Green Freeports Programme: island communities impact assessment

Step two – gather your data and identify your stakeholders

What data is available about the current situation in the islands?

N/A – Green Freeports are not being implemented in island communities.

Who are your key Stakeholders?

The list of key stakeholders involved in delivery of the Green Freeport are below.

• Governments
• Scottish Government
• UK Government
• Local authorities
• The Highland Council
• Falkirk Council
• City of Edinburgh Council
• Fife Council
• Port authorities
• Forth Ports
• Port of Inverness
• Port of Cromarty Firth
• Port of Ardersier
• Private industry
• Global Energy Group
• INEOS
• Babcock
• Haventus
• Scarborough Muir
• Operating companies
• Forth Green Freeport Ltd
• Inverness and Cromarty Firth Green Freeport Ltd

How does any existing data differ between islands?

N/A – Green Freeports are not being implemented in island communities.

Are there any existing design features or mitigations in place?

The Green Freeports focus is on achievement of the stated policy objectives, generating investment and job creation which is new and additional, and not displacing activity from other regions in Scotland, including from island communities.

In respect of displacement, the policy design requires that proposed Tax Sites – where cluster building will focus, are appraised against criteria (published in the Green Freeports Bidding Prospectus) in terms of both physical size and shape and potential to meet the policy objectives. One of the aims of this is to ensure that the selected tax sites maximise the benefits of the Green Freeport whilst minimising, as far as possible, any deadweight or displacement.

Further it was acknowledged that while the location(s) of proposed tax sites should be chosen with the intention of minimising displacement of economic activity from wider local areas, a small amount of displacement may nevertheless occur. Green Freeport governing bodies are therefore required to propose appropriate displacement factors for their tax sites to be considered when calculating the non-domestic rates to be retained. In addition they are also required, within their business cases, to explain how the tax site(s) minimise displacement of economic activity from wider local areas, especially economically disadvantaged areas.

In respect of Green Freeports non-domestic rates relief, local authorities can choose to apply additional tests that they deem appropriate in order to avoid incentivising displacement of activity in the Green Freeport area from the surrounding area.

In respect of Green Freeport retained non-domestic rates (rNDR) income, retention should not include projects that would have come about anyway, without the Green Freeport incentives, but have been built within the tax site. In order for new properties to contribute to rNDR income, they must meet a ‘but-for’ test. In relation to this it is a requirement that local authorities must be capable of showing on request that:

• without the Green Freeport the necessary infrastructure investment would not take place
• the project meets one or more of the stated policy objectives

The Scottish Government can query or review Green Freeport properties to determine if they have met the 'but for' test.

The Green Freeports themselves are also designed to capitalise on local assets and strengths specific to their region. Where the Green Freeports’ target sectors do not overlap with island economies (e.g. alternative fuel production within Forth Green Freeport), any risk of displaced economic activity from islands to the Green Freeport should in practice be limited.

Where Green Freeports have overlapping sectoral interests with island communities outside Green Freeport areas (for example, in offshore wind), they should use incentives to attract large scale anchor investments, which help make Scotland the investment location of choice for that sector and support the national supply chain, with positive implications across Scotland, including for island communities. For example Orkney, with developments such as the West of Orkney Windfarm project, is well-placed to capitalise on the offshore wind opportunity which is the focus of the Inverness and Cromarty Firth Green Freeport. Plans to target anchor investments, support the creation of thousands of jobs (both directly and indirectly), and support wider supply chains in Scotland are clearly evidenced in both Green Freeport business cases.