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Freeports – what's the view nine months on?

Wayne Butcher Wayne Butcher

Nine months on from the announcement of eight UK freeports, our webinar asks where are we now and what are the barriers and the benefits?

In the Spring Budget 2021 Chancellor Rishi Sunak announced UK freeports as “special economic zones with different rules to make it easier and cheaper to do business”. Nine months on, we asked a panel of six experts – including representatives from Arup, Thames Estuary, freeports, wider business and more – what this looks like in actual terms through two core questions.

We've consolidated their answers from the webinar into the ‘key’ takeaways on each question.

To hear the detailed responses, watch the full freeports webinar →

Q1. How ready are local/regional areas for their freeports – what barriers need to be overcome?

Local focus over broad national policy

Freeports touch a number of key policy areas – eg, housing, transport, net-zero – and authorities must therefore have a very clear vision and strategy for the region. They must be able to translate a broad national policy into a focused narrative that works for the local area and is owned and delivered by regional stakeholders.

Managing differences through collaboration

Strong partnerships with passionate stakeholders who want freeports to succeed are the key to success. These partnerships are likely to be public/private sector arrangements, which often requires managing different views and working collaboratively to deliver.

Existing issues to balance

Ports are currently dealing with unprecedented volume, coupled with wider issues such as Brexit, Covid, and so on. It may therefore be difficult to focus on the freeport agenda while there are other issues to tackle. This should be considered as part of the planning and development stage.

How to encourage the ripple effect

Ensuring that the freeport benefits ripple out to areas beyond the freeport boundary will be a key challenge. It is important that this is considered as part of the detailed planning and development stages, and that there is a framework to measure success.

Incentivising for future growth

Government incentive packages will be available. How these are utilised in the short to long term will have major impacts on freeports' success and should be a catalyst to growth rather than the primary spine of the proposals.

Getting structure and governance right

Implementing the correct structure and governance procedures will bring benefits and likely reduce wider concerns around management and performance. It will also give more comfort to third party investors who are needed to attract the finance and funding required.

Q2. Can freeports make a difference to local economies and how do stakeholders capture the benefits?

Net zero opportunities

One of the largest opportunities with the freeports agenda is around de-carbonisation and net zero. It is a great opportunity for investment into green energy alternatives (eg, hydrogen and electric) to provide power both within the freeport boundaries and to the wider area, with the ability to create high-skilled jobs.

Job and skills creation

Local authorities should look at freeports as an intervention to expand job opportunities across the local area. Liverpool City Region Combined Authority ( LCRCA) estimates that its freeport will provide 10,000 new jobs. Additional investment in skills and education will also need to go beyond immediate job opportunities to those needed in five to 10 years as a result of the new business attracted to the area.

Local authorities are working with colleges and local training providers to put on programmes to help improve skills of local residents. The Freeports Skills Academy is being developed by the LCRCA, for example, to complement the opportunity with education establishments across the region.

Simplify procurement

Authorities should try to simplify procurement and the overall process to ensure they do not exclude SMEs from bidding and to allow for a broad mix of suppliers to unlock delivery, again contributing to the richer economic landscape that the freeports seek to achieve.

Levelling up through freeports

‘Levelling up’ is at the heart of the freeports agenda with a focus on building resilience and sustainability in the surrounding regions. This can be done by using the freeports to diversify the current local trade base and ensuring a net zero impact over the short medium and long term.

UK freeports offer an excellent opportunity for regeneration, says Wayne Butcher, Director, Public Advisory. He adds: "One of the big challenges in the development of this flagship government programme is to create a clearer view on how freeports will operate, integrate and deliver on their aims. As part of this, we've been working extensively on some of the major regional initiatives to help them take their next steps.

"But as our expert panel outlined, there are also once-in-a-generation opportunities for the eight freeport regions. Each one needs to develop a unique approach that fits its regional context and sector focus, and to leverage private sector involvement to stimulate growth and regeneration across the area. Local skills, employment and a clear plan to achieve this will be crucial."

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