THE WEST MIDLANDS INVESTMENT ZONE
JULY 2025
WHAT IS THE WEST MIDLANDS (WM) INVESTMENT ZONE (IZ)?
Investment zones serve as a special economic area where the government and local authorities have reduced certain restrictions and taxes to encourage investment over multiple years. They were introduced in the autumn of 2022 to increase regional investment, with the long-term goal of increasing employment and levelling up local economies. In 2023, then-Chancellor of the Exchequer Jeremy Hunt announced that the West Midlands would be the recipient of an IZ, backed by £80m of funding - later increased in £160m in flexible capital and revenue funding - to support development of the IZ sites and the sectors they serve.
According to the West Midlands Combined Authority (WMCA), the IZ will help to accelerate growth in the region’s Advanced Manufacturing sector. This includes activity across electric vehicle and battery technology, green industries, health technology and the associated digital platforms that underpin development in these areas. The overlapping nature of these sectors will hopefully power a new ecosystem which attracts investors and ultimately creates jobs and opportunities. The WM IZ covers the region as a whole and will focus on three specific sites which will benefit from direct funding and in certain instances, tax incentives.
THE THREE SITES ARE:
• The Coventry-Warwick Gigapark at Coventry Airport. Anchored by a new battery gigafactory and associated businesses and technologies with a focus on electric vehicles.
• The Birmingham Knowledge Quarter – running northeast from the Birmingham City and Aston universities through Duddeston and Nechells to Aston with a focus on health/med-tech and wider digital technology capabilities.
• The Wolverhampton Green Innovation Corridor will support the transition to the emerging green sectors such as clean-tech, sustainable construction, cyber security and green engineering through a partnership between the city council and university.
More information about the areas covered by the West Midlands Investment Zone is available here: Map of UK Investment Zones: West Midlands, 2023
Government modelling suggests that these sites could attract more than £5.5bn of private investment into the West Midlands and ultimately create more than 30,000 jobs by 2034. Furthermore, approximately £1.5bn generated in business rates over the IZ’s 25-year lifespan will be retained and reinvested back into the region
WHAT DOES THIS MEAN FOR GREATER BIRMINGHAM BUSINESSES?
The West Midlands Growth Company sets out that businesses locating in the West Midlands Investment Zone will benefit from a range of incentives, including:
• Full business rates relief for 5 years*
• A 100% first-year capital allowance for expenditure on plant and machinery
• Full stamp duty land tax relief for land and buildings bought for commercial use or development for commercial purposes
• Enhanced structures and buildings allowances (SBAs): 10% straight-line deduction per annum
• Employer national insurance contributions (NIC) threshold raised from £9,100 (2023/24) to £25,000 in respect of new eligible employees for the first 36 months of their employment
*Tax incentives are available until 31st March 2034, for Birmingham Knowledge Quarter and Coventry & Warwick Gigapark.
The Birmingham Knowledge Quarter – the IZ site within Greater Birmingham – will additionally be supported by the delivery of homes, commercial and community spaces.
Tax revenue generated by the IZ will be utilised to deliver a range of interventions intended to support business growth including:
• Skills development (£5m)
• Supply Chain adaptation (£5m)
• R&D grants (£5m)
WHAT IS THE GBCC’S POSITION ON THE WM IZ?
The West Midlands Investment Zone represents a significant opportunity to drive forward inclusive economic growth across our region. The GBCC support this targeted approach to unlocking investment, particularly in advanced manufacturing, green industries, and emerging technologies—sectors where the West Midlands has both existing strength and future potential. The focus on the Birmingham Knowledge Quarter, alongside the other designated sites in Wolverhampton and Coventry, provides a strong platform for building on the existing strengths of our world-class higher education institutions to cluster innovation, attract employers and accelerate regeneration.
For the Investment Zone to deliver its full potential, it is essential that stakeholders remain committed to facilitating the delivery of necessary infrastructure – including the development of the Coventry and Warwickshire Gigafactory - and skills pipelines. Additionally, the planned interventions including R&D grants, equity fund support and supply chain adaption will also be critical to delivering transformative change in the sites that make up the Investment Zone.
WHERE CAN I GO TO GET THE LATEST ADVICE AND INSIGHTS?
The Greater Birmingham Chambers of Commerce is here to unleash the potential of local businesses, as unwavering champions and the leading voice for the local business community. We will continue to work with members and stakeholders to help shape initiatives to enable business growth and boost prosperity in the region.
The Chamber’s daily enewsletter, Greater Birmingham Business News, provides the latest news and developments in the Greater Birmingham Business Community and will continue to share key announcements regarding the Investment Zone. Subscribe here to receive the newsletter.