Agenda item

Briefing Note of the Director of Regeneration and Economy

The Business, Economy and Enterprise Scrutiny Board (3) received a briefing note which provided an update on the Greenpower Park and West Midlands Investment Zone.

The Board noted that the Council owns the freehold of Coventry Airport, a 125Ha site within Warwick District.  In 2021, the Council formed a joint venture with Coventry Airport Limited, which has a long leasehold over the site, in order to promote the site as the location for a battery gigafactory.

The note indicated that the costs of preparing the planning applications have been funded on a 50:50 basis, with each party committing £2m. In addition, the Council has provided a further £0.25m for preparation of the economic case for battery manufacturing on the site and for marketing the site to international investors bringing the Council’s total commitment to £2.25m

In January 2022, Warwick District Council gave outline planning approval for a total of 530,000m2 of development on the site for battery manufacturing and associated uses such as battery recycling, research and development (R&D), supply chain and HQ functions.  Economic modelling suggested that if the site was fully developed, up to 6,000 jobs could be supported in the local economy.

Realising full delivery of the Investment Zone site was vital to achieving the objectives of both the One Coventry Plan (particularly “Enhancing the Economic Prosperity of the City and Region) and the Coventry Economic development Strategy 2022-2027.  The site has huge potential to secure inward investment into the city and also position Coventry as a leader in the green industrial revolution, given the site’s target focus of electric vehicle and battery production, recycling and R&D and associated Advanced Manufacturing Supply Chain activities.  Through the delivery of supply chain support programmes, and skills support programmes, there would be major opportunities to facilitate the successful growth and diversification of local businesses operating with Advanced Manufacturing supply chains, and to tackle inequalities by supporting local residents to upskill and secure new job opportunities. 

The site has attracted interest from a variety of potential investor occupiers. This ranges from a large-scale battery manufacturer with significant output requirements through to smaller cell manufacturers looking to develop technology and scale up production over time. In addition, there is also interest from the wider supply chain with battery component suppliers, battery R&D and testing companies, battery recyclers and some vehicle manufacturers all engaged. 

In the UK government budget in March 2023, it was announced that eight areas including the West Midlands would be invited to develop proposals for Investment Zones. The aim of Investment Zones was to use tax reliefs, planning mechanisms and innovation, skills and business support to create private sector growth and quality jobs. Each Investment Zone must have a sector focus, and the West Midlands has selected Advanced Manufacturing, which is an excellent fit with Coventry’s economic ambitions, and specifically our plans for battery manufacturing at Greenpower Park.  The West Midlands Investment Zone (WMIZ) would focus on Coventry-Warwick Gigapark, Birmingham Knowledge Quarter and Wolverhampton Green Innovation Corridor.

The Coventry-Warwick Gigapark consisted of four sited, including the Greenpower Park, totalling 241Ha, making it by far the largest part of the WMIZ.  The other sites were Whitley South, Segro Park and Whitley East.  The following tax incentives were available for Coventry:

·  Full Business Rate Relief – (5 years) for newly occupied business premises and certain existing businesses where they expend in tax sites.

·  Full Stamp Duty Land Tax Relief – for land and buildings bought for commercial use or development for commercial purposes.

·  Employer National Insurance Contributions – zero rated threshold raised from £5,000 to £25,000 in respect of new eligible employees for the first 36 months of their employment.

·  Enhanced Structure and Building Allowances – 10% straight line deduction per annum.

·  100% First Year Capital Allowances – a 100% first year allowance for expenditure on plant and machinery.

A company investing in 20,000m2 building could expect to save an estimated £4.78m in the first five years of operation.  In addition to these tax incentives, WMIZ allows business rates from the three sets of sites in the region to be collected and reinvested into the Advanced Manufacturing sector in the West Midlands for 25 years. It was estimated that during this period £1.5bn in business rate growth would be generated to then reinvest in helping to grow the sector.

It was noted that the West Midlands Combined Authority (WMCA) would develop an investment plan for this funding, and Coventry (and its partners in Warwickshire) would be working to ensure that funding is reinvested into the Coventry and Warwickshire advanced manufacturing eco-system which is critical to the local economy.

The Board made statements, asked questions and received responses in respect of the following:

·  How raw materials would be brought to the site.

·  Whether there were any concerns about the impact of the supply chain on child exploitation, such as the production of Cobalt in the Congo.

·  Whether the protests around the Bubbenhall area related to  the wider investment zone.

·  Links between the site and Ansty Park.

·  Whether there had been any promotion of the site to the defence sector.

·  How many jobs could be created if the site were to be fully invested.

·  The impact of AI and robots on the potential employee numbers.

·  Whether the Council were insisting on options to provide skills to local children through apprenticeships.

·   

RESOLVED that, the Business, Economy and Enterprise Scrutiny Board (3):

1.  Note the content of the briefing note.

2.  Indicate that they have no specific recommendations for the Cabinet Member for Jobs, Regeneration and Climate Change.

3.  Request that information be provided on how many apprentices from Coventry are employed on the site.