A busy week in economic development: LUF3 and the Autumn Statement

Insight Author

Gareth Jones

Director

Tel: 07966 397 922

E: gareth@hardistyjones.com

Share

LUF 3 awarded without open bidding

The third round of projects supported by the Levelling Up Fund (LUF3) was announced on Monday 20 November 2023. Following open bidding for the first two rounds, the third round was awarded directly to projects that previously bid and scored highly. Fifty-five projects in England, Scotland, and Wales were awarded just over £1 billion of funds, including projects in Torbay, Somerset, Plymouth & South Devon Freeport, and a National Cyber Innovation Centre in Cheltenham.

Given ongoing inflation and a challenging economic environment, many of these may need to revisit their economic cases and value-for-money calculations, and possibly undertake some value-engineering.

Autumn Statement includes measures to promote local economic development

Later in the week, Wednesday’s Autumn Statement set out an overall aspiration to promote economic growth through a combination of support for businesses and demand stimulation, including a headline grabbing reduction in employees’ National Insurance contributions. Items of interest for local economic development are highlighted below.

Funding and finance for businesses:

  • £4.5 billion of strategic investment to support growth and the transition to zero emissions in the automotive, aerospace, life sciences, and clean energy sectors from 2025.
  • Direct investments in space clusters and quantum computing.
  • New parameters for Contracts for Difference for renewable energy projects and support for floating offshore wind, hydrogen, and carbon capture usage & storage (CCUS).
  • Encouraging pension scheme investment into technology and science businesses and establishing a Growth Fund within the British Business Bank.

Encouraging UK and foreign business investment:

  • Allocation of new investment Zones in the Midlands and North, and an increase in tax reliefs and an investment opportunity fund for Investment Zones.
  • Support to attract more foreign direct investment to the UK.

Delivering infrastructure and power for growth:

  • Reform to the planning system to speed up decisions on nationally significant infrastructure; proposals for a new premium planning service to accelerate major applications; and incentivising greater use of Development Consent Orders (DCOs).
  • Upgrading the electricity transmission network and reducing the time to deliver new grid connections to six months.
  • Accelerating the expansion of Electric Vehicle charging infrastructure.

Support for SME growth:

  • Supporting the introduction of digital technologies into manufacturing SMEs.

Workforce skills:

  • Support for two-year apprenticeship pilots in growth sectors.

Research and development:

  • £750 million for UK R&D.
  • UK to associate to the Horizon Europe and Copernicus programmes.

Greater devolution:

  • New devolution deals, including one for Cornwall.