priority sector
• provide an overview of the scale of opportunity and potential for future growth. For example, this could describe the high value-added activities the sector produces, evidence of growing demanded for the sector’s goods and/or services

The qualitative description must be complemented with the following local data:

• current number and growth rate of companies in the sector(s), over the last 10 years, in the region
• current and growth in employment in sector(s), over the last 10 years, in the region. Size of companies in sector,  with discussion where not exact
• Total revenue generated by the sector(s) for the region, over the last 10 years, in the region

Question 2: Please describe the existing economic cluster your Investment Zone will support and strengths of the wider eco-system?

Your answer should not exceed 500 words.

We expect places to provide a credible description of the cluster, its wider actors and economic geography.  Places must consider how the cluster aligns with wider HMG and local priorities and investments.

As part of this, you should include specific discussion on the location referencing the type of detail below:

• cluster supply chains
• knowledge anchors
• location of workers
• how the cluster aligns with wider priorities and central / local investments

This should include quantitative information, for example:

• commercial and/or industrial space created or developed, and any land redeveloped
• types of workers employed by companies in the intended cluster
• current average real wages in intended cluster, for low and high skilled workers
• related research to cluster in partner research institutions
• current research partnerships related to cluster in partner research institutions
• current patents generated by companies and research institutions related to the cluster

Question 3: What are the constraints or unrealised opportunities that if addressed could boost the cluster’s growth potential?

Your answer should not exceed 500 words.

This must include consideration of at least one of the following, linked to the sector and cluster:

• constraints to or unrealised opportunities for human capital – for example, skills available and the local labour market
• constraints to or unrealised opportunities for physical capital – for example, access to appropriate specialist premises, transport infrastructure and need for new plant and equipment
• constraints to or unrealised opportunities for intangible capital – for example, opportunities to develop new technologies, equipment, processes, or supply chains
• constraints to or unrealised opportunities for financial capital – for example, availability of FDI, bank finance, private equity finance

Qualitative evidence could include case studies where appropriate.

Quantitative evidence must be provided, this must support the constraint(s) or unrealised opportunit(y/ies) identified. For example, these could include:

• current skills mix in a place
• evidence of a skills mismatch or shortfall
• research partnerships per researcher
• local vs national research partnership ratios
• evidence of challenges or potential opportunities for raising finance, including FDI
• market failures associated with brownfield land / availability of sufficient commercially viable land

Geography

The questions below ask you to identify the proposed spatial focus of your Investment Zone intervention and set out how this will support agglomeration and Levelling Up. It also asks for information on potential tax and business rate retention sites to understand how they align with the existing and proposed spatial focus.

You should consider how the package of interventions you are beginning to design will come together across a coherent geography to be more than the sum of their parts. This might mean targeting specific support to increase R&D and mechanisms to encourage spinouts around the existing cluster of companies or core research assets, and then using interventions around local infrastructure and skills to ensure local communities in the surrounding area can benefit. You should think carefully about how this expresses itself geographically.

As you determine the spatial focus, you should consider how any proposed sites, be they tax, BRR, or proposed sites for planning and bringing forward development, link to that economic geography. For example, where you are proposing tax levers you could set out how they are supporting agglomeration by encouraging businesses to cluster together around research institutions in your city centres.

Question 4: What is the proposed spatial focus of your Investment Zone?

Your answer should not exceed 500 words.

Answers must describe the proposed spatial focus of the Investment Zone, with reference to the cluster ecosystem and barriers/opportunities.

They must also set out how this will support:

• Agglomeration
  • The collaboration of businesses in exchanging new ideas, best practice and building local supply chains
  • Matching businesses to workers with the right skills and increasing opportunities for local people
  • Encouraging the use of shared resources, such as facilities and lab space, to meet the needs of businesses
  • Transport connectivity
• Levelling Up
  • Places must provide credible evidence that their planned spatial focus can reduce levelling up need
  • This should be linked to quantitative information such as, with consideration of location
  • Under skilled workers (Number of qualifications and at what NVQ level)
  • Level 3+ equivalent skills in the adult population
  • Median gross weekly pay
  • Healthy life expectancy

Question 5: How many tax sites are you proposing, if any, and where are you planning to locate those tax sites?

If proposing more than one tax site, please repeat these as separate lists. For each proposed tax site, please provide the following details as a list as per below. Each postcode must be separated by semicolons. For example, AA1 1AA; AA2 2AB; AA1 2AC.

Alongside any postcodes, please provide maps as per the tax guidance – all maps should be Ordnance Survey, preferably in a GeoJSON or ESRI shapefile which shows the boundary of each site, within your combined authority, proposed combined authority or accountable authority. Please liaise with your relevant place lead if that format is not possible.

• Tax Site 1 (Insert site name):
  • its proposed ha
  • all postcodes that will be included across your tax sites
  • how the proposed tax site(s) meet the underdevelopment criteria
  • the landowners and the planning status of the site
• Tax Site 2 (Insert site name):
  • its proposed ha
  • all postcodes that will be included across your tax sites
  • how the proposed tax site(s) meet the underdevelopment criteria
  • the landowners and the planning status of the site
• Tax Site 3 (Insert site name):
  • its proposed ha
  • all postcodes that will be included across your tax sites
  • how the proposed tax site(s) meet the underdevelopment criteria
  • the landowners and the planning status of the site

Your answer should not exceed 500 words.

Please set out:

• how the each of the proposed tax site(s) meet the underdevelopment criteria
• whether landowners and other key stakeholders are on board with your Investment Zone proposal and how you will secure necessary agreements.
• an early description of why the tax site(s) is needed to support your Investment Zone proposal

We reserve the right to request further information as the proposal progresses and in advance of designation/release of funding.

Please answer the question with specifics relating to each tax site. Please refer to the Investment Zones policy prospectus and separate tax guidance around the details.

Question 6: How many BRR sites are you proposing, if any, and where are you planning to locate those sites?

For each proposed BRR site, please provide the following details as a list as per below. Each postcode must be separated by semicolons. For example, AA1 1AA; AA2 2AB; AA1 2AC.

Alongside any postcodes, please provide maps as per the BRR guidance – all maps should be Ordnance Survey maps, preferably in a GeoJSON or ESRI shapefile which shows the boundary of each site, within your combined authority, proposed combined authority or accountable authority. Please liaise with your relevant place lead if that format is not possible.

• BRR Site 1 (Insert site name):
  • its proposed ha
  • how the proposed BRR site(s) meet the criteria
  • all postcodes that will be included across your BRR sites.  Where part of a postcode is to be included, please highlight this and provide an estimate of the proportion of that postcode area within your BRR site proposal
  • the landowners and the planning status of the site.

If proposing more than one BRR site, please repeat these as three separate lists.

Your answer should not exceed 500 words. Please answer the question with specifics relating to each tax site:

• how the/both proposed BRR site(s) meet the underdevelopment criteria
• an early description of why the BRR site(s) is needed to support your Investment Zone proposal

UKG will also consider how the proposed planning offer relates to the business rates offer, given the value of business rates retention should increase with accelerated development, proposals should demonstrate how BRR sites can help support development either on the proposed BRR site or in other parts of the Investment Zone geography.

The interaction between BRR and any proposed tax sites: if you have proposed tax sites and business rates retentions that are not co-terminus, we would expect a clear explanation about why the rationale behind that and how you expect to attract businesses onto the site.

Please refer to the Investment Zones policy prospectus and separate BRR guidance when completing this question.

Planning

Proposals must include a strong commitment to proactive planning. Planning should be an opportunity for, not a barrier to, accelerating and securing the development necessary to support the growth of the target cluster. Areas should demonstrate that they have credible and ambitious planning solutions, which ensure development can happen quickly and maximises the Investment Zone’s opportunities. If you want to arrange a meeting with DLUHC planners to discuss planning tools, please reach out to your place lead.

Question 7: How will your planning offer help accelerate the progress of the Investment Zone proposal?

Your answer should not exceed 500 words.

The policy prospectus set out that Investment Zones must have a credible and ambitious planning offer to accelerate development needed to support the target cluster.

Places should set out at this stage:

• how planning proposal/offer supports cluster growth
• how planning proposals will accelerate existing development or bring forward new development. Please provide detail on how you intend to do this
• where planning is likely to take place, please include postcodes and maps
• the LPAs who will be responsible for planning decisions and what LAs it will cover
• key known planning issues (for example, infrastructure requirements, environmental constraints, land ownership challenges)

Places should also provide details regarding landowners and existing master planning status. Places should work to ensure better join up between strategic land use planning and transport planning, at the earliest stages of the funding and planning process.

Private Sector Investment and Support

The policy prospectus set out the programme’s intention to grow the private sector and ensure Investment Zone proposals were of a scale required to leverage in private sector investment.  This question is focused on understanding:

• private sector support for the overall proposal
• existing and future investment opportunities
• scope to attract additional or expanding businesses

At Gateway 4, we will ask about your plans to leverage in private sector funding, so please consider that as you answer this question.

Question 8: How will the Investment Zone proposal help to secure additional private investment?

Your answer should not exceed 500 words.

Places should set out how the cluster they are supporting has significant current strengths to build on, evidence of commercial interest and upcoming potential commercial opportunities and projects to attract investment.

You should reference any key upcoming investment opportunities, including list of businesses, anchor tenants and emerging intel on the scale of potential investment. This should include any information you can provide on potential timings of investment, for example, when an organisation might make first spend, and when it might then move into an area.

Places should consider how they will:

• foster internationally competitive companies
• generate new technologies for which there would be widespread demand (both domestically and internationally)
• attract significant domestic private or FDI investment, including anchor tenants. You should set out how you will mitigate displacement risk

Places should include reference to potential indicators, such as:

• capital flow into the cluster/sector in the region
• the exportable products of the sector/cluster
• does the sector/cluster have a track record of producing exportable intellectual property

Strategic alignment

Investment Zones sit within a wider set of interventions both from central and local government.  This ranges from local initiatives, such as the work of Jobcentre Plus, local skills improvement plans and local business/sector initiatives, to national strategies such as the UK Science and Technology Framework, the UK’s technology strategy, and major planned infrastructure. Please use the answer to this question to consider how your Investment Zone proposal can align with and amplify existing local and national strategies to support the programme’s aims wherever possible.

Places should also, throughout the design and delivery of their Investment Zone proposal, ensure that is done in a way to ensure additionality.

Question 9: How will the Investment Zone interact with other live policy interventions?

Your answer should not exceed 250 words. You must include evidence of how you have taken account of existing related policy interventions across the area when choosing the geographic location for interventions.

You must provide a qualitative discussion of complementarities and steps to support additionality and mitigate risks of displacement.

If you have a Freeport in your CA or proposed CA geography you answer must include reference to how you will manage that relationship at this stage.

Objectives

Investment Zones are about boosting productivity, providing more high priority jobs in places and levelling up the economy. As you answer this question, you should consider the specific objectives you intend to deliver through an Investment Zone and how these will contribute towards the overall programmes objectives as set out in the prospectus:

• growing strengths in national priority sectors
• addressing economic disparities that persist between and within regions

You should set out how your IZ will:

• boost productivity in the FEA
• increased real earnings for high and low skilled workers within the FEA
• increased international competitiveness of companies within the cluster
• internationally demanded new technologies

You should begin to consider how the objectives you described at this stage will influence the interventions you pursue and the outputs/outcomes you will focus on delivering.

Question 10: Taken together, how will the sectoral focus and geography of IZ intervention support the overall Investment Zone programme objectives?

Your answer should not exceed 500 words. We expect places to provide a credible narrative around how the cluster choice is appropriate to support the intended programme objectives.

Places should also include available quantitative data to underline how supporting the cluster can support the objectives and make sure they support additionality.

For example:

• current average earnings in the intended cluster
• commercial and/or industrial space created or developed, and any land redeveloped
• types of workers employed by companies in the intended cluster
• current average real wages in intended cluster, for low and high skilled workers
• related researchers to cluster in partner research institutions
• current research partnerships related to cluster in partner research institutions
• current patents generated by companies and research institutions related to the cluster

Research institution

Investment Zone proposals must be co-designed and to ensure that a relevant local research institution must co-sign the final proposal.

Each Investment Zone is expected to ensure strong collaboration between local government, industry, and research institutions. As you consider which of your research institutions (it can be more than one) will provide sign off, please think about how your Investment Zone proposal can be used as an opportunity to leverage the role of universities and local research institutions.

This could include nurturing and supporting local talent, building knowledge networks, collaborating on research commercialisation, and supporting scaleup and adoption of promising innovations following spinout to raise the productive potential of the whole area. We envisage this will mean establishing and leveraging partnerships with research institutions in the same functional economic area. However, we are open to additional collaborations over a longer distance.

Question 11: Considering the focus of your Investment Zone which research institution(s) will co-sign your Investment Zone proposal?

Your answer should not exceed 250 words.

You must identify a/or research institution(s) to be a co-signatory of the document, you should set out why they are appropriate to do so based on your priority sector, the needs of your cluster and wider area.

Please provide evidence that the relevant institution has been engaged and content to co-sign the proposal.

Annex C: Supplementary guidance – Business Rates Retention offer in Investment Zones in England

The BRR offer in Investment Zones

As part of the overall programme of interventions, Government is offering accountable bodies the ability to identify up to two sites within the zone within which the relevant billing authority will be able to retain 100% of any future growth in business rates above an agreed baseline for 25 years from the point at which the site is designated.

In drawing up proposals for Investment Zones, the accountable body will need to demonstrate how business rates retention will:

• provide for local economic growth within the region
• support existing local strategies with a focus on growth
• support the priority sector within the Investment Zone
• represent value for money for the government

Proposed sites must be underdeveloped (see below) and span no more than 600 hectare (ha) split over one or two sites. Proposals must be put forward in collaboration with the billing authority who will continue to take operational responsibility for collecting additional retained rates. The billing authority and accountable body will need to work together to develop a strong reinvestment strategy for the revenue stream. UKG will assess applications for the use of the business rates retention offer on these criteria. The government reserves the right to reject sites based on cost, value for money and deliverability.

Criteria that BRR site proposals need to meet

Size and shape of BRR sites – any BRR sites in investment zones

• Sites should be clearly delineated on a map with a single continuous boundary.
• Sites can have uneven boundaries, if that helps capture promising areas while cutting out areas that are more developed, so long as those sites are justifiably single and individual.
• If one site is being proposed this may be no greater than 600 hectares, alternatively two sites can be proposed of around 300 hectares each. Government will consider submissions that make an economic case for two sites that deviate from the 300 hectares guideline, for example one of 200 hectares and another of 400 hectares, but the total area of the individual BRR sites combined within the Investment Zone must not exceed 600 hectares. Those that do put forward proposals that exceed 600 hectares will be automatically dismissed.
• Sites do not have to be a single piece of land – for example, a single site could be two pieces of land split by a road. If there is no portion of land connecting the sites – for example, if they are split by a river, or residential property – we would consider these two separate sites unless very clear geographic and economic interconnection can be demonstrated (for example travel between them is plausible).
• The central offer (see above) assumes that each BRR site can be delivered through a single designated area, for example, an area enclosed within a single continuous boundary within a single billing authority. Where there is strong economic rationale and local appetite to work across billing authority boundaries, HMG will consider more complex arrangements requiring the introduction of multiple designated areas to deliver a single contiguous business rates retention site that spans one or more local authority boundary. The accountable body will need to clearly state how many billing authority areas are included within each proposed site. They will also need to demonstrate that all billing authorities have consented to administrative arrangements and agreed to put in place local MOUs to ensure all additional retained business rates are reinvested in the Investment Zone objectives. HMG reserves the right to reject sites – including more complex arrangements spanning multiple local authority boundaries – based on cost, deliverability, and value for money.
• Sites do not need to be fenced – but it should have clearly identifiable boundaries (for operational purposes) and be clearly delineated on a map provided as part of the application. Please see the map guidance (Annex A).
• Sites should not overlap with sites designated under schedule 7B to the Local Government Finance Act, for example, Enterprise Zones or Freeports. If there are overlaps, the Investment Zone arrangement cannot supersede previous arrangements and the prospective Investment Zone will need to explain how growth retained from the existing designation is to be used. This must include explanation of how original commitments about their use are to be honoured, and if they are not, a demonstration that beneficiaries of the existing designation have agreed to the proposed future arrangements.

BRR sites should be “underdeveloped” so that the BRR measures support areas with economic potential, rather than already economically successful sites

Under this broad, economic definition, empty land, brownfield land, under-utilised land with some construction and vacant premises are some examples of what might be considered “underdeveloped” so long as a good case is made. When justifying how their sites are “underdeveloped”, applicants should consider the following main criteria underpinning our definition:

• under-utilised: BRR sites should have sufficient viable but unoccupied physical space that is yet to be developed, is currently being developed or being used, to allow new or expanding businesses to construct, renovate, purchase or lease new premises in the BRR site
• potential investment growth: the accountable body should explain how Investment Zone status and the BRR site location will lead to additional investment by new and/or existing businesses in the BRR site(s) above current levels. The BRR site should relate to the priority sector either through the type of development coming forward, the location of the site, or the reinvestment strategy for retained rates. Where relevant this should include how the objectives of a place’s wider Investment Zone proposal such as agglomeration and additionality benefits, proposed new or accelerated development that avoids displacement, or infrastructure to support the diffusion of wider benefits from the cluster - are supported via additional retained rates
• interaction with tax sites: where both interventions are proposed, tax sites and BRR sites should be coterminous. Where tax and BRR sites are proposed to exist in separate locations within the IZ, we expect the accountable body to provide a clear explanation as to why this is preferable, rationale and supports the growth of the Investment Zone. If a place is not proposing tax sites, then government will consider BRR sites with a mixture of developed and undeveloped land, subject to a clear rationale, supporting development in the site and/or wider Investment Zone, directly driving the Investment Zone’s objectives. This is intended to reflect the urban reality of derelict brownfield sites which could be developed sitting next to existing businesses or research institutions in places
• only new business rates growth over an agreed baseline will be retained in full. Rates will continue to be collected by relevant billing authorities. The baseline will represent the annual amount of non-domestic rates, net of reliefs and accounting adjustments, that is collectible in the designated area immediately before the designated area comes into force. More details on the methodology to calculate the baseline will be provided to local authorities to assist the calculation of baselines

Scale and costs

• Ahead of the interventions gateway, government will expect to see a financial forecast estimating the growth in business rates income relative to the agreed baseline over the lifetime of the site. Government accepts that there is a level of uncertainty in any forecast and would welcome an estimate of this.
• Government reserves the right to reject BRR sites that we believe are (i) operationally unviable, (ii) do not offer value for money, and (iii) do not align or contribute to the economic potential or sectoral focus of the IZ site.
• As part of the BRR site assessment process outlined (see below) and through the provided template, Investment Zones should provide information to facilitate government’s appraisal.

Alignment with wider investment zone programme objectives

• Government requires assurance that proposed governance structures, agreements with stakeholders, risk assessments and delivery plans are robust and/or achievable before BRR sites are formally designated in legislation.
• This process will be separate to the BRR site assessment process and more detail will be communicated soon.

BRR site assessment and designation

The government will assess Investment Zone BRR site proposals against the criteria set out in this document to ensure that sites are compatible with those. As part of this assessment process, places will need to submit detailed information about their proposals, explaining how they satisfy the assessment criteria.

BRR proposals will be reviewed against the criteria, government reserves the right to reject or rework BRR sites based on cost and deliverability following review. Places will be invited to present their BRR site proposals teams to ensure that those are understood. Partially completed proposals will also be dismissed.

The government reserves the right to reject, or ask for modifications to, BRR sites that do not meet these requirements.

Government reserves the right to look across all proposals for business rate retention sites and reject sites based on cost and deliverability.

BRR sites which are approved will be designated in Regulations. Under Schedule 7B to the Local Government Finance Act 1988, there must be a separate designated area for each billing authority area. Regulations designating the BRR sites can only be made with effect from the start of a financial year. Exceptional arrangements to enact the BRR measures may be considered where suitable if the site cannot be designated in time for the start of the financial year in which the measures are planned to be introduced.

Map requirements

Standards for maps of BRR sites

All maps should be provided digitally and in single image files – each map should be contained within a single file. For example, if the Investment Zone has two proposed BRR sites then the following three map image files would need to be submitted:

• the combined authority/proposed combined authority boundaries
• each proposed BRR site including how these span billing authority boundaries where relevant

All maps should be Ordnance Survey maps.

Specifications

• Any indicators on the map should be created as vectors (not a flat image) including:
  • the border
  • the cross-hatching
  • any titles
  • any keys (for example, map scale, example of border)
• The underlying map itself can be a flat image (raster) with the vectors over the top (although if everything is vector it will make the file size smaller). More information on raster and vector graphics is available.
• The file should be submitted in PDF format.

Maps of Investment Zones

A titled dated map of the whole combined authority/proposed combined authority to a scale of at least 1:50,000 which shows the tax sites within. This should be free of any markers or data other than the title, date, and boundary demarcation (see ‘Boundaries and cross-hatching’ section below). You can find more information and examples of ordnance mapping in HM Land Registry plans guidance. You can review examples of published maps of UK Freeports which demonstrate these requirements.

Maps of BRR sites

A titled (including BRR site area name) and dated map for each BRR site to a scale of 1:1,250. This should be free of any markers or data other than the title, date and boundary demarcation (see below). You can find examples of published maps of Freeport tax sites drawn to 1:1,250 which demonstrate these requirements.

Boundaries and cross hatching

On the map of the Investment Zone, combined authority/proposed combined authority boundaries should be clearly demarcated using a solid blue line. The proposed tax sites should be clearly demarcated using a solid red line. Each tax site boundary must be filled with red cross hatching to clearly demarcate your proposed tax site areas. Examples of cross-hatching can be found in the published Freeport tax site maps. No other boundaries or markers should be included in this map.

On each BRR site map, the BRR site should be enclosed by a solid red boundary line. Each boundary must be filled with red cross-hatching to clearly demarcate your proposed BRR site areas. The boundary line will need to clearly delineate the boundaries of the BRR site to provide certainty. For the avoidance of doubt, the BRR site area should be the area up to the inside edge of the boundary line, and the boundary line itself will not constitute part of the area of the BRR site.

No other boundaries or markers should be included in this map (for example, alternative sites)

These maps will be given legal effect and will be relied upon when determining how much additional business rates above the agreed baseline should be retained for the period of 25 years. Therefore, it is essential that the boundary lines are accurately drawn so as not to exclude parts of land, buildings, and structures that you intend to form part of the BRR site.

Annex D: Supplementary guidance - tax offer in Investment Zones in England

Tax offer in Investment Zones

As part of the overall Investment Zone policy offer, government offers the following tax reliefs in designated tax sites within each Investment Zone:

• Stamp Duty Land Tax (SDLT): a full SDLT relief for land and buildings bought for commercial use or development for commercial purposes
• Business Rates: 100% relief from business rates on newly occupied business premises, and certain existing businesses where they expand in Investment Zone tax sites
• Enhanced Capital Allowance: 100% first year allowance for companies’ qualifying expenditure on plant and machinery assets for use in tax sites
• Enhanced Structures and Buildings Allowance: accelerated relief to allow businesses to reduce their taxable profits by 10% of the cost of qualifying non-residential investment per year, relieving 100% of their cost of structures and buildings over 10 years
• Employer National Insurance Contributions relief: zero-rate Employer NICs on salaries of any new employee working in the tax site for at least 60% of their time, on earnings up to £25,000 per year, with Employer NICs being charged at the usual rate above this level. This relief can be applied for up to 36 months per employee

Criteria that tax site proposals need to meet

Size and shape of tax sites

Any tax sites in Investment Zones:

• should be clearly delineated on a map – they should not be engineered to create a single site with the use of long and narrow lines (if there is an economic case for it there can be multiple sites, please see refer to tax site guidance)
• should encompass up to three individual sites, ideally of no more than 200 hectares each. We will consider submissions that make an economic case for an individual site that falls outside the 200 hectares guideline, but the total area of the individual sites within the Investment Zone must not exceed 600 hectares. Those that do put forward proposals that exceed 600 hectares will be automatically dismissed
• can have uneven boundaries, if that helps capture promising areas while cutting out areas that are more developed, so long as those sites are justifiably single and individual
• do not have to be a single piece of land – for example, a single site could be two pieces of land split by a road. We are open to one single site containing multiple parcels of land split by a road, protected area or geographic feature (such as a river) so long as the parcels within the land can reasonably be considered one single site because geographic and economic interconnection between the sites can be demonstrated (for example, travel between them is possible)
• do not all have to be owned by one owner – it can include multiple, separately owned parcels of land that all fall under the single delineated site. Applicants must provide evidence that landowners have signed up to the vision for the proposed tax site and will take appropriate steps to ensure development on the site aligns with the Investment Zones objectives and those of the wider Investment Zones policy
• do not need to be fenced – but it should have clearly identifiable boundaries (for enforcement purposes) and be clearly delineated on a map provided as part of the application. Please see the map guidance in Annex A.

Tax sites should be underdeveloped

Tax measures support areas with economic potential, including through the creation of new jobs, rather than already economically successful sites. The tax measures support areas with economic potential including through the creation of new jobs, rather than already economically successful sites. When justifying how their sites are “underdeveloped”, applicants should have regard to the following factors:

• job creation: applicants should evidence that their proposed tax site does not contain significant incumbent employment in relation to the local region. Applicants should then explain how tax site status and the associated tax reliefs will lead to additional employment in the Investment Zone tax site(s) by new and/or existing businesses above current level
• underutilisation: tax sites should have sufficient viable but unoccupied physical space that is yet to be developed or used to allow new or expanding businesses to construct, renovate, purchase, or lease new premises in the Investment Zone
• potential investment growth: applicants should explain how tax site status and the associated tax reliefs will lead to additional investment by new and/or existing businesses in the tax site(s) significantly above current levels
• examples of sites that may be considered “underdeveloped” are sites containing empty land, brownfield land, or underutilised land with some construction and vacant premises. Site proposals which present other cases for underdevelopment will be considered where underpinned by a strong evidence base
• sites will be considered on a case-by-case basis, and we reserve the right to reject or request amendments to sites that do not meet these criteria

Scale and costs

The policy offers flexibility in how many tax sites each area can make use of. Investment Zone areas can opt to use both the single 5-year tax offer and spend or only spending. Tax reliefs are offered over a maximum size of 600 hectares for one site or can be divided across a maximum of three 200-hectare sites. If a place chooses not to take up tax reliefs, they will have a larger spending envelope available to them. There is no flexibility on the tax reliefs available. Only the size/number of tax sites is scalable.

The estimated cost of 600 hectares of tax reliefs is £45 million, scaled down to £15 million for 200 hectares, to be deducted from the overall £80 million envelope available to an Investment Zone. As part of the tax site assessment process outlined in section 3 and through the provided criteria Investment Zones need to provide information about the value of their tax site proposals. We reserve the right to reject tax sites that we believe cost significantly more than the above estimate.

Alignment with wider Investment Zones programme objectives and subsidy control

Tax site proposals will also be assessed separately against how well they deliver against the Investment Zone objectives and sectoral focus. Proposals will need to justify why intervention is necessary and how any negative effects are accounted for and mitigated. Government will also require assurance that proposed governance structures, agreements with stakeholders, risk assessments and delivery plans are robust and/or achievable before tax sites are formally designated in legislation.

These areas will largely be assessed as part of DLUHC’s overall gateway assessment process, and we reserve the right to request additional information and assurances before tax sites are approved and designated.

The Investment Zones tax offer will be subject to the UK’s domestic and international subsidy control obligations. If needed, the government may, at an appropriate point, introduce further guidance for businesses claiming Investment Zones tax reliefs, to reflect those ongoing obligations and any changes to them. Businesses located in designated tax sites will need to fulfil any requirements in place to ensure compliance with those obligations in advance of, during, and after claiming relief.

Tax site assessment and designation

The government will assess Investment Zone tax site proposals against the criteria set out in this document and the gateway process guidance as set out in 2.4 above. Places will need to submit detailed information about their proposals, explaining how they satisfy all assessment criteria. The government reserves the right to reject or ask for modifications to tax sites that do not meet these criteria.

The tax site assessment process will be run in parallel with the gateway process. No formal approval of tax sites will be received until the overall Investment Zone proposal passes all gateways and is formally approved.

We anticipate that from submission, the tax site assessment process will usually take around 12 weeks, although we reserve the right to take longer if there are issues that need to be resolved. Places may be invited to present their tax site proposals to the HMT / HMRC assessment teams to ensure that they are understood.

Tax sites which are approved by HMT / HMRC will be designated in secondary legislation only when the Investment Zone proposal passes all gateways and receives final approval. Following their designation in legislation, sites will be formally activated at the point where legislation comes in force. All tax reliefs will be available from this point onwards.

Map requirements

Standards for maps of tax sites

All maps should be provided digitally and in single image files – each map should be contained within a single file. For example, if your Investment Zone has three proposed tax sites then the following four map image files would need to be submitted:

• the combined authority/proposed combined authority boundaries
• each proposed tax site

All maps should be Ordnance Survey maps.

Specifications

• any indicators on the map should be created as vectors (not a flat image) including:
  • the border
  • the cross-hatching
  • any titles
  • any keys (for example, map scale, example of border)
• the underlying map itself can be a flat image (raster) with the vectors over the top (although if everything is vector it will make the file size smaller). More information on raster and vector graphics is available
• the file should be submitted in PDF format

Maps of Investment Zones

A titled dated map of the whole combined authority/proposed combined authority to a scale of at least 1:50,000 which shows the tax sites within. This should be free of any markers or data other than the title, date, and boundary demarcation (see ‘Boundaries and cross-hatching’ section below). You can find more information and examples of ordnance mapping in HM Land Registry plans guidance. You can review examples of published maps of UK Freeports which demonstrate these requirements.

Maps of tax sites

A titled (including tax site area name) and dated map for each tax site to a scale of 1:1,250. This should be free of any markers or data other than the title, date and boundary demarcation (see ‘Boundaries and cross-hatching’ section below). You can find examples of published maps of Freeport tax sites drawn to 1:1,250 which demonstrate these requirements.

Boundaries and cross hatching

On the map of the Investment Zone, combined authority/proposed combined authority boundaries should be clearly demarcated using a solid blue line. The proposed tax sites should be clearly demarcated using a solid red line. Each Tax Site boundary must be filled with red cross hatching to clearly demarcate your proposed tax site areas. Examples of cross-hatching can be found in the published Freeport tax site maps. No other boundaries or markers should be included in this map.

On each tax site map, the tax site should be enclosed by a solid red boundary line. Each boundary must be filled with red cross-hatching to clearly demarcate your proposed tax site areas. The boundary line will need to clearly delineate the boundaries of the tax site to provide certainty. For the avoidance of doubt, the tax site area should be the area up to the inside edge of the boundary line, and the boundary line itself will not constitute part of the area of the tax site. No other boundaries or markers should be included in this map (for example, alternative sites).

These maps will be given legal effect and will be relied upon when determining whether the tax reliefs apply. Therefore, it is essential that the boundary lines are accurately drawn so as not to exclude parts of land, buildings, and structures that you intend to form part of the tax site. For example, if part of an existing building is not entirely included within the red boundary line, qualifying expenditure on that building will require apportioning for the purposes of claiming the enhanced structures and buildings allowance – this may be an unexpected result if the intention was to include the entirety of the building. Similar issues will arise in respect of the other tax reliefs where the intended boundaries are not clearly defined.

Guidance and documents on Freeports tax reliefs for reference

Stakeholders may find the following documents and guidance published in relation to the Freeports tax reliefs helpful. While these may not directly apply to Investment Zones, they will still be relevant. This is not tax advice and guidance may change / will be updated.

Designation of Tax Sites:

• section 113 of the Finance Act 2021

Stamp Duty Land Tax Relief

• section 61A of the Finance Act 2021
• Check if you can claim relief from Stamp Duty Land Tax in a Freeport tax site in England

Enhanced Capital Allowances

• part 2A of the Capital Allowances Act 2001
• Check if you can claim the enhanced capital allowance relief in UK Freeport tax sites

Structures & Buildings Allowances

• part 2 of the Capital Allowances Act 2001
• Check if you can claim enhanced structures and buildings allowance relief in UK Freeport tax sites

National Insurance Contributions

• National Insurance Contributions Act 2022
• Social Security Contributions (Freeports) Regulations 2022
• Check if you can claim National Insurance relief in UK Freeport tax sites

Business Rates

• Freeports business rates relief: local authority guidance

Annex E: Outcomes Framework

Skills

Skills objectives

Specialist sectoral-focused skills programme where the local labour market need, as identified by the Investment Zone, is not being met by existing programmes – for example, sector-specific bootcamps or funding for local join-up of the apprenticeships system across providers and businesses.

Investment Zone plans must demonstrate how interventions are targeted to specific needs and understand the local labour market. In England, when considering potential skills provision Investment should support the work of the designated employer

representative body responsible for the development and subsequent reviews of a Local Skills Improvement Plan for a specified geographical area.

This can be achieved through collaboration between:

• the designated ERB for the specified area in which the IZ cluster is located, including feeding sector skill needs into the Local Skills Improvement Plan process
• businesses and existing FE and HE providers including Institutes of Technology (IoT) licensed in that area
• the relevant combined authority or GLA, local authorities and Local Enterprise Partnership with their responsibilities for growth and skills. Proposals will need to align with devolution deals and should not exceed the MCA/trailblazer offers. Places should ensure that Local Skills Improvement Plans reflect both the current and future skills requirements of the cluster supported by an Investment Zone

Skills IZ interventions (A-E)

• A – Investment Zone funding used to complement LSIF-funded work and complement uses of other funding streams to deliver LSIP priorities
  • Example projects
    • capital investment for skills facilities identified in the LSIP
    • resource investment to design and commission skills programmes identified in the LSIP
  • Suggested Outputs
    • spend of LSIF funding shown to directly relate to LSIP priorities through monitoring of financial returns.
    • number of training courses available (and frequency & relevant sector)
    • number of trainees
  • Suggested Intermediate Outcomes - Human capital outcomes
    • increase in individuals in skilled employment / with level 3+ qualification
    • increase in learners enrolled in Sectoral Skills Assessments (SSAs) identified as a priority in LSIP
    • increase in number of employees with required employer skills
    • decrease in reported employer skills shortages
    • number of skills interventions graduates achieving a positive outcome after 6 months
• B - Funding to support local skills through training co-designed with employers, for example, sector-specific Skills Bootcamps. (Human Capital)
  • Example projects
    • local employer sponsored Skills Bootcamp
  • Suggested Outputs
    • number of training courses available (and frequency & relevant sector)
    • number of employers sponsoring a Skills Bootcamp
    • number of learners completing a Skills Bootcamp
  • Suggested Intermediate Outcomes - Human capital outcomes
    • increase in individuals in skilled employment / with level 3+ qualification
    • increase in learners enrolled in Sectoral Skills Assessments (SSAs) identified as a priority in LSIP
    • increase in number of employees with required employer skills
    • decrease in reported employer skills shortages
    • number of skills interventions graduates achieving a positive outcome after 6 months
• C - Funding to support entrepreneurial skills and networks (Human Capital)
  • Example projects
    • local level entrepreneurial skills training programme
  • Suggested Outputs
    • number of entrepreneurial skills networks established (and relevant sector)
    • number of entrepreneurs supported
  • Suggested Intermediate Outcomes - Human capital outcomes
    • increase in individuals in skilled employment / with level 3+ qualification
    • increase in learners enrolled in Sectoral Skills Assessments (SSAs) identified as a priority in LSIP
    • increase in number of employees with required employer skills
    • decrease in reported employer skills shortages
    • number of skills interventions graduates achieving a positive outcome after 6 months
• D - Retraining support, to support those into high knowledge sectors (Human Capital)
  • Example projects
    • retraining programme for existing workers into IZ specific role
  • Suggested Outputs
    • number of retraining courses available (and frequency & relevant sector)
    • number of retrainees
  • Suggested Intermediate Outcomes - Human capital outcomes
    • increase in individuals in skilled employment / with level 3+ qualification
    • increase in learners enrolled in Sectoral Skills Assessments (SSAs) identified as a priority in LSIP
    • increase in number of employees with required employer skills
    • decrease in reported employer skills shortages
    • number of skills interventions graduates achieving a positive outcome after 6 months
• E - Investment Zones will be able to propose localised apprenticeship incentives for employers linked to the sectoral focus of the Investment Zone, to stimulate demand for apprenticeships targeted to the specific skills and labour market needs of their Investment Zones. (Human Capital)**
  • Example projects
    • local apprenticeship incentive scheme
  • Suggested Outputs
    • number of employers claiming an incentive payment for a new apprentice
    • number of individuals starting an apprenticeship (and relevant sector)
  • Suggested Intermediate Outcomes - Human capital outcomes
    • increase in individuals in skilled employment / with level 3+ qualification
    • increase in learners enrolled in Sectoral Skills Assessments (SSAs) identified as a priority in LSIP
    • increase in number of employees with required employer skills
    • decrease in reported employer skills shortages
    • number of skills interventions graduates achieving a positive outcome after 6 months

Local infrastructure

Local infrastructure objectives

Specific local infrastructure improvement projects (for example, local transport schemes, digital infrastructure schemes) linked to specific business investment opportunities or to unlock specific sites, for example, schemes to improve connectivity to support the local labour market’s ability to benefit from and access the sector or land remediation for labs.

Further recommendations:

• previous examples include DfT’s Local Pinch Point Fund and National Productivity Investment Fund to reduce traffic congestion and encourage growth, including some of the then Enterprise Zones
• BSIP Guidance sets out what type of revenue interventions can be delivered for bus interventions
• working in conjunction ATE on scheme design to deliver schemes that meet cycle infrastructure design guidance (LTN 1/20)

Local infrastructure IZ interventions (A-H)

• A - Funding for new, or improvements to highways access linked to the emerging sectors including those that increase communities’ abilities to benefit from and support cluster growth (Physical Capital)
  • Example projects
    • local highway authorities provide additional capacity within their highway boundary, or purchased land, to widen roads to segregate different modes, improve junctions or add access spur roads to potential development sites for industry.
  • Suggested Outputs
    • number of highways access interventions added / improved
    • number of junctions added / improved
    • number of modes segregated
  • Suggested Intermediate Outcome - Physical capital outcomes
    • increase in connectivity of employment and education sites to areas of housing (access to employment)
    • improved local road capacity
    • increase in active travel and public transport mode share for relevant airports, seaports and rail stations
    • safer road junctions
    • increased investment in plants and machinery
    • increased floorspace unlocked because of intervention (by land use - commercial, lab space, factory, mixed use)
• B - Additional revenue funding added to the Bus Service Improvement Programme Plus (BSIP+) funding model from June 2024 - that would award funding to LTAs based on a connectivity scoring so they could undertake activities that would boost economic growth. (Physical Capital)
  • Example projects
    • local authorities could – through their Enhanced Partnerships – work with bus operators to introduce new bus routes and/or improve the service frequency on existing routes with access to large employment facilities (for example, Amazon)
  • Suggested Outputs
    • new or additional bus services to employment sit
  • Suggested Intermediate Outcomes - Physical capital outcomes
    • increase in connectivity of employment and education sites to areas of housing (access to employment)
    • improved local road capacity
    • increase in active travel and public transport mode share for relevant airports, seaports and rail stations
    • safer road junctions
    • increased investment in plants and machinery
    • increased floorspace unlocked because of intervention (by land use - commercial, lab space, factory, mixed use)
• C - Enhanced capital funding for bus infrastructure to speed up journeys, for example, traffic signalling improvements or bus lanes. This provides better, more reliable public transport access for passengers to employment sites. (Physical Capital)
  • Example projects
    • bus lanes and traffic signal upgrades along an important bus corridor
  • Suggested Outputs
    • length of bus lanes (km)
    • number of signalling upgrade
  • Suggested Intermediate Outcomes - Physical capital outcomes
    • increase in connectivity of employment and education sites to areas of housing (access to employment)
    • improved local road capacity
    • increase in active travel and public transport mode share for relevant airports, seaports and rail stations
    • safer road junctions
    • increased investment in plants and machinery
    • increased floorspace unlocked because of intervention (by land use - commercial, lab space, factory, mixed use)
• D - Improving transport connections between modes (Physical Capital)
  • Example projects
    • connection between transport modes/mobility hub – incorporating multiple transport modes in one location, for example, bus services, cycling facilities, electric charging points
    • better provisions for freight and logistics sector
    • connections between local, national and international transport networks
  • Suggested Outputs
    • number of multi-modal transport hubs
    • number of local distribution hubs that meet a specific standard
  • Suggested Intermediate Outcome - Physical capital outcomes
    • increase in connectivity of employment and education sites to areas of housing (access to employment)
    • improved local road capacity
    • increase in active travel and public transport mode share for relevant airports, seaports and rail stations
    • safer road junctions
    • increased investment in plants and machinery
    • increased floorspace unlocked as a result of intervention (by land use - commercial, lab space, factory, mixed use)
• E - Funding for new, or improvements to active travel (walking/wheeling/cycling) routes that provide high quality, safe and direct links to areas of employment and education that supports growth of new and emerging sectors, and that help to create town and citywide networks that link to major areas of housing. (Physical Capital)
  • Example projects
    • improved walking routes, road crossings and junctions that reduce severance between residential areas and employment sites to access nearby labour market
    • cycleway links to existing networks that enable high quality end to end journeys
  • Suggested Outputs
    • length of new/upgraded footways/cycleway (km)
    • number of new/improved crossings
    • number and m2 of sites where community severance removed, or direct links created
  • Suggested Intermediate Outcomes - Physical capital outcomes
    • increase in connectivity of employment and education sites to areas of housing (access to employment)
    • improved local road capacity
    • increase in active travel and public transport mode share for relevant airports, seaports and rail stations
    • safer road junctions
    • increased investment in plants and machinery
    • increased floorspace unlocked because of intervention (by land use - commercial, lab space, factory, mixed use)
• F - Specific capital interventions to enable better join up of potential development sites with utilities and access to the grid (Physical Capital)
  • Example projects
    • access for specific development site to the grid
  • Suggested Outputs
    • number and m2 of sites where barriers to utilities removed or direct access created
  • Suggested Intermediate Outcomes - Physical capital outcomes
    • increase in connectivity of employment sites to areas of housing (access to employment)
    • increased investment in plants and machinery
    • increased floorspace unlocked because of intervention (by land use - commercial, lab space, factory, mixed use)
• G - Funding for the development and support of appropriate innovation infrastructure at the local level
  • Example projects
    • development of lab space for growing businesses
  • Suggested Outputs
    • number and m2 of commercial buildings developed or improved
  • Suggested Intermediate Outcomes - Physical capital outcomes
    • increase in connectivity of employment sites to areas of housing (access to employment)
    • increased investment in plants and machinery
    • increased floorspace unlocked because of intervention (by land use -commercial, lab space, factory, mixed use)
• H - Funding for new, or improvements to, digital infrastructure capacity and capability in cluster areas to improve connectivity and facilitate the adoption of new technologies
  • Example projects
    • support new or existing projects and interventions aimed at providing advanced wireless and gigabit connectivity for businesses and public services, as well as digital connectivity for complimentary Investment Zone activities.
    • projects that encourage innovation and automation with technology supported by 5G and other advanced wireless, for example, in manufacturing, agritech, or public services such as transport and smart city applications.
    • local interventions that remove barriers to digital infrastructure deployment, for example, improvement to streetworks processes or facilitating access to sites for infrastructure deployment.
  • Suggested Outputs
    • number of premises with or covered by improved digital connectivity.
    • number of businesses and public services adopting advanced wireless or gigabit services.
  • Suggested Intermediate Outcomes - Physical capital outcomes
    • increase in connectivity of employment sites to areas of housing (access to employment)
    • increased investment in plants and machinery
    • increased floorspace unlocked because of intervention (by land use - commercial, lab space, factory, mixed use

Research and innovation

Research and innovation objectives (A-F)

Funding for R&D grants to support bringing products to market, commercialisation, improving uptake, streamlining processes, and supporting innovation.

Research and innovation IZ interventions (A-g)

• A - Locally commissioned and designed R&D and Innovation grants to support bringing products to market (commercialisation), improve translation and uptake and streamline processes. UKRI or Innovate UK can, at the discretion of the responsible body, be approached for advice on how to ensure any R&D grants are set up and targeted sensibly. (Intangible and Financial Capital)
  • Example projects
    • provide start-ups, spinouts and researchers with early-stage investment to support the development of an innovative ideas / technology in the Investment Zone. This could include, providing grant funding so innovative stakeholders can access the existing facilities and assets they need to develop and test their idea/technology
  • Suggested Outputs - Intangible outputs
    • number of SME firms funded
    • number of large firms funded
    • number of businesses/interested parties receiving financial support other than grants
  • Suggested Outputs – Financial outputs
    • number of SME firms funded
    • number of large firms funded
    • number of businesses/interested parties receiving financial support other than grants
  • Suggested Intermediate Outcomes - Intangible outcomes
    • increased number of innovation focused partnerships formed between for example, firms, universities, other relevant institutions/research organisations, social enterprises, and local councils.
    • increased number of businesses in relevant innovative sector
    • improved time-to-market for R&D product
    • R&D activity undertaken by business for example: Increased scope of current R&D activity on Business Enterprise Research and Development Survey (BERD)
    • improved time to market for new products (longer-term). Can be sourced qualitatively from participating firms.
  • Suggested Intermediate Outcomes - Financial outcomes
    • increased size of investment rounds / match funding / funding on collaborative R&D projects attracted alongside to the seed funding
    • increased Foreign Direct Investment
• B - Grant funding to support purchase of capital equipment to support improved R&D activity undertaken by businesses. (Intangible and physical capital)
  • Example projects
    • financial support to enable a business to purchase the R&D enabling equipment (including computers) they need to innovate, for example, machinery to develop and test a new idea
  • Suggested Outputs - Physical outputs
    • value of new R&D capital equipment attributed to grant. (£ of capital equipment purchased because of grant may lead to over attribution to grant).
    • number of businesses/interested parties receiving grants
  • Suggested Outputs - Financial outputs
    • number of businesses/interested parties receiving grants
    • value of new R&D capital equipment attributed to grant. (£ of capital equipment purchased because of grant may lead to over attribution to grant).
  • Intangible outputs
    • value of new R&D capital equipment attributed to grant. (£ of capital equipment purchased as a result of grant may lead to over attribution to grant).
    • number of businesses/interested parties receiving grants
  • Human outputs
    • Number of businesses/interested parties receiving grants
    • Value of new R&D capital equipment attributed to grant (£ of capital equipment purchased as a result of grant may lead to overattribution to grant)
  • Suggested Intermediate Outcome - Physical outcomes
    • increase in plants and machinery
  • Suggested Intermediate Outcome - Financial outcomes
    • increased size of investment rounds / match funding / funding on collaborative R&D projects attracted alongside to the seed funding
    • increased Foreign Direct Investment
  • Suggested Intermediate Outcome - Intangible outcomes
    • improved time-to-market for R&D product
    • R&D activity undertaken by business for example: Increased scope of current R&D activity on Business Enterprise Research and Development Survey (BERD)
    • improved time to market for new products (longer-term). Can be sourced qualitatively from participating firms.
  • Suggested Intermediate Outcome – Human capital outcomes
    • Increase in number of people employed in businesses supported by intervention (and sector)
• C – Grant funding to support R&D activities subject to implementation considerations (Intangible capital)
  • Example projects
    • provide flexible and patent grant funding to innovative SMEs for highly innovative late-stage R&D projects (for example, TRL 5-9)
  • Suggested Outputs - Intangible outputs
    • number and Value of R&D grant given at the firm level
  • Suggested Intermediate Outcome - Intangible outcomes
    • increased scope of current R&D activity on Business Enterprise Research and Development Survey (BERD)
    • increase in new areas for research (new project initiated).
    • improved time to market for new products (longer-term). Can be sourced qualitatively from participating firms.
• D - Support for PhDs linked to sector strengths and commercialisation opportunities (Intangible and financial capital)
  • Example projects
    • Part or fully funded PhD fellowships that are aligned with the sector strengths of the Investment Zone
  • Suggested Outputs - Intangible outputs
    • number of PhDs on offer in research institution linked to sector
    • number of industry sponsored PhD linked to the sector
    • number of individuals completing a PhD
  • Suggested Outputs - Human outputs
    • number of PhDs on offer in research institution linked to sector
    • number of industry sponsored PhD linked to the sector
    • number of individuals completing a PhD
  • Suggested Intermediate Outcomes - Intangible outcomes
    • increased knowledge exchange between universities and firms (due to PHD students in relevant specialties). Measured through the KEF framework.
    • increased research capability (number of publications)
  • Suggested Intermediate Outcomes - Human capital outcomes
    • increase in individuals in skilled employment / with level 8 qualification
    • increase in number of employees with required employer skills
    • decrease in reported employer skills shortages
• E - Grant funding and mentoring programmes to support entrepreneurial academics to develop spinout company proposals (Intangible and financial capital)
  • Example projects
    • for example, funding to support proof-of-concept targeted projects. RDEL spend can be used to resource a mentorship programme
  • Suggested Outputs - Intangible outputs
    • number of academics attending entrepreneurship programmes
    • number of proof-of-concept grants provided to academics
    • number of academics receiving non-financial support
  • Suggested Outputs - Financial outputs
    • number of businesses/interested parties receiving grants
    • · number of businesses/interested parties receiving financial support other than grants
  • Suggested Intermediate Outcomes - Intangible outcomes
    • increased rate of spinouts from university.
    • improved regional university-business research collaboration (co-patents/research
  • Suggested Intermediate Outcomes - Financial outcomes
    • increased size of investment rounds / match funding / funding on collaborative R&D projects attracted alongside to the seed funding
    • increased Foreign Direct Investment
• F – Provide to up funding to support local existing Knowledge Transfer Partnership to expand into specific sectoral interests or use funding to replicate this model. (Intangible, human, and financial capital)
  • Example projects
    • KTPs are funded by a UKRI grant, Investment Zones could cover part of the match funding required, subject to subsidy control
  • Suggested Outputs – Human capital outputs
    • number of training courses
    • number of events/participatory programmes
  • Suggested Outputs - Intangible outputs
    • number of businesses receiving non-financial support
  • Suggested Outputs - financial outputs
    • number of businesses receiving of financial support other than grants
    • number of businesses receiving grants
  • Suggested Intermediate Outcomes – Human capital outcomes
    • increase in individuals in skilled workers/with level 3+ qualification
    • increase in number of employees with required employer skills
    • decrease in reported employer skills shortages
    • increase number of organisations engages in new knowledge transfer activity
    • increase in number of people employed in businesses supported by intervention (and sector)
  • Suggested Intermediate Outcomes - Intangible outcomes
    • number of businesses adopting new or improved products or services
    • increased spending on sector specific training
    • increased awareness and understanding of industrial digital technologies by SME manufacturers
    • peer-to-peer learning and networking between SME manufacturers
    • improved time to market for new products (long term)
  • Suggested Intermediate Outcomes - Financial outcomes
    • increased size of investment rounds / match funding / funding on collaborative R&D projects attracted alongside to the seed funding
    • increased Foreign Direct Investment
• G – Provide funding to enable the Investment Zone and innovative stakeholders within the Investment Zone, to work with a Catapult on given activities and projects that support the Investment Zone’s targeted sector(s) (Intangible, human and financial capital)
  • Example projects
    • paying for stakeholders within the investment zone to access any of the relevant Catapult’s facilities and expertise
  • Suggested Outputs – Human capital outputs
    • number of training courses
    • number of events/participatory programmes
  • Suggested Outputs – Intangible outputs
    • number of businesses receiving non-financial support
  • Suggested Outputs – Financial outputs
    • number of businesses receiving financial support other than grants
    • number of businesses receiving grants
  • Suggested Intermediate Outcomes – Human capital outcomes
    • increase in individuals in skilled workers/with level 3+ qualification
    • increase in number of employees with required employer skills
    • decrease in reported employer skills shortages
    • increased number of organisations engaged in new knowledge transfer activity
    • increase in number of people employed in businesses supported by intervention (sector)
  • Suggested Intermediate Outcomes – Intangible outcomes
    • number of businesses adopting new and improved products or services
    • increased spending on sector specific training
    • increased awareness and understanding of industrial digital technologies by SME manufacturers
    • peer-to-peer learning and networking between SMT manufacturers
    • improved time to market for new products (longer term)
  • Suggested Intermediate Outcomes – Financial outcomes
    • increased size of investment rounds/match funding/funding on collaborative R&D projects
    • increased Foreign Direct Investment

Business / stakeholder support

Business / stakeholder support objectives

Building on sector-specific tailored support for start-ups and businesses that leverage local research strengths and facilities (for example, Catapults), and is additional and complementary to the national offer.

Is it recommended that places have regard to alignment and engagement with other HMG-funded business support activities and provision that would be of relevance to businesses within the Zone. This would include DBT’s trade/export/inward investment services, the British Business Bank’s UK network, Innovate UK for support to innovative businesses, Sector-specific support such as Made Smarter, DSIT’s locally delivered digital initiatives, DfE’s local skills partnerships etc.

Interventions relating to seed funding should ensure they are not duplicating existing British Business Bank programmes

It is recommended that where possible, Investment Zones should work in collaboration with the Growth Hub network and the Business Support Helpline, as these are the two main HMG-funded national and local entry points for businesses seeking advice and guidance, to convene and simplify the business support ecosystem for businesses and providers in their areas.

Business / stakeholders support IZ interventions (A-G)

• A - Funding to develop concierge system to help sector related businesses in navigating the challenges of access to finance and other forms of support. (Intangible and financial capital
  • Example projects
    • for example, funding to support proof-of-concept targeted projects. RDEL spend can be used to resource a mentorship programme
  • Suggested Outputs
    • investment concierge service - a single point of contact to coordinate incoming investment queries, signpost interested investors to opportunities in the area and troubleshoot queries.
    • innovation hub concierge service
    • an innovation service, consisting of, for example, a lead, knowledge exchange managers, and technical and research specialists - all positions funded from RDEL budget. Innovative businesses in the Investment Zone could access this service free of charge to help them navigate the existing ecosystem including commercial access to facilities and expertise, and work with specialists to help them identify opportunities
  • Suggested Intermediate Outcomes - Financial outcomes
    • increased size of investment rounds / match funding / funding on collaborative R&D projects attracted alongside to the seed funding
    • increased Foreign Direct Investment
  • Suggested Intermediate Outcomes - Intangible outcomes
    • increased number of businesses adopting new or improved products or services.
    • increased spending on sector specific training
• B - Support or extend Made Smarter Adoption programme, providing tailored expert advice, intensive support, matched grants, and leadership training to enable SME manufacturers to adopt industrial digital technology solutions. Sector specific tailoring of support to aid all manufacturing sub-sectors (Intangible, human and financial capital)
  • Example projects
    • expert advice with grant funding to adopt the right technology to grow a business, increase productivity and reduce energy use and emissions
  • Suggested Outputs - Human capital outputs
    • number of technology training courses, number of leadership training courses
    • number of digital internships (student placements)
  • Suggested Outputs - Intangible outputs
    • number of businesses receiving non-financial support, for example, expert advice
    • number of businesses undertaking digital road mapping sessions
  • Suggested Outputs - Financial outputs
    • number of businesses receiving financial support other than grants
    • number of businesses receiving grants
  • Suggested Intermediate Outcomes – Human capital outcomes
    • increase in individuals in skilled workers / with level 3+ qualification
    • increase in number of employees with required employer skills
    • decrease in reported employer skills shortages
  • Suggested Intermediate Outcomes - Intangible outcomes
    • number of businesses adopting new or improved products or services
    • increased spending on sector specific training
    • increased awareness and understanding of industrial digital technologies by SME manufacturers
    • peer-2-peer learning and networking between SME manufacturers
    • improved time to market for new products (longer-term)
  • Suggested Intermediate Outcomes - Financial outcomes
    • increased size of investment rounds / match funding / funding on collaborative R&D projects attracted alongside to the seed funding
    • increased Foreign Direct Investment
• C - Funding to support city regions to grow clusters through hosting international business events and conferences that support wider local growth sectors. (Financial capital)
  • Example projects
    • using grant funding to hold a conference for the lead sector
  • Suggested Outputs
    • number of businesses attending events
    • number of events/participatory programmes
  • Suggested Intermediate Outcomes - Financial outcomes
    • increased size of investment rounds / match funding / funding on collaborative R&D projects attracted alongside to the seed funding
    • increased Foreign Direct Investment
• D - Seed funding to support the creation of angel/venture capital investor funds (Financial capital)
  • Example projects
    • angel investor networking events
    • Venture Capital networking events
  • Suggested Outputs
    • number of angel investors/venture capitalist investors engaged
  • Suggested Intermediate Outcomes - Financial outcomes
    • increased size of investment rounds / match funding / funding on collaborative R&D projects attracted alongside to the seed funding
    • increased Foreign Direct Investment
• E - Funding for new and improvements to existing training hubs, business support offers, ‘incubators’ and ‘accelerators’ for local enterprise which can support entrepreneurs and start-ups through the early stages of development and growth by offering a combination of services, including account management, advice, resources, training, and access to workspace. (Intangible, physical, human, and financial capital)
  • Example projects
    • Programmes that provide support to start-ups through the early stages of growth (incubator) and advancement of growth (accelerator). These programmes could support start-ups through various means including by providing access to mentorship networks, expertise on business model development, see investment funding or support applying for it from other sources, and support attracting venture capital firms to invest in the business.
  • Suggested Outputs - Human capital output
    • number of training courses
    • number of events/participatory programme
  • Suggested Outputs - Intangible outputs
    • number (and value) of businesses/interested parties receiving incubator support
    • number of businesses/interested parties receiving non-financial support
  • Suggested Outputs - Financial outputs
    • number of businesses receiving financial support other than grants
    • number of businesses receiving grant
  • Suggested Outputs - Physical outputs
    • number of organisations receiving support
    • number and m2 of commercial buildings developed or improved
    • amount of rehabilitated land or premises
  • Suggested Intermediate Outcomes - Human capital outcomes
    • increased number of workers trained
    • increased number of organisations engaged in new knowledge transfer activity
    • increase in number of people employed in businesses supported by intervention (and sector)
  • Suggested Intermediate Outcomes - Intangible outcomes
    • number of businesses adopting new or improved products or services
    • increased spending on sector specific training
    • increased awareness and understanding of industrial digital technologies by SME manufacturers
    • peer-2-peer learning and networking between SME manufacturers
    • increased scope of current R&D activity on Business Enterprise Research and Development Survey (BERD)
    • increase in new areas for research
    • improved time to market for new products (longer-term). Can be sourced qualitatively from participating firms.
    • patent applications
  • Suggested Intermediate Outcomes - Financial outcomes
    • increased size of investment rounds / match funding / funding on collaborative R&D projects attracted alongside to the seed funding
    • increased Foreign Direct Investment
  • Suggested Intermediate Outcomes - Physical outcomes
    • increased floorspace unlocked because of intervention (by land use - commercial, lab space, factory, mixed use)
    • increased investment in plants and machinery

Planning

Planning objectives

Areas should look to best practice and innovative approaches where they would add value. These could include the establishment of area-based teams, proactive master-planning, the use of LDOs and other routes to permission. We envisage each area using their core Investment Zone funding to support this planning offer.

Planning IZ interventions (A-B)

• A - Funding to recruit required technical skills to develop masterplans and associated documents to facilitate development of sites. (Human and physical capital)
  • Example projects
    • upskilling local planners/ procuring consultants/employing additional resource to develop a masterplan for the regeneration of new city quarter.
    • employing a dedicated planning lead at the Combined Authority level or within MDCs who can unblock issues and drive proactive engagement (inc. with developers)
  • Suggested Outputs - Human outputs
    • number of qualified planners working in area/authorities
    • number of consultancy days
    • number of consultants with specialist skills successfully recruited
    • number of authorities taking up the opportunity to procure specialist resource
    • number of planners attending training courses
  • Suggested Outputs - Physical outputs
    • amount of investment in placemaking
    • number of qualified planners working in area/authorities
    • number of consultancy days
    • number of consultants with specialist skills successfully recruited
    • number of authorities taking up the opportunity to procure specialist resource
    • number of planners attending training courses
  • Suggested Intermediate Outcomes - Human outcomes
    • reducing staffing shortfall
    • LPAs to procure specialist support, unlocking key delivery with local authority areas
    • increased capacity for LPAs
    • increased number of local planners upskilled (for example, in master planning, design coding)
    • improved technical skills support wider delivery and performance in the system locally
  • Suggested Intermediate Outcomes - Physical outcomes
    • increase in masterplans or development documents produced
    • faster planning application processing times
    • increased planning applications
    • higher proportion of successful applications
    • improved perception of regenerated area
    • increased development activity
    • increase in new or improved commercial space (linked to sector, for example, lab space, manufacturing space, production space)
    • improved quality of the built environment
• B - Seed funding for the development corporation/delivery model. (Human and physical capital)
  • Example projects
    • Mayoral Development Corporation / Local Development Order is determined to be the most appropriate vehicle to drive development and/or regeneration. Funding used to kick start this and fund through the first years before fees begin to sustain income / recoup costs.
  • Suggested Outputs - Human outputs
    • number of qualified planners working in area/authorities
    • number of consultancy days
    • number of consultants with specialist skills successfully recruited
    • number of authorities taking up the opportunity to procure specialist resource
    • number of planners attending training courses
  • Suggested Outputs - Physical outputs
    • amount of investment in placemaking
    • number of qualified planners working in area/authorities
    • number of consultancy days
    • number of consultants with specialist skills successfully recruited
    • number of authorities taking up the opportunity to procure specialist resource
    • number of planners attending training courses
    • number of MDCs established
  • Suggested Intermediate Outcomes
    • human outcomes
    • reduced staffing shortfall
    • LPAs to procure specialist support, unlocking key delivery with local authority areas
    • increased capacity for LPAs
    • increased number of local planners upskilled (for example, in master planning, design coding)
    • improved technical skills support wider delivery and performance in the system locally
  • Suggested Intermediate Outcomes - Physical outcomes
    • increase in masterplans or development documents produced
    • faster planning application processing times
    • increased planning application
    • higher proportion of successful applications
    • improved perception of regenerated area
    • increased development activity
    • increase in new or improved commercial space (linked to sector, for example, lab space, manufacturing space, production space)
    • improved quality of the built environment

Long Term Outcomes

• Boost productivity in FEA
• Increased real earnings for high and low skills workers within the FEA
• Increased internationally competitiveness of companies within the cluster
• Internationally demanded new technologies

Annex F: Privacy notice

The following is to explain your rights and give you the information you are entitled to under UK data protection legislation.

Note that this section only refers to your personal data (your name, address and anything that could be used to identify you personally, not the other contents of your Investment Zones documentation).

The identity of the data controller and contact details of our Data Protection Officer

The Department for Levelling Up, Housing and Communities (DLUHC) is a data controller for all Investment Zones related personal data collected with the relevant forms submitted to DLUHC, and the control and processing of Personal Data.

The Data Protection Officer can be contacted at dataprotection@levellingup.gov.uk.

Why we are collecting your personal data

Mayoral Combined Authorities and upper tier local authorities have been designated as lead local authorities for Investment Zones.

As part of the co-development gateway process for Investment Zones, we will be collecting the following data from lead local authorities:

• names and contact details of key staff preparing the gateway proposals (personal data)
• names and contact details of key staff approving the gateway proposals (personal data)
• names and contact details of the lead officer managing the delivery of Investment Zones programmes (personal data)

Your personal data is being collected as an essential part of the Investment Zones, so that we can contact you regarding the gateway process, request supporting documentation if required, process future information which may be requested and for monitoring purposes. We may also use it to contact you about matters specific to the programme.

Legal basis for processing your personal data

The Department for Levelling Up, Housing and Communities will process all data according to the provisions of the Data Protection Act 2018 and the UK General Data Protection Regulation 2018 (UK GDPR) and all applicable laws and regulations relating to processing of Personal Data and privacy, including, where necessary, the guidance and codes of practice issued by the Information Commissioner and any other relevant data protection regulations (together “the Data Protection Legislation (as amended from time to time)”).

The Data Protection Legislation sets out when we are lawfully allowed to process your data.

The lawful basis that applies to this processing is Article 6 (1) (e) of the UK GDPR; that processing is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the controller; data being processed belongs to business contacts processed during the routine course of business of a government department.

With whom we will be sharing the data

As part of the process of assessment and monitoring of the Investment Zones, the Department for Levelling Up, Housing and Communities will share your personal data with relevant government departments or arm’s-length bodies, including:

• His Majesty’s Treasury (HMT)
• Cabinet Office
• His Majesty’s Revenue and Customs (HMRC)
• Department for Work and Pensions
• Department for Transport
• Department for Business & Trade
• Department for Education
• Ministry of Defence
• Department of Environment Food and Rural Affairs
• Department for Culture, Media and Sport

We may also share data with contractors for the purposes of assessment, monitoring and evaluation, in which case their contract will set out what they are permitted to do with the data.

There are data processing agreements in place between the Department and its data processors to ensure that the processing of your personal data remains in strict accordance with the requirements of data protection legislation.

How long we will keep the personal data, or criteria used to determine the retention period

Your personal data will be held for up to 12 years from the point of Spring Budget 2023 announcement. This is currently estimated to be 2035. As part of the monitoring process, we will contact you regularly to ensure our records are up to date.

Your rights, for example, access, rectification, erasure

The data we are collecting is your personal data, and you have considerable say over what happens to it. You have the right to:

• know that we are using your personal data
• see what data we have about you
• ask to have your data corrected, and to ask how we check the information we hold is accurate
• object to the use of your personal data in certain circumstances and to have your personal data deleted when the processing is no longer necessary
• complain to the ICO (see below)

Sending data overseas

Your personal data will not be sent overseas.

Storage, security and data management

In the first instance, your personal data will be stored on their secure UK-based server. Your personal data will be transferred to our secure government IT system as soon as possible, and it will be stored there for up to 12 years before it is deleted, unless we identify that its continued retention is unnecessary before that point.

Where data is shared with third parties, as set out in section 4 above, we require third parties to respect the security of your data and to treat it in accordance with the law. All third parties are required to take appropriate security measures to protect your personal information in line with our policies.

Complaints and more information

If you are unhappy with the way the department is using your personal data, you can make a complaint.

You have a right to lodge a complaint with the independent Information Commissioner’s Office (ICO) if you think we are not handling your data fairly or in accordance with the law. You can also contact the ICO for independent advice about data protection, privacy and data sharing. The ICO’s contact details are provided below.

If you are not happy with how we are using your personal data, you should first contact dataprotection@levellingup.gov.uk.

If you are still not happy, or for independent advice about data protection, privacy, and data sharing, you can contact:

The Information Commissioner’s Office Wycliffe House
Water Lane
Wilmslow
Cheshire
SK9 5AF

Telephone: 0303 123 1113 or 01625 545 745

Information Commissioner’s Office