To seek Cabinet’s, in principle, approval of the Freeport East Retained Business Rates Agreement, acting as the Billing Authority, in line with the Council’s ‘Freeport East Policy for Managing Retained Business Rates’, and to set out the next steps to finalise the Agreement.

To ask Cabinet, acting as Founding Member, to approve the Freeport East Ltd Annual Business Plan for 2025/26, as required by the Members’ Agreement.

RESOLVED that Cabinet –

(a)        in its role as Billing Authority, notes the progress made to date to complete the Freeport East Retained Business Rates Agreement, and agrees the approach as proposed in Appendix A to the Leader of the Council’s report (A.1);

(b)        authorises the Deputy Chief Executive and the Section 151 Officer to approve and sign the final Freeport East Retained Business Rates Agreement in line with the Council’s Freeport East Policy for Managing Retained Business Rates and Freeport East Policy for Granting Non-Discretionary Domestic Rates Relief; and

(c)        in its role as a Founding Member, and in accordance with the Members’ Agreement, approves the 2025/26 Freeport East Ltd. Annual Business Plan.

Cabinet considered a report of the Leader of the Council (A.1) which: -

(1)     sought Cabinet’s, in principle, approval of the Freeport East Retained Business Rates Agreement, acting as the Billing Authority, in line with the Council’s ‘Freeport East Policy for Managing Retained Business Rates’, and to set out the next steps to finalise the Agreement; and

(2)     requested Cabinet, acting as a Founding Member, to approve the Freeport East Ltd. Annual Business Plan for 2025/26, as required by the Members’ Agreement.

Freeport East Retained Business Rates Agreement

Cabinet was aware that Freeport East was a Government backed hub for investment, trade and innovation. It was central to the Government’s agenda for driving clean growth, promoting regeneration and job creation. Freeport East included the Port of Felixstowe, Harwich International Port, and the Gateway 14 business park in Stowmarket, Suffolk. It comprised 275 hectares of space and facilities across three sites eligible for tax relief (“Tax Sites”) at Felixstowe dock, Bathside Bay in Harwich, and Gateway 14 in Stowmarket.

Members recalled that Freeport East Ltd had been incorporated as a Company Limited by Guarantee in December 2022. It had been established by a range of local public and private partners, including Tendring District Council, to act as the main counterpart to Government for delivery of the freeport policy for Freeport East.

Cabinet was reminded that Freeport East, in consultation with partners, had developed a ‘Local Growth & Investment Strategy’ (formerly the Retained Business Rates Strategy) that set out how Freeport East would pool, allocate, spend and monitor the retained business rate income that was collected on the freeport tax sites over the next 25 years. This included the company’s operational costs.

That Strategy had been approved by the Board in March 2024 and fully reflected decisions made by Tendring District Council in relation to Business Rates usage. To achieve the site developments envisaged in the Full Business Case, 70 per cent of the total retained Business Rates from the Harwich tax site were planned to be allocated to support the further development of the Harwich tax site to achieve the outcomes of the Green Energy Hub. As a result, the Freeport East’s ‘Local Growth & Investment Strategy’ aimed to align with the Council’s ‘Freeport East Policy for Managing Retained Business Rates’, approved by Cabinet in January 2023.

Members were advised that, separately, the Billing Authorities, which included Tendring District Council, had decided a ‘Retained Business Rates Agreement’ was required to be put in place to ensure there was clarity around forecasting, collection and management of Business Rates funds in a manner that was consistent with the Local Growth & Investment Strategy.

It was reported that the Freeport East Accountable Body, East Suffolk Council, had instructed legal firm Browne Jacobson to prepare the Retained Business Rates Agreement for Freeport East (Appendix A to the Leader’s report) on their behalf. On 14 March 2025 Browne Jacobson had circulated a draft document for partners building on the Local Growth & Investment Strategy. 

It was noted that this document was not designed to override the Local Growth & Investment Strategy and was primarily aimed at dealing with the “mechanics” of the relationships between the Billing Authorities, Accountable Body and Freeport East Limited, to ensure the timely sharing of relevant information and movement of funds, where applicable, between the parties. The agreement recognised that it might need to change from time to time to reflect any amendments to the Local Growth & Investment Strategy, as may be determined by a decision of the Governing Body (i.e. through a decision of the Directors of Freeport East Limited).

Cabinet was informed that this document had been reviewed by this Council’s Section 151 Officer and the Deputy Chief Executive and some minor changes were required to the current draft to ensure it aligned fully with the: -

• Tendring Council’s Freeport East Policy for Managing Retained Business Rates;
• Tendring Council’s Freeport East Policy for Granting Non-Discretionary Domestic Rates Relief; and
• Freeport East Ltd’s Freeport East Local Growth and Investment Strategy (formerly the Retained Business Rates Strategy): Using retained business rates on freeport tax sites

Those comments would be supplied to Browne Jacobson for inclusion prior to completion and adoption of the document by the Billing Authorities and Freeport East Ltd.

Freeport East Ltd. Business Plan 2025/26

Cabinet recalled that, on 24 May 2024, it had approved the Freeport East Ltd. Annual Business plan for 2024/25 and had delegated authority to the Leader of the Council to approve future annual business plans on behalf of Tendring District Council as a Founding Member of Freeport East Ltd. The Leader now brought the business plan to Cabinet for its approval in the context of this wider update on Freeport East.

Members were made aware that Freeport East Ltd had produced a draft Annual Business Plan 2025/26 (Appendix B to the Leader’s report). The Business Plan set out their vision and purpose and key priorities for the year, namely: -

• developing a high performing organisation;
• delivering on ambitious vision for Freeport East;
• delivering investment; and
• making the most of its visibility and voice.

The Business Plan also set out how Freeport East Ltd would deliver those priorities, including the types of activities they would pursue, and the resources needed. It also set out a high-level summary of key achievements for 2023/24, its first year of operation and the Company would present their second Annual Report at the Annual General Meeting in September 2025 to be published thereafter, which would showcase achievements against the 2024/25 Business Plan.

Cabinet was aware that the Business Plan needed to be approved by the Founding Members as set out in the Members’ Agreement. Once the Business Plan had been approved, Freeport East intended to publish the final version on its website as an important means to convey to the wider public the scope of what they were delivering.

As well as setting the direction for the organisation, the Business Plan also created a

framework for expenditure that could be followed internally. Freeport East Ltd cost in the region of £1.25m per year, funded originally through Government grant but now through the business rate income as set out in the Local Growth & Investment Strategy and elsewhere in the Leader’s report (A.1).

The Leader of the Council made the following statement:-

“I’m pleased to propose this update on Freeport East, which is driving investment, innovation, and clean growth across our region. The Freeport includes three strategic sites: Felixstowe, Harwich, and Gateway 14 in Stowmarket, covering 275 hectares of tax-relieved development space.

A central part of Freeport East’s work is the Local Growth & Investment Strategy, which sets out how retained business rates from these sites will be used over the next 25 years. This includes funding for site development to bring forward businesses and jobs on the site, include the port in Harwich. 70% of the retained business rates from the Harwich site are allocated to support the development of the Green Energy Hub, regeneration and job creation, a major opportunity for our District.

To support this strategy, a Retained Business Rates Agreement has been drafted to provide clarity in how business rates are forecasted, collected, and managed, and aligns with our council’s policies. It has been reviewed by our Section 151 Officer, with minor amendments underway to ensure full consistency.

In addition, the Freeport East Business Plan for 2025/26 outlines the organisation’s priorities for the year ahead.  

This plan, will require approval by founding members, including this Council, it will be published to ensure transparency and accountability.”

Having duly considered the Leader’s report (A.1) and having recognised that the recommendation to complete the approval of the Freeport East Retained Business Rate Agreement would provide a signed agreement that protected the Council and put into legal effect the relevant parts of the Freeport East Local Growth and Investment Strategy and documented the underlying mechanisms to support its implementation and that the Freeport East Business Plan provided clarity on the plans for 2025/26 and this Council’s approval followed the requirements of the Members’ Agreement and good governance:-

It was moved by Councillor M E Stephenson, seconded by Councillor Kotz and:-

RESOLVED that Cabinet –

(a)        in its role as Billing Authority, notes the progress made to date to complete the Freeport East Retained Business Rates Agreement, and agrees the approach as proposed in Appendix A to the Leader of the Council’s report (A.1);

(b)        authorises the Deputy Chief Executive and the Section 151 Officer to approve and sign the final Freeport East Retained Business Rates Agreement in line with the Council’s Freeport East Policy for Managing Retained Business Rates and Freeport East Policy for Granting Non-Discretionary Domestic Rates Relief; and

(c)        in its role as a Founding Member, and in accordance with the Members’ Agreement, approves the 2025/26 Freeport East Ltd. Annual Business Plan.