Driving economic growth and regeneration in the West Midlands

As the dust settles on UKREiiF for another year, it is clear to see investors are looking to the West Midlands as a key investment area outside of London and the South East as regeneration across the region continues at pace.

UKREiif was busier than ever this year. More investors, more positivity around the economic environment and, more importantly, a real energy around the West Midlands Pavilion as investors, developers and businesses talked excitedly about the opportunities across the region.

This year was the first time the West Midlands presented at the event as a collective. All three cities of the West Midlands – Birmingham, Wolverhampton and Coventry & Warwickshire, joined forces with Dudley, Sandwell, Solihull, and Walsall to present a united opportunity – and the benefits were clear to see.

Showcasing a portfolio of transformative development opportunities worth more than £20 billion, investors looked at the West Midlands as a regeneration hotspot outside of the traditional London, Southeast and Thames Valley investment areas.

The question now is how does the region capitalise on that interest to drive economic growth and further regeneration over the next 10 years?

Deloitte recently launched its ‘Growth 35’ campaign which focuses on the UK’s economic growth rate, and how, if that growth rate increases to 2% per annum by 2035, rising further to 2.5% by 2050, the UK economy could be almost half a trillion pounds larger by 2050.

One of the key elements behind driving that growth is attracting foreign investment. The Commonwealth Games once again catapulted the West Midlands region onto the international stage, and we now have a once-in-a-lifetime opportunity to capitalise on that opportunity.

As part of Deloitte’s commitment to the region, I spent a morning hosting panels at UKREiiF and the overarching conversation focused on the significant regeneration opportunities across the towns and cities of the West Midlands.

Emerging as the UK’s top regional location for attracting Foreign Direct Investment (FDI), the West Midlands recorded the highest annual growth rate of all UK locations in 2022-23. The Commonwealth Games, coupled with transport investment, the promise of HS2 and greater connectivity to London, and deeper devolution, has also undoubtedly raised the region’s international profile. Alongside the opportunity, is the reality of the barriers that need to be overcome for greater economic growth and prosperity.

Viability is an ongoing challenge for regeneration, especially in the Black Country boroughs that are now coming to market with a number of ambitious town centre schemes, which require significant investment, particularly when creating new, affordable homes and unlocking brownfield sites.

The ambition of the local authorities is clear, but budgets are often stretched with too many calls on resources. Government interventions can often be complex and hard to coordinate, and much longer-term commitments are needed to make meaningful impact, at scale, on viability challenges. Progress made on devolution is welcome, and the West Midlands Combined Authority continues to channel funds into developments with viability challenges and a particular focus on affordable housing. Indeed, they have recently announced a further £200m of grant funding for this purpose. Public sector programmes must continue in a more streamlined way, but developers and investors also have a key role to play if their patient capital is to be deployed effectively

The presentation of a collaborative, cross-region project pipeline that aligns the different growth opportunities and propositions set by the boroughs of the West Midlands, is essential to drive growth and a net-zero economy.

We are already seeing major infrastructure changes connecting those boroughs, like Dudley’s new £24m interchange scheduled to be completed this year. This will provide seamless connections to the wider West Midlands region, and further support decarbonisation.

This is a moment for new models of funding and investment to be developed in the UK, and the West Midlands is at the forefront of this, given the opportunity in the region.

Deloitte’s Birmingham Crane Survey provides a snapshot of developer activity in the city core and surrounding areas, and whilst covering a small pocket of the larger region, evidences a hive of activity with a very strong pipeline.

Areas such as Solihull have great schemes coming forward, with strong partnerships such as Muse on Mell Square leading the way. This is evidence that there is market interest in partnering to create high-quality developments, as long as the viability obstacles can be resolved.

What was evident throughout UKREiiF was an overwhelming optimism and belief that the West Midlands is an exemplar of growth in the UK.

Collaboration, as always, will be key and we need to engage with the private sector to develop these new models so that cash intervention is optimised in the right places.

Growth is happening right across the region already but can be powered up further by showing the government and investment market a truly joined-up strategy and a strong pipeline of opportunities.

Now is the time to capitalise on all the hard work and investment, and to become part of the West Midlands story.