The levelling up secretary has confirmed that investment zones will not be funded by transferring finance from other parts of the local government budget.
Simon Clarke, speaking in the House of Commons at questions for the Department for Levelling Up, Housing and Communities on 17 October, said: “This is new money. It is coming from the Treasury as part of the settlement.”
However, Clarke did add: “Clearly, my right honourable friend, the chancellor, will be setting out the Medium-Term Fiscal Plan on 31 October and that will be the moment of confirmation.”
Investment zones are designated areas where businesses benefit from tax incentives and relaxed planning rules. They were announced in the ill-fated mini-budget on 23 September, with the government subsequently asking for bids from mayoral combined authorities, upper tier councils and freeports by 14 October.
Clarke said that the responses from local authorities had been “extraordinary”, and added: “We have had hundreds of applications from local authorities for these zones, which is testament to the huge appetite for growth and investment opportunities across this country.
Bids are known to have been submitted by authorities including Derbyshire, Greater Manchester, Worcester, Harrogate and Doncaster.
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