Leicester and Nottingham have been named as two of England’s key locations outside of London for foreign business investment.
The report, by leading business and financial adviser Grant Thornton UK LLP’s Place Analytics team, identifies the key places outside the country’s capital that offer high quality locations for inward investment, and also highlights some of the areas that offer investors the best value for money in terms of quality and cost.
Based on Grant Thornton’s Business Location Index (BLI), the report provides a ranking of 324 local authorities in England on key economic, social and environmental criteria that influence business decisions.
The two East Midlands cities are named by the report as offering ‘relatively high quality business locations at lower operating costs’ outside of London. The West Midlands also features, with Birmingham, Warwick, Coventry and Solihull identified by the report.
The BLI’s analysis reveals that 7% of English local authorities offer relatively high quality business locations at relatively low costs, with the majority located in the East Midlands, and Yorkshire & Humber.
The aim of the research is to give local authorities and local enterprise partnerships (LEPs) the tools to better understand and market their strengths and assets to inward investment.
Commenting on the findings, Grant Thornton’s Chris Frostwick, practice leader and partner of its East Midlands’ regional office in Leicester, said: “The report shows that Leicester and Nottingham are low cost high quality business locations, two of 21 (7%) English districts identified as such, making them strong contenders as two of the most desirable and affordable places in England for outside business investors.
“While the quality of a business location will be a major factor, the final investment decision will involve other considerations, in particular cost and including factors such as average earnings, business rateable value and average house prices.
“In my view, performance of an existing local economy is part of what makes an area attractive to inward investors.
“Overall, what drives inward investment is a complex mix of factors,” adds Chris. “What cannot be denied is the value of inward investment to a regional economy. As it stands, in terms of existing numbers of foreign-owned companies, there is currently a premiership (London & the South East), a Championship (East of England, West Midlands and the North West), a Football League (East Midlands, Yorkshire & Humber and the South West) and a Conference (the North East).”
While London remains a key location for investors, the report’s analysis identifies a number of attractive locations outside of the City offering high quality yet more cost effective options. It also identifies corridors of attractive locations for foreign direct investment (FDI) and business relocation along the main transport routes out of London.
Other locations outside of London named in the report include, Leeds, Manchester and Bristol, as measured by economic, social and environmental criteria. The report also names other relatively high quality business locations that offer lower operating costs, with these found in the North East (Newcastle upon Tyne), North West (Trafford, Liverpool, Cheshire East), South West (Wiltshire, South Gloucestershire, Swindon), and Yorkshire & Humber (York, Bradford).
London Boroughs account for twelve of the top 20 best performing local authority areas overall. However, outside of the capital, it places Cambridge (and South Cambridgeshire), Birmingham, Leeds, Manchester and Bristol, together with Wokingham and Watford as the top performing areas.
Other corridors of attractive locations for foreign direct investment (FDI) and business relocation outside of London identified in the report include to the north, Milton Keynes and parts of Hertfordshire and Buckinghamshire. To the west, along the Thames Valley, they include Berkshire and Wiltshire and Swindon, while along the M3 they include parts of Surrey and Hampshire. To the south, Crawley, Brighton and Hove and parts of West Sussex.
Chris Frostwick adds: “Inward investment is a major component of delivering growth helping to drive GDP, foster innovation, enhance productivity, support and create jobs and ultimately, develop a more vibrant UK economy. However, the success rate in attracting inward investment varies significantly across the country and the unequal distribution of foreign ownership is stark.
Phillip Woolley, Partner, Grant Thornton UK LLP, commented: “The Business Location Index has been created to help local authorities, LEPs and central government understand more about and ultimately redress this imbalance.
“There are both national and local implications emerging from this analysis. At the national level these include: the need to recognise the importance of the city region and wider travel to work patterns; using new infrastructure developments, such as HS2, to help shift London’s sphere of influence in relation to inward investment; and helping to identify and support the development of specific ecosystems and sector strengths and using a range of fiscal levels alongside targeted investment to support the development of these. Giving true devolution to all local public services would allow local authorities to develop place based, outcome focused services with no Whitehall strings and enable them to design and deliver services based on people’s needs rather than nationally determined organisational funding silos.”
