The zone will benefit from a mix of tax incentives, direct funding and business rate retention. It will focus on driving growth in advanced manufacturing, green industries, health-tech and underlying digital technologies.
The Investment Zone itself will cover the whole West Midlands but will be powered through three specific sites:
There was further good news for the region with the Autumn Statement confirming a seismic shift of power and influence away from Whitehall with the go ahead for a single pot of funding for the West Midlands, leaving local leaders to decide for themselves on how best to use the money to help level up the region.
The Single Settlement, one of several commitments in the region’s Deeper Devolution Deal agreed in March, will give the West Midlands unparalleled control over spending similar to the Scottish and Welsh Governments.
Today’s confirmation of the Single Settlement will give local leaders new autonomy to decide for themselves on how to use the money over the long-term, free from micromanagement by Whitehall. The funding will be used to improve transport, skills, housing, the retrofitting of homes to reduce people’s energy bills and to drive inclusive economic growth. Payments will start at the next Spending Review period, expected to be in 2025.
The Chancellor also confirmed an extension of the 75% discount business rates relief for retail, hospitality and leisure businesses, and an increase in the Local Housing Allowance to cover the bottom 30% of market rents - the first time since 2020 - and direct funding for local authorities to tackle homelessness. The WMCA had lobbied the Chancellor to include all those measures in the Autumn Statement.
Andy Street, Mayor of the West Midlands and Chair of the West Midlands Combined Authority, said: “I welcome the serious and substantial announcements set out by the Chancellor in today’s Autumn Statement. The responsible and forward-thinking decisions he has taken will support households and businesses, boost growth and investment and create job opportunities.
“It’s great news that we now have confirmation that our region will play host to an Investment Zone – incorporating sites from Wolverhampton to Birmingham to Coventry. This will turbo-charge the prospects of some of our key areas of strength including tech, advanced manufacturing, and green industries. Working alongside the outstanding research capabilities of our world-leading universities, this Investment Zone will enhance our ability to attract global companies to our region.
“The Chancellor's decision to empower the West Midlands with a single funding settlement heralds a pivotal moment for our region. It will end the need for competitive bidding into Government to fund our transport, housing, skills, and investment projects and put us on par with Government departments and devolved parts of the UK.
“This greater financial certainty – and the trust shown in us by Government – will enable the WMCA to deliver prosperity for local people in the years ahead. It places decision-making where it belongs: in the hands of those who best understand our region's priorities.”
The West Midlands Investment Zone has the potential to initially attract more than £2bn of new investment into the regional economy and a further £3.5bn over the lifetime of the zone, creating more than 30,000 jobs by 2034.
The Chancellor also announced that the funding package for the zone will be increased from £80m to £160m and can be applied over 10 years rather than five as originally proposed.
Sites within the Coventry-Warwick Gigapark and Birmingham Knowledge Quarter will offer tax breaks for businesses as well as funding for infrastructure such as roads and power.
In addition, millions of pounds that would have gone back into Government coffers, will be kept in the West Midlands thanks to a 25-year business rates retention scheme within the two sites. The money will be reinvested into the wider region by the WMCA.
Meanwhile, the Wolverhampton Green Innovation Corridor will receive millions of pounds to support the construction of key infrastructure needed to establish the site.
Investment Zone funding is also expected to support a range of skills and business support programmes across the whole region.
Government will continue to work with the WMCA and other partners to co-develop the plans for the Investment Zone, including priority development sites and specific interventions to drive cluster growth, ahead of the final confirmation of the plans.
Cllr Stephen Simkins, the WMCA's portfolio holder for economy and innovation and leader of City of Wolverhampton Council, said: “The Green Innovation Corridor will build on Wolverhampton’s growth as a centre for sustainable construction and create skilled jobs for local people. A shift of power from Westminster to Wolverhampton will enable us to capitalise on emerging green industries.
“For too long the region has been held back by the centralisation of power. Now that we have the single settlement fund, we can determine our own economic future, and I know the people of Wolverhampton will want to see good, green, and most importantly, decent advanced manufacturing jobs in the Black Country.”
The Chancellor’s decision to give the go-ahead for an Investment Zone follows the region’s success in attracting private sector money including into the Birmingham site which will receive a further £40 million investment from Bruntwood SciTech. The developer is working alongside partners Aston University, Birmingham City University, the University of Birmingham and Birmingham City Council to set up an innovation district within the wider Knowledge Quarter area.
Chris Oglesby, executive chair of Bruntwood SciTech, said: “The Birmingham Knowledge Quarter masterplan will create a leading innovation cluster centred on science, technology and enterprise.
“We have committed £1bn to invest in the West Midlands over the next decade, and as part of that Birmingham Knowledge Quarter has the potential to be a world-class hub for R&D – a status that is ever more achievable as a government-recognised Investment Zone, backed by the WMCA‘s Trailblazer single settlement deal.
“We look forward to working in tandem with WMCA and our Knowledge Quarter partners to deliver an innovation ecosystem that will ultimately drive the future prosperity of the regional economy for generations to come.”
Alongside the Investment Zone, the WMCA continues to make good progress with Government around its proposed ‘Levelling Up Zones’, also mentioned in the Trailblazer Deeper Devolution Deal earlier in the year.”
These zones will be supported by similar business rate retention arrangements within designated ‘Growth Zones’. Currently, zones are being explored across Dudley, Sandwell, Walsall, East Birmingham and Solihull.
