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Freeports: a national ambition for local regeneration

Wayne Butcher Wayne Butcher

UK freeports are an excellent opportunity for regeneration. The government has announced eight sites in England, and there are hopes for similar plans in Scotland and Wales. Wayne Butcher looks at how these ambitious projects might play out. 

All eight freeport sites already announced in England have a key role in delivering the government's ambition to drive economic growth while levelling up prosperity and opportunity across the country.

Freeports are designed to boost local growth by providing tax incentives within an area to encourage businesses to locate premises there. These sites are considered 'outside the country' for customs purposes - this means that goods can enter and re-exit the port without incurring the usual import procedures or tariffs. Alongside tax benefits, the government is offering access to simplified planning processes and infrastructure funding to accelerate sustainable, inclusive economic growth in the area.

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What core opportunities for economic growth do freeports bring?

Each freeport has a once in a generation opportunity to develop a unique approach that fits its regional context and sector focus. Private sector involvement can be leveraged to stimulate growth and regeneration across the area.

One significant opportunity is gigafactories, large facilities designed to accommodate the manufacture of high-volume products such as batteries. Many places across the world are competing to attract this investment, and freeports are an ideal site for them. 

In all eight sites, local skills will be vital. As the below chart shows, the correlation between learning and skills varies between each area, so each freeport will need to develop a clear skills plan that explains how it will support employment opportunities. Positive dialogue with local universities, colleges and schools and business communities will be key to their strategies.

freeports chart

Figure 1: Proportion of working-age population qualified to NVQ4+ vs workplace mean earnings (£)

What could prevent freeports unlocking this ambition?

Freeports can create jobs, encourage entrepreneurship and the creation of local businesses. This development is only achievable with investment into connectivity, housing, business support and skills. Without this, the areas will not become desirable areas to live, work and play. Targeted investment can bring true regeneration within reach.

There are also other obstacles to be negotiated to deliver this ambition. Planning, the tax regime, security concerns, and poor project management are all potential vulnerabilities noted by commentators.

If all of these challenges are robustly addressed, none of them should be fatal to the success of any freeport, but structured thinking with a laser focus on funding and finance regimes and how the risk and governance structure will sit alongside the delivery plans for each freeport is required.

Freeports need to be able to answer questions about funding the early stages of their establishment and leveraging the private sector and government to deliver quick wins and show progress towards their long term ambitions.

Freeports also need to be ahead of the curve in their thinking around funding infrastructure. This investment will be critical for building a firm platform to generate business investment and establish a wider commitment to ensure our asset management systems are optimised to deliver economic growth and regeneration. This is more likely to work when freeports plans are tied into wider place-based strategies so that there is a common set of outcomes.

From a risk perspective, it's vital that stakeholders not only defend themselves against critics but also give confidence in how freeports will be managed, interaction with the local economy and the wider place-based strategy in that region. This must be done in a manner that protects standards and mitigates the risk of security breaches that could ultimately create distrust in the entire programme.

So, what next?

Freeports are a core strand of the government's vision for post-Brexit Britain.

For many places located close to the freeports, new jobs and new business are key to a new future which many desire, and rightly so. The challenge is delivering it.

If you would like more information or insight on freeports, get in touch with Wayne Butcher.