Green Freeports Programme: island communities impact assessment

Step one – develop a clear understanding of your objectives

What are the objectives of the policy, strategy or service and what are the intended impacts/ outcomes and how do these potentially differ across the islands?

The UK Freeports policy and programme was set and is led by the UK Government. In late 2021 the UK Government sought agreement to joint delivery of the Programme in Scotland and in early 2022, agreement on the principles for joint delivery of the Green Freeports Programme was reached.

The Green Freeports Programme adapts the UK Freeports policy model, in particular in relation to fair work and decarbonisation, to deliver Green Freeports in Scotland. The Programme in Scotland has four core policy objectives set at a programme level:

• promote regeneration and high-quality job creation
• promote decarbonisation and a just transition to a net zero economy
• establish hubs for global trade and investment
• foster an innovative environment

Each objective is underpinned by two key outcomes (see below). The outcomes describe what we want to achieve through the programme.

Promote regeneration and high-quality job creation

a. Increased number of jobs and average private sector wages within the Green Freeport, host local authority area(s), wider regional economy, and specifically disadvantaged areas in the host local authority area(s).

b. Increased economic activity through new company formation and expansion of existing companies in the Green Freeport tax sites, wider designated area and the regional economy.

Promote decarbonisation and a just transition to a net zero economy

a. Decrease in carbon emissions in the Green Freeport area, relative to the sector averages of those firms occupying the site.

b. Increased number of local upskilling and re-skilling opportunities and job opportunities in green sectors.

Establish hubs for global trade and investment

a. Net increases in inward investment within the Green Freeport boundary area, surrounding region and nationally, in line with the Scottish Government’s Vision for Trade.

b. Increased transactions in trade throughput through the designated port(s), in line with the Scottish Government’s Vision for Trade and the ambitions in Scotland: A Trading Nation.

Foster an innovative environment

a. Increased public and private sector funding in research and development (R&D) and innovation in the Green Freeport area, enabling increased productivity in the wider region.

b. Scale of sectoral clusters is increased by innovation and collaboration with Scotland’s enterprise agencies, universities, and colleges.

Green Freeport objectives are envisaged to be realised over time, through a process whereby investable sites are created, investment is landed in target sectors, and this supports growth of new industrial clusters. Increased activity is expected to unlock further benefits to communities, including skills programmes to support access to new, well-paid jobs.

Positive impacts are reinforcing, and controls are in place ensuring benefits are well-aligned to the core objectives. These include:

• tax and customs incentives decreasing the costs and risks of private investment, encouraging major new business activity in priority sectors within the Green Freeport
• seed capital funding, enabling critical supporting infrastructure and supporting sites to be unlocked
• supply chain opportunities emerging from new industrial clusters, with high value businesses supporting increased innovation and productivity
• dedicated Green Freeport skills funds, training programmes, and multi-agency collaboration – applied locally - supporting growth of a well-paid and well-skilled labour force, attuned to sectoral priorities
• decarbonisation occurring as a result of new investment in green energy (a target sector) accelerating Scotland’s clean energy output, enabling cheaper, greener and more secure energy for the long term
• investment being further enabled by a supportive planning environment, wider trade promotion activity, and the investment of retained non-domestic rates to support the Green Freeport’s activities
• positive social impact arising from empowering communities and strengthening local economies, leading to better outcomes for those based in Green Freeport regions

A competitive bidding process was opened to coalitions which included ports, local businesses, international businesses, academic institutions, and local authorities (and the Regional Economic Partnerships where they are formed) in March 2022. In January 2023, two Green Freeports were jointly selected by the Scottish and UK governments from five bids: Forth Green Freeport and Inverness and Cromarty Firth Green Freeport.

Neither Green Freeport is located within an island community – and neither Green Freeport’s 45km Outer Boundary (the primary area of intended impact) covers an island community. As a result, direct impact from Green Freeports on island communities in practice will be limited. Though it is possible that island communities, like other areas of Scotland, could experience indirect impact from the intervention. Through a combination of programme and local controls, Green Freeports seek to maximise the spread of positive benefits across Scotland, whilst mitigating risks of negative impact (e.g. displacement).