A new report by the cross-party Business and Trade Committee
demands the Government ‘urgently improve' governance and
transparency at freeports and investment zones.
Freeports and investment zones are important projects within the
Government's levelling-up agenda. They create a geographical area
with preferential tax breaks and business rates for firms that
operate inside them.
In its report, the Committee says that ‘long-term political
commitment' is critical to their success, but needs to be firmly
founded upon public trust and clear accountability. It
recommended that a single regional leader is needed for each
freeport and investment zone after it heard that fragmented
decision making has led to mixed messaging and difficulties in
securing investment. The result would be a single political
leader responsible for the projects and to be held accountable
for their performance.
The Committee called out the Government's failure to publish
impact assessments for freeports making it ‘impossible to
accurately assess' whether they or investment zones provided the
best value for money. It demanded that the Government
publish assessments, annual reports, evaluations with
accompanying data, and the publication of the dashboards used to
monitor them.
Evidence to the Committee demonstrated that although structures
of scrutiny in mayoral combined authorities for the projects were
sound, they suffer from low attendance and engagement, citing
their low stature. In the West Midlands almost two-thirds of
scrutiny meetings were cancelled in the three years to 2021-22.
The Government must address this, and incentivising engagement
with scrutiny bodies by linking additional funding for freeports
and investment zones with high attendance could be a way of doing
this, the report concluded.
In addition, the Committee listed five key improvements if
freeports and investment zones are to achieve their full
potential. These are;
- prioritised access to energy;
- extended planning freedoms;
- access to enhanced skills;
- improved customs arrangements in
freeports; and
- connection to wider government
economic security policies, including the potential of relocation
incentives for smaller firms.
Committee Chair said:
“The long-term success of freeports and investment zones rests on
long-term political backing, and crucially, trust and confidence
in the governance This can only be achieved by enhancing
governance and transparency. It's now up to Ministers to fix the
missing link between the local and national leaderships to help
deliver results.”
“We've heard evidence that we have some solid scrutiny structures
in place to examine spending on Freeports, but they risk a
deficit of the required attention.”
“Building and maintaining political and public confidence must be
a priority for the longevity of freeports and investment zones,
alongside prioritised planning freedoms, improved customs
arrangements in freeports and a connection to wider government
economic security policies.”
“Given that freeports and investment zones account for barely one
thousandth of spend on economic affairs, on their own they will
be unable to deliver levelling-up, but nonetheless with long-term
backing they could make an important difference.”
