Consider creative potential of investment zones, councils told

Councils should consider using the government's new investment zones initiative as an opportunity to support creative industries in their area, the Local Government Association (LGA) has said.

Announced as part of last month's mini budget, the government wants to establish scores of investment zones across the country to encourage growth and deliver on its levelling up agenda.

The LGA's Culture, Tourism and Sport Team has said local authorities should contemplate how their creative economy and cultural sector could benefit from the incentives on offer.

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In its September bulletin to members, it stated: “Following the [investment zones] announcement, the Secretary of State for Levelling Up, Housing and Communities, Simon Clarke, wrote to councils, encouraging them to consider how this policy would benefit their local areas. 

"Councils may wish to consider if this is an opportunity to support their creative industries to grow, making use of the advice in ‘Creative Places – supporting your local creative economy’.”

The government has said it is already “in discussions” with 38 local authorities in England regarding its investment zone plans. 

Council areas that sign up to the initiative will be able to offer a range of incentives to businesses, included time-limited tax reductions and fast-tracked planning applications.

Amongst the benefits will be 100% business rates relief on newly occupied and expanded premises and a zero rate for employer National Insurance contributions on new employee earnings up to £50,270 per year.

Mayoral combined authorities that host an investment zone will also receive a single ‘local growth settlement’ in the next Spending Review period.

Investment and jobs

Staffordshire County Council, which the Conservatives retained control of in 2021, has already given strong support to the initiative.

Deputy leader and cabinet member for economy and skills Philip White said it was “hugely encouraging” that Staffordshire was being considered as a location for one of the zones.

He added: “This could bring in millions of pounds’ worth of investment to our county and create thousands of new high-quality jobs.”

The government has said it also intends to work closely with the devolved administrations and local partners to develop investment zones in Scotland, Wales and Northern Ireland.

Capital transfers

The announcement of the proposed zones comes a month before ACE makes a decision on which London-based NPOs will be moving out of the capital, as part of its £8m Transfer Programme.

The programme was prompted by the government's levelling up agenda and a desire by ACE to ensure that more of the money it invests goes outside of the capital, with funding for London being cut by 15%.

Under the terms of the Transfer Programme, successful applicants will receive two-year funding for the period 01 April 2023 – 31 March 2025. Those that have successfully relocated by 31 October 2024 will then be able to apply for ring-fenced funding for 2025/26 through a separate programme launching in autumn 2024.

Jonathan Todd, Chief Economist at BOP Consulting, a research and consulting practice for culture and the creative economy, told Arts Professional that arts organisations and the cultural industries should engage with investment zones that have the potential for success.

"This means adding economic value across the UK – not just displacing activity from one place to another," he said.

"This additionality will be unlocked through new strengths and clusters, which arts and culture should be integral to – provided robust strategies are in place to make the most of local potential.  

“NPOs relocating outside of London can play a major role in unlocking local potential – but only in the context of strategies that maximise complementarities between inward investment, local businesses, and human capital.

"Investment zones will contribute to such strategies if they combine with a clear, compelling, and deliverable vision for where the locality can be in a decade.”  

Writer and independent arts consultant David Micklem said that while the zones “may benefit those companies who have opted to relocate from the capital (assuming they get ACE funds confirmed next month)”, there will be plenty of established companies in these local authority areas “who will hope to be at the front of the queue for any investment zone benefits”.