Michael Gove, the levelling up secretary, has confirmed the Westminster government’s change of approach to investment zones, saying they will focus on “leveraging the success” of university research and growth industries in “communities in need of regeneration”.
Mr Gove also said a process to identify investment zones would “shortly begin”, when he delivered a speech to the Convention of the North in Manchester.
In Liz Truss’ fleeting spell as prime minister, investment zones were envisaged as a tax-cutting and deregulation measure.
But after Rishi Sunak replaced her, new chancellor Jeremy Hunt signalled in his autumn statement that there would be a “change of approach”. The zones would now focus, he said, on “leveraging our research strengths by being centred on universities in left-behind areas to help build clusters for our new growth industries”.
Then The Guardian reported this month that a planned announcement about a replacement scheme had been called off at the last minute, after discussions between the Treasury and the Department for Levelling Up, Housing and Communities over previous months “about rebadging the schemes as research and development zones, innovation zones, or academic zones”.
“Several Whitehall officials suggested there had been disagreements between the departments, with some iterations rejected for being ‘half-baked’,” The Guardian said.
In his speech, Mr Gove said on investment zones: “This country has no shortage of growth industries, whether in advanced manufacturing, renewable industries or life sciences. And we have no shortage of world-class universities, including here in Manchester.
“But where we have underperformed is leveraging the success of these industries and research to support growth across the whole country, and particularly in communities in need of regeneration. That is my guiding mission for investment zones, and we will shortly begin a process to identify investment zones in areas that need levelling up.”
He said the approach would be guided by three principles.
“First, that government cannot create clusters, but it can and has to create the conditions for them to succeed. Second, success requires fiscal support, but also that wider range of interventions that we saw in [London] Docklands, whether that’s land assembly, housing investment, transport infrastructure or skills investment, in order to ensure we tackle the specific barriers in each cluster that hold back growth. And, of course, third, investment zones can only happen in partnership with strong local leadership.”
