The Strategic Case

Demonstrating that the intervention is needed

Plymouth and South Devon (PASD) have an identified need to level-up given the area’s performance on a range of economic indicators but the FBC identified a number of strengths on which to build. The Strategic Case described key strengths and also pinpointed the challenges to be addressed which are summarised below.

Strengths (value proposition) Weaknesses (shortfalls and vulnerabilities)
  • Strong and well-established clusters
  • Specialisms in marine, defence and space sectors where we can capitalise on major global markets, including low carbon applications
  • A range of natural and physical assets:
    • Natural harbour and sheltered water with deep water access to the English Channel and Atlantic
    • One of the largest naval bases in Europe with unique nuclear defence capabilities
    • The UK’s first marine Enterprise Zone at Oceansgate underpinned by the Oceans Futures regional programme
    • World class businesses and research assets in marine autonomy and marine renewables
    • The UK’s first 5G connected ocean trialling area (Smart Sound)
    • Spaceport Cornwall
  • A proactive knowledge base including the universities of Plymouth and Exeter as well as local colleges
  • The South West Institute of Technology aligned to Freeport opportunities
  • Valuable waterside development sites with the potential to support marine/defence innovation and high value shipbuilding at South Yard
  • Significant development sites within the Eastern corridor (at Langage and Sherford)
  • Established freight routes through the Port of Plymouth with scope for growth and for piloting short sea shipping routes
  • A major arterial road (A38 Devon Expressway) linking to the M5
  • Economic challenges around the area’s:
    • Lower than average GVA per head
    • Low wages
    • Historical unemployment rates
    • Ranking on indices of deprivation
  • Low numbers of exporting businesses and low levels of innovation/R&D
  • Lack of investment in infrastructure and space inhibits business clustering opportunities
  • Anchor tenants lack modern facilities for expansion
  • Despite having development sites in the Eastern corridor, the area suffers from major viability constraints which inhibit private sector investment, compounded by high transport costs
  • Businesses are also held back from investing by known barriers to growth including finance and skills
  • Regeneration opportunities ‘behind the wire’ of MOD land at South Yard cannot easily be unlocked without significant service re-provision costs
  • Port infrastructure needs to be improved to enable additional throughput to support short sea shipping
  • The Octagon roundabout in the centre of Plymouth requires improvements to facilitate larger HGVs and accommodate increased movements of goods to and from the tax sites
  • There are limitations within the skills infrastructure for target markets

The Strategic Case described how Freeport seed capital along with the tax, customs and innovation levers provide a unique opportunity to build on strengths and overcome these issues through:

  • Physical regeneration – by delivering infrastructure to unlock key employment sites and innovation assets, supporting business clustering and clean growth opportunities;
  • Economic regeneration – by delivering inward investment, supply chain opportunities and productivity gains within identified growth sectors; and,
  • Social regeneration – by delivering a pipeline of jobs across the spectrum of employment from entry level to higher skilled/high value with upskilling opportunities.

Activities described within the FBC are focused geographically on:

  • The South Yard site – which is located near the Port, adjacent to the existing Oceansgate Enterprise Zone and will be developed as a tax site, expanding the existing Oceansgate footprint and forming the centrepiece of the Freeport’s Innovation Hotbed;
  • The Langage site – which is located on greenfield land within the Eastern corridor of the city, in close proximity to the A38 Expressway and is a strategic employment allocation. It will be developed as a tax site with a customs site incorporated within it and will provide industrial and manufacturing as well as light industrial units for high value manufacturing/ engineering companies, focusing primarily but not exclusively on the marine, defence and space sectors. The site will also be home to a Green Hydrogen Electrolyser being developed by landowner Carlton Power and a Mobility Hub to deliver sustainable and low carbon transport options; and,
  • The Sherford site – which is located on the opposite side of the A38 Expressway to Langage, Sherford forms part of the employment allocation of the Sherford new community. Plans are being considered to develop the site for logistics purposes with a coterminous tax and customs site boundary, providing warehousing, storage and engineering space.

Seed capital is also expected to support enhancements at the Port to enable the value and tonnage of cargoes to be expanded, thus supporting short sea shipping and an associated modal shift.

Underpinning the above, the FBC focused on:

It also made a commitment to acting as an exemplar in working with local partners to deliver a net zero emissions target for the area covered by the Freeport’s outer boundary and wider region significantly ahead of 2050.

These activities should lead to a range of benefits as follows:

Core Freeport Activities
  • Delivering land remediation and supporting transport infrastructure to develop our sites
  • National and global marketing to attract investment and stimulate exporting
  • Enhancing port infrastructure
  • Implementing our skills plan with the development of a marine skills academy
  • Implementing our innovation strategy (including the innovation centre)

Indicative Outputs

  • 20 new businesses trading through the Freeport tax sites
  • 8 new FDI attracted to the Freeport
  • £441m additional trade throughput
  • % increase in value/tonnage of cargo through Port by 2046
  • % Increase in cargo (tonnes) arriving from other UK ports by 2046

(volume uplift in the above to be aligned with national Freeport M&E Framework)

  • 88.3 hectares of land developed
  • 3,584 gross new jobs created
  • £249.67 m private sector investment in buildings and development on our three sites (based on modelling)
  • 50 people upskilled, gaining qualifications (through aligned activity) per year
  • 10% of jobs filled by inactive claimants and registered unemployed
  • 3,000 Sqm of skills infrastructure (Marine Skills Academy) – delivered as a hub and spoke model
  • Delivery of trained workforce in marine skills (300-500 learners per year through the Marine Skills Academy)

With a strong zero carbon focus:

  • 2,400 Sqm new innovation space
  • 160 business diagnostics
  • £16m private R&D investment
  • 20 new to market and 40 new to firm products
  • 8 new patent applications filed
  • 48 collaborative business/academic projects including KTPs, industrial PhDs and large-scale JIPs/industry consortia
  • 10 student placements annually
  • 8 funded collaborative R&D projects (national grant awards)
Measureable Outcomes
  • Increase in trade throughput
  • Increase in short sea shipping
  • Reduction in freight transport emissions
  • Improved regional connectivity
  • Increase in investment (domestic and FDI)
  • Increase in number of businesses exporting
  • Increase in employment and economic activity rates
  • Increase in average F/T earnings (from manufacturing and sector specific growth)
  • Increase in economic specialisation (marine/autonomy/defence cluster)
  • Decrease in deprivation
  • Enhanced skills facilities
  • Increase in R&D spend
  • Boosting GVA through increasing high value economic activity
  • Increase in productivity
  • Contribution to net zero research and innovation agendas
  • Extension of regional national and international networks
Government Objectives

In order to make a compelling case for Freeport designation, the business case that was submitted to Government followed a prescribed template that was by necessity very detailed and also contained a range of commercially sensitive information. These summaries provide a more digestible overview of the business case with commercially sensitive information removed. It should also be noted that the material presented, including all cost assumptions, was accurate at the time of submission (April 2022). The summaries have not been updated since then. We have moved forward on a number of core activities through our mobilisation phase which are not reflected in the summaries, with the Freeport Company and associated board structures having now been established. This has enabled us to start building on the hard work that went into securing Freeport designation, working with our partners to leverage exciting new opportunities for the area.