Join Report of the Head of Economy, Enterprise and Skills and Director of Finance (EES/22/3) on the Plymouth and South Devon Freeport, attached.
(a) that the work undertaken by the partners towards government’s approval of the Outline Business Case and towards the Full Business Case, due for submission to government on 22nd April 2022, be noted;
(b) that it also be noted that the Freeport designation ensures 25 years of retained business rates for the participating authorities, for the designated sites;
(c) that the Council borrows up to £15 million of capital investment to leverage the Government’s seed capital funding of £9.6 million to deliver transport schemes, to support the development of the Freeport sites in Devon and that this borrowing will be repaid from retained business rates in future years;
(d) that the Council becomes a founder member of a company limited by guarantee to operate the Freeport, alongside South Hams District Council (SHDC) and Plymouth City Council (PCC) and that the appointment, in due course, of a Member of Devon County Council to serve as a director of the company, following the completion of steps required to effect such appointment also be approved;
(e) that the Head of Service for Economy Enterprise and Skills, in consultation with the Leader of the Council, portfolio holder for Economic Recovery and Skills and the Director of Finance and Head of Legal and Democratic Services be given delegated authority to:
i. approve and submit the Final Business Case (FBC) for the Plymouth and South Devon Freeport;
ii. approve the articles of association and reserved matters for the Freeport company and enter into member agreements for the company between SHDC, PCC and DCC;
iii. enter into the business rates sharing agreement with South Hams District Council; and
iv. approve the Freeport Business Rates Policy, which with the business rates sharing agreement defines the basis for loan repayments and distribution of any surplus achieved, which will include contributions to ongoing running costs of the Freeport company and other activities which aim to avoid Business Rate displacement.
(f) that Cabinet note appropriate scrutiny arrangements will be put into place in conjunction with SHDC and PCC regarding the operation of the Freeport.
(Councillors Connett, Gent and Hannaford attended in accordance with Standing Order 25(2) and spoke to this item).
The Cabinet considered the Joint Report of the Head of Economy, Enterprise and Skills and Director of Finance (EES/22/3) on the Plymouth and South Devon Freeport, circulated prior to the meeting in accordance with regulation 7(4) of the Local Authorities (Executive Arrangements) (Meetings and Access to Information) (England) Regulations 2012.
The Report sought the approvals necessary to submit the Full Business case on 22nd April 2022, ahead of a tax site designation, enabling operations to begin in the early summer and to set up a Company Limited by Guarantee to operate the Freeport owned by Plymouth City Council (PCC), South Hams District Council (SHDC), and DCC, with director representation from PCC, SHDC, DCC and the private sector.
The Report had been submitted in parallel with approval processes taking place at Local Authority partners, South Hams District council (SHDC) and Plymouth City Council (PCC), with Plymouth and South Hams having approved recommendations at their March Cabinet meetings.
Freeports had been set up to act as hubs for global trade and investment across the UK, to act as designated tax and customs sites with benefits to businesses from tax breaks, simplified customs, investment funding to open up sites and creating of high-skilled jobs.
Appendix 1 gave a description of a Freeport and the benefits to occupiers, which would be available for occupiers for 5 years, up until 2026/27.
The Plymouth and South Devon (PASD) Freeport was the result of a successful bid submitted in February 2021, with an Outline Business case submitted in November 2021. The business case showed that the establishment of the Freeport had the potential to unlock £314 million in inward investment and create 3,584 jobs. It would provide a new world class innovation space enabling the area to build on the global reputation for marine innovation and advanced engineering.
It would anchor some large employers, protect existing jobs and ensure they could expand their local operations. It would also unlock 130 Hectares of development land to provide space for high value advanced manufacturing and logistics companies.
The Full Business Case would set out the ambition to deliver a Freeport that also contributed positively to the achievement of Carbon Net Zero.
The Report gave full detail on the Plymouth and South Devon Freeport Proposal, including vision and partnership arrangements, the proposed three tax sites at South Yard in Devonport, Langage Energy Park and part of Sherford Employment Zone, Customs sites and proposed main customs sites within the tax site boundaries at Langage and Sherford. It also outlined Governance arrangements, Gateway Policy (avoiding displacement), Business Rates Relief Policy, Land Owner Agreements, expected outputs and timelines.
The total investment in the Freeport was predicted to reach £314 million (Appendix 5). This was made up of £25 million in Government seed capital grant with local public sector match funding of £29 million. For the South Yard site, Plymouth City Council was bidding for a ... view the full minutes text for item 148