Background to the West Midlands Investment Zone

National Landscape

In March 2023, the UK Government launched Investment Zones (IZs) in eight combined authority areas across England, to tackle barriers to growth at a regional level through new investment, innovation and a range of fiscal levers. These zones brought together central and local government, universities and private sector partners to support growth in at least one priority growth area. Each IZ could benefit from targeted funding, and tax incentives and the ability to retain business rates growth above an agreed baseline on designated sites.

In the UK Government’s Modern Industrial Strategy (2025), the Government has now grouped Freeports, Investment Zones and Enterprise Zones, and AI Growth Zones, as Industrial Strategy Zones, although with all their original levers and arrangements remaining. It has also committed to over £160 million in funding over 10 years to stimulate growth, up to 2034.

Regional Landscape

The development of the WMIZ was a pan-regional endeavour: working with all the local authorities and key stakeholders to identify the priority sector (‘advanced manufacturing’), sites, and the optimal range of levers to deploy.

IZ policy was directed to Combined Authority (CA) areas to underpin a regional economic approach, with the CAs acting as accountable bodies for funding. The CAs are also responsible for the effective delivery of site development, investor attraction and the overall delivery of anticipated outcomes. WMCA was approached during the development and delivery phase to establish a strong and deep partnership approach with all relevant partners, to not only ensure delivery but use the IZ as a catalyst and spark for wider economic opportunities.

The WMIZ was informed by the West Midlands’ ‘Plan for Growth’ (2023) and will support the delivery of the region’s Integrated Settlement and the recently published ‘Growth Plan’ (2025) – not just through its immediate 10-year funding envelope, but also through the 25-year business rate retention opportunity. 

Sectoral Focus

Advanced manufacturing is a core strength of the West Midlands, contributing £10.4 billion to the regional economy and supporting 11.3% of local jobs, well above the national average and with significant growth potential, aligning with the regional economic policies.

The West Midlands hosts key manufacturing companies including Jaguar Land Rover and Collins Aerospace, with Aston Martin and JCB in the wider region, alongside leading research institutions, including for example MTC, Warwick Manufacturing Group and UK BIC. Overall, a third of all British-made cars roll off West Midlands’ production lines with growing electric vehicle and battery capabilities.

To maximise the opportunities from IZ policy and to genuinely reflect the breadth of the West Midlands economy, this focus on ‘advanced manufacturing’ was drawn to incorporate its intersections with electric vehicle and battery development, research and manufacturing, green industries, med-tech and health-tech, and the underlying digital capabilities that support the ‘advanced’ part of the sector title.