Blow for Midlands as No.10 takes axe to investment zones

INVESTMENT zones in the West Midlands will be rebranded ‘levelling-up zones’ as bids by the West Midlands Combined Authority have been overridden and abandoned by Rishi Sunak’s government.

Business leaders and politicians in the region claimed the investment zones would boost the regional economy by more than £4.7 billion a year, create more than 65,000 new jobs, 18,600 homes and more than 333 million square feet of commercial space.

But the plans, which would have allowed tax exemptions and liberalised planning rules, are set to be scrapped as Mr Sunak dismantles another legacy of former prime minister Liz Truss.

Fewer than 20 zones will now focus on delivering growth for universities.

It comes as the levelling up minister, Lee Rowley, revealed that the idea of investment zones had been reviewed by both No.10 and the Treasury.

He said the policy was “going to be refocused on productivity, improving growth and job creation”.

Investment zones were billed only three months ago as a way to drive growth by cutting red tape, including planning regulation, and offering time-limited tax incentives.

Under the new scheme, universities in Birmingham, Coventry and Wolverhampton would benefit, with areas such as Sandwell, Dudley, and Walsall potentially missing out.

Previous chancellor Kwasi Kwarteng said 38 local authorities were interested, and named 24 sites that could be eligible. Around 76 formally applied to the scheme.

Investment zones considered in the West Midlands included the proposed gigafactory at Coventry Airport; Arden Cross and the new HS2 Interchange station in Solihull; brownfield regeneration in Sandwell; and a ‘green innovation corridor’ north of Wolverhampton.

It is not known how much the bid in the West Midlands cost, but the Local Government Association estimated that each competitive funding bid would cost about £30,000 to put together.

Andy Street, the Conservative mayor of the West Midlands, defended the decision and said he was confident the bids remain “resolute”.

The mayor, who backed Liz Truss during last year’s Conservative leadership election, said: “We look forward to submitting our strong proposals once the new process is in place and if any of our existing local options don’t chime with the new criteria, they will certainly feature in our broader devolution deal asks. Whether it’s investment zones, levelling up zones or another label altogether, what really matters here is that we will continue to make our powerful case to government as we unlock new opportunities for residents right across our region in the months and years ahead.”

What matters here is that we will continue to make our powerful case to government as we unlock new opportunities. Andy Street