News / Demands for improvement to governance and transparency at UK freeports

Prime minister Boris Johnson and chancellor Rishi Sunak visit Teesport following its winning bid

The UK cross-party Business and Trade Committee has demanded the government “urgently improve” governance and transparency at freeports and investment zones. 

Freeports and investment zones are a geographical area with preferential tax breaks and business rates for firms that operate inside them. The primary goal of a freeport is to encourage trade and economic growth. 

August 2019 saw the announcement of the creation of several new freeports across the UK that began operations in 2021. There are no ten: East Midlands Airport; Felixstowe and Harwich; Forth Green; Humber Region; Inverness and Cromarty Firth; Liverpool City Region; Plymouth and South Devon; Solent; Teesside; and Thames.  

But in the committee’s Performance of investment zones and freeports in England report published today, it called out the government’s “failure to publish impact assessments for freeports” and said it was “impossible” to accurately assess whether they or investment zones provided the best value for money.   

It requested the government publish “assessments, annual reports, evaluations with accompanying data and the dashboards used to monitor them”. 

The committee also said that “fragmented decision-making has led to mixed messaging and difficulties in securing investment” and called for a single regional leader for each freeport and investment zone. 

“The result would be a single political leader responsible for the projects and to be held accountable for their performance,” said the report.  

In addition, the committee listed five key improvements to be made if freeports and investment zones were to achieve their full potential:

• 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. 

And the report underscored that a “long-term political commitment” is critical to a freeport’s success. 

 Committee chair Liam Byrne 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.” 

However, Mr Byrne expressed scepticism that freeports and investment zones would offer the benefits they promised, due to low funding. 

“Given that freeports and investment zones account for barely one-thousandth of the spending on economic affairs, on their own they will be unable to deliver levelling-up,” he said. 

But he added that with long-term backing and the committee’s proposed edits, they could make an “important difference”.