Chancellor of the Exchequer Jeremy Hunt has binned ‘existing expressions of interest’ from councils to set up investment zones as the Government moves to ‘refocus’ the programme.
In the official papers to accompany the Chancellor’s Autumn Statement the Treasury said the programme would now be used ‘to catalyse a limited number of the highest potential knowledge-intensive growth clusters, including through leveraging local research strengths’.
It said the Department for Levelling Up, Housing and Communities (DLUHC) would ‘work closely with mayors, devolved administrations, local authorities, businesses and other local partners to consider how best to identify and support these clusters’.
The first clusters are set to be announced ‘in the coming months’.
Investment zones, aimed at enticing businesses with tax cuts and relaxed planning rules, were introduced by Mr Hunt’s predecessor Kwasi Kwarteng in his now-infamous mini-budget just under two months ago. But councils have feared they could mean a reduction in environmental protection for the green belt.
Levelling up secretary Michael Gove said last month that he recognised ‘one of the concerns raised about investment zones was the impact on the environment’.
The Treasury is also understood to be concerned about the impact on tax revenues from lost business rates.
The Government reportedly views the existing programme as expensive but delivering few benefits, with one estimate suggesting they could create a tax liability of £12bn.
