Businesses in the South West are eagerly awaiting the arrival of the region’s planned freeport in Plymouth – but many are unclear about how it will operate and have raised concerns about where skilled workers are going to come from as companies ramp up plans to bring jobs to the region.
Transatlantic law firm Womble Bond Dickinson (WBD), which has a large office in Plymouth, has launched its Freeports Business Sentiment 2021 report, representing the views of more than 500 businesses across the UK, from a range of sectors and turnover size.
The report, which includes contributions from Plymouth Manufacturers’ Group and City College Plymouth, shows positive sentiment from South West business leaders is the highest in the UK, with 50% of respondents agreeing that freeports would have a positive impact for their business, compared to a national average of 44%. And 52% also felt freeports would help to enhance trade to and from the UK.
READ THE ENTIRE REPORT: UK FREEPORTS, AN OVERVIEW OF BUSINESS SENTIMENT HERE
But only 18% of respondents in the region felt they had a clear understanding of how freeports will operate and how governance will work in practice.
This mirrored the national viewpoint, with businesses wanting to understand the practicalities of how the initiative becomes a reality and see better guidance on how freeport activity will be secure and fair for the whole South West.
When asked about skills, 59% of respondents in the region agreed freeports have the potential to regenerate areas and create highly skilled jobs.
And 42% of respondents based within a freeport or free zone also said they would seek to create more skilled roles during the next 12 – 24 months and said this was due to the impact of the Freeport and incentives.
Peter Snaith, partner and head of manufacturing at WBD, said: “A large proportion of businesses in freeports and free zones expect to create more skilled roles in the next 12 – 24 months. This is a great indicator that freeports will bring the benefits they promise and help to build opportunities in the surrounding areas.
“However, multiple contributors across the country from both business and education sectors stress that collaboration is what’s needed to drive success.
“As of yet, there isn’t enough clarity on what is expected of governance structures, but the expectation is that a key function will be to ensure the security of custom sites and ensure that the businesses operating within them are adhering to the associated rules and regulations.”
Steve Gerry, secretary and treasurer at Plymouth Manufacturers’ Group, said: “Plymouth has the highest concentration of manufacturing jobs in the South of England and we already have a major skills shortage. There is a feeling that if the region does succeed in bringing in more investors, the labour market could tighten further.
“The forecasted 9,000 new jobs that the freeport is expected to bring will also require an improvement in the region’s supporting infrastructure. We will need to work closely with education providers to ensure we are providing imaginative solutions to introduce the skills required to fill these jobs.”
Jackie Grubb, principal and chief executive at City College Plymouth, said: “Freeports and free zones have the potential to develop skills across multiple sectors to meet the needs of the future as hubs of innovation and to support the creation of long-term job prosperity, so we have developed its strategic direction to encompass the majority of free zone users, linked to maritime, manufacturing, construction and the built environment.
“As part of this strategy, the college is working closely with industry to ensure that they are demand-led and demand informed, building on the skill requirements for the short, medium and long term. Regular skill scan surveys form part of this action, whilst innovation, collaboration and horizon thinking will support the industry with its future needs.”
Only 32% of respondents were aware that businesses outside of freeports and free zones could access some of the same incentives and initiatives as those within the customs and tax sites.
Craig Moore, partner and head of WBD's Plymouth office, said: “We would like to see the Government expand the possibilities of customs and tax benefits within regions by allowing customs warehouses or those with appropriate authorisations to link up more formally with the freeport sites.
“This could make it really exciting, creating mutual benefits and expanding the success in the region as long as there is commitment between the sites.
“It is very encouraging to see at this stage that the majority of respondents in the South West think that the freeports initiative has the potential to drive regional regeneration and economic recovery. The survey highlights a number of key trends, but most importantly emphasises that freeports will not drive success in isolation.
“Freeports will not be the answer for every business, but used as one tool in the economic toolkit, the benefits could be significant if all plans are realised and that’s a really exciting opportunity.”
The UK’s eight freeports will begin operations from late 2021, though Plymouth's will probably start in 2022.
Plymouth City Council joined with neighbours at Devon County and South Hams District Council, and the Heart of the South West LEP for the bid for the Plymouth and South Devon Freeport, to be called a “freezone”, in February..
They are now working up a more detailed business case. If all goes to plan, the “freezone” could be up and running by summer of 2022.
The “freezone” would include sites at Devonport’s South Yard, Langage Energy Zone and the as yet unbuilt Sherford Business Park next to the A38.
It would create space for businesses to import goods and materials, add value to them by manufacture, and export them and leverage the city’s marine innovation strengths to attract marine sector tech companies.
Recently, MPs criticised the Government for failing to publish a report on the economic impact of freeports and said they are worried plans to clamp down on global tax avoidance, agreed at the recent G7 summit in Cornwall, will actually mean firms inside the freeports gain no advantages.
The House of Commons International Trade Committee wants a full impact assessment on Chancellor Rishi Sunak’s flagship freeports programme.
