A new investment zone for the Cardiff Capital Region has launched, with backers confident it will create 4,000 high-skilled jobs over the next decade.
The zone consists of three strategic sites in Cardiff and Newport and is backed by £160m of UK Government funding, supported by the Welsh Government. It is expected to leverage a further £500m in private sector funding.
The zone is run by Cardiff Capital Region, a statutory body covering the 10 local authorities of South-East Wales, and will use support measures to boost sectors including cybersecurity, compound semiconductors, digital and manufacturing.
Compound semiconductor cluster targets 6,000 staff
The region’s compound semiconductor cluster is targeting 6,000 high-skilled staff by 2030, with companies operating in it generating combined revenues of £1bn. The cluster currently employs around 2,000 people. The majority of the projected 4,000 new jobs in the investment zone are expected to come from the cluster.
The zone includes Imperial Park in Newport, home to leading commercial players in the cluster such as Vishay Intertechnology, IQE and KLA, as well as part of the adjoining Tregedar Park, which houses the Office for National Statistics.
The second element is the proposed Cardiff Parkway new mainline train station and integrated business park at St Mellons. Over time, the site could see up to one million sq ft of new commercial space developed.
Rolls-Royce appraises Cardiff Parkway site
While a funding deal for a new train station has yet to be agreed, engineering giant Rolls-Royce has appraised the site as ticking all the right boxes for a major hub investment. Its submarine division already has a satellite office operation nearby at St Mellons Business Park.
If Rolls-Royce were to invest at Parkway, it would see the zone’s target of 4,000 jobs over the next ten years being easily exceeded.
The third part of the zone covers the Central Quay regeneration scheme south of Cardiff Central train station and the Atlantic Wharf project in Cardiff Bay, where, alongside a new indoor arena, there is a masterplan for up to one million sq ft of mixed-use development.
Business rates retention at variance with England and Scotland
However, in terms of the new business rates generated in the zone, the city region will only be able to retain 50% for reinvestment purposes, with the Welsh Government taking the other half. This is at variance with UK Government-backed investment zones in England and Scotland, where there is 100% business rates retention within zones.
Cardiff Capital Region, which has lobbied for 100% retention, is exploring the possibility of providing funding to zone projects by borrowing against expected future business rates created through tax increment financing. However, its scope will be limited by the Welsh Government’s current retention position.
Leader of Newport City Council and a deputy chair of Cardiff Capital Region, Dimitri Batrouni, said: “Cardiff Capital Region’s investment zone represents a landmark opportunity to accelerate growth, innovation and prosperity across South East Wales.”
Leader of Cardiff Council, Chris Weaver, said: “The £160m investment zone programme gives us a once-in-a-generation opportunity to build on those strengths and attract hundreds of millions of private sector investment, supporting businesses to grow and innovate, attracting investment, and competing on a global stage.”
The city region has launched a range of early initiatives for the zone, including investment in infrastructure, targeted skills interventions and programmes designed to deepen local supply chains and increase business competitiveness.
Secretary of State for Wales Stephen Kinnock said: “This UK Government investment zone will be an engine room for high-tech industry and innovation – driving new jobs and opportunities into communities across South East Wales.”
Adam Price, Cabinet Minister for Enterprise, Connectivity and Energy, said: “The launch of the Cardiff Capital Region investment zone marks a defining moment for South East Wales. By bringing together business, academia and government around our world-leading semiconductor cluster, we’re turning opportunity into delivery and creating high-skilled jobs, unlocking major investment, and building a sustainable, innovative future economy for the region.”
