The government’s new 10-year Industrial Strategy, published on 23 June, sets out a long-term vision for economic renewal with a focus on translating national priorities into local delivery.
Among the headlines are major sector-specific investments, including over £2.8 billion in advanced manufacturing R&D and £600 million to expand AI capacity in the life sciences sector. But for local authorities and regional delivery partners, it is the suite of place-based funding mechanisms that stands out.
Three new funding streams – the £600 million Strategic Sites Accelerator, £500 million Local Innovation Partnerships Fund, and £500 million Mayoral Recyclable Growth Fund – are designed to unlock development, crowd in private investment, and support innovation-led regeneration.
The Strategic Sites Accelerator will provide funding support to unlock the development of key sites within designated Industrial Strategy Zones, such as Investment Zones and Freeports.
The strategy references land remediation costs as an example of what can be covered. This suggests that at least some of the sites supported by the accelerator programme are expected to be brownfield, particularly in urban or industrial contexts.
The £500 million Local Innovation Partnerships Fund provides support for local R&D ecosystems. It is set to enable local authorities and partners to invest in facilities and innovation infrastructure aligned with local economic strengths.
It acknowledges the role of local institutions such as universities, Catapults, and business networks in translating national missions into commercially viable projects. For areas that have already laid the groundwork under Investment Zones, Freeports, or Neighbourhood Plans (previously Long-Term Plan for Towns/Levelling Up Round 3), the fund may help consolidate delivery capacity and accelerate market-led innovation.
The £500 million Mayoral Recyclable Growth Fund is a revolving capital mechanism that will enable mayoral combined authorities to offer a flexible mix of grant and loans to unlock, for example, major city-centre developments and strategic industrial sites.
Details of the ‘recycling mechanism’ are not specified in the document. We anticipate that the fund will use returns from development activity through land value uplift and capture of publicly owned land and/or increases in council tax and business rates to enable mayoral combined authorities to reinvest in future projects. Similar models, such as the Enterprise Zone in Birmingham, have proved to be particularly well suited to unlock large, complex schemes requiring grant funding support in early stages of development.
For teams like ours who support combined authorities and local authorities in developing growth strategies, delivery strategies and funding bids, the Industrial Strategy offers the tools needed to implement the changes outlined in the Spending Review and Green Book Review, published on 11 June. The new suite of funding mechanisms will further support local and regional governments to make the place-based approach set out in the Green Book Review a reality.
To tap into funding we anticipate there will be an immediate need to review local and regional development pipelines, test viability and review deliverability to ensure that projects are ‘shovel-ready’ when the funding becomes available.
Although some of the funding elements outlined above focus on designated areas such as Investment Zones and Freeports, our understanding is there remains a level of flexibility for local and regional government to invest funding where they see the best potential and highest need. Our team has worked with developers and local authorities across the country to bring forward challenging brownfield schemes often in town centres or on historically underused employment land. In many cases, public intervention has helped to unlock stalled development. A brownfield-focused approach delivers clear sustainability benefits, including the reuse of premises with embedded carbon, support for urban intensification and reduced pressure on green belt release and urban sprawl. This can also have a positive impact on agglomeration effects and, thus, can be part of the solution to the UK’s ongoing productivity issues.
My colleague, Daniel Vargas, has carried out some useful analysis assessing the 350 UK local authorities’ economic complexity and their potential to move towards higher value-added specialisations. This can be helped if targeted strategic investment in up-skilling and infrastructure were to be provided. This analysis could support regional and local government in a) identifying the local authorities with the biggest potential, b) recommending what higher value industries to target and c) recommending strategies to get there.
The Industrial Strategy is not just about sectors – it’s also about places. For teams like ours working at the intersection of planning, development and economics, the strategy provides additional tools needed to turn the government’s place-based approach into deliverable projects. For central government, the next step will be to reflect the Industrial Strategy in published guidance whereas local and regional government will need to agree on delivery mechanisms/partnerships and develop a pipeline of projects that can benefit from the funding once it’s available.
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