AMIDS - Glasgow Airport Tax Site Full Business Case
Renfrewshire Council · 29 April 2026
Back to Leadership Board — 29 April 2026 and its agenda
Text extracted from the council's PDF. Layout and reading order may differ from the original.
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PUBLIC _____________________________________________________________________ To: Leadership Board On: 29 April 2026 _____________________________________________________________________ Report by: Chief Executive _____________________________________________________________________ Heading: AMIDS / Glasgow Airport Tax Site Full Business Case _____________________________________________________________________ 1 Summary 1.1 This report provides an update on the Full Business Case (FBC), which has been prepared to support the facilitation and management of the Investment Zone tax site at the Advanced Manufacturing Innovation District Scotland (AMIDS) and Glasgow Airport. The tax site is a central component of the Glasgow City Region Investment Zone (GCR IZ) programme, offering £25 million of grant funding as company tax incentives designed to unlock development, attract globally mobile advanced manufacturing investment, and accelerate the delivery of high-value employment space. _____________________________________________________________________ 2 Recommendations 2.1 It is recommended that the Board: (i) Notes the contents of the report. (ii) Approves the content of the Tax Site Full Business Case and note that it will be subsequently presented to the City Region Cabinet as part of the overall business case approval process linked to the Investment Zone programme. (iii) Notes that further progress on the Tax Site delivery will be reported to the Leadership Board as appropriate. ____________________________________________________________________
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PUBLIC 3 Background 3.1. The Glasgow City Region Investment Zone (GCR IZ) is a 10‑year, £160 million programme jointly funded by the UK and Scottish Governments. It aims to accelerate economic growth, attract inward investment, and create high-value jobs in advanced manufacturing, precision engineering, and adjacent sectors. An update report on the GCR IZ was provided to members at the Leadership Board on the 17th of September 2025. 3.2. The tax site at AMIDS/Glasgow Airport is intended to address long-standing market failures, including competitive disadvantage against other regions, high capital costs for specialist manufacturing facilities, and undersupply of suitable floorspace. The proposal is expected to accelerate development and support cluster growth around aerospace, sustainable aviation, life sciences, space and engineering. _____________________________________________________________________ 4 Tax Site Proposal 4.1. The tax site combines serviced development land at the AMIDS Netherton Campus, as well as 3 sites around the Airport at Abbotsinch, Airside North, and Campsie Drive (see Figure 1 below). Figure 1: IZ Tax Site Boundary 4.2. Businesses locating within the designated boundary will be eligible for a suite of statutory tax incentives for up to 10 years: • Full Land and Buildings Transaction Tax (LBTT) relief for qualifying acquisitions and commercial development. • 100% Non‑Domestic Rates (NDR) relief for up to 5 years (subject to a £9.1m overall collective cap on NDR relief).
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PUBLIC • 100% first‑year capital allowances for plant and machinery. • Enhanced Structures & Buildings Allowance (10% per year over 10 years). • Employer NIC relief for eligible new employees. 4.3. The IZ Tax Site went live in February 2026 and these tax incentives are now available to companies wishing to locate within the tax site1. Eligible individual companies locating within the tax site will be required to make their own application to the respective governments for 4 of the tax incentives. They will be required to make an application to Renfrewshire Council for any non- domestic rates relief that is sought. _____________________________________________________________________ 5 Tax Site Full Business Case 5.1. As part of GCR’s assurance protocols, a FBC was required for the IZ Tax Site to ensure it is managed appropriately and remains compliant with government requirements. 5.2. Consultants were commissioned by Renfrewshire Council in December 2025 to support the preparation of the FBC, drawing on their experience of producing similar business cases for other Investment Zones and Freeports across the country. 5.3. A full copy of the FBC is in Appendix 1 of this report. Purpose and strategic rationale 5.4. The tax site is intended to act as a catalyst for advanced manufacturing investment, helping to address barriers such as high development costs, limited availability of specialist premises, and competition from other regions offering strong fiscal incentives. The site leverages existing assets including the airport, GAIA infrastructure, and AMIDS innovation facilities at NMIS and MMIC. 5.5. The proposal will utilise £25m of grant funding within the £160m IZ programme envelope for statutory tax incentives intended to unlock private investment and accelerate development. How the tax site works 5.6. As stated above in Section 4, eligible businesses locating within the designated boundary can access time‑limited reliefs. These reliefs aim to reduce capital and operating costs, de-risk investment, and incentivise earlier development and new job creation. Expected economic benefits 5.7. The tax site is forecast to: • Attract £410m (at 2026 values) private investment • Deliver 166,450 sqm of employment floorspace 1 https://www.renfrewshire.gov.uk/news/2026/tax-incentives-now-available-new-businesses-locating-amids- and-glasgow-airport
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PUBLIC • Support 2,300 jobs • Generate £610m GVA over 15 years (net present value) • Deliver a benefits to cost ration (BCR) of 7.2 and £155m net present social value compared with the £25m opportunity cost 5.8. The economic uplift arises mainly from accelerated development, bringing investment and jobs forward earlier than the counterfactual case. Delivery model 5.9. Development is led by the landowners (Renfrewshire Council and its JV partner (Buccleuch Property) and AGS Airports Ltd using normal commercial processes. Tax reliefs are accessed through statutory mechanisms and applications by the companies concerned. Governance and risk management 5.10. As most reliefs are automatic once a business occupies the defined site, governance focuses on controlling access to the site rather than the tax reliefs themselves. 5.11. A new Tax Site Oversight Committee (with officer representatives from Renfrewshire Council, Buccleuch Property, AGS Airports) will: • Operate a pre-lease gateway process to ensure occupiers align with IZ objectives • Manage NDR relief allocation on behalf of Renfrewshire Council within the £9.1m cap for that element of tax relief • Oversee monitoring, data collection and coordination of enabling actions • Support marketing and pipeline management 5.12. Occupiers will sign Tax Site Framework Agreements confirming intended use, eligibility considerations, and light-touch monitoring commitments. 5.13. Key risks include uptake pace, investor certainty on NDR relief, administrative burdens and ensuring occupier mix remains aligned with advanced manufacturing. Financial considerations 5.14. Government values the tax incentives over the 10-15 year period at £25m and reduces the overall GCR IZ grant allocation (£160m) by that amount. Reserved reliefs (UK Government) are uncapped and may exceed forecasts if demand is strong. Similarly, LBTT (Scottish Government) is uncapped whilst NDR relief (Renfrewshire Council) reimbursement is capped (£9.1m), requiring proactive management to avoid overspend. 5.15. Key financial considerations include uptake pace, investor certainty on NDR relief and ensuring occupier mix remains aligned with advanced manufacturing _____________________________________________________________________
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PUBLIC 6 Next Steps 6.1. The IZ Tax Site FBC will be brought to the May 2026 meeting of the Glasgow City Region Chief Executives Group for approval. 6.2. Progress of the IZ Tax Site will be reported to the Leadership Board on a rolling basis, including updates on investment and tax incentive uptake. _____________________________________________________________________ Implications of the Report 1. Financial – There will be revenue costs associated with the administration and monitoring of the tax site. These costs are expected to be covered from either the IZ programme allocation or through retained non-domestic business rates. 2. HR & Organisational Development – None 3. Community/Council Planning – • Our Renfrewshire is thriving – The project supports significant investment in Renfrewshire, which will support job creation, business development and GVA and overall economic growth. 4. Legal – None 5. Property/Assets – None 6. Information Technology – None 7. Equality & Human Rights - The Recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. If required following implementation, the actual impact of the recommendations and the mitigating actions will be reviewed and monitored, and the results of the assessment will be published on the Council’s website. 8. Health & Safety – None 9. Procurement – None 10. Risk – None 11. Privacy Impact – None 12. Climate Risk – None 13. Children’s Rights – None 14. Cosla Policy Position – None
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PUBLIC _______________________________________________________ List of Background Papers • Investment Zone - Update Report- Leadership Board, 17 September 2025 __________________________________________________________________ Author: Euan Shearer; Regeneration and Place Manager Email: euan.shearer@renfrewshire.gov.uk
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Glasgow City Region Investment Zone AMIDS / Glasgow Airport tax site Full business case v 0.3 Presented by:
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GCR IZ - tax site business case 2 Version Description Date Author Approved 0.1 Working draft for review 9th January 2026 LG / BCJ LA 0.2 Revisions following client comments 27th February 2026 LG LA 0.3 Revision following GCR comments 16th April 2026 LG BCJ
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GCR IZ - tax site business case 3 Table of contents Appraisal template ........................................................................................................................................ 5 List of acronyms .......................................................................................................................................... 16 Executive Summary ..................................................................................................................................... 17 Overview .................................................................................................................................................. 17 Strategic Case .......................................................................................................................................... 17 Economic Case ........................................................................................................................................ 21 Commercial Case .................................................................................................................................... 24 Financial Case ......................................................................................................................................... 25 Management Case ................................................................................................................................... 27 1 Strategic Case ...................................................................................................................................... 31 1.1 Overview and summary ................................................................................................................ 31 1.2 The case for change ...................................................................................................................... 33 1.3 Strategic objectives ...................................................................................................................... 36 1.4 Policy alignment ........................................................................................................................... 38 1.5 Stakeholders ................................................................................................................................ 42 1.6 Risks, dependencies, and constraints ........................................................................................... 42 2 Economic Case .................................................................................................................................... 45 2.1 Options appraisal ......................................................................................................................... 45 2.2 Economic assessment ................................................................................................................. 48 2.3 Value for Money ............................................................................................................................ 50 2.4 Sensitivity testing ......................................................................................................................... 54 2.5 Confirmation of the preferred option ............................................................................................. 56 3 Commercial Case ................................................................................................................................. 57 3.1 Commercial approach and scope ................................................................................................. 57 3.2 Delivery model and market arrangements ..................................................................................... 57 3.3 Occupier assurance agreements .................................................................................................. 58 3.4 Commercial risks and dependencies ............................................................................................ 58 4 Financial Case ...................................................................................................................................... 60 4.1 Financial appraisal ....................................................................................................................... 60 4.2 Implementation costs .................................................................................................................. 64 4.3 Financial risks and assumptions ................................................................................................... 65 5 Management Case ................................................................................................................................ 67 5.1 Governance and delivery .............................................................................................................. 67 5.2 Decision-making and project roles ................................................................................................ 79
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GCR IZ - tax site business case 4 5.3 Marketing and promotion .............................................................................................................. 82 5.4 Project schedule .......................................................................................................................... 85 5.5 Monitoring and evaluation ............................................................................................................ 86 5.6 Sustainability Case ....................................................................................................................... 87 Annex 1: Tax site map ................................................................................................................................... 89 Annex 2: Project risk register ........................................................................................................................ 90
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GCR IZ - tax site business case 5 Appraisal template Section OBC Appraisal Questions FBC Appraisal Questions Section 1. Strategic case 1.1 Strategic Need 1.1.1 Has confirmation been provided that the project rationale has been revisited and that it remains valid? Has any additional information been provided to reflect the content of the OBC? 1.1.1 Has confirmation been provided that the project rationale has been revisited and that it remains valid? Has any additional information been provided to reflect the content of the FBC? 1.2 1.1.2. Has confirmation been provided that the opportunity has been revisited and remains valid? Does the business case advise how the Project will address the root cause rather than the symptoms of the market failure or deliver the opportunity? 1.1.2. Has confirmation been provided that the opportunity has been revisited and remains valid? Does the business case advise how the Project will address the root cause rather than the symptoms of the market failure or deliver the opportunity? 1.2 1.1.3. Has confirmation been provided that the rationale for the intervention/for new investment by the public sector set out in the SBC has been revisited and remains valid? 1.1.3. Has confirmation been provided that the rationale for the intervention/for new investment by the public sector set out in the OBC been revisited and remains valid? 1.2 1.1.4 Has confirmation been provided that the case for why the Project is needed now has been revisited since the SBC development and remains valid for the OBC? 1.1.4 Has confirmation been provided that the case for why the Project is needed now has been revisited since the OBC development and remains valid for the FBC? 1.2 1.1.5. Has confirmation been provided that the consequence of not delivering the Project (i.e. policy off/ counterfactual case) which were explained at SBC stage has been revisited and remain valid? 1.1.5. Has confirmation been provided that the consequence of not delivering the Project (i.e. policy off/ counterfactual case) which were explained at OBC stage has been revisited and remain valid? 1.2 1.2.Strategic and Policy Context For The Project and Contribution to the Investment Zone 1.2.1. Has confirmation been provided that the fit with UK, Scottish, Regional and Local policy demonstrated at SBC stage remains valid for OBC stage? Have any new policies been identified? 1.2.1. Has confirmation been provided that the fit with UK, Scottish, Regional and Local policy demonstrated at OBC stage remains valid for FBC stage? Have any new policies been identified? 1.4
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GCR IZ - tax site business case 6 Section OBC Appraisal Questions FBC Appraisal Questions Section 1.2.2. . Has the fit with the Glasgow City Region Investment Zone objectives been demonstrated Does this describe how the project contributes to Investment Zone Principles? Open-Access Facilities, Technology Diffusion, Promoting Fair Work and Inclusive Growth, An Equalities Impact Assessment (EQIA) and Capital Investment Health Impact Assessment (CHIA) 1.2.2 Has confirmation been provided that the recommended intervention still satisfies the strategic Objectives of the Investment Zone Programme 1.3 2.3.12 5.1.42 1.3.Project Objectives 1.3.1. Has confirmation been provided that objectives which were provided at SBC stage been revisited and remain valid for OBC? 1.3.1. Has confirmation been provided that the objectives which were provided at OBC stage been revisited and remain valid for FBC? 1.3 1.4. Existing Arrangements 1.4.1. Has confirmation been provided that existing arrangements outlined at SBC stage been revisited and do these remain valid? Do they continue to relate to the objectives listed at Section 1.3.2? 1.4.1. Has confirmation been provided that existing arrangements outlined at OBC stage been revisited and do these remain valid? Do they continue to relate to the objectives listed at Section 1.3.2? 1.2 1.5.Project Summary 1.5.1 Has a clear, quantified description of the Scope been provided with reference to the Output indicators as per Investment Zones in Scotland: Technical Document 1.5.1 Has confirmation been provided that the quantified Scope outlined in the OBC has been revisited and remains valid at FBC stage? 1.1 1.5.2. Has a clear explanation of how the Project differs to any current interventions/existing arrangements (as defined at Q1.4.1) been provided? Only applicable at FBC stage where indicated by OBC comments 1.1 1.5.3. Has a clear description of how the Project will be implemented including what the money will be spent on, been provided? Only applicable at FBC stage where indicated by OBC comments 1.1 1.5.4. Has a clear case been made for how the Project addresses all the areas of need as described at 1.1.1? 1.5.4. Has a clear case been made for how the Project addresses all the areas of need as described at 1.1.1? 1.1 1.5.5. Has confirmation been provided that Critical Success Factors identified at SBC stage have ben revisited ad remain valid in order that options can be appraised against these at OBC stage? Only applicable at FBC stage where indicated by OBC comments N/A 1.5.6. Has confirmation been provided that any evidence demonstrating the success from similar Projects at SBC stage has been revisited (including monitoring and evaluation evidence, lessons learned or pilots) and how have these lessons been incorporated into the Project? If not, why not? Only applicable at FBC stage where indicated by OBC comments 1.2
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GCR IZ - tax site business case 7 Section OBC Appraisal Questions FBC Appraisal Questions Section 1.6.Dependencies and Constraints 1.6.1. Has confirmation been provided that all relevant internal factors on which the successful delivery of this Project are dependant which were identified at SBC stage revisited and remain valid? How will they be managed? 1.6.1. Has confirmation been provided that all relevant internal factors on which the successful delivery of this Project are dependant which were identified at OBC stage revisited and remain valid? How will they be managed? 1.6 1.6.1. Has confirmation been provided that all relevant external factors on which the successful delivery of this Project are dependant which were identified at SBC stage revisited and remain valid? How will they be managed? 1.6.1. Has confirmation been provided that all relevant external factors on which the successful delivery of this Project are dependant which were identified at OBC stage revisited and remain valid? How will they be managed? 1.6 1.6.1. Has confirmation been provided that all relevant factors that place demands on the project (i.e. constraints) which were identified at SBC stage revisited and remain valid? How will they be managed 1.6.1. Has confirmation been provided that all relevant factors that place demands on the project (i.e. constraints) which were identified at OBC stage revisited and remain valid? How will they be managed 1.6 1.7.Stakeholders 1.7.1. Has confirmation been provided that the main stakeholder groups and their contribution or interest in the Project which were identified at SBC stage have been revisited and remain valid? 1.7.1. Has confirmation been provided that the main stakeholder groups and their contribution or interest in the Project which were identified at OBC stage have been revisited and remain valid? 1.4 1.7.2. Has confirmation been provided that Project benefits/ dis-benefits for stakeholders which were identified at SBC stage have been revisited and remain valid? Only applicable at FBC stage where indicated by OBC comments 1.4 1.7.3. Has confirmation been provided that potential or current areas of conflict between stakeholder groups and or demands which were identified at SBC stage have been revisited and remain valid? How will they be managed? Only applicable at FBC stage where indicated by OBC comments 1.4 1.8.Risk 1.8.1. Is there robust analysis of the potential risks that might arise? How were the risks identified and appraised? Only applicable at FBC stage where indicated by OBC comments 1.6 1.8.2. Has a detailed risk management plan been developed for all elements of risk in line with the Programme Risk Strategy? 1.8.2 Have the risk management arrangements and plans been finalised? 1.6 1.8.3. Has confirmation been provided that risks and the mitigating actions which were included in the SBC’s risk register have been revisited and remain valid for OBC? Are the key risks summarised in the body of the of the business case doc? 1.8.3. Has confirmation been provided that risks and the mitigating actions which were included in the OBC’s risk register have been revisited and remain valid for FBC? Are the key risks summarised in the body of the of the business case doc? 1.6 1.8.4. Does the Project create any new risks, or increase risks, for the Investment Zone Programme? If so, have these been identified, fully appraised with mitigating actions, and incorporated into the Project Risk Register? Only applicable at FBC stage where indicated by OBC comments 1.6
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GCR IZ - tax site business case 8 Section OBC Appraisal Questions FBC Appraisal Questions Section 2. Economic Case 2.1. List of options 2.1.1. Is there a reasonable range of options covering what/ when/ who/ how/ where? Has there been any change since S/O BC? Is there a long-list and clear rationale for selection to a short-list for detailed appraisal? Only applicable at FBC stage where indicated by OBC comments 2.1 2.1.2. How were the short-listed options selected and appraised? Who was involved, what was the process? Only applicable at FBC stage where indicated by OBC comments 2.1.3. Did options definition include analysis of potential alternatives around scope, procurement, service delivery, implementation and funding? Only applicable at FBC stage where indicated by OBC comments 2.1.4. Have the alternative options been costed – capital and revenue for direct public costs, and capital for direct follow-on investment? [Note: for Projects that are claiming benefits (S2.3) arising from follow-on investments, the cost attributed to these activities must be provided] Only applicable at FBC stage where indicated by OBC comments 2.2. Additionality 2.2.1. Have deadweight, displacement, leakage and substitution effects been identified? Have the assumptions for the values used been presented – are these realistic? Only applicable at FBC stage where indicated by OBC comments 2.2 Table 2.4 2.2.2. Does the analysis of additionality present a robust case on the need for public sector intervention? Has consideration been given to the amount of activity/ outcomes that would happen without the Project – does this link with Section 1.1.5? Only applicable at FBC stage where indicated by OBC comments 2.3 2.3. Benefit 2.3.1. Have gross and net benefits for each of the short-listed options been identified and quantified? What dis-benefits will arise, and can these been mitigated? [Note: Gross benefits are defined as those arising from both direct Investment Zone and direct follow-on investments – see 2.3.8. Net benefits are the out- turn of these direct benefits, taking account of the additionality assessment at 2.2] 2.3.1 Have the benefits of the preferred option identified within the OBC changed? If they have these should be clearly detailed. If not, this should be clearly stated. If this is a sub-Project of the OBC, has the FBC detailed the outputs and outcomes that it will deliver? 2.2.14 2.3.2. Have the wider qualitative benefits and dis- benefits arising from each option been listed and clearly described? Does this include all relevant items? Does this include health, equity and wellbeing benefits/ disbenefits identified via CHIA? 2.3.2 Have the disbenefits of this project/sub-project been listed and clearly described? Does this include health, equity and wellbeing benefits/ disbenefits identified via CHIA? 2.3.9 2.3.3. How have qualitative benefits been assessed e.g. using a weighting and scoring approach? Only applicable at FBC stage where indicated by OBC comments Table 2.7 2.3.4. Has the timescale for the realisation of benefits/ dis-benefits been provided? 2.3.4 Has confirmation been provided that the timescales for the realisation of benefits/disbenefits has been revisited and remains valid? Figure 2.1 2.3.11 2.3.5. Does the text clearly describe the assumptions used in calculating benefits/ dis- benefits? Only applicable at FBC stage where indicated by OBC comments 2.2
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GCR IZ - tax site business case 9 Section OBC Appraisal Questions FBC Appraisal Questions Section 2.3.6. Are there any distributional/ equity factors for benefits that will impact on selection of the preferred option? Are these critical in the decision on preferred option? Only applicable at FBC stage where indicated by OBC comments 2.3.12 2.3.7. Have clear measurement, monitoring and evaluation plans been identified to track the delivery of each stated benefit? Is this taken forward to Section 5.7? Does this take into account CHIA monitoring framework for benefits/ disbenefits identified during the CHIA stakeholder workshop? 2.3.7 Has confirmation been provided that measurement, monitoring and evaluation plans have been revisited and remain valid? Is this taken forward to Section 5.7? 5.4 2.3.8. Is there clarity on which benefits will be generated as a direct result of Investment Zone Project investment, and those that are generated as a direct result of subsequent action by others e.g. follow-on private or public sector investment? 2.3.8 If this FBC is a sub-project of an OBC, does this provide clarity on the benefits that are generated as a direct result of Investment Zone project investment, and those that are generated as a direct result of subsequent action by others e.g. follow-on private or public sector investment? 2.2.3 2.4.Cost/Benefit Analysis 2.4.1. Are all costs (specifically capital and revenue costs) and benefits quantified and if not has this been justified? Are these presented as gross and net costs/ benefits over the time period that they will arise and also as discounted totals? 2.4.1 Have any of the Project costs changed from those within the OBC (for example following the procurement process)? N/A 2.4.2. Is there a robust and consistent approach to appraising Cost-Benefit outcome – using net results with NPV calculated correctly (including discounting at 3.5%) – for each option? Only applicable at FBC stage where indicated by OBC comments 2.3 2.4.3. Has Value for Money (VfM) been appropriately presented using (as a minimum) the following ratios: NPV of: net economic benefits divided by the total economic costs (public and private) NPV of: net economic benefits divided by the total public costs – capital and revenue Note: for some Projects it will be appropriate to present VfM for public and private costs as two results – including and excluding commercial development costs e.g. business space and residential construction should be included but if no allowance is taken of the income generated from them, they will skew the results. 2.4.3 Where costs have changed, has this had an impact upon the Value for Money calculation within the OBC? If costs have changed then the VfM calculations (BCR calculation within the OBC) should be reviewed and restated reflecting any changes. 2.3 2.5. Options Appraisal Results 2.5.1. Have all potential options been compared using a SWOT (or STAG, or other robust approach) analysis? Is this consistent for each option, and robust? 2.5.1 Has confirmation been provided that the options identified within the OBC still valid? N/A see 2.1 2.5.2. Does the analysis include clear scoring of options – quantifiable/ qualitative benefits, contribution to objectives, CSFs, key risks, impacts, etc? Does this include valuation of the net benefits and costs associated with each option? 2.5.2 Has confirmation been provided that the rankings of the options within the OBC been reviewed and are they still valid? N/A see 2.1 2.5.3. Have any assumptions used within the options appraisal been stated? How has ruling out of options been justified – is this clear and robust? 2.5.3 Have any of the key assumptions used within the options appraisal at OBC changed? N/A see 2.1
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GCR IZ - tax site business case 10 Section OBC Appraisal Questions FBC Appraisal Questions Section If any of the assumptions have changed then the FBC must demonstrate that the preferred option continues to offer better public value. 2.6. Preferred Way Forward/Preferred Option 2.6.1. Has evidence been provided demonstrating that the Preferred Option achieves all Project objectives? 2.6.1 Has confirmation been provided that the preferred option identified within the OBC remains the Preferred Option? Table 2.1 2.6.2. What evidence has been provided demonstrating that the preferred option provides the best Value for Money? If not, do un-quantified and/ or distributional benefits (as presented at Section 2.3.2 and 2.3.6) justify the higher cost and/ or lower benefits? Only applicable at FBC stage where indicated by OBC comments 2.4.6 2.7. Sensitivity and risk profile 2.7.1. Has appropriate sensitivity analysis been completed, including worst case scenario? Is there a clear rationale for the upper/ lower range used for sensitivity, or if arbitrary values have been used is this justified? 2.7.1 If the preferred option identified at OBC has changed, has confirmation been provided that appropriate sensitivity analysis has been completed? 2.4 2.7.2. Has the Project given appropriate consideration to the need for switching values analysis where Projects carry high risk of not achieving stated benefits (i.e. assumptions behind the economic appraisal are not robust or carry high level of risk), high optimism bias rate needed for cost, and/ or where the Benefit to Cost Ratio (BCR) is close to 1:1? Only applicable at FBC stage where indicated by OBC comments 2.4 2.7.3. Linked to results at Section 1.6 and 1.8, have all economic risks, constraints and dependencies been identified, managed and allocated in the risk register, and are the key economic risks listed, with mitigating actions? Only applicable at FBC stage where indicated by OBC comments 1.6 2.7.4. Is there a clear description of, and allowance taken for, optimism bias (for costs and benefits) and has it been aligned with the overall risk of the Project? How have optimism bias factors been calculated, and has this changed since SBC as more detail on the Project is known? Is further change expected at FBC? Only applicable at FBC stage where indicated by OBC comments N/A – see 2.2 2.7.5. Are all relevant wider positive and negative impacts presented and assessed e.g. sustainability, competition, regulatory impact? Only applicable at FBC stage where indicated by OBC comments 2.3 2.7.6. On completion of sensitivity analysis, is there final confirmation that the Preferred Option remains preferred, and all relevant risks and sensitivities are understood and clearly articulated? Only applicable at FBC stage where indicated by OBC comments 2.4.6 3. Commerci al Case 3.1. Commercial Aspects 3.1.1. How does the Preferred Option address the needs of all parties and Project partners and other direct funders, and wider Project partners (including those that are expected to deliver activity or outcomes as a result of Investment Zone investment)? 3.1.1 Has confirmation been provided that the Preferred Option continues to address the needs of all parties and Project partners and other direct funders, and wider Project partners (including those that are expected to deliver activity or outcomes as a result of Investment Zone investment)? 3.1
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GCR IZ - tax site business case 11 Section OBC Appraisal Questions FBC Appraisal Questions Section 3.1.2. Have funding options been outlined and fully considered for the preferred option? Have appropriate alternative funding sources been explored and included/ discounted, if not why not? 3.1.2 Have the funding options for the preferred option contained within the OBC changed? If yes, has evidence been provided of the alternative funding sources that have been adopted. If not, has confirmation been provided they have been revisited and remain valid? Does the FBC set out the contractual arrangements for the negotiated contract? 3.1 3.1.3. If appropriate, have alternative arrangements been identified where any required follow-on private/ public sector funding does not occur at the required time? Is there a description of the extent to which the Project benefits/ outcomes (as described at Section 2.3.8) are dependent on this private sector investment? 3.1.3 Are there any changes to the requirements for follow on private/public sector funding as stated in the OBC? If this has changed then this change should be clearly described and quantified. If there are no changes, has confirmation been provided that requirements have been revisited and remain valid? 3.2 3.1.4. What is the commercial demand for the outputs generated by the Project e.g. if CD investment is for Programme Management that will release/ improve land for development, what is the evidence of demand for this land? [Note: for most CD Projects the demand is likely to come from the follow-on investment rather than from the direct CD funded activities – should be aligned with the impacts that are considered at Q2.3.1 and Q2.3.8] Only applicable at FBC stage where indicated by OBC comments N/A 3.1.5. Where payments are to be made to external parties (including consultants/ contractors/ developers), what are the planned payment processes, and are they clearly described? Highlight the key contractual arrangements / terms. 3.1.5 Where payments are to be made to external parties, has the circumstances or nature of these process changed from the description provided within the OBC? if not, has confirmation been provided this has been revisited and remains valid? N/A 3.2. Procurement Strategy 3.2.1. Has a project specific procurement strategy been provided? Has it been clearly articulated in the business case and is the procurement process in line with relevant regulations? Has it been confirmed that the approach meets the requirements of the Government Sanctions Guidance https://www.gov.uk/government/publications/the-uk- sanctions-list Does this section clearly describe what will be procured, by who, when, and how? 3.2.1 Has the procurement approach that was set out in the OBC been followed? If this has changed, has the reason for the change been clearly articulated and was the strategy still in line with the procurement regulations? N/A 3.2.2. Has a justification for the proposed procurement approach been carried out and stated within the project’s Procurement Strategy? Only applicable at FBC stage where indicated by OBC comments N/A 3.2.3. Has the body (or bodies) which will procure the Project been clearly identified? 3.2.3 Does the body (or bodies) identified within the OBC to procure the Project remain unchanged? N/A 3.2.4. Does the business case confirm that the project procurement is being carried out by dedicated procurement officers/team within the delivery body? Only applicable at FBC stage where indicated by OBC comments N/A 3.2.5. Relevant to the level of investment being made, are appropriate conditions of contract being proposed for the project? 3.2.5 Have the proposed contracting arrangements described within the OBC changed? If they have changed N/A
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GCR IZ - tax site business case 12 Section OBC Appraisal Questions FBC Appraisal Questions Section do the new contracting arrangements include appropriate conditions of contract? 3.2.6. Have clear contractual key milestones and delivery dates for the procurement process been provided? 3.2.6 Have the contractual milestone and delivery dates for the procurement process identified in the OBC been reviewed and confirmed/ updated as appropriate? N/A 4. Financial Case 4.1. Financial appraisal 4.1.1 Has the total cost of the Project and spend phasing been detailed and quantified within the OBC? 4.1.1 Is there a clear description of Project costs (split by individual element) phased over the delivery timescale detailed and quantified within the FBC? Have any changes since the OBC been detailed within the FBC? 4.1 4.1.2 Is there a clear description of costs to complete the Project to FBC stage? Only applicable at FBC stage where indicated by OBC comments N/A 4.1.3. Have appropriate benefit and monitoring evaluation costs been described and quantified, covering the full Investment Zone period to 2035? 4.1.3 Have appropriate benefit and monitoring evaluation costs been described and quantified, covering the full Investment Zone period to 2035? 4.2 4.1.4 Is there a clear description of Project funders? 4.1.4 Have funding sources been detailed and quantified within the FBC? Have any changes since the OBC been detailed within the FBC? 4.1 4.1.5 Does this clearly identify the direct Investment Zone grant funding, Match funding other direct public sector funding? ((minimum (60/40% CDEL/RDEL split) (n.b.CDEL/RDEL% split should be a clear statement within SBC and reiterated in Executive Summary) 4.1.5 Does this clearly identify the direct Investment Zone grant funding, Match funding other direct public sector funding? ((minimum (60/40% CDEL/RDEL split) (n.b.CDEL/RDEL% split should be a clear statement within SBC and reiterated in Executive Summary). Have any changes since the OBC been detailed within the FBC? N/A 4.1.6. Will all Project benefits be achieved with the Project fund listed at Section 4.1.1, or is there a need for additional follow-on investment at a later date to deliver the benefits (e.g. property development)? 4.1.6 Has the additional follow-on investment required to deliver the Project benefits, as specified in the OBC, been reviewed? Have any changes been described and quantified? 3.1 4.1 4.1.7. Has evidence been provided demonstrating that full budget funding has been secured and budgeted for by all parties – the Investment Zone project, other direct Project funders, other follow-on investment? 4.1.7 Has evidence been provided demonstrating that full budget funding has been secured and budgeted for by all parties – the Investment Zone project, other direct Project funders, other follow-on investment? 4.2 4.1.8 Has income from capital receipts related to this project been considered and included? 4.1.8 Has income from capital receipts related to this project been considered and included? 4.1.26
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GCR IZ - tax site business case 13 Section OBC Appraisal Questions FBC Appraisal Questions Section 4.1.9. Have the impacts on Investment Zone project income/expenditure a/c and on balance sheet been provided if applicable? Does this specifically include ongoing revenue costs to Investment Zone project or other public sector organisation? Are financing costs and operational running costs available and have they been included? 4.1.9 Has confirmation been provided that the impacts on Investment Zone project income/expenditure a/c and on balance sheet (if applicable) have been revisited and remain valid? Does this specifically include ongoing revenue costs to MA or other public sector organisation? Does this include both financing costs and operational running costs? 4.1 4.1.10. Has allowance for optimism bias been applied? What percentage/value has been applied? How have potential cost over runs been considered and provided for? Have these been appropriately tested in the Sensitivity Appraisal, and included in the Risk Register? 4.1.10 Is contingency still contained within the costing, and if so what is the value and %? What is the value and % of contingency, and where applicable Optimism Bias, for the Project? Does the level of contingency provided for seem reasonable? N/A – see 2.3.7 4.1.11. How will VAT will be treated? Is there a description in OBC of applicable VAT risks, and if so are they included in the Risk Register? 4.1.11 How will VAT will be treated? Is there a description in the FBC of applicable VAT risks, and if so are they included in the Risk Register? N/A 4.1.12. Have any guarantees been provided, or financial agreements made? Does this cover direct Project funding or follow-on investment? Are these guarantees from the Investment Zone Project to third party, or vice-versa? How substantial are these agreements, and to what extent is the Project’s success dependent on these guarantees? 4.1.12 Have any guarantees been provided, or financial agreements made? Does this cover direct Project funding or follow-on investment? Are these guarantees from the Investment Zone Project to third party, or vice- versa? How substantial are these agreements, and to what extent is the Project’s success dependent on these guarantees? N/A 4.1.13. Linked to results at Section 1.8, have all relevant financial risks been identified, managed and allocated in the risk register, and are the key financial risks presented here, with clear mitigating actions? 4.1.13 Has confirmation been provided that all relevant financial risks identified, managed and allocated in the risk register (linked to results at Section 1.8) have been revisited and remain valid?, have, and are the key financial risks presented here, with clear mitigating actions? 1.6 5. Management Case 5.1. Project roles 5.1.1. Have Project roles and responsibilities been clearly stated? Is it clearly demonstrated that the team members have appropriate skills and experience to manage, deliver and oversee the Project? 5.1.1 Have the Project roles and responsibilities for or this FBC been finalised and noted within the document? Have the appropriate skills and experience of the team members been described? 5.2 Table 5.4 5.1.2 If the Project involves grant to a third party, how will the Investment Zone project ensure that the Project delivers outcomes on time, at scale, to quality, etc.? 5.1.2 If the Project involves a grant to a third party, have the measures described within the OBC to ensure that the Project delivers outcomes on time, at scale, to quality etc. been put in place? N/A
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GCR IZ - tax site business case 14 Section OBC Appraisal Questions FBC Appraisal Questions Section 5.2. Project governance Structures 5.2.1. Have approval processes within the been stated and followed 5.2.1. Have approval processes within the Investment Zone project been stated and followed and consistent with the FBC in terms of scope, finance, timeline, and benefits? 5.1 5.2.2. Have robust Project management arrangements been clearly stated in relation to the operational delivery and future management of the completed Project within the Investment Zone project? 5.2.2 Have robust Project management arrangements been clearly stated in relation to the operational delivery and future management of the completed Project within the Investment Zone Project 5.1 5.2.3. If the Project involves creation of a new asset, is there a description of how governance will be transferred to operational use? Only applicable at FBC stage where indicated by OBC comments N/A 5.2.4. Has a description of the approach for managing the delivery of Project benefits (including community benefits) been provided? Only applicable at FBC stage where indicated by OBC comments 5.1 5.3. Project Controls and Tolerances 5.3.1. Have project controls / tolerances been identified in which to manage the project within? 5.3.1 Highlight the project controls and agreed tolerances in which the project can operate within. N/A 5.4. Legal Matters and Required Approvals 5.4.1 Has confirmation been provided that all legal risks and issues identified at SBC which might affect the Project been revisited and that new risks/issued have been added to the risk register and/or Issues Log including [non-exclusive list]: Compulsory Purchase Orders; Local Authority powers; Government powers; Land Ownership. Have mitigating actions been revisited and do they remain valid? 5.4.1 Has confirmation been provided that all legal risks and issues identified at OBC which might affect the Project been revisited and that new risks/issued have been added to the risk register and/or Issues Log including [non-exclusive list]: Compulsory Purchase Orders; Local Authority powers; Government powers; Land Ownership. Have mitigating actions been revisited and do they remain valid? If this FBC is for a sub-Project of the OBC, are there any additional legal matters relating to this sub-Project that require to be considered? N/A – see 5.1.51 5.4.2 Has confirmation been provided that external legal advice has been taken on those risks/issues where it is appropriate to do so and that any advice received at SBC stage has been revisited and remains relevant? 5.4.2 Has confirmation been provided that external legal advice has been taken on those risks/issues where it is appropriate to do so and that any advice received at OBC stage has been revisited and remains relevant? N/A 5.4.3. Have all required approvals and licences (for example planning approval, marine licence, SEPA licence, Traffic Regulation Orders etc) been secured? Do any conditions apply to the approval granted? 5.4.3 Have all required approvals and licences necessary to begin construction (for example planning approval, marine licence, SEPA licence, Traffic Regulation Orders etc) been secured? Do any conditions apply to the approval granted? N/A
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GCR IZ - tax site business case 15 Section OBC Appraisal Questions FBC Appraisal Questions Section 5.5. Project schedule 5.5.1. Are there clear delivery dates and detailed milestones for the overall Project, and any sub- elements? Has a detailed Project schedule been provided, showing key dates for start/ completion of each task and covering all Project elements? 5.5.1 Are there clear delivery dates and detailed milestones (showing MM/YYYYY) for the overall Project? Has the Project schedule (GANTT chart) including delivery dates and milestones, been reviewed and updated within the FBC and does this align with the contractors programme? 5.4 5.6. Sustainability case 5.6.1. Does the sustainability case assess whether proposals are sustainable and do they contribute to the wider sustainability agenda? Only applicable at FBC stage where indicated by OBC comments 5.6 5.6.2. Does the OBC present robust consideration of sustainability from perspectives of – environmental, financial, economic, social factors? Only applicable at FBC stage where indicated by OBC comments N/A – see 5.6 5.6.3. Is there a Project- or site-specific Environmental Impact Appraisal – is it recent and robust? If no EIA (or it is dated) what is the justification? Only applicable at FBC stage where indicated by OBC comments N/A 5.6.4 Have the requirements set out in the Scottish Deals Carbon Management Guidance been met? 5.6.4 Have the requirements set out in the Scottish Deals Carbon Management Guidance been met? N/A 5.7. Project Monitoring 5.7.1. Have clear measurement, monitoring and evaluation plans been identified to track the delivery of the Project and each stated benefit? 5.7.1 Have the Project measurement, monitoring and evaluation arrangements to track the delivery of the Project and each stated benefit described within the OBC been updated and finalised? 5.4 5.7.2. Is the monitoring and evaluation plan in line with the requirements of the Assurance Framework and Programme Business Case e.g. do the monitoring and evaluation arrangements cover the period until Project completion in 2035? 5.7.2 Is the monitoring and evaluation plan in line with the requirements of the Investment Zones in Scotland: Technical Document. GCR IZ Assurance Framework currently being developed. Do the monitoring and evaluation arrangements cover the period until Investment Zone programme completion in 2035? 5.4 5.7.3. Has responsibility for Project monitoring and evaluation after the physical Project works are complete been set out in the OBC? 5.7.3 Has responsibility for Project monitoring and evaluation changed from the information provided within the OBC? 5.2
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GCR IZ - tax site business case 16 List of acronyms AGS – AGS Airports Ltd AMIDS – Advanced Manufacturing Innovation District Scotland BCR – Benefit-cost ratio BCIS – Build Cost Information Services CBA – Cost-benefit analysis CDEL – Capital Departmental Expenditure Limit CHIA – Capital Investment Health Impact Assessment CPI – Centre for Process Innovation Limited DoF – Director of Finance and Resources EIA – Environmental Impact Appraisal / Environmental Impact Assessment EIO – Economic Investment Officer EOI – Expression of Interest EQIA – Equalities Impact Assessment ESG – Environmental, Social and Governance FBC – Full Business Case GAIA – Glasgow Airport Investment Area GCR – Glasgow City Region GVA – Gross value added HMG – His Majesty’s Government HMT – His Majesty’s Treasury IZ – Investment Zone JV – Joint venture KPI / KPIs – Key performance indicator(s) LBTT – Land and Buildings Transaction Tax M&E – Monitoring and evaluation MA – Member authority MHCLG – Ministry of Housing, Communities, and Local Government MMIC – Medicines Manufacturing Innovation Centre MoU – Memorandum of Understanding NDR – Non-domestic rates NDRR – Non-domestic rate retention NI / NICs – National Insurance / National Insurance contributions NMIS – National Manufacturing Institute Scotland NPF4 – National Planning Framework 4 NPV – Net present value NPSV – Net present social value OBC – Outline Business Case PS – Project Sponsor PV – Present value RC – Renfrewshire Council RDEL – Resource Departmental Expenditure Limit RM – Regeneration Manager RRO – Responsible Rates Officer SBC – Strategic Business Case SEPA – Scottish Environment Protection Agency SG – Scottish Government SMART – Specific, measurable, achievable, relevant and time-bound SME / SMEs – Small and medium-sized enterprise(s) SRO – Senior Responsible Officer TSFA – Tax Site Framework Agreement TSOC – Tax Site Oversight Committee UWS – University of the West of Scotland VAT – Value Added Tax VfM – Value for Money
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GCR IZ - tax site business case 17 Executive Summary Overview This Full Business Case (FBC) sets out the case for designating and operating a tax site at Glasgow Airport and AMIDS as part of the Glasgow City Region (GCR) Investment Zone programme. The FBC supports the programme decision to proceed with the tax site offer in lieu of £24m of grant within the fixed £160m IZ envelope and sets out the governance and management approach required to deliver sector-aligned outcomes, and thereby maximise the net gains from the initiative at the Renfrewshire, GCR, Scottish and UK levels. The intervention is delivered primarily through statutory, time-limited tax incentives available to qualifying activity within the designated boundary. The package includes proposed LBTT relief, NDR relief, enhanced capital allowances, enhanced structures and buildings allowances, and employer NIC relief. For GCR, the principal cost is the opportunity cost within the fixed IZ envelope in terms of grant forgone: choosing the tax site results in a £24m reduction in grant to the GCR IZ programme in recognition of the costs of the tax reliefs provided on the site. 1. Tax site map Strategic Case The case for change The Glasgow City Region advanced manufacturing cluster has strong foundations, but its growth is constrained by structural barriers that the market is unlikely to resolve without intervention. These barriers include a competitive disadvantage relative to other UK and international locations offering fiscal incentives; the high
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GCR IZ - tax site business case 18 cost and risk of developing advanced manufacturing facilities; an undersupply of suitable premises; and the risk of losing strategically important tenants and associated supply chain activity to competing locations. These issues are particularly acute in advanced manufacturing, where investment decisions are sensitive to total cost of ownership, the availability of high-specification premises, and proximity to research, skills and logistics assets. The result is that, in the absence of intervention, development is likely to remain slower, more piecemeal and less ambitious than required to capture the full economic opportunity. As recognised in the Glasgow City Region Investment Zone Strategic Outline Programme Business Case (SOPBC), these site-level barriers sit within a wider set of structural constraints affecting the cluster across the region, including limited access to specialist equipment and infrastructure, shortages of specialist skills, supply chain fragmentation, and the cost and risk of commercialising new technologies. The wider Investment Zone programme is intended to address these root causes through a coordinated package of interventions in skills, infrastructure, R&D capability and business support. Within that wider response, the tax site has a specific role in improving the viability of development at AMIDS / Glasgow Airport, lowering cost barriers for occupiers, de-risking early investment decisions, and helping to anchor private investment in a location already connected to nationally significant innovation assets. Existing arrangements and rationale for intervention Development at the proposed tax site currently takes place through a combination of landownership arrangements, planning frameworks, enabling infrastructure and partnership working that pre-date the Investment Zone. At AMIDS, development is being progressed through a formal joint venture between Renfrewshire Council and Buccleuch Property, while significant enabling infrastructure has already been delivered through the Glasgow Airport Investment Area City Deal project. The site also benefits from nationally significant innovation and skills assets, including the National Manufacturing Institute Scotland and the CPI Medicines Manufacturing Innovation Centre, alongside links to universities, colleges and skills agencies. These existing arrangements provide a strong platform for future growth, but they do not in themselves resolve the central constraint of commercial development viability or provide a mechanism to influence the pace, scale or location of private investment decisions. In the absence of Investment Zone designation, development and occupation would continue on a market-led basis, with some activity proceeding over time but limited ability to accelerate delivery, provide early investor certainty, or secure coordinated clustering benefits at the pace envisaged within the Investment Zone period. The rationale for the tax offer is therefore to provide a targeted, place-based mechanism that can directly improve investor returns and reduce risk at the point of decision-making. Unlike discretionary grants, the tax offer provides a predictable, rules-based package of reliefs that can improve project economics and strengthen the competitiveness of the site. In practice, the tax offer lowers effective capital costs, reduces operating costs, and removes or mitigates some upfront transaction costs. Taken together, these measures directly address the barriers identified above by helping Glasgow City Region compete with other Investment Zones and Freeports, narrowing viability gaps for complex industrial developments, supporting speculative development of suitable premises, and strengthening the case for retaining and expanding strategic occupiers. The tax offer is further strengthened by the complementary non-domestic rates retention (NDRR) mechanism, which provides a long-term revenue stream that can be reinvested in enabling activity, infrastructure and skills. Expected benefits
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GCR IZ - tax site business case 19 The intervention is delivered primarily through statutory, time-limited tax incentives available to qualifying activity within the designated boundary. The package includes proposed LBTT relief, NDR relief, enhanced capital allowances, enhanced structures and buildings allowances, and employer NIC relief. The tax site is intended to accelerate development and occupation, supporting: • Follow-on investment of £410m (present value) • 166,450 sqm. employment floorspace, supporting 2,300 jobs • net present value GVA of £610m over the 15-year appraisal period As with other non-tax sites zones withing the GCR IZ programme, and tax sties in Scotland’s two Green Freeports, additional business rates generated on the site will be retained within GCR for a period of 25 years. Strategic objectives The tax site has been designed to contribute directly to the wider Glasgow City Region Investment Zone programme objectives while focusing on outcomes that can be delivered at site level. The four project objectives are to: • Leverage private sector investment in advanced manufacturing • Unlock the full potential of City Deal investments by accelerating the development of underutilised land • Create new high-skilled jobs • Extend benefits to the whole City Region through non-domestic rates retention These objectives are intended to be specific, measurable, achievable, relevant and time-bound. Key risks, dependencies and constraints The main strategic risks relate to uptake, delivery pace and implementation. • The scale and timing of benefits are sensitive to market conditions and the ability of landowners to convert investor interest into signed commitments and occupation. Slower take-up would reduce the acceleration effect that underpins much of the economic case. • There is a risk associated with the administration and availability of NDR relief, as this is the only element of the tax offer that is locally administered and subject to capped reimbursement arrangements. If not managed clearly, uncertainty over relief availability could weaken investor confidence or delay occupier decisions. • There is a modest capacity and cashflow risk associated with the administration of NDR relief and retention, particularly in the early years before retained receipts are available to support operating costs. • There is a strategic risk around additionality and occupier mix. Because most tax reliefs are statutory and automatic once a business occupies qualifying premises, there is limited scope to influence outcomes after occupation. If occupier mix drifts away from the intended advanced manufacturing cluster, this could weaken additionality and undermine the strategic rationale for the intervention. These risks will be managed through clear site-level governance, a pre-lease gateway process, coordinated investor engagement, early identification and escalation of delivery constraints, and proportionate local arrangements for relief allocation, monitoring and reporting.
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GCR IZ - tax site business case 21 Economic Case Options appraisal A separate full options appraisal has not been undertaken for this business case because the Glasgow City Region Investment Zone programme, including the designation of a tax site, was developed and agreed before this stage through the GCR open call process, the five-stage Government Gateway process and subsequent Cabinet approvals. The purpose of the Economic Case is therefore not to revisit those programme-level decisions, but to explain how the tax site emerged from that process and to confirm the viability of the agreed intervention. The UK and Scottish Governments established the overall Investment Zone framework, requiring proposals to demonstrate a clear sector focus, appropriate economic geography, stakeholder engagement, governance, deliverability and value for money. Within that framework, Glasgow City Region developed the programme through a structured process led by the GCR Programme Management Office, supported by the GCR Intelligence Hub, Scottish Enterprise, Innovate UK, regional partners and government. A broad set of programme options was developed through an Expression of Interest process and a subsequent open call, informed by the GCR Intelligence Hub’s innovation cluster analysis. The open call attracted 41 bids with a combined value of more than £1.8 billion. Shortlisting followed a multi-stage process, including quantitative scoring, qualitative review by Scottish Enterprise and Innovate UK, sectoral impact review by the Intelligence Hub, and final consideration by the Strategic Assessment Panel. Given the volume and strength of submissions, advanced manufacturing and precision engineering was recommended as the sector focus and approved by GCR Cabinet. Within this wider programme process, the Glasgow Airport / AMIDS tax site was taken forward as part of the preferred package of interventions. The approved package comprised six short-listed projects, a designated tax site, three non-domestic rates retention sites, an investment fund, and skills and business support measures. The tax site was therefore selected as part of the wider programme response and is treated in this business case as the agreed preferred option. Economic assessment A cost-benefit analysis has been undertaken to assess the value for money of the proposed tax site. The assessment focuses on three main benefit categories: private sector investment, operational employment and gross value added (GVA). Benefits are assessed over 10-year and 15-year appraisal periods and discounted at 3.5% per annum in line with HM Treasury Green Book guidance. All economic benefits associated with the tax site depend on follow-on private investment. As with any large specialist site, there is uncertainty over how quickly and how extensively development will occur. This depends on market demand, investor confidence, occupier requirements, planning timelines, and the sequencing of infrastructure and enabling works. To reflect this, the business case adopts a conservative core scenario based on the assumptions used in the Gateway 3 and 4 submissions to Government. The core scenario is assessed against a counterfactual in which development outcomes are delivered three years later in the absence of tax site benefits. This means the appraisal does not assume that tax incentives permanently change the ultimate scale of development. Instead, the tax site is assumed to accelerate development and bring forward investment, jobs and GVA more quickly than would otherwise happen.
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GCR IZ - tax site business case 22 On this basis, the tax site is expected to increase the present value of private investment, employment and GVA over the appraisal period, even though the non-discounted end state is assumed to converge in the long term. NPV GVA over time (Scotland-level) Over 15 years, the assessment shows: • £410 million in present value investment under the intervention scenario, compared with £380 million in the counterfactual • £275 million in net additional GVA at Scotland level • the same cumulative end-state floorspace and jobs in both scenarios, but delivered earlier under the tax site scenario Additionality and geography The economic case has been presented at four levels of geography requested by GCR: Renfrewshire, Glasgow City Region, Scotland and the UK. This reflects the fact that some benefits accrue more locally, while others spill across wider supply chains and labour markets. Additionality assumptions vary by geography. Displacement and leakage are highest at the most local geography and reduce at wider geographies, reflecting the greater retention of benefits within larger spatial areas. Substitution is assumed to be zero across all geographies. On this basis, net present value GVA over 10 years is estimated as: Net present value GVA over ten years Area Counterfactual With tax site Net benefits Renfrewshire £115m £250m £135m Glasgow City Region £140m £295m £155m Scotland £155m £330m £175m UK £195m £410m £215m Value for Money The tax site is not a conventional public capital project. It is delivered through a package of fiscal incentives and does not involve direct public procurement or construction expenditure. Accordingly, value for money is assessed by comparing the present value of net additional benefits with the £24 million opportunity cost to the £20m £40m £60m £80m £100m 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 With tax site Counterfactual Net benefits
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GCR IZ - tax site business case 23 programme: that is, the flexible grant funding foregone as the valued tax incentives are deducted from the fixed Investment Zone envelope. The value for money assessment is summarised in the table below. Quantitative value for money assessment Value for Money element Renfrewshire GCR Scotland UK Over 10 years A Present value net additional GVA benefits £135m £155m £175m £215m B Present value net additional private sector investment £115m £115m £115m £115m C Present value costs (opportunity cost to programme) £24m £24m £24m £24m (𝑨𝑨−𝑩𝑩) 𝑪𝑪⁄ Benefit-cost ratio 0.7 1.7 2.5 4.2 𝑨𝑨 − 𝑩𝑩 − 𝑪𝑪 Net present social value -£4m £16m £36m £76m Over 15 years A Present value net additional GVA benefits £205m £240m £275m £340m B Present value net additional private sector investment £30m £30m £30m £30m C Present value costs (opportunity cost to programme) £24m £24m £24m £24m (𝑨𝑨−𝑩𝑩) 𝑪𝑪⁄ Benefit-cost ratio 7.3 8.8 10.2 12.8 𝑨𝑨 − 𝑩𝑩 − 𝑪𝑪 Net present social value £151m £186m £221m £286m Note: numbers may not sum due to GVA and private sector investment being rounded to the nearest £5 million. This indicates very high value for money when Scotland-level benefits are compared with the opportunity cost to the programme. The BCRs are materially lower over the 10-year period. This is for two reasons. First, the appraisal deducts the private sector investment uplift from benefits when calculating the BCR. Over the shorter period, the counterfactual has not yet caught up, so the net investment uplift remains larger and more of the benefit stream is offset. Second, the tax site is a longer-term intervention than many grant-funded Investment Zone projects. Benefits are only realised after investors are attracted, development is delivered, floorspace is occupied, and employment and productivity impacts follow. A 15-year appraisal therefore provides a better representation of the value generated by the intervention. The relatively high BCR should also be interpreted in context. No optimism bias or risk uplift has been applied to the £24 million opportunity cost, there is no publicly funded capital cost, and the tax site benefits from interactions with the wider Investment Zone package, including skills, business support and the future use of retained NDRR. These factors help explain why value for money appears stronger than in some conventional grant-funded projects. Non-monetised impacts In addition to quantified GVA benefits, the tax site is expected to generate a range of important non-monetised benefits. These include: • Catalysing innovation activity and collaboration, by helping anchor innovation-led occupiers and strengthening links to existing assets at AMIDS and the Airport
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GCR IZ - tax site business case 24 • Cluster formation and agglomeration, by creating a coherent advanced manufacturing location • Skills pipeline and specialist labour market development, by supporting closer links between employers, universities, colleges and skills providers • Supply chain development and capability building, through increased local demand for specialist suppliers and associated professional services These non-monetised benefits are strongly aligned with the wider Investment Zone programme objectives and the specific tax site objectives. Commercial Case Commercial approach The tax site is delivered through a package of statutory tax incentives rather than through public sector procurement, commissioning or direct capital funding. Development of buildings and occupation of land within the tax site will be market-led and financed through follow-on private investment by landowners, developers and occupiers. Delivery model Commercial delivery of the site will be led by the landowners (Renfrewshire Council and AGS Airports Ltd) using their existing development and property processes. New buildings and facilities are expected to be brought forward through standard market arrangements, including plot sales, leases and occupier-led investment in buildings, plant and machinery. The preferred route for each parcel will depend on market demand, site characteristics and investor requirements. The role of the public sector is therefore not to procure development, but to provide the policy framework and governance necessary to support investment. A coordinated promotion strategy will help market the tax site and communicate the value of the tax incentives to prospective occupiers. Some enabling works or infrastructure may still be required over time, but these would be taken forward separately through the normal commercial, funding or procurement routes of the relevant landowner or delivery body. They are dependencies for achieving the full benefits of the tax site, rather than part of the intervention itself. Assurance, risks and dependencies The commercial approach is supported by proportionate governance arrangements, including a pre-lease gateway process and occupier assurance agreements. These are intended to provide clarity on tax site eligibility, intended use and monitoring requirements, while remaining light-touch enough not to create unnecessary friction in lease negotiations. Their purpose is to balance transparency and auditability with the flexibility needed to secure investment quickly. The main commercial risks sit with the landowners and developers rather than the public sector. These include market demand, the ability to convert investor interest into firm commitments, and the timing and sequencing of development across different parcels. Key dependencies include the readiness of development plots, the availability of servicing and utilities, and alignment between proposed occupier uses and the relevant planning permissions. Overall, the success of the tax site will depend on landowner delivery and market conditions, with no additional procurement or contracting exposure for the public sector through this business case.
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GCR IZ - tax site business case 25 Financial Case Funding structure and tax benefits The tax site does not involve direct public sector capital expenditure or grant funding. Instead, it is delivered through a package of statutory tax incentives. Because the overall Investment Zone envelope is fixed, a nominal deduction must be made from the Glasgow City Region allocation to reflect the value of the tax site. For the Glasgow Airport / AMIDS tax site, this has been set at £24 million over the ten-year programme period. The estimated value of the tax package is distributed across devolved and reserved reliefs, including non- domestic rates relief, LBTT relief, employer NIC relief, and capital allowances, is shown below. Tax package estimates Outcome Type Value Note Non-Domestic Rates relief Devolved £9.1m Confirmed by SG Land and buildings transactions tax (LBTT) relief Devolved £4.0m Confirmed by SG National Insurance relief Reserved £6.2m Our estimate Enhanced Structures and Buildings Allowance Reserved £4.7m Our estimate Enhanced Capital Allowance Reserved - Our estimate Total £24.0m Note: the UK Government has not provided a disaggregated breakdown of the estimated value of reserved tax incentives. The reserved tax figures shown are therefore based on independent analysis commissioned by Renfrewshire Council. These estimates are indicative only; reserved tax reliefs are not capped and actual take-up will depend on market-led investment and qualifying activity. These figures are indicative and are used primarily to determine the split between tax incentives and flexible grant within the wider Investment Zone programme. Actual take-up will depend on the pace, scale and mix of market-led development on the site. A key distinction is that most tax incentives are administered through national systems and do not create a direct financial exposure for Renfrewshire Council or Glasgow City Region. The principal local exception is non- domestic rates relief, which is administered by Renfrewshire Council and reimbursed by the Scottish Government only up to an agreed cap of £9.1 million. Investment profile and tax benefit take-up The appraisal assumes that the tax site will support around £540 million of private investment by 2037, equivalent to around £410 million in present value terms. This investment profile is backloaded, reflecting the nature of large specialist employment sites, where development is typically phased and driven by a relatively small number of major occupiers and associated construction periods.
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GCR IZ - tax site business case 26 Profile of follow-on investment (Gateway scenario): 2028 - 2037 The profile of tax benefits follows the same broad pattern. Profile of tax benefits (Gateway scenario): 2028 - 2042 Relief take-up is expected to begin from 2028, rise through the early-to-mid 2030s as the site is developed and occupied, and then taper as the site approaches maturity. This reflects the different ways in which the individual incentives operate, including longer tails for employer NIC relief, NDR relief and enhanced structures and buildings allowance. These profiles are illustrative rather than fixed forecasts. They are based on the Gateway scenario and are intended to show the likely shape and timing of investment and relief take-up, rather than a committed annual budget profile. Non-domestic rates retention The tax site also forms part of the wider non-domestic rates retention (NDRR) proposition. Based on the assumed development trajectory, the site is forecast to generate around £52 million of retained NDR income over the retention period, after adjustment for the standard displacement factor and the one-year lag associated with rates billing, collection and retention arrangements. This retained revenue is strategically important because it can provide a longer-term income stream to support enabling activity, infrastructure, skills and wider Investment Zone objectives. In practice, early reinvestment of NDRR is expected to be a key dependency for sustaining delivery momentum and strengthening the long-term revenue stream. A detailed NDRR Investment Strategy will therefore be developed in due course. £20m £40m £60m £80m £100m £120m 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Structures and buildings Plant and machinery £0.5m £1.0m £1.5m £2.0m £2.5m £3.0m £3.5m £4.0m 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 NDR relief LBTT relief Enhanced SBA NI relief
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GCR IZ - tax site business case 27 Local authority implications and implementation costs Implementation of the tax site will require modest revenue costs to support governance, programme management, investor engagement, administration of NDR relief and retention, and monitoring and evaluation. These costs are expected to be small relative to the scale of private investment and wider economic benefits, but they remain important to maintain an effective and credible operating model. It is proposed that they are funded from retained NDR growth, subject to GCR governance and Cabinet approval. A robust quantified estimate of implementation costs has not been prepared at this stage because the final cost will depend on the detailed governance and administration model, the pace of occupier uptake, the volume of relief applications and reporting requirements, and the extent of any external support needed. Renfrewshire Council will resource the local function and work with GCR to develop an appropriate resourcing plan. The intention is that any reimbursement or chargeback arrangement operates on a transparent cost- recovery basis, so that the Council is not left bearing unrecovered costs associated with administering the tax site and meeting UK and Scottish Government requirements. Management Case Governance and delivery approach The Glasgow City Region Investment Zone will be delivered through established GCR governance arrangements rather than a new standalone delivery vehicle. This reflects the wider programme model agreed through the Gateway process and the Programme Business Case, which places the Investment Zone within the same governance framework used for other major post-City Deal interventions, including the UK Shared Prosperity Fund, Clyde Mission and the Innovation Accelerator. The advantage of this approach is that it avoids the need for a separate corporate entity, while still providing clear accountability to Glasgow City Region, the Scottish Government and the UK Government for delivery of outcomes That said, the tax site creates additional governance demands that do not arise in the same way for conventional capital grant projects. Once the site is designated, most tax incentives are effectively automatic: qualifying occupiers can access them through normal statutory processes such as payroll operation or tax returns. This means that the critical point of control is before occupation, when decisions are made about who will take space on the site and whether that occupation is consistent with Investment Zone objectives. The one significant exception is non-domestic rates relief, which remains discretionary and capped for reimbursement purposes, creating a specific need for governance over allocation and financial exposure. For these reasons, a proportionate but specific governance layer is required for the tax site. The proposed solution is the creation of a Tax Site Oversight Committee. This will operate as a voluntary, collaborative body involving Renfrewshire Council, AGS Airports Ltd, Buccleuch Property and GCR.
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GCR IZ - tax site business case 28 Proposed tax site governance structure Its purpose is not to replace the commercial role of the landowners or the statutory functions of Renfrewshire Council as rating authority, but to provide an auditable gateway before leases are signed, support alignment with Investment Zone objectives, manage monitoring requirements, and provide a forum for collaborative problem-solving where barriers to delivery need to be addressed. Decision-making and conflicts of interest The Tax Site Oversight Committee is intended to operate as an advisory gateway, not a formal statutory approvals body. For each proposed occupation, the relevant landowner will act as sponsor of the proposal, prepare the occupation proposal form and draft strategic assessment, and present the proposal to the Committee. The sponsoring landowner will then step back from the recommendation stage. Recommendations will normally be reached by consensus of non-conflicted members, with four possible outcomes: supported; supported subject to conditions or clarification; not supported; or escalated for advisory steer where agreement cannot be reached or where a proposal is particularly novel, borderline or material. Conflicts of interest are recognised as an inherent feature of the tax site governance model, because the principal landowners will routinely bring forward occupiers for sites from which they stand to benefit commercially. These interests will therefore be treated as standing conflicts for the relevant case and recorded formally in the decision note. A member with a direct commercial interest may present the proposal and answer questions, but will withdraw from the recommendation stage. Where Renfrewshire Council has both a landowner role and a rating authority role, those functions will be kept separate. Any formal decision on discretionary NDR relief will remain a separate function of Renfrewshire Council in its capacity as rating authority, applying the relevant local policy and funding constraints. Gateway process, occupier assurance and NDR relief The governance model is built around two practical mechanisms: • A gateway process for new leases This process will provide a clear, proportionate, and auditable decision point before occupation of tax site premises. Landowners will engage with the committee early and proactively to confirm that proposed Tax Site Oversight Committee Renfrewshire Council Buccleuch Properties AGS Airports Ltd. Investment Zone Accountable Body Glasgow City Region Assurance and M&E End users (RC-owned land) End users (AGS-owned land) Commercial & contractual relationship Commercial & contractual relationship Rating Authority Renfrewshire Council NDR responsibilities remain with Renfrewshire Council
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GCR IZ - tax site business case 29 occupations aligns with Investment Zone objectives and delivers additionality. This reflects the fact that the critical point of control is before a lease is signed, as decisions at this stage determine how limited NDR relief is allocated and whether the site achieves its strategic purpose. • Occupier assurance agreements These ‘Tax Site Framework Agreements’ will be entered into between Renfrewshire Council, the landowner (where different), and the occupier at the time of lease execution. Agreements will be short, simple and written in plain English. They will remind occupiers of eligibility conditions and outline monitoring expectations without creating onerous compliance obligations. Gateway process for new leases The gateway process ensures that proposed occupations are considered before a lease is signed, which is the point at which the site’s strategic direction and access to incentives are most effectively influenced. The gateway process is summarised below: 1 Landowner identifies a prospective end user The landowner identifies a potential occupier and promptly notifies the Tax Site Oversight Committee. This informal notification (typically by email or a brief call) serves to flag the proposal early and prevent late-stage issues. The secretariat logs the notification for transparency. No meeting is required at this stage. 2 Landowner submits occupation proposal The landowner completes a one-page occupation proposal form, which includes: • Key details: occupier’s name, proposed activity, lease duration, and space requirements. • A declaration confirming compliance with subsidy control. • A draft strategic assessment, outlining how the proposal aligns with Investment Zone objectives and represents effective use of tax incentives. • An initial estimate of the NDR impact (timing and value), and the intentions of the occupier to apply for NDR Relief. The completed form is submitted to the Tax Site Oversight Committee secretariat, which circulates it to committee members. Supporting documents are only required if specifically requested. 3 Strategic assessment The Tax Site Oversight Committee reviews the landowner’s draft strategic assessment. Members may confirm agreement, request clarification, or raise concerns via email. Only in cases of disagreement or complexity is a formal meeting convened. The final assessment and rationale are recorded in a brief note. Further detail on the strategic assessment is provided below. 4 Decision and record The Tax Site Oversight Committee confirms the outcome and formally records the decision, rationale, and any monitoring conditions. A one-page decision note is signed electronically by both landowners and logged by the secretariat. The NDR allocation tracker is updated accordingly. The process is deliberately designed to be proportionate and commercially workable. It avoids unnecessary meetings or large volumes of documentation, focusing instead on a short occupation proposal
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GCR IZ - tax site business case 30 form, a strategic assessment, and a decision note. These documents together provide an auditable record of the basis on which each occupation has been considered. The strategic assessment sits at the heart of this process. Its purpose is to ensure that tax incentives are used as strategic tools to build the intended advanced manufacturing cluster and to support uses that strengthen the wider economic ecosystem around the site. Proposals are expected to be assessed in terms of whether they are primary advanced manufacturing uses, secondary supporting supply-chain activities, or tertiary site amenities. For secondary and tertiary uses, a more structured assessment is required, considering their role in enabling advanced manufacturing, supporting site build-out, strengthening the tax site rationale, and contributing to the wider objectives of the Investment Zone. This allows the governance process to remain flexible enough to support legitimate supporting uses, while still maintaining a clear link to the primary purpose of the tax site. Occupier assurance agreements Alongside this, occupiers will be asked to sign a Tax Site Framework Agreement at lease execution. These are intended to be short, plain-English assurance statements rather than complex legal contracts. Their purpose is to record the intended use of the premises, the basis on which the occupier was supported through the gateway process, the expectations regarding NDR relief where relevant, and any proportionate monitoring commitments. They are also intended to support transparency and auditability, reduce the risk of later dispute over what was agreed, and provide a clear record for government assurance. NDR relief requires particular attention because it is the only tax incentive in the package that is awarded locally and reimbursed only up to a capped envelope. A key purpose of the governance model is therefore to manage this capped envelope transparently and to avoid late-stage surprises for occupiers or the Council. Renfrewshire Council will determine the detailed administration model, but the current proposal is that occupiers and the Council will agree a preliminary annual profile of expected NDR relief, which can be reviewed over time. A central tracker will monitor drawdown against the overall cap. Once the capped envelope is exhausted, no further Investment Zone NDR relief would be available unless a separate decision is taken outside the reimbursement arrangements. This is a key control point for managing public sector financial exposure. Monitoring and evaluation Monitoring and evaluation will be integrated with the wider Glasgow City Region Investment Zone framework. The tax site will adopt its own local monitoring and evaluation structure from mobilisation, but this will be aligned to the programme-level outputs and outcomes framework and feed into GCR’s formal six-monthly reporting to government. The intention is to monitor the tax site at three levels: delivery activities, direct outputs and longer-term outcomes. This includes metrics such as plot readiness, enquiries, leases, occupied floorspace, jobs, occupier mix and the extent to which the site remains aligned with the intended sector focus. Data will be collected through a combination of landowner information, occupier information gathered through the gateway process and framework agreements, and supporting audit trail from leases and decision notes. This is intended to keep reporting proportionate while still providing a reliable basis for accountability and later evaluation.
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GCR IZ - tax site business case 31 1 Strategic Case 1.1 Overview and summary 1.1.1 Investment Zones are locally-led, place-based programmes that bring together flexible public funding and time-limited tax reliefs to create the conditions for investment and innovation. Glasgow City Region’s Investment Zone is a ten-year, £160 million programme jointly backed by the UK and Scottish Governments. It is one of two Investment Zones in Scotland and twelve across the UK. 1.1.2 Within this broader offer, the programme’s sector focus is advanced manufacturing, a sector identified as critical to regional and national competitiveness. It will deliver a package of interventions including research and development facilities, capital investment in key sub-sectors (space, semiconductors, and maritime), skills programmes, and fiscal incentives to attract private investment and create high- value jobs. 1.1.3 This business case addresses one of the core elements of the Investment Zone strategy – a designated tax site at Glasgow Airport and the Advanced Manufacturing Innovation District Scotland (AMIDS) from the perspective of the Glasgow City Region. This means the business case addresses returns and opportunity costs to the Region – inevitably a somewhat narrower perspective than the Programme Business Case and the earlier Gateway submission to government. 1.1.4 The tax site proposition involves time-limited tax reliefs and acts as a catalyst for inward investment, enabling infrastructure-led regeneration and fostering innovation clusters. The ambition is to unlock over £400 million of private investment and create over 2,000 skilled jobs by 2035. The opportunity cost to the GCR of the tax site proposition is the forgoing of £24 million of grant that would have been available under the Investment Zone proposition in the absence of the tax site. 1.1.5 The land within the tax site is owned by Renfrewshire Council and Glasgow Airport and comprises four distinct land parcels, including the AMIDS Netherton Campus. Significant public investment has already been made through the Glasgow Airport Investment Area (GAIA) City Deal project, which delivered enabling infrastructure such as the realignment of Abbotsinch Road, new river crossings, and active travel links. 1.1.6 A map of the tax site is available as Annex 1 of this document. 1.1.7 Together, the ownership structure, serviced land parcels, and existing research assets provide a strong platform for investment. The combination of fiscal incentives (see Box 1) and new enabling infrastructure delivered through the GCR City Deal positions the tax site as a competitive location for manufacturing and innovation.
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GCR IZ - tax site business case 32 Information box 1: tax benefits available to Investment Zone end users Businesses occupying premises within an Investment Zone tax site can access the following reliefs: • Land and buildings transaction tax (LBTT) relief: full relief on LBTT for land and buildings purchased for commercial use or development for commercial purposes. • Non-domestic rates (NDR) relief: 100% relief from non-domestic rates for up to five years on newly occupied business premises, and for certain existing businesses expanding within the tax site. • Enhanced capital allowance: 100% first-year allowance for qualifying expenditure on plant and machinery assets for use in the tax site1. • Enhanced structures and buildings allowance: accelerated relief allowing businesses to deduct 10% of qualifying non-residential investment costs per year, relieving 100% of the cost over 10 years. • Employer national insurance contributions relief: zero-rate Employer NICs on salaries of new employees working in the tax site for at least 60% of their time, on earnings up to £25,000 per year. This relief applies for up to 36 months per employee. Value and role of tax incentives 1.1.8 The UK and Scottish Governments have determined a split of the overall £160 million funding envelope into (a) grant; (b) investment in skills incentives; and (c) tax incentives. 1.1.9 It is understood that this is based in part on an estimate of the costs to the Exchequer of the last of these., albeit the methodology behind this calculation has not been disclosed. For the GCR IZ, the split is £135 million of grant and £24 million of tax levers on the assumption of the proposed tax site. This means the opportunity cost to GCR of the proposed tax site is £24m of grant forgone. 1.1.10 GCR’s own estimates of the potential development of the tax site suggests that the value of the tax levers could be higher. In practice, the achieved value of tax incentives will depend on the pace and scale of development within the tax site. Relative to any estimate, whether government’s or GCR’s, if build-out is slower or less intensive than anticipated, the value will be lower. If development is accelerated and site utilisation is higher, the value could exceed the estimate. The value is also sensitive to changes to the wider tax regime which can also increase or reduce the value of the reliefs on offer on the tax site. 1.1.11 The Scottish Government intends to cap the reimbursement of non-domestic rates relief at £9.1 million. All other tax benefits are not subject to a cap. 1.1.12 Taken together, these measures are designed not only to reduce costs and de-risk investment but to accelerate development and attract globally mobile businesses. By combining fiscal incentives with advanced infrastructure and research assets, the tax site is expected to deliver substantial economic benefits: • Follow-on investment of £410m (present value). 1 This full expensing allowance is now also available generally in the UK, but tax site designation protects investors from future national level tax changes.
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GCR IZ - tax site business case 33 • 166,450 sqm. employment floorspace, supporting 2,300 jobs. • Net present value GVA of £610m over the 15-year appraisal period. 1.2 The case for change Market failure and barriers to growth 1.2.1 The advanced manufacturing sector in Glasgow City Region faces structural barriers that limit its ability to grow and compete internationally. These challenges are persistent and cannot be addressed by market forces alone. Without intervention, the region risks losing investment, high-value jobs, and its position in sectors critical to Scotland’s economic future. The key issues fall into four areas, discussed below. Together, these factors demonstrate why fiscal incentives are essential to unlock development at pace and scale. Competitive disadvantage 1.2.2 GCR faces a competitive disadvantage compared to other regions in the UK and abroad. For advanced manufacturing, a critical factor in location decisions is the total cost of ownership over the first decade. Competing sites such as Freeports or other Investment Zones (e.g. Infinity Park Derby, Coventry and Warwick), offer attractive fiscal packages, making them more appealing to globally mobile businesses. Without targeted interventions, GCR cannot compete effectively for these investments. High risk, high-cost facility development 1.2.3 The market currently supports low-cost, low-risk developments such as logistics warehouses, but it does not support the type of sophisticated, capital-intensive facilities required by advanced manufacturing. These projects involve high sunk costs and long payback periods, creating significant risk for investors. Without financial incentives to narrow the funding gap, companies are unlikely to commit to building or relocating such facilities in the region. Undersupply of suitable premises 1.2.4 Demand for advanced manufacturing space has grown rapidly, driven by national priorities and global trends. However, supply has not kept pace. The specific requirements of advanced manufacturing (such as bespoke layouts, high-specification utilities, and proximity to research assets) make development costly and complex. Market forces alone cannot deliver the scale or quality of premises required, creating a persistent undersupply that constrains sector growth. Strategic tenants at risk 1.2.5 Glasgow Airport is home to major employers such as British Airways, which is considering relocating its Glasgow operations to Cardiff or Madrid to close a funding gap. The absence of financial incentives possesses a real risk of losing high value jobs and supply chain activity too other locations. Retaining and expanding these anchor businesses is critical to safeguarding Scotland’s competitive position in aerospace and advanced manufacturing. 1.2.6 As set out in the Glasgow City Region Investment Zone SOPBC, these barriers are part of a wider set of structural constraints affecting the cluster across the region, including limited access to specialist equipment and infrastructure, shortages of specialist skills, supply chain fragmentation, and the high cost and risk of bringing forward investment in emerging technologies and advanced manufacturing activity.
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GCR IZ - tax site business case 34 1.2.7 The wider Investment Zone programme is intended to address these root causes through a coordinated package of interventions in skills, infrastructure, R&D capability and business support. 1.2.8 Within that wider programme, the tax site has a specific role: to improve the viability of development at AMIDS / Glasgow Airport, lower cost barriers for occupiers, de-risk early-stage investment decisions, and help anchor private investment in a location that is already strategically connected to key innovation assets. In that sense, the tax site should be understood as part of the wider IZ response to the underlying causes of underinvestment, rather than as a standalone measure addressing only the symptoms of market failure. Existing arrangements 1.2.9 Development activity at the proposed tax site currently takes place through a combination of landownership arrangements, planning frameworks, innovation assets and partnership working that pre-date the Investment Zone proposal. 1.2.10 Development at the Netherton Campus is progressed through a formal 50:50 joint venture between Renfrewshire Council and Buccleuch Property, established in 2023. This joint venture provides an agreed commercial mechanism for bringing forward serviced plots in response to market demand, subject to viability, planning approval and occupier commitment. 1.2.11 Significant enabling infrastructure has been delivered through the Glasgow Airport Investment Area City Deal project, including transport access, site servicing and utilities. These investments have reduced some physical barriers to development and established a platform for future activity, but do not in themselves determine development pace or tenant mix, which remain market-led. 1.2.12 The area hosts nationally significant innovation and skills assets, including the National Manufacturing Institute Scotland and the CPI Medicines Manufacturing Innovation Centre, alongside established partnerships with universities, colleges and skills agencies. These assets support research collaboration, workforce development and engagement with industry, and represent an important part of the advanced manufacturing ecosystem. However, their presence does not directly address commercial development viability or provide a mechanism to influence the timing or location of private investment decisions. 1.2.13 Under existing arrangements, in the absence of Investment Zone designation, development and occupation would continue on a piecemeal, opportunity-led basis. While some investment would be expected to proceed over time, there is limited ability to accelerate delivery, provide early investor certainty, or achieve coordinated clustering effects at the pace and scale envisaged within the Investment Zone period. Rationale for tax offer 1.2.14 These barriers highlight the need for a targeted, place-based intervention that can reduce costs, de-risk investment, and attract globally mobile businesses. A tax site offers a predictable, rules-based mechanism that directly improves investor returns and reduces risk at the point of decision-making. Unlike grants, which are finite and competitive, tax reliefs apply automatically to qualifying activity, providing certainty and transparency for investors. 1.2.15 Tax reliefs influence three critical decision levers for investors: • Lowering effective capital costs through accelerated allowances on structures and buildings.
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GCR IZ - tax site business case 35 • Reducing operating costs via non-domestic rates relief and employer NIC relief. • De-risking speculative development by removing upfront transaction costs through LBTT relief. 1.2.16 Taken together, these measures directly address the four market failures identified above: • Competitive disadvantage: tax site designation would help put the City Region on parity with other UK Investment Zones and Freeports in terms of tax incentives, ensuring a level playing field for attracting investment. • High-risk, high-cost facility development: tax incentives materially improve project economics. For example, a 10,000 sqm facility developed next year could generate £3-4 million in tax savings over five years. Enhanced Structures and Buildings Allowance accelerates relief on construction costs, while capital allowances reduce upfront expenditure on plant and machinery, shortening payback periods and improving viability.2 • Undersupply of suitable premises: LBTT relief and non-domestic rates relief reduce transaction and occupancy costs, making speculative development more attractive. Combined with employer NIC relief, these incentives create a compelling proposition for both developers and occupiers. • Strategic tenants at risk: the tax offer provides a mechanism to retain and expand anchor businesses by reducing operating costs and supporting investment decisions, particularly for firms considering relocation to other jurisdictions where fiscal incentives are already available. 1.2.17 These measures are also complemented by the non-domestic rates retention (NDRR) offer, which will generate a sustainable revenue stream over 25 years to reinvest in infrastructure and skills, further strengthening the business case for development of the tax site.3 1.2.18 Global benchmarking shows that comparable sites in Ireland, the Netherlands, and Singapore offer similar fiscal packages to attract advanced manufacturing investment. Without a competitive tax offer, Glasgow City Region risks losing out to these locations and to other UK Investment Zones. Expected benefits of the tax site 1.2.19 The tax site will act as catalyst for growth in advanced manufacturing, levering fiscal incentives to attract domestic and international occupiers. It is expected to deliver approximately 166,000 sqm. of employment space and support around 2,300 high-value jobs, generating an estimated £205 million in GVA annually. 1.2.20 Development will focus on two strategic areas: Aviation and jet zero innovation • Glasgow Airport plans a hydrogen production, storage and distribution facility to support zero- emission flights and airport decarbonisation. • The Aerohub will accommodate aerospace manufacturing units, the relocation of British Airways’ maintenance operations, and integration with NMIS for aircraft decommissioning and recycling. • A £31 million CargoHub will double freight handling capacity, supporting advanced manufacturing supply chains. • ZeroAvia is expected to lease runway-accessible space within AMIDS for jet zero innovation. 2 Assuming 165 jobs, build costs of c.£25 million based on BCIS estimates, a rateable value of c.£340,000 and an annual rental value of c.£2 million. 3 Under the IZ policy, all IZ tax sites become NDR retention zones. IZs are allowed up to three NDR retention zones and GCR is proposing to use its full allocation, but with only the AMIDS/Airport site also being a tax site.
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GCR IZ - tax site business case 36 Industrial manufacturing and supply chain development • Dedicated zones for engineering and life sciences will include speculative units such as Tech Terrace for advanced manufacturing SMEs and NMIS spin-outs. Subsequent investments will deliver 48,000 sqm of space and create 800 jobs. • Airside North is earmarked for 40,000 sqm. of advanced manufacturing and supply chain activity, supporting co-location and clustering benefits. 1.2.21 These developments represent a clear vision for the tax site and its role in strengthening Glasgow City Region’s position in advanced manufacturing. Without the tax offer, delivery is likely to be slower, more piecemeal, and less ambitious, reducing the potential for clustering and supply chain integration. Fiscal incentives provide the certainty and cost competitiveness needed to accelerate investment and realise the full benefits of the site. 1.3 Strategic objectives Investment Zone programme objectives 1.3.1 The Investment Zone Programme Business Case sets out objectives for the Glasgow City Region Investment Zone as a whole. These objectives have been approved by the GCR Cabinet and include: 1) Build on strengths of the City Region’s current and emerging cluster specialisms. 2) Grow new and existing R&D focused firms which are geared to take advantage of local academic expertise. 3) Create a significant number of mid to high skilled ‘good’ jobs. 4) Generate short and longer-term private sector investment in the Region’s cluster specialisms - both through existing firms and wider supply chain development. 5) Align with existing investment within the region e.g. City Deal, Innovation Districts / Innovation Accelerator, UK Shared Prosperity Fund. 6) Maximise the impacts through enhancing connections to existing clusters. 7) Facilitate the development / regeneration of under-developed land and assets within the City Region. 8) Extends the benefit to the whole City Region including developing options for a IZ skills programme for local residents and a regional investment fund. Tax site project objectives 1.3.2 The tax site objectives have been created by adapting the most relevant programme objectives to reflect the specific opportunities and challenges of the site. These objectives ensure that the project contributes directly to the wider ambitions of the Investment Zone while focusing on outcomes that can be delivered locally. They are: 1) Leverage private sector investment in advanced manufacturing.
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GCR IZ - tax site business case 37 2) Unlock the full potential of City Deal investments by accelerating the development of underutilised land. 3) Create new high-skilled jobs. 4) Extend benefits to the whole City Region by contributing to NDRR. 1.3.3 These objectives are designed to be SMART (specific, measurable, achievable, relevant, and time- bound). Table 1.1 explores these objectives through the SMART framework. Table 1.1: Project objectives 1 Leverage private sector investment in advanced manufacturing Specific Provide incentives to attract advanced manufacturing businesses and supporting supply chain firms to further grow the high value cluster. Measurable By the number of new advanced manufacturing businesses occupying the tax site. Achievable Evidence from UK Freeports and other IZs demonstrate that the tax incentives available can successfully encourage development. Relevant Contributes to IZ programme objective to generate long-term investment (#4) in this sector, and supports GCR’s objectives to grow the inclusive economy and improve productivity. Timebound Target for 50% of the tax site to be fully developed or committed to development by 2035. 2 Unlock the full potential of City Deal investments by accelerating the development of underutilised land Specific Facilitate the development of underdeveloped land across AMIDS and Glasgow Airport, ensuring these sites deliver economic and social value faster than otherwise possible. Measurable By the amount of underutilised land brought into productive use (hectares developed) and the number of new developments or businesses established on these sites. Achievable City Deal has already funded enabling infrastructure for AMIDS through the GAIA project, and evidence from similar Freeport and IZ programmes shows that targeted support and infrastructure investment can successfully unlock development. Relevant Contributes to the IZ programme objectives to align with existing investment (#5) and facilitate the development of underutilised land (#7). Timebound Target for 50% of the tax site to be fully developed or committed to development by 2035. 3 Create new high-skilled jobs Specific Facilitate direct investment through tax incentives to attract businesses that will establish facilities employing mid- and high-skilled workers within the tax site. Measurable By the number of jobs created on the tax site, tracked through employer reporting and workforce data. Achievable Investment attracted through tax incentives will lead to the establishment of new facilities that require mid- and high-skilled roles. Companies will recruit locally, creating employment opportunities and supporting workforce development through training and apprenticeships. Relevant Contributes to IZ programme objective to create significant number of mid to high skilled ‘good’ jobs (#3) and supports GCR’s objectives to grow the inclusive economy and improve productivity.
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GCR IZ - tax site business case 38 Timebound Target the employment of 2,300 workers within the tax site by 2037. 4 Extend benefits to the whole City Region by contributing to NDRR Specific Enable growth in NDR on the tax site, ensuring these revenues are retained and reinvested into programmes that maximise future NDR growth on the tax site and deliver benefits across the wider City Region. Measurable By the total amount of non-domestic rates retained by Renfrewshire Council from the tax site over the retention period. Achievable Evidence from similar Freeport and IZ programmes shows that targeted support and infrastructure investment can successfully unlock development. Governance arrangements related to NDRR are in place. Relevant Contributes to the IZ programme objective to extend the benefit across the whole region (#9) Timebound The non-domestic rate retention period is set for 25 years, providing a long-term funding stream for regional investment. 1.4 Policy alignment Alignment with the regional economic strategy 1.4.1 Glasgow City Region’s Regional Economic Strategy (2021) sets out a long-term vision for inclusive and sustainable growth. It identifies three missions (creating an inclusive economy, enhancing productivity, and addressing the climate emergency) and provides a framework for prioritising investment and policy interventions. 1.4.2 Assessing the alignment of the tax site with this strategy is important as the tax site involves the deployment of public subsidy in the form of statutory reliefs. This assessment provides assurance that the intervention is strategically coherent and contributes to existing policy objectives rather than operating in isolation. Creating an inclusive economy 1.4.3 The region faces persistent barriers to inclusion, including low employment rates, underemployment, skills underutilisation, and concentrations of deprivation. The tax site will help address these issues by: • Tackling low employment and underemployment: the tax site will attract advanced manufacturing companies that create high-value, long-term jobs in sectors like aerospace, robotics, and specialist materials. These roles offer better pay and career progression compared to the foundational economy, helping residents move out of low-paid work. • Creating pathways for skills development: advanced manufacturing companies typically invest in workforce training and apprenticeships. Locating these firms within the tax site will increase opportunities for upskilling and re-skilling. • Driving fair work and supply chain opportunities: the clustering effect of advanced manufacturing will create indirect jobs in construction, logistics, and professional services. These sectors can adopt fair work practices and provide entry-level roles for residents who may not have specialist skills, widening participation in the labour market. In addition, the tax site will be supported by a Fair Work Charter, informed by the approach developed for Scottish Green
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GCR IZ - tax site business case 39 Freeports, which will be used to encourage occupiers to align with Fair Work principles and help ensure that the jobs created are not only high value, but also fair, secure and inclusive. Increasing productivity 1.4.4 The region faces a longstanding productivity challenge driven by low levels of innovation and business R&D, a relatively low business base/enterprise rate, and skills constraints (including under-utilisation), alongside the drag created by a large but less productive foundational economy. The tax site will help address these issues by: • Unlocking productivity-enhancing physical capital (premises, plant, and equipment): the tax site is intended to bring forward development on under-developed land, enabling delivery of modern industrial floorspace and supporting business investment in buildings and capital equipment. This directly addresses a key constraint for scaling advanced manufacturing activity (access to suitable space and specialist facilities) which underpins productivity growth. • Crowding-in private capital investment and accelerating delivery timelines: by improving development viability and reducing the cost of investment, the tax site helps to secure earlier and larger private sector commitments than would otherwise occur, supporting faster build-out and earlier occupation. This supports productivity by accelerating the transition from under-utilised land to productive employment space in a priority growth cluster. • Providing a clear, investable proposition that supports business dynamism: the Regional Economic Strategy highlights the need to strengthen the business base. A designated tax site provides a visible, place-based offer that can improve the region’s competitiveness for inward investment and expansion decisions in priority sectors. Achieving net zero and climate resilience 1.4.5 Responding to the climate emergency is central to the Regional Economic Strategy. It highlights the need for a step change in mitigation and adaptation, improved business support for decarbonisation, and a just transition to avoid exacerbating inequalities. The tax site will help address these issues by: • Bringing forward low/zero-carbon employment development on under-developed land: the tax site is intended to unlock development and accelerate build-out on under-developed parcels, enabling new employment space to come forward in a way that can be specified to high standards of energy performance and carbon reduction. • Catalysing strategic net zero infrastructure at Glasgow Airport through the Hydrogen Hub proposition: Glasgow Airport has conducted a feasibility study for a hydrogen production, storage and distribution facility to support zero-emission flight and wider airport decarbonisation. The Hydrogen Hub is therefore an important step toward Scotland’s 2045 net zero target, but delivery is dependent on securing a private partner. The tax incentives associated with the tax site are expected to strengthen the investment proposition and support the search for, and securing of, a suitable private sector partner by improving viability and de-risking early investment. • Supporting a ‘just transition’ through the type and quality of jobs anchored on a net-zero-aligned site: the Regional Economic Strategy explicitly links net zero with resilience, and stresses that equity must be embedded to avoid widening inequalities. While broader employability/skills programmes sit outside the tax site business case, the tax site can still contribute by attracting and enabling growth in cleaner, higher-value industrial activity and supply chains, supporting a transition pathway consistent with these aims.
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GCR IZ - tax site business case 40 Alignment with the national Advanced Manufacturing Sector Plan 1.4.6 The UK Government’s Advanced Manufacturing Sector Plan (as part of the UK’s Modern Industrial Strategy) sets out a ten-year approach to increasing investment and growth in advanced manufacturing, with an ambition to nearly double annual business investment by 2035 and to prioritise six frontier industries (including aerospace, space, automotive, batteries, advanced materials and agri-tech). 1.4.7 The AMIDS / Glasgow Airport tax site aligns strongly with the sector plan in the following ways: • Crowding-in investment and accelerating delivery of capital-intensive activity: the tax site reduces effective capital and operating costs at the point of decision-making, improving viability for advanced manufacturing facilities and equipment investment and helping bring forward development. • Supporting frontier advanced manufacturing industries (especially aerospace and adjacent supply chains): the sector plan prioritises aerospace and other frontier industries, and the tax site is explicitly focused on anchoring and expanding advanced manufacturing at an airport-linked location with strong potential for aerospace-related activity and supporting suppliers. • Strengthening place-based clusters and regional growth: the sector plan emphasises the role of clusters and city regions in driving advanced manufacturing growth across the UK; the tax site reinforces a concentrated, investable cluster proposition at AMIDS/Glasgow Airport, increasing visibility, co-location benefits and the likelihood of follow-on investment. • Enabling innovation adoption and commercialisation: the sector plan positions advanced manufacturing as central to innovation and technology adoption; the tax site complements this by leveraging proximity to established innovation assets at AMIDS and encouraging earlier private commitment to R&D-adjacent facilities and scale-up space. • Supporting net zero-aligned industrial transition (including aviation decarbonisation pathways): the sector plan explicitly links advanced manufacturing transformation to decarbonisation; the tax site strengthens the proposition for cleaner industrial investment and net zero-aligned activity on and around the airport campus. Alignment with wider policies 1.4.8 This section summarises how the proposed tax site aligns with the most relevant national and local policy frameworks, complementing the detailed policy alignment set out above. 1.4.9 Table 1.2 provides a high-level overview of alignment with key Scottish Government and Renfrewshire Council policy documents, setting out each policy’s headline objectives and the specific role the Investment Zone tax site plays in supporting their delivery. Table 1.2: Wider policy alignment Policy document Headline objectives Alignment with the IZ tax site Scottish Government Scotland’s National Strategy for Economic Transformation (2022) Sets out a ten-year strategy to improve Scotland’s economic performance through focused interventions, including increasing productivity, opening new markets, The tax site aligns by using a targeted intervention to accelerate private investment in a priority sector, support productive regional growth and reinforce an existing advanced
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GCR IZ - tax site business case 41 Policy document Headline objectives Alignment with the IZ tax site developing skills and building on strengths in sectors such as technology, space and decarbonisation. manufacturing location with strong links to research and innovation assets. National innovation strategy 2023 to 2033 (2023) Sets out Scotland’s ten-year innovation strategy, with a vision for Scotland to become one of the most innovative small nations in the world and a programme centred on successful innovation clusters, business innovation and commercialisation. The tax site complements this strategy by supporting the physical and commercial conditions needed for cluster growth around AMIDS, NMIS and MMIC, helping innovation- led firms to locate, scale and invest alongside existing research infrastructure. National Planning Framework 4 (2023) Scotland’s national spatial strategy and planning policy, bringing together spatial principles, regional priorities, national developments and planning policy to support sustainable, liveable and productive places. The tax site aligns with NPF4 by focusing growth in an established strategic employment location, using existing infrastructure and planning support to bring forward productive development on land already identified for business and industry uses Renfrewshire Council Renfrewshire’s Economic Strategy 2020-2030 (2020) Sets out the Council’s strategic outcomes, including economy, place and green priorities, under the vision of creating a fairer Renfrewshire built on innovation, wellbeing and opportunity. The tax site is aligned with the Council’s place objectives by supporting innovation-led development, strengthening the local economic base and helping to bring forward a strategic employment location linked to wider regeneration and infrastructure investment. Renfrewshire Local Development Plan 2021 (2021) Sets out Renfrewshire’s spatial strategy and proposals for the following ten years. It is part of the statutory development plan and provides the planning framework for economic, infrastructure and place development. The tax site aligns with the Local Development Plan because the areas already sit within an adopted planning framework that supports employment-generating development, reducing planning uncertainty and reinforcing the site’s readiness for market-led investment 1.4.10 These policies evidence clear and consistent support for advanced manufacturing as a priority sector, focusing investment in established and well-connected locations, and crowding-in private capital to improve productivity and long-term economic resilience.
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GCR IZ - tax site business case 42 1.5 Stakeholders 1.5.1 The main stakeholder groups for the tax site are those with a direct role in designation, delivery, governance and benefits realisation. 1.5.2 At programme level, this includes the UK Government, the Scottish Government and Glasgow City Region. These organisations are responsible for the Investment Zone policy framework, funding envelope and programme oversight. 1.5.3 At site level, the principal delivery stakeholders are Renfrewshire Council, AGS Airports Ltd and Buccleuch Property. Renfrewshire Council has multiple roles as landowner, planning authority, rating authority and local delivery partner. AGS Airports Ltd is a key landowner and commercial partner for airport-related land. Buccleuch Property is Renfrewshire Council’s joint venture partner for development at the Netherton Campus within AMIDS. 1.5.4 A further stakeholder group includes research, innovation and skills partners linked to the site and the wider advanced manufacturing cluster. This includes NMIS, CPI/MMIC, the University of Strathclyde, UWS, West College Scotland, Scottish Enterprise and Skills Development Scotland. These organisations have an interest in ensuring that the tax site supports cluster growth, innovation, inward investment and skills development. 1.5.5 The tax site also has a direct relationship with prospective occupiers, investors and supply chain firms. These stakeholders will influence the pace and scale of follow-on private investment. Local communities and the regional workforce are also stakeholders, as development is expected to deliver economic benefits, including jobs and regeneration, alongside wider impacts from increased activity. 1.6 Risks, dependencies, and constraints Risks 1.6.1 Key strategic risks include: • Uptake and delivery pace risk: the scale and timing of benefits are sensitive to wider market conditions and the ability of landowners to convert interest into signed commitments and occupation. Slower take-up would reduce the ‘acceleration’ effect that underpins much of the present value benefit and could weaken the overall impact of the tax site within the programme period. This will be managed through a coordinated investor proposition, a focus on pipeline conversion through agreed site-level KPIs, and by using the tax site governance arrangements to identify and escalate delivery constraints early. • NDR relief cap and investor confidence risk: NDR relief is the only element of the tax offer that is locally administered and reimbursed only up to an agreed cap, creating a real risk that late-stage uncertainty over the availability of relief could deter occupiers or delay lease completion. This will be managed by applying a clear local approach to allocating relief within the capped envelope, supported by the pre-lease gateway process and framework agreements so that relief expectations are discussed and recorded before occupation. • NDR relief cashflow and administration burden risk: the Scottish Government will not meet administration costs associated with IZ NDR relief. In addition, reimbursement is via General Revenue Grant mechanisms that relies on notified/audited returns and reconciliation. This creates
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GCR IZ - tax site business case 43 a modest capacity and timing risk for the rating authority, which, if not managed, could introduce friction into occupier onboarding and relief administration. This will be managed by embedding processes within existing rates functions, keeping requirements proportionate, and (where needed) bridge early-year resourcing costs until retained receipts / programme capacity arrangements are available. • Additionality and tenant mix risk: because most tax reliefs are statutory and ‘automatic’ once a business occupies qualifying premises, there is limited scope to influence outcomes after occupation. If occupier mix drifts away from the target cluster, this risks undermining additionality, reputational credibility, and the strategic rationale for using the tax levers. This will be managed through a pre-lease gateway process and strategic assessment to steer occupier mix. 1.6.2 A project risk register is available as Annex 2. Constraints 1.6.3 GCR will face the following constraints in the delivery and operation of the tax site. • Focus on advanced manufacturing organisations: Despite a strong market for low-risk, low-cost industries such as logistics and warehousing, GCR’s focus for the tax site is advanced manufacturing. This is because it would facilitate the creation of high paid jobs and greater R&D, which is in line with GCR’s strategic goals of driving productivity and innovation, with higher levels of additionality from a GCR, Scottish and UK perspective, than traditional logistics and warehousing propositions, less dependent on IZ support mechanisms, including the proposed tax site tax breaks. This is a constraint on the companies and institutions that GCR can allow to occupy the tax site, and is addressed further in the management case, which sets out how additionality on the tax site will be protected. • Timeframes associated with the tax benefits: There is a time constraint as occupants can only trigger tax incentives by delivering investment within ten years. For example, new occupants can benefit from 100% relief from non-domestic rates for up to five years, but they need to trigger the start of those five years by investing within ten years. After the five years are up the normal rates regime will apply. • Cap on NDR relief: The Scottish Government will reimburse GCR of the foregone NDR as part of the reliefs provided to the new occupants for up to five years. However, this contribution by the Scottish Government will be capped at £9.1 million. • Staff time and council resource: There is a resource and time constraint for the Council and its staff who would have to balance other council commitments with the delivery and operation of the tax site. Dependencies 1.6.4 GCR will need to manage the following dependencies in the delivery and operation of the tax site. • Legal dependencies: The promotion of tax incentives to attract private investors is dependent on the Government’s designation as a tax site. • Public transport service / wider investments in the site: The full realisation of expected benefits is dependent on wider investments in the site on supporting infrastructure, facilities and public transport service. Without these, companies will struggle to attract a suitable workforce and carry out their operations, whilst workers and employers may have to incur higher day-to-day costs.
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GCR IZ - tax site business case 44 • Supporting Scottish and UK Government policy environment: The continued success of the tax site in driving innovation and economic activity will depend on supporting Scottish and UK Government policy around a host of areas including Investment Zones, industries, growth sectors, support for businesses, business rates and other taxes and innovation. Whilst at present, there is government support for the advanced manufacturing sector, future changes in Government policy will have favourable or unfavourable impacts on the operations and outcomes of the tax site. • Wider macroeconomic conditions: The realisation of benefits will depend on the macroeconomic conditions in the UK and globally. Macroeconomic conditions (such as changes to costs, government (in)stability, changes to borrowing rates etc.) will positively or negatively impact GCR’s ability to attract companies into the tax site, the occupants’ economic activity, wages paid to the workforce and the spend on R&D to support innovation.
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GCR IZ - tax site business case 45 2 Economic Case 2.1 Options appraisal Overview 2.1.1 A full options appraisal has not been undertaken for this business case because the Glasgow City Region Investment Zone programme, including the designation of a tax site, was developed and agreed before this stage. The programme was taken forward through the GCR open call, the five-stage Government Gateway process and subsequent Cabinet approvals. 2.1.2 The purpose of this Economic Case is therefore not to revisit those programme-level decisions, but to explain how the tax site emerged from that process and to confirm the viability of the agreed intervention. 2.1.3 The UK and Scottish Governments set the overall Investment Zone framework, requiring proposals to demonstrate a clear sector focus, appropriate economic geography, stakeholder engagement, governance, deliverability and value for money across five gateway stages: vision; sector and geography; governance; interventions; and delivery. Proposals were expected to show a clear logic from identified opportunities and constraints to selected interventions and intended outcomes. 2.1.4 Within this framework, Glasgow City Region developed the programme through a structured process led by the GCR Programme Management Office, supported by the GCR Intelligence Hub, Scottish Enterprise, Innovate UK, regional partners and government. The designation of the Glasgow Airport / AMIDS tax site reflects the outcome of this programme-level process rather than a separate project-level options appraisal. Option generation and assessment 2.1.5 A broad set of programme options was developed through two stages of market and stakeholder engagement. First, the GCR Programme Management Office ran an Expression of Interest (EOI) process to test appetite across sectors and locations. This was informed by the GCR Intelligence Hub’s innovation cluster analysis, which identified sector strengths, ecosystems and locational patterns across the region. 2.1.6 The EOI invited submissions from businesses and institutions across priority sectors, including advanced manufacturing and precision engineering, digital creative industries, digital enabling technologies, net zero and life sciences. The process tested market and academic appetite, match-funding potential and the emerging sector focus. Submissions were reviewed qualitatively, including links to academia, investment commitment and deliverability. 2.1.7 Building on this, GCR launched an open call in January 2024 for proposals in advanced manufacturing and precision engineering, digital enabling industries and life sciences. Applications followed the HM Treasury Green Book structure and addressed strategic fit, benefits, commercial viability, delivery, governance and funding. In total, 41 bids were received, with a combined value of over £1.8 billion.
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GCR IZ - tax site business case 46 Assessment and shortlisting 2.1.8 Assessment and shortlisting followed a multi-stage process agreed by the GCR Chief Executives’ Group. This included quantitative scoring by the GCR Programme Management Office, qualitative input from Scottish Enterprise and Innovate UK, a sectoral impact review by the GCR Intelligence Hub, and final review by the Strategic Assessment Panel. 2.1.9 The Strategic Assessment Panel provided independent and transparent appraisal of the programme, reviewing recommendations from the quality assessment and considering both the merits of individual projects and the strength of the programme as a whole. 2.1.10 Projects that passed the initial quality threshold were subject to further review by Scottish Enterprise and Innovate UK, focusing on alignment with Investment Zone objectives, fit with wider UK and Scottish clusters, and key strengths or risks. Projects were also grouped into broad roles to test their strategic contribution to the programme. 2.1.11 The Panel first considered the appropriate sector focus for the Investment Zone. Given the volume and strength of submissions, Advanced Manufacturing and Precision Engineering was recommended and approved by GCR Cabinet as part of Gateway 2. Assessment was guided by principles including additionality, provision of new capability, leverage of private investment, contribution to cluster development, coherence at programme level and portfolio risk. 2.1.12 Following clarification and refinement sessions to test scope, viability, impacts and delivery assumptions, a programme shortlist was approved by GCR Cabinet. Short-listed projects were those considered to best meet programme objectives, be deliverable and form a coherent package of interventions. Relevance to the tax site 2.1.13 Within this programme-level process, the Glasgow Airport / AMIDS tax site was taken forward as part of the preferred package of interventions. The approved package comprised six short-listed projects, a designated tax site, three non-domestic rates relief sites, an investment fund, and skills and business support measures. The tax site supports growth in advanced manufacturing and precision engineering, aligns with the development of Glasgow Airport and AMIDS, and is intended to attract private investment, create high-quality jobs and support regeneration. 2.1.14 This business case therefore treats the tax site as the agreed preferred option emerging from the wider programme process. It does not revisit alternative sites through a separate project-level options appraisal, as this work was undertaken through the open call, programme assessment and Government Gateway process. As noted in the Strategic Outline Programme Business Case, bidders developed their own internal options, with assessment focused on submitted proposals rather than underlying alternatives. Scope, delivery, funding, and cost information 2.1.15 Although a conventional project-level options framework was not applied, the open call and assessment process tested issues relating to scope, delivery, funding and implementation. Bidders were required to provide information on match funding, spending profiles, outputs, outcomes, delivery
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GCR IZ - tax site business case 47 plans, governance, risks and sustainability. Deliverability formed part of both the Programme Management Office quality assessment and the Strategic Assessment Panel review. 2.1.16 Short-listed projects also submitted detailed financial information at programme level, including ten-year spending profiles, outputs, outcomes and funding sources. Costs and funding assumptions were reviewed and approved at each stage through GCR governance arrangements to ensure consistency with programme objectives and available resources. 2.1.17 For the tax site, programme documentation identifies an indicative public sector allocation of £24 million over ten years, alongside forecast private investment, employment and additional gross value added. The tax site was considered as part of the overall package of interventions, rather than as a stand-alone capital project requiring comparison against alternative delivery options. Assessment against project objectives 2.1.18 The preferred option for the tax site has been developed to deliver a set of project objectives that align with the wider Investment Zone programme. The structured assessment against these objectives presented in Table 2.1 shows how the proposed intervention will achieve its intended outcomes. Table 2.1: Assessment against project objectives Project objective Assessment Leverage private sector investment in advanced manufacturing. ✔ The tax site addresses underinvestment in the existing advanced manufacturing cluster by offering fiscal incentives that reduce costs and improve viability. Without these incentives, GCR risks losing investment to competing UK and overseas sites offering similar benefits. This supports the IZ programme objective of generating long-term investment and aligns with GCR’s goals to grow an inclusive economy and improve productivity. Forecasts indicate the tax site could unlock approximately £540 million of private sector investment. Unlock the full potential of City Deal investments. ✔ The tax site builds on GAIA infrastructure and accelerates development of approximately 166,000 sqm of employment space. The tax site covers c. 375 hectares of underdeveloped land, with over 80 percent currently vacant. Tax incentives will catalyse development and prevent the land from remaining underutilised. Create new high- skilled jobs. ✔ The tax site is expected to create around 2,300 high-value jobs in advanced manufacturing and related sectors, compared to a business-as-usual scenario. These roles will be complemented by indirect employment in construction, logistics, and professional services. Occupiers will also invest in workforce training and apprenticeships, supporting skills development and fair work practices. Extend benefits by contributing to NDRR. ✔ Designation will enable retention and reinvestment of non-domestic rates, creating a sustainable revenue stream for infrastructure and skills programmes across the region. Without a tax site, NDR growth would be limited and reinvestment mechanisms would not exist. 2.1.19 This assessment demonstrates that the preferred option is well aligned with the project objectives and will deliver measurable benefits across investment, land development, job creation, and regional reinvestment.
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GCR IZ - tax site business case 48 2.2 Economic assessment Overview 2.2.1 A cost-benefit analysis (CBA) has been undertaken to assess the Value for Money of the proposed tax site. This includes an economic assessment undertaken in line with the City Region’s Assurance Framework. This analysis covers: • Private sector investment: forecast additional investment leveraged by the tax site through fiscal incentives and clustering effects. • Operational employment: estimated number of high-skilled jobs supported. • Gross value added: contribution to regional productivity and economic output resulting from new business activity and employment 2.2.2 Benefits are considered over 10-year and 15-year appraisal periods and discounted at 3.5% annually to calculate their net present value (NPV) in line with HMT Green Book guidance. Development and counterfactual scenarios 2.2.3 All economic benefits associated with the tax site are dependent on follow-on investment. 2.2.4 There is uncertainty over how quickly and how extensively development will occur within the tax site. This is typical for large sites in specialist sectors. Development depends on a range of external factors, such as market demand, investor confidence, occupier requirements, planning timelines, and the sequencing of infrastructure and enabling works. These factors mean that the level and timing of activity on the tax site cannot be predicted with certainty at this stage. 2.2.5 This business case has adopted a conservative core scenario, which was included in the Gateway 3 and 4 submission to Government. This reflects a relatively conservative view on uptake based on current market intelligence. 2.2.6 The core scenario is assessed against a counterfactual where development outcomes are delivered three years later in the absence of tax site benefits. The value of the activity assumed to be brought forward on the Glasgow Airport sites is higher than what would happen in the absence of intervention.4 2.2.7 This means the core scenario does not assume the impact of the tax breaks on viability is permanent. Implicit in this assumption is background improvements in viability that would ultimately mean investment would be deliverable without the tax breaks. Economic assessment findings 2.2.8 The designation of the tax site is anticipated to increase private investment, employment, labour demand and the development of underutilised land. Table 2.2 summarises the headline results of the economic assessment, comparing the counterfactual and tax site scenarios and showing the resulting net present value impacts. 4 The GVA per worker assumed is £89,669 (the average for manufacturing in Scotland) compared to £67,477 in the counterfactual (the overall average for Scotland). This is based on analysis of the Scottish Annual Business Statistics.
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GCR IZ - tax site business case 49 Table 2.2: Economic assessment findings (15-years) Outcome Counterfactual Intervention Net benefits Present value investment £380m £410m £30m Floorspace (sqm.) 166,470 166,470 - Gross jobs 2,300 2,300 - Net present value GVA (Scotland level) £590m £865m £275m 2.2.9 The assessment assumes that the tax sites will accelerate development, bringing forward jobs, investment, and GVA faster than would otherwise be possible. This results in an increase in monetised, present value impacts over the appraisal period - however the overall jobs delivered on site by 2038 is anticipated to be the same in each scenario. The phased nature of these outcomes is illustrated in Table 5 below, which presents results at five-year intervals from 2031 and in Figure 2.1, which shows NPV GVA over time. Table 2.3: Economic outcomes over time (Scotland-level) Outcome Counterfactual With tax site Net benefits Over 5 years Present value investment £40m £95m £55m Floorspace (sqm.) 14,990 35,765 20,775 Gross jobs 250 595 345 Net present value GVA £15m £70m £55m Over 10 years Present value investment £270m £385m £115m Floorspace (sqm.) 114,750 154,470 39,720 Gross jobs 1,670 2,185 515 Net present value GVA £220m £425m £205m Over 15 years Present value investment £380m £410m £30m Floorspace (sqm.) 166,470 166,470 - Gross jobs 2,300 2,300 - Net present value GVA £590m £865m £275m £10m £20m £30m £40m £50m £60m £70m £80m £90m £100m 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 With tax site Counterfactual Net benefits
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GCR IZ - tax site business case 50 Figure 2.1: NPV GVA over time (Scotland-level) 2.2.10 By 2031 the tax site has enabled around 35,765 sqm and 595 jobs compared with 14,990 sqm and 250 jobs in the counterfactual, alongside a higher present value (PV) of investment (£95m vs £40m) and PV GVA (£70m vs £15m). 2.2.11 By 2036, this acceleration effect is still evident, with the tax site scenario substantially ahead on floorspace (154,470 sqm vs 114,750 sqm) and jobs (2,185 vs 1,670), and the PV investment gap peaking (£385m vs £270m). 2.2.12 However, by 2040 the non-PV end state converges - both scenarios reach the same cumulative floorspace (166,470 sqm) and jobs (2,300) - reflecting the assumption that the counterfactual largely catches up once development occurs. 2.2.13 Yet the tax site scenario retains a PV advantage even when physical outputs converge, because earlier investment and output are worth more in present value terms under Green Book discounting: although the PV investment uplift narrows to £30m by 2041 as the counterfactual catches up, the intervention still delivers a larger PV GVA overall (£865m vs £590m, a £275m net gain). 2.2.14 Table 2.4 below presents the NPV GVA associated with the project at the four levels of geography requested by GCR over the ten-year and 15-year appraisal periods. Table 2.4: Net present value GVA at different geographies Counterfactual With tax site Net benefits Over 10 years Renfrewshire £115m £250m £135m Glasgow City Region £140m £295m £155m Scotland £155m £330m £175m UK £195m £410m £215m Over 15 years Renfrewshire £445m £650m £205m Glasgow City Region £525m £765m £240m Scotland £590m £865m £275m UK £730m £1,070m £340m 2.2.15 Additionality assumptions for these geographies are presented in Table 2.5 below. Table 2.5: Additionality assumptions Displacement Leakage Substitution Renfrewshire 20.0% 35.0% 0% Glasgow City Region 12.5% 30.0% 0% Scotland 7.5% 25.0% 0% UK 5.0% 10.0% 0% 2.3 Value for Money Monetised benefits 2.3.1 The costs and benefits of the tax site are brought together in Table 2.6. The following two key metrics presented in this table support the assessment of Value for Money (VfM):
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GCR IZ - tax site business case 51 • The benefit-cost ratio (BCR): a ratio of the present value of benefits to the present value of costs. It provides a measure of the benefits relative to costs. A BCR above one indicates a positive net return on investment, and a BCR above two represents high VfM. • The net present social value (NPSV): the present value of benefits less the present value of costs. It provides a measure of the overall impact of an option. 2.3.2 The proposed tax site is not a conventional public investment project: it is delivered through a package of fiscal incentives and does not directly involve public sector procurement or capital expenditure. Accordingly, there is no meaningful public sector capital cost to set against benefits in the way that would be expected for a grant-funded infrastructure scheme.5 2.3.3 Accordingly, VfM is assessed by comparing the present value of net additional benefits (relative to the counterfactual) with the £24m opportunity cost to the programme: the flexible grant funding foregone as the valued tax incentives are deducted from the fixed Investment Zone envelope. Table 2.6: Value for Money assessment Value for Money element Renfrewshire GCR Scotland UK Over 10 years A Present value net additional GVA benefits £135m £155m £175m £215m B Present value net additional private sector investment £115m £115m £115m £115m C Present value costs (opportunity cost to programme) £24m £24m £24m £24m (𝑨𝑨− 𝑩𝑩) 𝑪𝑪⁄ Benefit-cost ratio 0.7 1.7 2.5 4.2 𝑨𝑨 − 𝑩𝑩 − 𝑪𝑪 Net present social value -£4m £16m £36m £76m Over 15 years A Present value net additional GVA benefits £205m £240m £275m £340m B Present value net additional private sector investment £30m £30m £30m £30m C Present value costs (opportunity cost to programme) £24m £24m £24m £24m (𝑨𝑨− 𝑩𝑩) 𝑪𝑪⁄ Benefit-cost ratio 7.3 8.8 10.2 12.8 𝑨𝑨 − 𝑩𝑩 − 𝑪𝑪 Net present social value £151m £186m £221m £286m Note: numbers may not sum due to GVA and private sector investment being rounded to the nearest £5 million. 2.3.4 The tax site is anticipated to generate £275 million in net additional GVA benefits at a Scotland level. When compared to a to the £24 million opportunity cost to the programme, this represents a BCR of 10.2 and a NPSV of £221 million. On that basis, the tax site represents very high value for money when Scotland-level economic benefits are compared with the opportunity cost to the GCR programme envelope 5 In this context, it would also be inappropriate to treat the headline value of the tax incentives as the ‘cost’ in a social cost-benefit analysis. In Green Book appraisal, taxes and tax reliefs are not, in themselves, real resource costs to society in the same way as construction expenditure or operating costs; they are primarily fiscal flows and (in welfare terms) are treated under the framework for economic transfers and tax adjustments, rather than being counted directly as resource costs in a BCR.
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GCR IZ - tax site business case 52 2.3.5 BCRs are materially lower over the ten-year appraisal period for two related reasons. First, the appraisal approach deducts the private-sector investment uplift from benefits when calculating the BCR. Over a shorter appraisal period, development and investment in the counterfactual have not yet caught up with the intervention scenario, so the net investment uplift remains large. Although the tax site brings forward more net investment in the 10-year appraisal period than in the 15-year appraisal period, this offset reduces the measured BCR. By year 15, the gap between the intervention and counterfactual narrows significantly, so a smaller share of benefits is offset. 2.3.6 Second, the tax site delivers benefits more gradually than many Investment Zone capital grant projects. Benefits are realised only after investors are attracted, development is delivered, floorspace is completed and occupied, and employment and productivity impacts follow. In the core scenario, a large share of development and occupation occurs in the early to mid-2030s, meaning a ten-year appraisal captures only part of the economic return. A fifteen-year appraisal period therefore provides a more appropriate assessment of value for money, as it captures a greater share of the later-stage employment and productivity benefits once development is complete. Interpreting the relatively high BCR 2.3.7 As with any BCR, the result is sensitive to what is included in the cost base and how risk is treated, and so comparisons with other projects should be made cautiously. The following considerations help explain the relatively high BCR for the tax site: • Treatment of risk and optimism bias: no optimism bias or risk uplift has been applied to the £24m opportunity cost. For grant-funded capital projects, it is common for the public cost estimate to be uplifted for optimism bias (often in the 20-44% range), which tends to reduce reported BCRs, but in this case there is no publicly funded capital. Instead, there is a known opportunity cost in terms of forgone grant. • Nature of the intervention mechanism: the tax offer is designed to influence investment and location decisions directly through fiscal incentives. In contrast, grant funding frequently supports enabling works, abnormal costs or viability gaps that are necessary to unlock development but may not translate one-for-one into monetised benefits in appraisal. • Programme interactions and complementary levers: the intervention scenario assumes other elements of the wider Investment Zone package, including the skills programme and the potential use of NDRR to support delivery and site attractiveness. These complementary resources are not included in the £24m opportunity cost used as the VfM denominator for the tax site. • Estimated cost of tax incentives: independent analysis commissioned to support discussions with Government indicates the fiscal value of the tax incentives is likely to be higher than the level of grant forgone (£24 million). • This analysis is from a GCR perspective, both in terms of GVA and opportunity cost: this is appropriate for a GCR business case, but it is not the same as a net national welfare analysis. 2.3.8 Notwithstanding the above, the BCR could improve further if development proceeds faster than assumed in the core scenario, as this would increase the present value of benefits, while the opportunity cost to the programme remains anchored to the fixed envelope deduction agreed for the tax offer. Other things being equal, the BCR would also improve under the assumption that the tax breaks delivered permanent rather than temporary improvements in financial viability.
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GCR IZ - tax site business case 53 Non-monetised impacts 2.3.9 In addition to the quantified GVA benefits, the tax site is expected to generate a number of important non-monetised benefits. The tax site may also give rise to some non-monetised disbenefits, particularly if growth is not matched by supporting action on transport, skills and inclusive access. Table 2.7 below identifies these effects and explains how they contribute to, or could affect, the GCR Investment Zone programme objectives and the tax site project objectives Table 2.7: Non-monetised benefits and disbenefits assessed against strategic objectives Impact Contributes to objectives? Rationale Catalysing innovation activity and collaborations ✔ Supports programme objectives to build on cluster strengths, grow R&D-focused firms, attract private investment, align with existing regional innovation assets, and strengthen links across the wider cluster. Also supports the tax site objectives of leveraging private sector investment and unlocking the full potential of existing public investment at AMIDS. The tax site can help anchor innovation-led occupiers and support earlier commitment to R&D activity, facilities and collaborations than would be likely under a slower development path. This can strengthen knowledge spillovers, capability development and university-industry collaboration. Cluster formation, agglomeration and international positioning ✔ Supports programme objectives to build on existing and emerging cluster strengths, attract private investment, enhance connections to existing clusters, and regenerate underused land and assets. Also supports the tax site objectives of leveraging private investment and unlocking the full potential of City Deal and AMIDS investment. The tax site helps create a coherent advanced manufacturing location at AMIDS / Glasgow Airport. This can improve visibility, help build critical mass, and strengthen the City Region’s ability to compete with other locations offering strong incentive packages. Skills pipeline and specialist labour market development ✔ Supports programme objectives to grow R&D-focused firms, create significant numbers of good jobs, and extend benefits across the region through skills activity. Also supports the tax site objective of creating new high-skilled jobs. By accelerating and concentrating demand for specialist skills, the tax site can support apprenticeships, PhD placements, STEM outreach and work-integrated learning, while giving providers a clearer signal on future demand and helping create progression routes into good jobs. Supply chain development and capability building ✔ Supports programme objectives to build cluster strengths, create good jobs, attract private investment, strengthen cluster connections and extend benefits across the region. Also supports the tax site objectives of leveraging private investment and creating new high-skilled jobs. Anchoring major manufacturers and related activity can increase addressable demand for suppliers in precision engineering, electronics / robotics, specialist materials, cleanroom services and associated professional and digital services, allowing firms to invest, specialise and expand.
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GCR IZ - tax site business case 54 Impact Contributes to objectives? Rationale Potential pressure on transport networks and local accessibility If unmanaged, this could affect programme objectives relating to good jobs, regeneration and inclusive regional benefit, and could reduce the extent to which the tax site fully unlocks the potential of the location. Accelerated development and increased site activity may place additional pressure on local transport infrastructure and reduce accessibility for some groups if sustainable and inclusive access is not addressed alongside development. Potential environmental and amenity impacts from accelerated development If unmanaged, this could weaken programme objectives relating to alignment with existing investment, regeneration and sustainable place development, and could affect how the tax site contributes to the wider strategic case. Increased development activity may give rise to local environmental disbenefits, including traffic, noise, construction impacts and wider pressures associated with airport- adjacent growth, if not properly managed through planning and site design. 2.3.10 Overall, the main non-monetised benefits are strongly aligned with the programme objectives relating to cluster growth, R&D capability, private investment and high-skilled employment. The main non- monetised disbenefits do not alter the strategic rationale for the tax site, but they do reinforce the importance of supporting measures on transport and wider regional reinvestment 2.3.11 These non-monetised impacts would be realised at the same timescales as the monetised benefits as the tax site is developed. Distributional impacts 2.3.12 No differential distributional and equity impacts are anticipated to result from the tax site at this stage. Any future impacts will be dependent on the specific tenants attracted to the site. An Equalities Impact Assessment (EQIA) and Capital Investment Health Impact Assessment (CHIA) report has been undertaken by GCR at the programme level as part of the Strategic Outline Business Case submission. Going forward, the tax site is committed to the principles outlined in these documents and will review with the City Region at appropriate times to ensure compliance. 2.4 Sensitivity testing Switching value 2.4.1 Table 2.8 below presents a switching value analysis for the tax site at Scotland level. This tests the extent to which monetised benefits could reduce before the project would cease to offer acceptable value for money. The analysis provides an indication of the resilience of the economic case to downside risk in the delivery of benefits. Table 2.8: Switching value analysis (Scotland-level) Outcome GVA benefits BCR NPSV Over 10-years Core scenario £175m 2.5 £36m
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GCR IZ - tax site business case 55 Outcome GVA benefits BCR NPSV 15% reduction £149m 1.4 £10m 21% reduction £139m 1.0 - Over 15-years Core scenario £275m 10.2 £221m 15% reduction £234m 8.5 £180m 25% reduction £206m 7.3 £152m 50% reduction £137m 4.5 £83m 80% reduction £54m 1.0 - 2.4.2 Over the 15-year appraisal period, present value GVA benefits would need to fall by around £220 million from the core scenario before the BCR reduced to around 1.0. This is equivalent to a reduction of around 80% in monetised benefits, indicating that the value for money case is relatively robust over the longer appraisal period. 2.4.3 Over the shorter 10-year appraisal period, benefits are more sensitive because fewer years of accelerated development are captured within the appraisal window. On the assumptions shown, a reduction of around £35-£40 million in present value GVA benefits would be sufficient to reduce the BCR to around 1.0 Scenario testing 2.4.4 A series of downside scenarios has been tested to examine the sensitivity of the economic case to slower or weaker-than-expected delivery. These scenarios reflect the principal risks to benefits realisation for the tax site: slower build-out of employment space, lower levels of occupancy than assumed in the core scenario, and a combined downside case in which both effects occur together. 2.4.5 Table 2.9 summarises the resulting impacts on GVA, BCR and NPSV. Table 2.9: Scenario testing Slower build-out Lower occupancy Combined downside Outcome GVA BCR NPSV GVA BCR NPSV GVA BCR NPSV Over 10-years Renfrewshire £65m 0.7 -£4m £105m -0.4 -£34m £50m 0.2 -£19m GCR £70m 1.2 £1m £125m 0.4 -£14m £60m 0.6 -£9m Scotland £85m 1.6 £16m £140m 1.1 £1m £65m 0.9 -£4m UK £100m 2.4 £31m £175m 2.4 £36m £80m 1.5 £11m Over 15-years Renfrewshire £125m 4.5 £86m £165m 5.6 £111m £100m 3.5 £61m GCR £145m 5.5 £106m £195m 6.8 £141m £115m 4.2 £76m Scotland £170m 6.3 £131m £220m 7.9 £166m £130m 4.9 £91m UK £205m 7.9 £166m £270m 10.0 £216m £165m 6.2 £126m 2.4.6 The scenario testing shows that the value for money case remains comparatively robust over the 15- year appraisal period across all geographies, although it becomes materially weaker under the combined downside scenario. By contrast, results are more sensitive over the 10-year appraisal period because a shorter appraisal window captures fewer years of accelerated development and therefore less of the present value benefit associated with earlier delivery
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GCR IZ - tax site business case 56 2.4.7 This pattern differs from many grant-funded Investment Zone projects, where benefits can arise relatively quickly once expenditure is incurred. For the tax site, benefits are realised over a longer period because the mechanism depends on first attracting investors, then securing occupation and development, and only then generating employment and GVA 2.5 Confirmation of the preferred option 2.5.1 On the basis of the VfM assessment above, the tax site has been carried forward as the preferred option.
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GCR IZ - tax site business case 57 3 Commercial Case 3.1 Commercial approach and scope 3.1.1 As part of the Investment Zone programme development, alternative locations and delivery configurations were considered at programme level, including other advanced manufacturing sites and options within the wider AMIDS area. Through the UK and Scottish Governments’ Gateway process, including Gateway 4 consideration of interventions and delivery, the Glasgow Airport / AMIDS tax site was confirmed as the preferred option. This reflected its strategic alignment with the agreed sector focus, development readiness, and its ability to meet the needs of key delivery partners and funders by accelerating investable opportunities within the Investment Zone timeframe. 3.1.2 The tax site intervention is delivered entirely through statutory tax incentives. There is no public sector procurement, commissioning of works, or direct funding sought through this business case. Instead of channelling funding to the City Region, the Scottish and UK Governments will designate and apply the relevant reliefs through legislation. 3.1.3 Delivery of new buildings on the tax site is dependent on market-led private investment by landowners and occupiers, rather than public sector procurement or capital funding. 3.1.4 Total follow-on private sector investment of approximately £540 million (2026 prices, by 2037), equivalent to around £410 million on a present value basis, is assumed in the appraisal. Further detail on the profiling, composition and treatment of this investment is provided in the Financial Case (Section 4.1). 3.1.5 Development activity within the tax site will be progressed by the landowners - Renfrewshire Council and AGS Airports Ltd. - through their established commercial processes. The majority of activity on the tax sites is expected to be delivered by enabling occupiers to secure sites and invest in facilities, plant and machinery, supporting new employment and economic outcomes. The land and/or premises may be brought forward through a range of standard commercial arrangements, with the preferred approach determined on a parcel-by-parcel basis and in response to market demand and individual investor requirements. 3.1.6 There may be some procurement or contracting by the landowners in respect of enabling works or infrastructure. These activities are a dependency to the benefits of the tax site, but form part of the landowners’ normal responsibilities as site developers and are not the subject of this business case. 3.2 Delivery model and market arrangements 3.2.1 All developable land within the tax site is controlled by Renfrewshire Council (and its joint venture partner) or AGS Airports Ld. Development will be brought forward through their standard commercial approaches, including marketing plots and engaging potential occupiers. A co-ordinated promotion strategy will support occupier attraction by highlighting the tax benefits. This is consistent with other comparable initiatives, such as Enterprise Zones and Freeports, where a bespoke ‘brand’ has been developed to market the benefits of investment in the location. 3.2.2 Some enabling activity (e.g., site preparation, utilities, or public transport infrastructure) may be required over time, delivered by the landowners or developers. Where such activity involves public
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GCR IZ - tax site business case 58 funding or procurement, it will be developed and approved separately based on normal procurement and funding routes. For the purposes of this business case, these elements are treated as dependencies for achieving the full benefits of the tax site, rather than components of the intervention itself. 3.2.3 The delivery model is supported by proportionate governance mechanisms (see the Management Case), including a gateway process for new leases and light-touch occupier assurance arrangements. These mechanisms provide confidence that proposed uses align with Investment Zone objectives, while allowing landowners to retain responsibility for commercial delivery. 3.3 Occupier assurance agreements 3.3.1 To support transparent and effective delivery of the tax site, all new occupiers will be required to enter into Tax Site Framework Agreement, which is an ‘occupier assurance agreement’, at the point of lease or sale. These short, plain-English agreements are designed to record the shared understanding between the landowner, Renfrewshire Council (as rating authority), and the occupier regarding eligibility for tax incentives, intended use, and monitoring expectations. 3.3.2 From a commercial perspective, these agreements serve several purposes: • Clarity and confidence: while several incentives are available to all businesses within the tax site boundary, certain reliefs require occupiers to meet specific conditions and retain supporting evidence (for example, employer NIC relief depends on employees being expected to spend at least 60% of their working time in the tax site). The Framework Agreement helps ensure occupiers understand these conditions and the information that may be required to support claims. • Proportionate assurance: the agreements are intentionally light-touch and non-legal, ensuring that they do not add unnecessary friction to lease negotiations or deter potential occupiers. • Alignment with strategic objectives: by linking lease execution to a gateway process and assurance agreement, the landowners can demonstrate that site occupancy aligns with Investment Zone objectives and the requirements for NDRR. 3.3.3 The commercial arrangements are therefore underpinned by these assurance agreements, which balance the need for transparency and auditability with the flexibility required to attract and secure investment. Further detail on the governance and operational management of these agreements is provided in the Management Case. 3.4 Commercial risks and dependencies 3.4.1 Delivery of development within the tax site is influenced by several commercial risks and dependencies. These risks primarily sit with landowners and developers, as they lead marketing, negotiation, and delivery. The public sector has no direct contracting exposure through this business case (other than – in the case of Renfrewshire Council – in their role as landowner). 3.4.2 Key risks include: • Market demand: the success of the tax site depends on investor confidence and the willingness of businesses to locate within the designated area. Wider economic conditions, such as interest rates and global supply chain pressures, will shape this demand.
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GCR IZ - tax site business case 59 • The ability of landowners to secure occupiers: landowners must convert interest into firm commitments. This involves competitive pricing, attractive lease terms, and clear communication of the benefits of the tax incentives. Failure to secure occupiers in a timely manner could delay development and reduce the economic impact. • Timing and sequencing of development: the pace of development is critical. If enabling works or site preparation are delayed, it may affect the attractiveness of the tax site and the ability to meet programme milestones. Sequencing issues could also arise if multiple parcels are brought forward without coordination. 3.4.3 Key dependencies include: • Readiness of development plots: serviced plots which are prepared for occupation reduces development risk. Dependencies include site clearance, groundworks, and compliance with planning conditions. • Alignment with planning permissions: for most developments planning consents must be in place and aligned with the intended uses of the tax site. While outline permissions exist, detailed approvals will still be required for specific developments. Some development on airport land may be progressed through permitted development rights. 3.4.4 The governance arrangements for the tax site provide structure and assurance, but do not alter the underlying commercial risks. Overall, the commercial performance of the tax site will depend on landowner delivery and market conditions, with no additional procurement or contracting exposure for the public sector through this business case.
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GCR IZ - tax site business case 60 4 Financial Case 4.1 Financial appraisal Value of tax benefits 4.1.1 The cost of tax benefits to the UK and Scottish Governments is inherently variable, as these benefits are only realised when businesses within the Investment Zone apply for and receive reliefs. The eventual drawdown is subject to significant uncertainty, reflecting the scale, mix, and pace of future development on the tax site. 4.1.2 Nevertheless, it has been necessary to estimate the value of these tax benefits because a nominal deduction must be made from the £160 million funding envelope allocated to each Investment Zone. 4.1.3 For the Glasgow City Region Investment Zone, the designated tax site at Glasgow Airport/AMIDS has been assigned a nominal value of £24.08 million over the ten-year programme period. The estimated breakdown across the primary reliefs is shown in Table 4.1 below. Table 4.1: Estimated value of tax benefits Outcome Type Value Note Non-Domestic Rates relief Devolved £9.08m Confirmed by SG Land and buildings transactions tax (LBTT) relief Devolved £4.0m Confirmed by SG National Insurance relief Reserved £6.2m Our estimate Enhanced Structures and Buildings Allowance Reserved £4.8m Our estimate Enhanced Capital Allowance Reserved - Our estimate Total £24.08m Note: the UK Government has not provided a disaggregated breakdown of the estimated value of reserved tax incentives. The reserved tax figures shown are therefore based on independent analysis commissioned by Renfrewshire Council. These estimates are indicative only; reserved tax reliefs are not capped and actual take-up will depend on market-led investment and qualifying activity. 4.1.4 The overall nominal value has been estimated by the UK and Scottish Governments, based on information provided by Glasgow City Region during the Gateway process. Renfrewshire Council and AGS Airports Ltd. have not been provided with the underlying methodology used to prepare these estimates. 4.1.5 With the exception of Non-Domestic Rates (NDR) relief, the estimates presented above are used solely to determine the split of the £160 million funding envelope between tax benefits and grant. LBTT relief, National Insurance relief, Enhanced Structures and Buildings Allowance, and Enhanced Capital Allowances are not subject to any cap or limitation. This means that if activity on the tax site exceeds the forecasts made during the Gateway process, the value of tax benefits available to businesses may exceed £15.0 million. 4.1.6 By contrast, reimbursement of NDR relief is subject to a cap: the Scottish Government will only reimburse Renfrewshire Council for the cost of relief up to £9.1 million. Any relief granted in excess of this amount will need to be met through alternative routes. At this stage, no additional NDR relief beyond the £9.1 million cap is proposed for tax site businesses. The detailed process for managing this allocation will be developed by Renfrewshire Council, as set out in the Management Case.
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GCR IZ - tax site business case 61 Financial forecasts Investment in the tax site 4.1.7 A total of £540 million is expected to be invested in the tax site by 2037. On a present value basis, this totals £410 million. Figure 4.1 below presents an indicative profile of private sector capital investment expected to be delivered on the tax site over the period 2028-2037, expressed in constant 2025 prices. This profile is split between structures and buildings and plant and machinery. These estimates were prepared primarily to inform the valuation of the tax incentives (Enhanced Structures and Buildings Allowance and Enhanced Capital Allowance). Figure 4.1: Profile of follow-on investment (Gateway scenario): 2028 - 2037 4.1.8 The core Gateway scenario indicates that investment on the tax site is back-loaded, mirroring the forecast development and occupation trajectory. There is no material investment assumed in 2025- 2027, with the first significant spend occurring from 2028 (£6.8m total) and a rapid ramp-up thereafter. The highest levels of annual investment are concentrated in the early-to-mid 2030s, peaking around 2033 (£96.9m) and 2034 (£92.6m), reflecting the assumed period of greatest floorspace delivery and fit-out activity. 4.1.9 Overall, the profile reflects a pattern typical of large specialist employment sites: phased delivery driven by a small number of major occupiers and associated construction phases rather than smooth, linear growth. 4.1.10 These figures are high-level, modelled estimates produced to translate the assumed floorspace delivery programme into an indicative capital investment profile. The approach uses benchmark cost rates to estimate build costs, drawing on BCIS datasets which are widely used across the UK construction sector for high-level cost planning and benchmarking.6 6 These estimates should be interpreted as indicative and not as a project budget or a commitment on behalf of landowners or occupiers. Actual investment will vary materially depending on the eventual mix of occupiers and their operational requirements (for example cleanroom specifications, advanced manufacturing equipment intensity, utilities demand, and the extent of bespoke aviation-linked infrastructure). In addition, benchmark rates do not capture site-specific factors such as abnormal ground conditions, servicing constraints, abnormal utility upgrades, procurement strategy, or contractor pricing at the time of tender. £20m £40m £60m £80m £100m £120m 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Structures and buildings Plant and machinery
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GCR IZ - tax site business case 62 Tax benefits 4.1.11 Figure 4.2 presents an indicative profile of tax benefits associated with the tax site over time, based on independent analysis commissioned by Renfrewshire Council and AGS Airports Ltd, consistent with the Government’s own estimate of a total value of £24.08m. 4.1.12 The UK and Scottish Governments have provided headline estimates to support the nominal allocation of the tax site within the Investment Zone funding envelope but have not provided a phased breakdown. The independent analysis therefore distributes the tax benefits over time in line with the assumed development, investment and occupation trajectory in the core Gateway scenario. As with the investment profile, this should be treated as illustrative: it is intended to show the likely shape and timing of relief take-up Figure 4.2: Profile of tax benefits (Gateway scenario): 2028 - 2042 4.1.13 Figure 4.2 shows tax benefit take-up beginning from 2028 and accelerating through the early-to-mid 2030s as the site is developed and occupied. The annual value of benefits rises quickly from relatively modest levels in the late 2020s to a peak in 2034 (c. £3.6m), with similarly high levels in 2033 (c. £3.3m) and 2035 (c. £3.0m). This reflects the period of greatest delivery activity and occupier ramp-up in the Gateway scenario. Benefits then taper after 2036 as the site approaches maturity and fewer new occupiers and qualifying investments enter the relief regime. 4.1.14 Employer NICs relief can extend into the mid-2030s because, while eligibility to start the relief runs until 30 September 2034, the zero-rate NICs can be applied for 36 months per eligible new employee. 4.1.15 NDR relief extends beyond the relief window because it applies for five years from the point at which a beneficiary first receives relief, and eligibility to first claim can run up to the end of the qualifying window (currently set out as up to 30 September 2034). A business that first becomes eligible later in the period can therefore continue to receive NDR relief after 2034, which explains the tail into 2038-2039 in the illustrative profile. This analysis is based on assumptions for when ratepayers will start to claim NDR relief. 4.1.16 Enhanced SBA continues into the early 2040s because it provides relief at 10% per year for up to ten years from the allowance period start date. Even though qualifying expenditure must be incurred within the eligibility window (and buildings brought into qualifying use by the relevant deadline for Investment Zone tax sites), the claim is spread over up to ten years. Non-domestic rate retention (NDRR) 4.1.17 Table 4.2 below summarises the forecast growth in occupied floorspace on the tax site and the estimated resulting rateable value, gross non-domestic rates liability and retained NDR income over the appraisal period. £1.0m £2.0m £3.0m £4.0m 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 NDR relief LBTT relief Enhanced SBA NI relief
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GCR IZ - tax site business case 63 4.1.18 The Scottish Government has confirmed that a 7.5% displacement factor will be applied to all Investment Zone NDRR to reflect the principle that not all new rateable value growth represents wholly additional economic activity. Given the need for Renfrewshire Council (as rating authority) to bill and collect rates, remit these to Scottish Government, and then process the retention mechanism, a one-year lag has been applied in the profiling of NDRR receipts. Table 4.2: Profile of anticipated NDRR: 2028 - 20250 Year Occupied floorspace Rateable value Gross NDR NDRR (adjusted for displacement) 2028 8,175 sqm. £0.25m £0.14m - 2029 29,079 sqm. £1.00m £0.57m £0.13m 2030 30,937 sqm. £1.07m £0.60m £0.52m 2031 52,597 sqm. £1.80m £1.01m £0.56m 2032 80,391 sqm. £2.77m £1.56m £0.94m 2033 86,894 sqm. £3.00m £1.69m £1.45m 2034 100,610 sqm. £3.47m £1.96m £1.57m 2035 154,468 sqm. £5.35m £3.03m £1.82m 2036 166,468 sqm. £5.77m £3.26m £2.80m 2037 166,468 sqm. £5.77m £3.26m £3.02m 2038 166,468 sqm. £5.77m £3.26m £3.02m 2039 166,468 sqm. £5.77m £3.26m £3.02m 2040 166,468 sqm. £5.77m £3.26m £3.02m 2041 166,468 sqm. £5.77m £3.26m £3.02m 2042 166,468 sqm. £5.77m £3.26m £3.02m 2043 166,468 sqm. £5.77m £3.26m £3.02m 2044 166,468 sqm. £5.77m £3.26m £3.02m 2045 166,468 sqm. £5.77m £3.26m £3.02m 2046 166,468 sqm. £5.77m £3.26m £3.02m 2047 166,468 sqm. £5.77m £3.26m £3.02m 2048 166,468 sqm. £5.77m £3.26m £3.02m 2049 166,468 sqm. £5.77m £3.26m £3.02m 2050 166,468 sqm. £5.77m - £3.02m Total 166,468 sqm. £5.77m £56.27m £52.07m 4.1.19 Subject to GCR Cabinet approval, a significant proportion of early NDR growth could be reinvested to address critical site constraints and support delivery. The Gateway scenario assumes this reinvestment and it is a key dependency for both benefits realisation and the longer-term strength of the NDRR revenue stream. A full NDRR Investment Strategy will be developed in due course. Implications for local authority revenues 4.1.20 Most elements of the Investment Zone tax offer are administered through national tax systems (HMRC for reserved reliefs; Scottish Government/Revenue Scotland for devolved transaction tax) and therefore do not create direct budgetary implications for Renfrewshire Council or the Glasgow City Region. These reliefs are claimed by businesses through the relevant statutory mechanisms (e.g., payroll operation for employer NICs relief and corporation tax returns for capital allowances), with the fiscal impact borne at UK or Scottish Government level rather than through local authority accounts.
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GCR IZ - tax site business case 64 NDR relief 4.1.21 NDR relief is the main exception, because it is administered locally and interacts directly with local government rates accounting. Under Scottish arrangements, Investment Zone NDR relief is delivered using local authorities’ discretionary relief powers (under Section 3A of the Local Government (Financial Provisions etc.) (Scotland) Act 1962, as amended), rather than through new primary legislation specific to Investment Zones. 4.1.22 Eligible businesses apply to the relevant local authority for Investment Zone relief, and awards are entirely at local authority discretion. As with other local reliefs, IZ relief awards must be funded through the local rates system in-year: awards are not deducted from the Council’s NDR Contributable Amount, meaning the local authority still contributes the cost of the relief to the NDR pool/rating account arrangements. 4.1.23 The Scottish Government provides additional General Revenue Grant to compensate councils for the cost of reported IZ relief awards that fall within the guidance parameters (e.g. after deduction of the displacement factor and subject to compliance with the ‘but for’ test), but the total funding is limited to the £9.1 million cap. There is expected to be a ‘lag’ of at least a year before reimbursement is received from the Scottish Government, which requires funding by the local authority. The authority will also incur additional administration costs in the administration of this and other IZ processes. 4.1.24 Renfrewshire Council will ensure that the Scottish Government is in agreement that business applying for NDR relief meets the “but for” test before sanctioning relief. 4.1.25 The Scottish Government does not meet additional “new burdens” administration costs, and councils are responsible for the associated processing, reporting and (where relevant) subsidy transparency requirements. Planning gain 4.1.26 No capital receipts, Section 75 contributions or other planning gain receipts have been assumed or included in this business case. The tax site intervention is intended to improve the viability of investment and accelerate development through fiscal incentives, rather than generate public-sector receipts from development activity. 4.1.27 Any future planning obligations or site-specific developer contributions would depend on the detailed form of individual schemes brought forward by occupiers or landowners. 4.2 Implementation costs 4.2.1 Implementation of the tax site will require modest programme costs to support delivery and benefits realisation, including governance and programme management, marketing and investor engagement, administration of NDR relief and retention (including reporting and audit trail requirements), and monitoring and evaluation activity. 4.2.2 While these costs are expected to be small relative to the scale of private investment and wider economic benefits associated with the tax site. However, they are necessary to maintain a credible investor proposition, support the effective operation of the local gateway and assurance processes, ensure compliance with the requirements attaching to NDR relief and retention, and provide the information needed for programme reporting and evaluation.
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GCR IZ - tax site business case 65 4.2.3 It is proposed that implementation costs are funded from retained non-domestic rates growth, consistent with Scottish Government guidance that retained receipts may be reinvested in operating and enabling activity that supports Investment Zone objectives. Any use of retained receipts for this purpose will be subject to the relevant GCR governance and approval processes, including the discretion of the GCR Cabinet. 4.2.4 It is not possible to prepare a robust quantified estimate of implementation costs at this stage. The eventual cost will depend on the final design of the governance and administration arrangements, the pace and profile of occupier uptake, the volume and timing of applications for NDR relief, the detailed reporting requirements agreed with GCR and government, and the extent of any external support required for specialist advice, monitoring or promotional activity. 4.2.5 Comparator evidence from Scotland’s Green Freeports suggests that accountable body and programme support costs can reach around £50,000 annually. However, these arrangements are not directly comparable, as Green Freeports operate through dedicated special purpose vehicles and have a broader remit than the proportionate, tax-site-specific arrangements proposed here. 4.2.6 Renfrewshire Council will resource the local function and will work with GCR to develop an appropriate resourcing plan as the operating model is finalised. The purpose of any reimbursement arrangement will be to ensure that the Council is not left bearing unrecovered costs in administering the tax site and meeting the associated reporting, assurance and compliance requirements. 4.2.7 Any contribution from retained NDRR towards Renfrewshire Council’s operating costs would be expected to reflect an amount considered necessary and proportionate, based on a budget and forward financial plan submitted by the Council to GCR. Any such contribution would be subject to periodic review through the relevant GCR governance arrangements. 4.2.8 In that context, GCR would be expected to give due regard to reasonable requests for reimbursement of operating costs necessarily incurred by Renfrewshire Council in discharging its responsibilities for the effective operation of the tax site and in meeting UK and Scottish Government requirements. Where support is provided by Renfrewshire Council or other partners, any chargeback or reimbursement arrangement would be expected to operate on a transparent cost-recovery basis. 4.2.9 To the extent that sufficient retained NDRR funds are not yet available to meet reasonable implementation costs, consideration would be given through the relevant governance arrangements to alternative means of maintaining cost neutrality for the Council during the early years of operation. 4.3 Financial risks and assumptions 4.3.1 Delivery of the tax site is subject to a number of financial risks and dependencies. With the exception of NDR relief, the fiscal impacts of the tax incentives sit primarily with the UK and Scottish Governments, rather than with Renfrewshire Council or the Glasgow City Region. 4.3.2 Key financial risks include: • Uptake and phasing uncertainty: the scale and timing of tax relief take-up is inherently uncertain and depends on the pace of development, occupier decisions and eligibility. Slower-than-assumed take-up would delay the timing of benefits and may weaken the early-years investment proposition; faster take-up could increase relief claims (for uncapped reliefs) beyond the nominal envelope estimates.
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GCR IZ - tax site business case 66 • NDR relief funding exposure beyond the agreed allocation: unlike all other incentives, NDR relief is administered locally and the Scottish Government’s compensation funding is limited to the agreed £9.1 million allocation. If demand for relief exceeds the funded allocation, there is a risk that additional relief cannot be supported without identifying alternative funding or applying local policy controls. This will be managed through a clear local relief policy, transparent allocation rules, and active forecasting of likely drawdown against the available funding. • NDR relief cashflow and reconciliation risk: NDR relief is funded through local rates accounting in-year, with Scottish Government compensation delivered through General Revenue Grant based on notified/audited returns and subject to reconciliation. This creates potential timing differences between awarding relief and receipt of compensating grant, and a risk of adjustment where reported and audited outturn differ. This will be managed through robust recording and timely reporting. • Administrative cost burden for NDR relief and retention: the Scottish Government will not meet the costs associated with administering IZ NDR relief or retention. This creates a modest resourcing risk for the rating authority (processing applications, evidence checks, reporting and subsidy transparency). This will be managed, to the extent possible, by embedding administration within existing rates functions and keeping processes proportionate, supported by governance oversight. However, as retained receipts will ramp up over time, early-year costs may require bridging through existing capacity budgets or short-term internal resourcing until the retained income stream becomes established. 4.3.3 Key financial dependencies include: • Effective administration and governance of NDR relief: local policy, decision-making and reporting must operate effectively to ensure eligible awards are made consistently with guidance and can be compensated through General Revenue Grant. This includes maintaining appropriate audit trail and subsidy transparency processes. • Reinvestment for delivery momentum: the Gateway scenario assumes that early NDRR revenues are reinvested to address constraints and support delivery momentum. This is a dependency for both benefits realisation and the longer-term strength of the revenue stream. This is managed through GCR governance routes and decision-making, with reinvestment proposals subject to approval. A full NDRR investment strategy will be developed in due course. 4.3.4 The governance arrangements set out in the Management Case provide a framework to monitor relief take-up, manage allocation and reporting requirements, and respond to emerging risks. However, they do not remove the underlying financial uncertainties associated with occupier uptake and the timing of development; these will be managed by the landowners through conservative forecasting, active pipeline monitoring, and marketing.
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GCR IZ - tax site business case 67 5 Management Case 5.1 Governance and delivery Context: overall IZ governance 5.1.1 Good governance is central to the successful delivery of Investment Zones, as it has been with similar initiatives in the past - e.g. Enterprise Zones and Freeports, particularly in terms of delivering genuine additionality both at a city region and national level. For this reason, throughout the Investment Zone Gateway approval process, the UK and Scottish Governments have consistently sought assurance that such arrangements are in place or will be established for the GCR Investment Zone. 5.1.2 The use of tax site incentives via a tax site places additional demands on governance because access to the tax break benefits is a function of access to the site, rather than individual investment decisions, as would typically be the case with a project specific capital grant. How to address these additional demands has been a key question for the Freeport and Green Freeport programmes7. 5.1.3 In its Gateway 3 submission, GCR set out the proposed governance arrangements for the IZ, aligned with GCR’s established governance structures. These structures have subsequently been developed further in the Programme Business Case, which was approved by the GCR Cabinet on 18th November 2025. 5.1.4 As set out in detail in the Programme Business Case, IZ decision-making and approval processes will follow the same robust framework applied to other major post-City Deal initiatives in the Glasgow region, including the UK Shared Prosperity Fund, Clyde Mission, and the Innovation Accelerator. 5.1.5 The integration of the GCR IZ within existing governance structures means that substantial new, bespoke and potentially duplicative arrangements are not required. This differentiates the IZ from Freeports and Green Freeports, for example, which have mostly established special purpose corporate entities (e.g., Inverness & Cromarty Firth Green Freeport Limited and Forth Green Freeport Limited) with bespoke corporate governance structures, separate budgets, and legal status. These arrangements are necessary for Green Freeports to manage relationships between the Green Freeport Company and public sector partners, compared with the IZ which will be delivered and managed within existing GCR governance structures. 5.1.6 There is, however, a need to complement these structures with specific governance arrangements to support delivery of the tax site element of the IZ proposition - covering, in particular, the management of third-party access to tax levers, delivery of additional economic activity in line with IZ objectives, and the mitigation of financial risk for the public sector. These arrangements, which draw on best practice from the Freeport and Green Freeport programmes are set out in this section. 7 The difference arises from the way in which tax break eligibility works on UK tax sites. Tax site tax breaks are enabled through secondary legislation that provides tax breaks for any occupier/investor in a specified location/site, which is typically designated as a whole in one go, usually before the occupiers/investors in the site are known. This means the only way to control access to the benefits is to control access to the site and/or secure binding commitments from existing occupiers, lease holders, end users on what they will use the site for.
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GCR IZ - tax site business case 68 Governance objectives and principles 5.1.7 Within the overall IZ governance arrangements described above, specific arrangements for the tax site are because, once the site has been designated by legislation, most Investment Zone tax benefits are ‘automatic’. Businesses qualify by being located within the designated tax site and meeting statutory conditions. Reliefs are accessed through standard processes like tax returns and payroll, without any further discretionary approval or statutory gateway process. Entitlement to tax levers follows once a business occupies qualifying land or premises, leaving little scope to influence outcomes after occupation. Eligible businesses are then free to apply for tax reliefs through the statutory claims processes. 5.1.8 The only exception is non-domestic rates (NDR) relief, which is awarded at the discretion of the rating authority and reimbursed by the Scottish Government up to a pre-agreed cap. This cap arrangement creates a finite envelope of support that must be managed carefully - and is another reason why clear governance is necessary. 5.1.9 For these two reasons, a bespoke and specific governance mechanism is required to: • provide landowners, end-users and investors with incentives and structures to deliver additional net growth and other outcomes in the IZ’s target sectors in return for the tax benefits on offer, and • give GCR, the UK and Scottish Governments confidence that a robust strategy is in place to ensure that public investment and support will realise the intended economic and social potential of the IZ offer and is not misdirected. 5.1.10 Recognising this context, the governance framework should be underpinned by clear objectives and guiding principles. These are intended to ensure that governance is proportionate, robust, and aligned with the wider IZ vision. They are set out below. Objectives 1) Clarity of roles & responsibilities. To ensure all parties have clarity on their respective roles and responsibilities, including their entitlement to tax and other benefits. 2) Collaboration. To support a partnership approach to addressing barriers to delivering the tax site proposition. 3) Risk management. To manage financial exposure for IZ partners, particularly in relation to NDR relief, and in terms of ensuring retained rates ultimately flow to the benefit of the city region. 4) Monitoring & evaluation. To enable efficient gathering of information to support the monitoring and evaluation of tax site performance. Principles 1) Alignment with the Investment Zone vision. The governance arrangements must incentivise all parties to act consistently with the Investment Zone objectives and target sectors. 2) Tax levers as strategic tools. Tax incentives are statutory and demand-led: qualifying activity within the designated tax site enables access to the reliefs, subject to the relevant conditions and claims processes. The governance framework should therefore aim to use the tax offer as an enabling tool to accelerate
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GCR IZ - tax site business case 69 additional, sector-aligned investment and support delivery decisions that strengthen the target cluster and minimise displacement. 3) Collaborative problem-solving. The governance arrangements must enable and encourage joint action to remove barriers to investment (e.g., infrastructure gaps). 4) Risk management. The governance arrangements must enable the management of any potential financial exposure (e.g., risk on NDR relief) for IZ partners. Governance arrangements 5.1.11 The proposed governance structure to manage the tax site is summarised by Figure 5.1 below. Figure 5.1: Proposed tax site governance structure 5.1.12 The governance structure introduces a new body: the Tax Site Oversight Committee. This will be a voluntary grouping of Renfrewshire Council, Buccleuch Properties (Renfrewshire Council’s JV partner and marketer of the Netherton Campus), and AGS Airports Ltd – supported by Glasgow City Region as the accountable body. 5.1.13 This FBC seeks approval for Renfrewshire Council to be represented on the Tax Site Oversight Committee by senior officers, reflecting the Committee’s operational delivery role. This delegation will not affect the Council’s statutory responsibilities or member decision-making for any matters requiring formal determination. 5.1.14 Terms of reference for the committee will be developed following the approval of this FBC. At this stage, it is anticipated that the committee will manage two core processes (further detail on each provided below): • A gateway process for new leases This process will provide a clear, proportionate, and auditable decision point before occupation of tax site premises. Landowners will engage with the committee early and proactively to confirm that proposed occupations aligns with Investment Zone objectives and delivers additionality. This Tax Site Oversight Committee Renfrewshire Council Buccleuch Properties AGS Airports Ltd. Investment Zone Accountable Body Glasgow City Region Assurance and M&E End users (RC-owned land) End users (AGS-owned land) Commercial & contractual relationship Commercial & contractual relationship Rating Authority Renfrewshire Council NDR responsibilities remain with Renfrewshire Council
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GCR IZ - tax site business case 70 reflects the fact that the critical point of control is before a lease is signed, as decisions at this stage determine how limited NDR relief is allocated and whether the site achieves its strategic purpose. • Occupier assurance agreements These ‘Tax Site Framework Agreements’ will be entered into between Renfrewshire Council, the landowner (where different), and the occupier at the time of lease execution. Agreements will be short, simple and written in plain English. They will remind occupiers of eligibility conditions and outline monitoring expectations without creating onerous compliance obligations. 5.1.15 In addition, the oversight committee will have for the following roles: • Pre-approving NDR relief While decisions on relief will be the responsibility of the rating authority, the Tax Site Oversight Committee will support the process by gathering data, recording and monitoring NDR relief allocations, to help the authority manage its financial exposure in the context of the cap on reimbursement from the Scottish Government. The power to approve NDR relief, including any cap on the total amount of relief, will remain with Renfrewshire Council as the rating authority. • Collaborative barrier resolution The committee will work with landowners and occupiers to identify barriers to development, such as enabling infrastructure requirements, and - where appropriate - escalate these to Glasgow City Region. It will act as the primary forum for collaborative problem-solving, including the potential use of retained NDR (NDRR) funding to address constraints. The NDRR fund will provide a key tool for resolving these barriers and the committee will have an important role in ensuring that funds are directed to the projects on the tax site that can best achieve the aim of unlocking further development (and NDR growth). A full NDRR investment strategy will be developed in due course. • Monitoring and evaluation The committee will manage the collection of data from tax site landowners and occupiers, to be passed on to GCR to enable it to meet UK and Scottish Government monitoring and evaluation obligations. 5.1.16 Table 5.1 sets out the high-level roles and responsibilities of the organisations engaged in the governance structure for the tax site.
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GCR IZ - tax site business case 71 Table 5.1: Governance roles and responsibilities Party Roles and responsibilities Glasgow City Region (as Investment Zone accountable body) • Accountable to UK and Scottish Governments for delivery of Investment Zone outcomes. • Monitoring and evaluation of Investment Zone outcomes following approval of individual project business cases. Renfrewshire Council (as rating authority) • Approving and administering discretionary NDR relief. Tax Site Oversight Committee • Developing and administering Tax Site Framework Agreements. • Engaging with GCR Investment Zone governance where support is required (e.g. from NDRR to address barriers to delivery of tax site outcomes). • Monitoring and evaluation of tax site outcomes. Tax site landowners (currently Renfrewshire Council and AGS Airports Ltd) • Members of the Tax Site Oversight Committee. • Engaging with the Tax Site Oversight Committee to obtain ratification of potential lease agreements. • Entering into Tax Site Framework Agreements with end- users and Renfrewshire Council. Tax site end-users (occupiers / tenants) • Supporting the landowner in obtaining ratification of potential lease agreements. • Entering into Tax Site Framework Agreements with the landowner and the Tax Site Oversight Committee. • Providing information and data to the Tax Site Oversight Committee to support monitoring and evaluation requirements. 5.1.17 The governance framework will be kept under review and may be refined over time in light of delivery experience. A formal review will be undertaken at six months from first occupation and annually thereafter, with additional trigger reviews where required (for example, material changes to the tax offer/legislation or guidance). Gateway process for new leases 5.1.18 The gateway process ensures that decisions about who occupies the tax site are made before leases are signed. This approach provides a clear and auditable mechanism to confirm that prospective occupiers align with Investment Zone objectives, deliver additionality, and do not create undue financial exposure for partners. 5.1.19 Key features of the gateway process include: • Proportionate and streamlined approvals: the process avoids unnecessary meetings or documentation, focusing only on what is essential for assurance and transparency. • Landowner-led eligibility and compliance checks: responsibility for confirming statutory eligibility and subsidy control compliance sits with the landowner, reducing duplication and administrative burden.
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GCR IZ - tax site business case 72 • Landowner-prepared draft strategic review: the landowner completes an initial assessment of the proposal’s alignment with Investment Zone objectives, which is then validated by the Tax Site Oversight Committee. • Auditable decisions: all decisions are recorded using standard templates and electronic records, ensuring transparency and accountability. • Independence: any potential conflicts of interest, where an applicant is also a committee member, will be managed via appropriate committee membership, or voting rules, which will be developed when the final terms of reference of the committee are drawn up. • Commercial practicality: the process is designed to be workable for all parties, supporting efficient site development while safeguarding public value. 5.1.20 The key steps in the gateway process are set out below: 1 Landowner identifies a prospective end user The landowner identifies a potential occupier and promptly notifies the Tax Site Oversight Committee. This informal notification (typically by email or a brief call) serves to flag the proposal early and prevent late- stage issues. The secretariat logs the notification for transparency. No meeting is required at this stage. 2 Landowner submits occupation proposal The landowner completes a one-page occupation proposal form, which includes: • Key details: occupier’s name, proposed activity, lease duration, and space requirements. • A declaration confirming compliance with subsidy control. • A draft strategic assessment, outlining how the proposal aligns with Investment Zone objectives and represents effective use of tax incentives. • An initial estimate of the NDR impact (timing and value), and the intentions of the occupier to apply for NDR Relief. The completed form is submitted to the Tax Site Oversight Committee secretariat, which circulates it to committee members. Supporting documents are only required if specifically requested. 3 Strategic assessment The Tax Site Oversight Committee reviews the landowner’s draft strategic assessment. Members may confirm agreement, request clarification, or raise concerns via email. Only in cases of disagreement or complexity is a formal meeting convened. The final assessment and rationale are recorded in a brief note. Further detail on the strategic assessment is provided below. 4 Decision and record The Tax Site Oversight Committee confirms the outcome and formally records the decision, rationale, and any monitoring conditions. A one- page decision note is signed electronically by both landowners and logged by the secretariat. The NDR allocation tracker is updated accordingly.
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GCR IZ - tax site business case 73 5.1.21 The key documents generated through this process are limited to the occupation proposal form, the strategic assessment note, and the decision note. These documents will be filed electronically by the secretariat, providing an auditable record of each decision. Decision notes will be shared with the Scottish Government to provide assurance and to pre-empt any challenges under the ‘but for’ test. 5.1.22 To manage stalled transactions, confirmations will be treated as time-limited: where a lease has not progressed within a defined period, the landowner will reconfirm key facts or resubmit the occupation proposal form if material assumptions have changed. Further detail: the strategic assessment Purpose of the strategic assessment 5.1.23 The strategic assessment ensures that tax incentives are used as targeted tools to curate a tenant mix that actively advances Investment Zone objectives. By intervening early in the leasing process, the Tax Site Oversight Committee can help ensure that new tenants contribute to the target sectors, but also the wider economic ecosystem that support and are supported by activity in these sectors. 5.1.24 In addition, the assessment establishes a robust, auditable evidence base. In a context where statutory reliefs are accessed through routine claims and returns, this documented gateway provides clear assurance to the UK and Scottish Governments that due diligence has been applied to every beneficiary. An additional benefit of this proactive approach is that it can help address the Scottish Government NDRR ‘but for’ test, distinguishing genuine economic growth from displacement, and safeguarding the integrity of the Investment Zone programme by mitigating the risk of clawback or policy challenge. Design principles 5.1.25 The strategic assessment is designed to be proportionate, focusing on the minimum information required to evidence alignment and additionality, while remaining robust enough to support benefit realisation and government monitoring & evaluation standards. 5.1.26 Assessment criteria are explicitly linked to Investment Zone objectives, with a priority on the target sector of advanced manufacturing but retaining flexibility to authorise legitimate supporting uses. This enables the inclusion of critical supply chain providers and site amenities (such as hospitality and childcare) where there is clear evidence that they support the viability of the primary cluster. 5.1.27 Ultimately, the process is intended to operate by exception: streamlined confirmation for proposals with a clear strategic fit, with additional scrutiny reserved for complex or borderline cases. In practice, most strategic assessments will be completed by correspondence, using the proposal form and any short supporting information requested. A formal meeting will be convened only where judgement is required (for example where a proposal is borderline, material in scale, or raises assurance issues that warrant collective discussion). Proposed strategic assessment process 5.1.28 The strategic assessment is designed to move quickly where a proposal is an obvious fit, while applying a proportionate check where the case is less direct. The landowner starts by categorising the proposed occupier as primary, secondary, or tertiary and recording this in the occupation proposal form with a short justification.
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GCR IZ - tax site business case 74 Table 5.2: Strategic assessment activity definitions Activity Definition Illustrative qualifying uses (non-exhaustive) Primary - advanced manufacturing An organisation whose core on- site activity is advanced manufacturing, meaning the industrial production, advanced assembly, or processing of goods and components and other technologically intensive on-site activities that materially relies on advanced manufacturing technologies and processes, and is undertaken with the intention of achieving productivity gains, new or improved products and processes, and more sustainable practices. • Making/processing products or components using advanced manufacturing technologies and processes. • Making/processing products or components with Manufacturing 4.0 or digital integration. • Making/processing products or components with a demonstrable focus on productivity improvement and/or new products/processes. • Making/processing products or components where sustainable practices are a material part of the manufacturing proposition. • Operational or maintenance activities that materially rely on advanced manufacturing technologies, digital integration, or high-value engineering capabilities, where these are a core component of the occupier’s on-site proposition. • Activities that meet any wider HMG or Scottish Government definitions of advanced manufacturing where this definition has the effect of widening qualifying uses. Secondary - supporting supply chain An organisation whose core on- site activity is to enable, supply, or directly support primary advanced manufacturing occupiers or to high-value engineering operations closely associated with the cluster, through specialist inputs, facilities or services that are materially linked to advanced manufacturing activity and where proximity to the site/cluster adds demonstrable operational value. • Specialist supply chain inputs primarily serving advanced manufacturing. • Specialist technical services integral to manufacturing operations (e.g., testing/validation, certification, industrial automation integration, specialist maintenance of production equipment). • Dedicated R&D, prototyping or scale-up support that is closely connected to manufacturing delivery. • Specialist operational, maintenance or inspection services where technical standards, engineering integration, or proximity to the cluster are material to delivery. • Specialist logistics required by high-value manufacturing where demonstrably part of supporting manufacturing operations.
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GCR IZ - tax site business case 75 Activity Definition Illustrative qualifying uses (non-exhaustive) Tertiary - site amenities An organisation whose core on- site activity provides amenities or support uses that enable the effective functioning, attractiveness and retention of the primary advanced manufacturing cluster and workforce, but which are not themselves advanced manufacturing or specialist manufacturing-enabling activities. • Workforce and visitor amenities primarily serving on-site employees and business visitors. • Services supporting workforce participation and retention where the primary user base is the on-site workforce. • Essential operational support. 5.1.29 Where a proposal is a primary use, the strategic assessment is limited to a short statement confirming alignment with Investment Zone objectives and the appropriate use of tax incentives. 5.1.30 Secondary and tertiary proposals are assessed using a short set of common criteria derived from the tax site objectives (see below Table 10). For each criterion, the landowner should provide a short narrative (two-to-three bullet points). The Tax Site Oversight Committee confirms or amends the scores and records the agreed rationale in the decision note. Table 5.3: Structured assessment for secondary and tertiary occupiers Criteria Narrative guide questions (prompt bullets for 2-3 lines of evidence) Enabling advanced manufacturing • How does this occupier strengthen the advanced manufacturing cluster? • What primary activities does it enable or support (directly or indirectly)? Investment and site build-out • How does this proposal support delivery of the tax site proposition? • Does it unlock development, accelerate build-out, or improve marketability? • Does it remove an identifiable barrier or improve tenant attraction/retention? Tax site rationale • Why does this activity need to be inside the tax site boundary? • If similar provision exists nearby, why is that insufficient? NDR impact • What is the expected NDR payable associated with the occupation over time? • Does the occupation meet the criteria of the Scottish Government’s NDRR ‘but for’ test? • If the occupier intends to apply for NDR relief, when and how much? Functional need and timing • Why is this use needed now? • How does it improve the site’s competitiveness for the target cluster? Proportionality of land take • Is the scale and footprint proportionate? • Does the land take avoid crowding out primary/secondary opportunities? • Is there a risk of “free-for-all” perception, and how is that mitigated in the justification?
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GCR IZ - tax site business case 76 5.1.31 Where the Tax Site Oversight Committee is unable to confirm the assessment as submitted, it may: i. Request clarification or further information. i. Agree amendments or conditions to strengthen alignment. ii. Record that the proposal is not supported. 5.1.32 In each case, the outcome and rationale are documented in the decision note. This ensures that any residual risks or points of disagreement are visible and auditable, rather than implicit. 5.1.33 These arrangements are intended to provide a shared, auditable basis for controlling access to the tax site, but they are not legally binding. Any instance where a landowner proceeds with an occupier in the absence of Tax Site Oversight Committee support would therefore be an exception and a departure from the agreed process. In such cases, the decision note would explicitly capture the committee’s position and would be escalated to the accountable body for awareness and any follow-up deemed appropriate. While it is recognised that this means the approach lacks legal enforceability, it is expected that - in the collaborative environment within which the IZ proposition has been developed - the potential for reputational damage and impact on key relationships will act as a disincentive for a landowner to actively enter into a lease which has failed the strategic assessment. Occupier assurance agreements 5.1.34 Tenants on the tax site will be asked to sign a Tax Site Framework Agreement at the time of entering into a lease. These agreements will be short, plain-English assurance statements that record the basis on which the occupier was supported through the gateway process and strategic assessment, including the intended use of the premises and any proportionate monitoring expectations. It will also form a record of the agreement between the business and Renfrewshire Council as to the eligibility of the occupier to NDR Relief (including the arrangements for any cap on relief). 5.1.35 Their purpose is therefore to ensure that key expectations are clear and shared from the outset, without creating additional friction in lease negotiations. 5.1.36 Framework agreements are not intended to be legal instruments and are not expected to be enforced through formal legal mechanisms. Their value lies in providing a clear, contemporaneous record of the parties’ shared understanding at the point of lease execution. This strengthens transparency and auditability, supports government assurance (including around the Scottish Government ‘but for’ expectation which is relevant for NDRR), and reduces the risk of dispute or retrospective reinterpretation of what was agreed. Parties and timing 5.1.37 The framework agreements will be entered into at lease execution between: • Renfrewshire Council (as rating authority); • the landowner (where different); and • the end user/occupier. 5.1.38 The agreement will be drafted using the occupation proposal form, strategic assessment undertaken by the landlord, and the associated decision note, ensuring a clear line of sight between the gateway decision and the assurance statement signed alongside the lease. What the agreements will cover 5.1.39 It is anticipated that framework agreements will cover the following core points:
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GCR IZ - tax site business case 77 • Intended use and alignment with Investment Zone objectives: the agreement will record the intended use of the premises as set out in the gateway decision. It will confirm that the occupier’s on-site activity is expected to remain consistent with this. • NDR relief expectations (where relevant): where applicable, the agreement will set out the expectation regarding NDR relief, including whether relief is anticipated and how this will be kept under review in light of the overall cap position. • Additionality / ‘but for’ statement: the agreement will include a short occupier confirmation that the investment/use meets requirements around additionality and consistency with IZ objectives. This provides a concise written record that can be drawn on if required for assurance purposes, including in relation to dialogue with the Scottish Government, e.g. around the ‘but for’ test which is relevant to NDRR. • Tax site needs: an agreed understanding of any site-specific needs or dependencies, such as enabling infrastructure, to support collaborative working to address them (e.g. Tax Site Oversight Committee support with unlocking NDRR funds). • Monitoring and data-sharing commitments: the agreement will set out proportionate monitoring requirements aligned to the gateway decision and programme evaluation needs. This will typically include the occupier’s commitment to provide agreed headline data (e.g. activity type, jobs, investment, occupancy timing) at a frequency and level of detail that avoids undue administrative burden. • Change control (material change in use): the agreement will require the occupier to notify the landowner of any material change in the occupier, tenant. or nature of on-site activity that could affect alignment with the gateway decision and therefore restart the gateway process. 5.1.40 Signed framework agreements will be filed electronically alongside the occupation proposal form and decision note, providing an auditable record linking gateway approval, lease execution, and monitoring expectations. 5.1.41 Renfrewshire Council and AGS Airports Ltd will work together to agree draft wording for the Tax Site Framework Agreements following the approval of this business case. Fair Work expectations 5.1.42 Renfrewshire Council and AGS Airports recognise that the tax site should support quality employment associated. In line with the wider objectives of the Investment Zone programme, the parties intend to promote Fair Work principles through the operation of the tax site. 5.1.43 To support this, Renfrewshire Council and AGS Airports will develop a Fair Work Charter, or equivalent statement of commitment, informed by the approach taken in Scottish Green Freeports. The Forth Green Freeport model is based on the Scottish Government’s Fair Work First guidance and the Fair Work Convention and is structured around the themes of respect and effective voice, security, opportunity and fulfilment. 5.1.44 The intention is that, as part of occupier onboarding, prospective end users will be asked to review the Fair Work Charter and, where appropriate, indicate their support for its principles through the Tax Site Framework Agreement. Renfrewshire Council and AGS Airports will use best endeavours to encourage occupiers to sign up to the charter
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GCR IZ - tax site business case 78 5.1.45 As with other elements of the site’s strategic management, Fair Work expectations will be kept under review through the Tax Site Oversight Committee and may be supported by light-touch monitoring or periodic discussion with occupiers where relevant Non-domestic rates relief 5.1.46 NDR Relief is discretionary and reimbursed by the Scottish Government up to a capped envelope. A key purpose of the tax site governance approach is to manage the capped envelope transparently and avoid late-stage surprises for occupiers, while keeping the overall process proportionate and aligned with the statutory nature of the other tax reliefs available within the tax site. It is critical for managing financial risk for Renfrewshire Council. Allocation approach and administration 5.1.47 While NDR Relief is a key lever within the tax site proposition, the reimbursement of the cost of relief by the Scottish Government is capped, and therefore mechanisms are required to manage (a) Renfrewshire Council’s financial exposure and (b) ratepayers’ expectations for how much relief they will receive. These arrangements need to be flexible enough to accommodate uncertainties such as the pace of development, the valuations determined by the Valuer, and the timing of application for relief by ratepayers. 5.1.48 Renfrewshire Council will in due course determine the mechanisms for administering NDR Relief. At a minimum, as part of the development of Tax Site Framework Agreements, ratepayers and the Council will agree a preliminary annual forecast of NDR Relief that it is expected will be claimed (amount and timing). This will be reviewed at least annually. If a ratepayer claims relief in any year above the agreed amount, the Council is not obliged to provide the excess, (although it may do so if there is an ‘underspend’ elsewhere). If the ratepayer claims less than the agreed amount, it can ‘make it up’ in subsequent years by refreshing the profile as part of the annual review. 5.1.49 The NDR Relief ‘envelope’ will be managed through an NDR tracker, maintained by Renfrewshire Council’s business rates team, which will also administer the actual relief through the normal rates process. 5.1.50 Once the capped envelope is reached, NDR relief will no longer be available unless a separate decision is taken outside the Investment Zone reimbursement arrangements. Compulsory purchase and land ownership risks 5.1.51 Compulsory Purchase Order and land ownership risks are not material to this business case. The tax site does not require land assembly or compulsory acquisition to proceed, as all land within the designated boundary is already under the control of Renfrewshire Council and AGS Airports Ltd. The intervention is delivered through designation of the tax site and subsequent occupation and investment by end users, rather than through public acquisition or construction activity.
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GCR IZ - tax site business case 79 5.2 Decision-making and project roles Decision-making 5.2.1 The Tax Site Oversight Committee is intended to operate as an advisory gateway rather than a formal statutory decision-making body. Its role is to provide a proportionate, auditable and collaborative check, before lease completion, that proposed occupations are aligned with the tax site objectives and do not create unacceptable unmanaged risk. 5.2.2 The Committee does not approve leases as a matter of law and does not replace the commercial decision-making of the landowners or the statutory functions of Renfrewshire Council as rating authority. 5.2.3 For each proposed occupation, the relevant landowner will act as sponsor of the proposal. The sponsoring landowner will prepare the occupation proposal form and draft strategic assessment, present the proposal to the Committee, and respond to any questions. 5.2.4 The sponsoring landowner will not participate in the recommendation on that proposal. Recommendations will normally be reached by consensus of the non-conflicted members. The Committee may record one of four outcomes: supported; supported subject to conditions or clarification; not supported; or escalated for advisory steer where consensus cannot be reached or the proposal is novel, borderline or materially significant. Conflicts of interest 5.2.5 Conflicts of interest will be managed through both standing and case-specific declarations. Because landowner members will routinely bring forward proposals for occupation on land from which they stand to benefit, such interests are expected and will be treated as standing conflicts for the relevant case. These interests will be declared and recorded in the decision note. 5.2.6 A member with a direct commercial interest in the proposal under consideration may present the proposal and answer questions, but will withdraw from the recommendation stage. 5.2.7 Where Renfrewshire Council is involved both as landowner and as rating authority, those roles will be kept separate in the operation of the Committee. Any formal decision on discretionary NDR relief will remain a separate decision of Renfrewshire Council in its capacity as rating authority, applying the relevant local policy and funding constraints. 5.2.8 Where the non-conflicted members are unable to reach a recommendation, or where a proposal raises issues that require wider judgement, the matter will be escalated to Glasgow City Region as accountable body for advisory steer. 5.2.9 The final position, together with any differing views and any conditions attached, will be recorded in the decision note. Where a landowner chooses to proceed with a transaction that is not supported through the gateway process, that departure from the agreed governance arrangements will be recorded and notified to GCR. Any such case would not create any automatic entitlement to discretionary NDR relief, which will remain subject to separate decision-making by the rating authority.
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GCR IZ - tax site business case 80 Project roles 5.2.10 Table 5.4 below sets out the tax site programme roles, alongside named individuals and their experience. Table 5.4: Project roles Project role and responsibility Named individual Expertise, skills and experience Renfrewshire Council RC Senior Responsible Officer (SRO) Overall accountability and ultimately responsible for the delivery of the tax site in respect of AMIDS; the SRO’s role is to ensure that the programme is focused and meets its objectives Alan Russell – Chief Executive of Renfrewshire Council Chief executive with a strong track record in strategic leadership, organisational transformation, and delivering inclusive economic growth. As Chief Executive of Renfrewshire Council, he provides overall corporate leadership, driving ambitious place-based regeneration, investment, and public service reform while working closely with partners to improve outcomes for communities across Renfrewshire. Project Sponsor (PS) Accountable to the SRO and is the key driving force behind the project. Responsibility for managing the development and delivery of the GCR IZ Tax Site. Alasdair Morrison – Head of Economy and Development, Renfrewshire Council Extensive experience in economic development, regeneration, and place-based growth. Provides strategic leadership across investment, town centre renewal, housing-led regeneration, and major capital programmes, working in partnership to drive inclusive economic growth and unlock the potential of communities and places across Renfrewshire. Director of Finance and Resources (DoF) Responsibility for the financial management of the Tax Site in terms of monitoring and reporting uptake of tax incentives. Alastair MacArthur – Director of Finance and Resources, Renfrewshire Council Senior public sector finance leader with extensive experience in strategic financial management, governance, and supporting large-scale transformation and regeneration programmes including previous City Deal projects. In his role as Director of Finance, he provides assurance and leadership on financial strategy, investment planning, and resource management, enabling the Council to deliver sustainable services, manage risk, and support inclusive economic growth. Regeneration Manager (RM) Accountable to the PS, DoF and SRO; the Regeneration Manager leads the day-to day development, delivery and coordination of the Euan Shearer – Regeneration Manager Experienced public sector professional with a strong background in economic development, programme delivery, and public service management.
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GCR IZ - tax site business case 81 Project role and responsibility Named individual Expertise, skills and experience Investment Zone Programme and will oversee monitoring and evaluation Economic Investment Officer (EIO) Accountable to the RM, the EIO will support delivery of strategic investment priorities, including maximising the impact of the Investment Zone and major opportunities linked to the AMIDS TBC Currently being advertised. Officer will require an understanding of investment intelligence and economic impact assessment, and the ability to develop and maintain investment profiles, as well as knowledge of sources for economic data, information and new policy. Responsible Rates Officer Accountable to the DoF, the RRO will monitor and report on NDR reliefs and advise and report on NDRR baseline. Pat Boyle – Revenues Manager Senior rates professional AGS Airports Ltd. Chief Financial Officer and Member of the AGS Board of Executives. Sits on the Glasgow Airport Investment Zone Board responsible for financial management in relation to delivering the development of the tax site for the airport. Phillip Staake - Chief Financial Officer, AGS Airports CFO with significant experience in airport financial management. Before joining AGS he was Finance Director at Budapest Airport. Has also worked within the AviAlliance GmbH Transactions Team, arranging financing solutions for several airport projects and coordinating strategic business planning exercises for airports in the AviAlliance portfolio as well as for airport acquisition projects. Real Estate Director Responsible for overseeing the real estate strategy and development across the group’s airport portfolio Sits on the Glasgow Airport Investment Zone Board responsible for managing the development and delivery of the commercial aspects of the tax site for the airport John McConnell - Real Estate Director, AGS Airports Chartered Surveyor with extensive experience in airport real estate development and management who leads the Property function at AGS Airports. Responsible for delivering sustainable growth and unlocking commercial opportunities within the aviation sector and diversifying operational land into commercial developments. Head of Commercial and Property, AviAlliance Representing AGS Groups shareholder AviAlliance, with oversight of the commercial implications for AGS by the Jan Lutz - Head of Commercial and Property, AviAlliance Leads the team responsible for non-aviation business planning, property development, and commercial strategy across AviAlliance’s airport investments as well as airport acquisition projects.
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GCR IZ - tax site business case 82 5.3 Marketing and promotion 5.3.1 The tax site will be promoted through the channels of the individual landowners. The two landowners will co-ordinate messaging so that prospective occupants will receive a clear messages which are tailored to the different advance manufacturing sub-sectors and markets served by each organisation. 5.3.2 The marketing propositions will be aligned with, and actively supported through, the Glasgow City Region’s wider inward investment and investment promotion activity (including Invest Glasgow and Invest in Renfrewshire), ensuring the tax site forms part of a joined-up regional offer to target sectors and intermediaries. This will include incorporating the tax site proposition into relevant sector campaigns, investor communications, and engagement with agents and inward investment partners, alongside the wider Investment Zone narrative. 5.3.3 To support this, Renfrewshire Council in partnership with its joint venture partner Buccleuch Property AGS Airports Ltd. will establish a light-touch coordination approach through the tax site governance arrangements. This will include: Project role and responsibility Named individual Expertise, skills and experience establishment of the tax site. Sits on the Glasgow Airport Investment Zone Board Former experience in real estate asset- and portfolio management Airport Development Director Responsible for the technical development of airport land within the tax site. Sits on the Glasgow Airport Investment Zone Board. Martin Tamovics - Airport Development Director, AGS Airports Highly experienced transportation expert and programme manager with expertise in master planning and airport development who leads on the strategic development of AGS’ airports. Leading on planning, transport and strategic economic development across the group. Sits on the Glasgow Airport Investment Zone Board. Accountable for leading the day-to day development, delivery and coordination of the tax site for AGS and providing direction for planning and economic development activity. Lisa Cameron – Head of Planning and Development, AGS Airports Chartered Town Planner with extensive experience in infrastructure town planning and development projects responsible leading for the strategic direction of planning and economic development activities at AGS Airports. Head of Corporate Affairs Responsible for governmental, parliamentary and sectoral engagement. Sits on the Glasgow Airport Investment Zone Board. Gavin Newlands – Head of Corporate Affairs, AGS Airports Highly experienced in governmental, parliamentary and sectoral engagement following nine years serving as the MP for Paisley and Renfrewshire North. In Parliament, he held spokesperson roles on Northern Ireland, Wales, Sport and later Transport, serving on the Justice and Transport Select Committees
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GCR IZ - tax site business case 83 • Shared core collateral (investor pack, key messages, web content and FAQs on the incentive offer) • Agreed target sectors and priority occupier profiles aligned to Investment Zone objectives • A coordination mechanism to manage overlapping enquiries and ensure that leads are directed to the most suitable plots and proposition. 5.3.4 However, each landowner will maintain its own pipeline and commercial processes. This reflects the practical and commercial reality that: • Each landowner is responsible for bringing forward and transacting its own landholdings • They may use different agents and channels to market distinct development products • Occupier discussions often involve commercially sensitive terms (pricing, lease structures and delivery sequencing) that are managed most effectively within each landowner’s established commercial arrangements. 5.3.5 Development and performance will therefore be monitored through shared, aggregated KPIs and regular coordination meetings, enabling effective oversight and collective alignment without requiring a single unified pipeline system. This will be reported to the Tax Site Oversight Committee. 5.3.6 Aggregated reporting will focus on site-level metrics (e.g., enquiries, heads of terms/leases, floorspace under offer/occupied, sector mix) and will be used to inform prioritisation, address constraints, and support benefits realisation. 5.3.7 Marketing and communications will be kept consistent with published Investment Zone guidance and local relief administration arrangements, recognising that reliefs are subject to eligibility criteria and (in the case of NDR relief) are awarded at local authority discretion. Marketing objectives 5.3.8 Marketing objectives will be aligned to the tax site’s strategic objectives but framed as enabling objectives focused on generating demand and converting it into occupier commitments. Proposed marketing objectives are detailed in Table 5.5 below. Table 5.5: Proposed marketing objectives Marketing objective Aligned to strategic objective… Example KPIs Build a qualified pipeline of aligned occupiers and convert interest into commitments by communicating a clear, credible single offer (incentives, location, and ecosystem). 1) Leverage private sector investment in advanced manufacturing • Number of qualified occupier enquiries (per quarter). Promote plot readiness and deliverability to reduce perceived risk and support earlier decisions. 2) Unlock the full potential of City Deal investments by accelerating development of underutilised land • Area marketed as available (pipeline supply) • Area under offer / reserved (pipeline conversion) • Area occupied (realisation)
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GCR IZ - tax site business case 84 Marketing objective Aligned to strategic objective… Example KPIs Target occupiers most likely to deliver high-skilled roles and embed skills/innovation linkages into the proposition (e.g., NMIS/MMIC/university links). 3) Create new high-skilled jobs • Forecast jobs associated with signed deals (occupier- provided) • Proportion of signed deals aligned to primary sectors Position the tax site within the wider GCR investment proposition (e.g., Invest Glasgow and Invest in Renfrewshire routes), targeting net new / expanding activity and ensuring a coherent outward-facing message across the City Region offer. 4) Extend benefits to the whole City Region by contributing to NDRR • Share of enquiries from outside the City Region (where known) • Number of joint campaigns / referrals via Invest Glasgow / inward investment partners (per year) 5.3.9 In practice, marketing will be managed as a pipeline and conversion function, with performance tracked through a small set of shared, site-level KPIs reported through the tax site governance arrangements. This approach supports benefits realisation while recognising that ultimate outcomes (investment, jobs, and revenue growth) depend on market conditions and landowner delivery. Governance and roles 5.3.10 A marketing group has been established to oversee delivery of the wider Investment Zone. The coordination group will meet on a regular cadence (e.g., quarterly, with ad hoc sessions as needed) to review aggregated performance metrics, agree priority sectors and target occupier profiles, and escalate delivery constraints that require wider programme input. 5.3.11 Decisions will be taken by consensus, with escalation to the GCR IZ Programme Board where agreement cannot be reached or where decisions have wider programme implications.
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GCR IZ - tax site business case 85 5.4 Project schedule 5.4.1 Figure 5.2 below presents the clear delivery dates and detailed milestones for the tax site. Activity Milestone May June July 25 01 08 15 22 29 06 13 20 27 Approvals FBC approval 26/05/26 Establish governance processes Confirm programme-level approval / internal mobilisation instruction 02/06/26 Draft Terms of Reference for the TSOC 09/06/26 Agree TSOC membership, chairing, secretariat and delegated officer arrangements 23/06/26 TSOC established / first mobilisation meeting held 24/06/26 Develop gateway processes Draft occupation proposal form, strategic assessment note and decision note templates 08/07/26 Finalise strategic assessment criteria for occupiers 22/07/26 Draft Tax Site Framework Agreement (TSFA) 15/07/26 Draft Fair Work Charter 15/07/26 Finalise TSFA and approval process 29/07/26 NDR relief and retention Develop local NDR relief administration process 15/07/26 Create NDR allocation tracker and cap-monitoring process 29/07/26 Prepare input to NDRR reinvestment strategy 22/07/26 Six-month governance review 02/04/27 Not shown on chart Figure 5.2: Gannt chart 5.4.2 These milestones show a relatively concentrated mobilisation period running from late May to late July 2026. Completion of the gateway templates, strategic assessment criteria and Tax Site Framework Agreement by the end of July 2026 is intended to ensure that prospective occupiers can be assessed consistently and that the tax site has a functioning control framework in place from the start. 5.4.3 The milestone relating to input to the NDRR reinvestment strategy should be read slightly differently from the other items. The wider NDRR reinvestment strategy is not a tax-site-only product and will be developed through the broader Glasgow City Region process led by GCR, rather than by Renfrewshire Council and AGS Airports acting alone. 5.4.4 The role of the tax site mobilisation programme is therefore to prepare and provide site-specific input into that wider strategy, including likely early priorities and barriers to delivery, rather than to finalise the strategy itself. Both the Gateway material and the FBC indicate that a fuller NDRR investment / reinvestment strategy will be developed separately through GCR governance arrangements.
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GCR IZ - tax site business case 86 5.5 Monitoring and evaluation 5.5.1 Monitoring and evaluation for the tax site will be integrated with the wider GCR Investment Zone programme monitoring and evaluation arrangements. The tax site will provide a defined set of site-level metrics into GCR’s formal six-monthly programme reporting to government, ensuring that tax site performance is visible and managed alongside other IZ interventions. 5.5.2 This approach is consistent with UK and Scottish Government expectations that IZ interventions are monitored against an agreed framework of outputs and outcomes, with reporting and performance management embedded within delivery governance and supporting learning and adjustment over time.8 5.5.3 The tax site will adopt a dedicated monitoring and evaluation framework from mobilisation for local management and reporting. These measures will then be mapped to the Investment Zone outputs and outcomes framework and refined, where necessary, to reflect any standardised reporting specifications confirmed through the forthcoming Memorandum of Understanding and subsequent guidance. M&E framework 5.5.4 Monitoring and evaluation will track whether delivery is progressing in line with the development trajectory assumed in the economic and financial analysis, and whether the mix of occupiers and activity remains consistent with Investment Zone objectives. The performance framework will therefore track a small set of measures across three levels: • Activities (delivery/process measures): measures that demonstrate that the tax site land is being brought to market and converted into commitments (e.g., plot availability/market readiness, enquiries, active negotiations, heads of terms/leases). • Outputs (direct results): attributable measures of what has been delivered on site (e.g., floorspace marketed/under offer/occupied; number of occupiers; number of jobs; occupier classification by primary/secondary/tertiary categories). • Outcomes (benefits realisation): indicators that delivery is translating into intended effects including sector alignment (share of occupiers in primary and secondary categories), and proportionate indicators of innovation/skills linkages where these are captured through occupier engagement. 5.5.5 The marketing KPIs (Table 5.5) provide the leading indicators for the “Activities” tier and will be used as the primary early-stage performance signals in monthly/quarterly reporting. The SMART project objectives in the Strategic Case (Table 1.1) provide the higher-level outcomes framework against which tax site performance will ultimately be judged. Data sources and collection 5.5.6 Data will be collected through a combination of existing sources to minimise burden while maintaining auditability: • Landowners (Renfrewshire Council and AGS Airports Ltd.) will provide high-level delivery and commercial metrics (floorspace marketed/under offer/occupied; occupier milestones such as lease completion), which can be aggregated at tax site level. 8 MHCLG (2025). Investment Zones in Scotland: Technical document.
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GCR IZ - tax site business case 87 • Occupiers will provide a small set of headline information through the channels already embedded in the governance arrangements, namely the pre-lease gateway process and the Tax Site Framework Agreements. This provides a structured route to capture agreed data items (e.g., nature of on-site activity; intended use/sector classification; occupation timing; indicative job forecasts and any agreed skills/innovation commitments) without creating onerous compliance obligations. 5.5.7 Key metrics will be supported by a proportionate audit trail (e.g., lease milestones, gateway decision notes, and signed framework agreements). Where national reporting requirements are refined through future guidance, templates for data capture through these governance channels will be updated accordingly, maintaining continuity of the core metrics where possible. Reporting and governance 5.5.8 Reporting will be designed to serve both operational management and programme accountability and will integrate with the wider GCR IZ reporting cadence: • Monthly reporting to GCR: tax site landowners will send GCR a brief monthly update containing data on leading indicators for the tax site. • Six-monthly reporting to Government: tax site landowners will input the required metrics and narrative (as specified in the Conditions of Grant and confirmed via the MoU) to enable GCR to compile the programme’s formal six-monthly monitoring reports to UK and Scottish Governments. • Evaluation support (as required): the tax site will support wider programme evaluation activity coordinated by governments and GCR (e.g., facilitating access to sites and stakeholders, and providing data), recognising that national evaluation scope and methods will be confirmed through a feasibility study and subsequent published M&E strategy. 5.6 Sustainability Case Sustainability policy framework 5.6.1 Both Renfrewshire Council and AGS Airports have established sustainability policy frameworks that are relevant to the future development of the tax site. 5.6.2 Renfrewshire Council’s Plan for Net Zero commits the area to working towards net zero by 2030 and is organised around five themes: clean energy, sustainable transport, circular economy, connected communities and resilient place. The Council’s accompanying Carbon Management Plan (2025/26– 2029/30) sets out its approach to reducing operational carbon emissions, including energy efficiency, waste reduction and increased use of on-site renewable energy. 5.6.3 The AGS Airports ESG Strategy 2025–2030 includes targets relating to greenhouse gas reduction, energy efficiency, waste management, climate adaptation and sustainable aviation innovation. AGS’s ESG Policy (2025) confirms the Group’s commitment to achieving net zero for direct emissions by 2035, embedding ESG into decision-making, and delivering capital investment in a way that supports responsible and sustainable growth.
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GCR IZ - tax site business case 88 Application to the tax site 5.6.4 Renfrewshire Council and AGS Airports will seek to bring forward development within the tax site in a manner that is consistent with these respective policy frameworks. In practice, this means that, where relevant and feasible, site development will be expected to take account of carbon reduction, energy efficiency, climate resilience, sustainable transport, waste minimisation and wider environmental responsibilities. 5.6.5 The sustainability effects of the tax site cannot yet be specified in detail. Outcomes will depend on the identity, operational model and development requirements of future occupiers, which are not yet known. At this stage, this uncertainty prevents the identification of project-specific sustainability impacts. 5.6.6 Notwithstanding this uncertainty, existing plans and development concepts for the site indicate potential sustainability opportunities. AMIDS provides access to: • an advanced district heat network • existing utilities infrastructure • masterplanned public realm • active travel connections 5.6.7 AGS Airports is also targeting for jet zero and hydrogen-related activity on the tax site. It has supported feasibility work for hydrogen production, storage and distribution, and the potential for runway-accessible space to support zero-emission aviation innovation.
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GCR IZ - tax site business case 89 Annex 1: Tax site map
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GCR IZ - tax site business case 90 Annex 2: Project risk register