A new investment zone for Cardiff Capital Region has launched, with its backers confident it will create 4,000 high-skilled jobs over the next decade.
The zone, which consists of three strategic sites in Cardiff and Newport, is being backed with £160m of UK Government funding and supported by the Welsh Government. It is expected to leverage a further £500m in private sector funding.
Zone structure and key sectors
The zone is being run by Cardiff Capital Region, a statutory body that covers the 10 local authorities of South-East Wales, and will use support measures to further boost sectors such as cybersecurity, compound semiconductors, digital and manufacturing.
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.
Strategic sites in Newport and Cardiff
The zone includes Imperial Park in Newport, which is home to some of the leading commercial players in the cluster, such as Vishay Intertechnology, IQE and KLA, as well as part of the adjoining Tredegar Park, which is home to 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.
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.
Funding and retention concerns
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.
Official reactions and early initiatives
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."
"While focused within Newport and Cardiff's travel-to-work area, its benefits will be felt across all ten local authorities through new investment, stronger supply chains, enhanced skills provision and high-value employment opportunities."
Leader of Cardiff Council, Chris Weaver, said: "Cardiff, Newport, and the wider Cardiff Capital Region are already driving innovation in sectors that will shape the future economy, from semiconductors and advanced manufacturing to cyber security, creative industries, and digital technologies."
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. Crucially, this can help create thousands of jobs, make our region more prosperous and resilient, and help drive growth for decades to come.
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."
It will build on the talent and expertise already on show in the region, supporting the development of a highly skilled workforce capable of meeting industry demand long into the future.
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."
The investment zone is the result of sustained partnership working and will be key to helping us boost growth, improve productivity, strengthen supply chain resilience, and ensure that public investment helps unlock private sector confidence.
