The Growth Plan 2022: Factsheet On Investment Zones

23rd September 2022

As part of The Growth Plan 2022, the Chancellor announced we are in discussions with 38 local authorities to establish investment zones in England.

The government intends to work closely with the devolved administrations and local partners to deliver this opportunity to drive local growth in Scotland, Wales and Northern Ireland.

Investment Zones will drive growth and unlock housing across the UK through lowering taxes and liberalising planning frameworks to encourage rapid development and business investment.

Investment Zones will drive growth and unlock housing across the UK by lowering taxes and liberalising planning frameworks to encourage rapid development and business investment.

Where will they be?
We are in discussions with 38 local authorities to establish investment zones in England and intend to work closely with the devolved administrations and local partners to deliver this opportunity to drive local growth in Scotland, Wales and Northern Ireland.

How will they work?
Areas hosting Investment Zones will benefit from:

Lower taxes - businesses in designated sites will benefit from time-limited tax benefits.

Accelerated development - there will be designated development sites to both release more land for housing and commercial development, and to support accelerated development. The need for planning applications will be minimised and where planning applications remain necessary, they will be radically streamlined. Development sites may be co-located with, or separate to, tax sites, depending on what makes most sense for the local economy.

Wider support for local growth - subject to demonstrating readiness, Mayoral Combined Authorities hosting Investment Zones will receive a single local growth settlement in the next Spending Review period.

When will they be set up?
In England, the Government will deliver Investment Zones in partnership with Upper Tier Local Authorities and Mayoral Combined Authorities.

In Scotland, Wales and Northern Ireland, Investment Zones will be delivered in partnership with Devolved Administrations and local partners.

The Secretary of State for the Department for Levelling Up, Housing and Communities will shortly set out the selection criteria to become an Investment Zone, and the process for designating sites within it.

Who decides where they are?
We have written to local leaders in every part of England to invite them to begin discussions with government to agree Investment Zone(s) in that area. The areas announced today are the areas keen to be involved now, with more to come.

We intend to work with the devolved administrations and other local partners to deliver Investment Zones across all parts of the UK as quickly as possible.

How will they grow the economy?
The Investment Zones tax offer will be carefully designed to encourage investment and new economic activity, supporting growth and jobs.

In addition to the tax offer, planning flexibilities will remove a significant barrier to economic growth, and together tax and planning flexibilities will enable businesses to benefit from the positive effects of co-locating (also known as "agglomeration effects").

The Freeports programme has already shown how targeted tax reliefs and support can bring together the public and private sector to begin to transform areas in need of levelling up.

What are the tax benefits?
Businesses in designated areas in investment zones will benefit from 100% business rates relief on newly occupied and expanded premises. Local authorities hosting Investment Zones will receive 100% of the business rates growth above an agreed baseline in designated sites for 25 years.

In addition businesses will receive full stamp duty land tax relief on land bought for commercial or residential development and a zero rate for Employer National Insurance contributions on new employee earnings up to £50,270 per year.

To incentivise investment there will be a 100% first year enhanced capital allowance relief for plant and machinery used within designated sites and accelerated Enhanced Structures and Buildings Allowance relief of 20% per year.

When will you provide more detail on the planning changes?
We will set out further detail on the liberalised planning offer for Investment Zones in due course.

Where are the 38 local authorities?
Blackpool Council
Bedford Borough Council
Central Bedfordshire Council
Cheshire West and Chester Council
Cornwall Council
Cumbria County Council
Derbyshire County Council
Dorset Council
East Riding of Yorkshire Council
Essex County Council
Greater London Authority
Gloucestershire County Council
Greater Manchester Combined Authority
Hull City Council
Kent County Council
Lancashire County Council
Leicestershire County Council
Liverpool City Region
North East Lincolnshire Council
North Lincolnshire Council
Norfolk County Council
North of Tyne Combined Authority
North Yorkshire County Council
Nottinghamshire County Council
Plymouth City Council
Somerset County Council
Southampton City Council
Southend-on-Sea City Council
Staffordshire County Council
Stoke-on-Trent City Council
Suffolk County Council
Sunderland City Council
South Yorkshire Combined Authority
Tees Valley Combined Authority
Warwickshire County Council
West of England Combined Authority
West Midlands Combined Authority
West Yorkshire Combined Authority