Agenda item

Report of the Director for Development and Economic Growth

Mr Cooper presented the East Midlands Freeport (EMF) report and delivered a presentation to the Group which set out key elements and progress of the Freeport.

Mr Cooper explained that freeports were economic zones created under the previous government and endorsed within the Industrial Strategy of the current government. He explained that they were a partnership of public and private partners, which in the East Midlands consisted of Rushcliffe, North West Leicestershire and South Derbyshire District Councils and their respective County Councils and six private sector members who were the site owners or site developers. He said that there were three sites within the freeport, being Ratcliffe on Soar (power station) site, the East Midlands Airport Gateway Industrial Cluster around East Midlands Airport and the East Midlands Intermodal Park site near to the Toyota Plant.

Mr Cooper confirmed that the Leader of Rushcliffe Borough Council was the Council’s representative on the EMF Board and said that the funds and finance of the EMF were decided by the public sector members and that the EMF was a not for profit organisation.

Mr Cooper said that the EMF was formally established in March 2023 and that the deadline for the end of the financial benefits was September 2031.

In relation to ambition, Mr Cooper explained that it was for the sites to become low carbon industrial sites attracting inward investment rather than relocation of existing businesses within the local area, stimulating job creation, skills development and innovation and improving transport and connectivity, with an ambition to stimulate £9bn of GVA for the regional economy. He said that the local authorities involved had received government guarantee that they would not be at a detriment from the loss of projected business rates income from the sites, with any income above that going to the EMF.

In relation to progress over the past three years, Mr Cooper said that the skills delivery plan was being finalised, scoping work for a new sustainability strategy had been completed and that the innovation strategy was being prepared. He highlighted the key sectors of focus, being aerospace, automotive, advanced logistics and low carbon and energy, and the lower focus sectors of rail, food and drink, space and life sciences.

Mr Cooper said that the accountable body was currently Leicestershire Council with the intention for that to transfer to the East Midlands Combined Authority (EMCCA)  to act as central body and provide more synergy for investors. He explained that the tax benefits for the sites were that companies could apply for business rates relief (up to 30 September 2031), National Insurance Contributions (NIC) relief, Stamp Duty (SDLT) relief and Enhanced Rate of Structures and Buildings Allowance (SBA).

In relation to customs benefits, Mr Cooper said that the sites provide duty flexibilities, duty exemptions, duty suspensions and a simplified import procedure. He said that the EMF had worked with the Chamber of Commerce to publicise the sites but that interest had been low so far.

In relation to the geographies of the three sites, Mr Cooper showed maps of the sites to the Group and explained the owners, locations and characteristics of each of them.

In relation to the Ratcliffe on Soar site, Mr Cooper said that it was a large site comprising of circa 200 hectares for development and was covered by a Local Development Order granted by the Council in 2023 for low carbon energy production and manufacturing. He said that the site was connected by a rail head, had water extraction rights and national grid power infrastructure and due to these factors, the Office for Investment had assessed it as within their top three sites for advanced manufacturing and was the site within the EMF which had generated the most interest. Mr Cooper noted that decommissioning of the site would run from 2025-2030 and that national grid connections were taking longer than had been anticipated. In relation to transport, he said that J24 of the M1 would be under much pressure from two of the EMF sites and as such transport modelling and work with National Highways and local Highways was taking place to ensure that schemes coming forward were fit for purpose.

Mr Cooper said that the EMF organisation comprised of fourteen members of staff who were committed to getting the complex sites ready to bring in investment and ensuring that skills providers were in place. He confirmed that the three sites had currently attracted circa £150m of investment and generated 850 jobs and offered a great opportunity for the region and that the EMF was committed to working with local communities around the sites.

In relation to business interest, Mr Cooper said that the EMF had thirty live enquiries from small to large scale industry and that much work was taking place to map what and where potential investment may originate from around the world. He added that biodiversity net gain requirements and mitigation would apply for all sites.

Councillor Brown said that there was currently no public transport to the East Midlands Gateway (EMG) and Ratcliffe on Soar sites and asked about plans for future provision. He expressed concern about local routes becoming rat runs for commuters. Mr Cooper said that there was an electric shuttle bus to EMG and that East Midlands Airport was connected to the West of the area but confirmed that there was a need to ensure good transport links were in place and to look at how best to get workforces to the sites.

Councillor Calvert asked about decision making for extension of the tax incentives and Mr Cooper confirmed that this would be determined by the government, likely on a site by site basis, and that the process for doing so was to be confirmed.

Councillor Calvert referred to skills plans for deprived communities and Mr Cooper said that EMF was working with local authorities across the East Midlands to develop these and would report back on which specific deprived communities were being referred to.

Councillor R Walker asked where the EMF sat in comparison to the other eight freeports and Mr Cooper said that it sat around the middle to the pack and benefitted from having a fuller dedicated team in place and was the only inland freeport.

Councillor R Walker said that there did not appear to be any specific momentum or sense of real progress and asked about leadership to drive the venture and provide cohesion to generate activity. He said that leadership to overcome, for example, the problems with J24 and grid infrastructure delays was required and thought that the EMCCA Mayor lacked visibility. Mr Cooper appreciated that the Group wished to see progress and noted that the Ratcliffe on Soar site was extremely complex and said that there were many issues to be looked at. He said that the East Midlands Mayor was very supportive of the EMF.

Members of the Group asked about writing to the EMCCA Mayor and local MPs. The Head of Economic Growth and Property explained that it was on their agendas and that the report would also be presented to Cabinet. She said that the report had been brought to the Group to provide information about the EMF and suggested that an all Councillor update could be provided. She added that Rushcliffe Chief Executive chaired a Ratcliffe on Soar forum which brought together key partners with the aim of progressing the site.

In relation to oversight, Mr Cooper said that there was Freeport Board which was in place to drive collaboration between the Board and landowners and that there was a team at Uniper leading on the decommissioning of the Ratcliffe on Soar site.

The Chairman asked about traffic modelling and Mr Cooper explained that this was being carried out by the EMF working with the Highways Authority to look at the entire infrastructure around J24, to create modelling for a comprehensive, long term solution for the junction followed by identification of funding streams for that work.

The Chairman expressed being underwhelmed at the lack of progress and lack of tangible evidence for progress taking place and Councillor R Walker said that due to the complexity of the site, strong leadership with influence was required to drive activity and make things happen.

Members of the Group asked if there was a timeline for future movement on the site. Mr Cooper said that whilst it was not possible to give assurity of timescales he could report back a more defined timeline for work taking place and in relation to J24 including information about how the modelling would be approached in terms of local knowledge input.

The Chairman asked about interest in the site and Mr Cooper said that EMF were working closely with EMCCA and Uniper regarding the Ratcliffe on Soar site regarding marketing and attracting suitable industry and making sure that the site had the necessary infrastructure and agreements in place to facilitate that industry development.

Councillor Brown asked about approval of applications for the sites and Mr Cooper confirmed that applications would be determined by the responsible planning authority. He said that should the sites not generate significant interest then investment income generated would be lower for EMF and reinvestment across the region.

Mr Cooper said that advanced logistics related to more automated processes and in time logistics.

Councillor Way asked about reference to safeguarding of HS2 and Mr Cooper said that part of the route of HS2 was safeguarded and that EMF was looking at removal of those safeguards to enable development of implicated sites but that the Department of Transport had not as yet made a decision on that.

The Chairman summarised that the Group wished for their comments and feedback expressed during the meeting to be fed back to Cabinet through the report to Cabinet.

The Chairman suggested that members of the Group feedback to their Councillor colleagues about information presented and discussion that had taken place at this meeting.

The Group requested that an update for all Councillors be provided.

Members of the Group discussed inviting a representative to return to a future Group meeting and it was agreed that this be reviewed following receipt of the timeline information.

It was RESOLVED that Growth and Development Scrutiny Group members considered the update provided by EMF at the Committee meeting and identified any further opportunities to be explored or developed.