Somerset Council withdraws £150m of funding to support £4bn gigafactory
Construction work is moving forward with Agratas’ new facility at the Gravity enterprise zone
Last updated 11th Feb 2026
Somerset Council has withdrawn £150m of funding in its capital programme intended to aid the delivery of Somerset’s new £4bn gigafactory.
Construction work is moving forward with Agratas’ new facility at the Gravity enterprise zone between Puriton and Woolavington, which will create up to 4,000 new jobs once fully operational.
Construction reached a major milestone in the last fortnight with the completion of the steel frame for ‘Building One’, which used 23,000 tonnes of British steel – the same amount used to build Wembley stadium.
The council confirmed in March 2024 that it would be investing up to £150m (funded by external borrowing and repaid through retention of business rates) to deliver targeted infrastructure improvements, reducing the risk to the site’s private sector backers.
But the council has now withdrawn this borrowing from its capital programme following further negotiations with Agratas and central government – with the improvements being delivered through different funding methods.
This change was highlighted as part of a lengthy report published before a meeting of the council’s corporate and resources scrutiny committee in Taunton on January 28.
Nicola Hix, the council’s director of finance and procurement, said that the council remained committed to delivering infrastructure within the Gravity site and to ensuring business rates collected from the gigafactory would be reinvested in local projects.
She said in her written report: “Within the enterprise zone, additional income from business rates generated on-site over its lifetime will be reinvested locally to realise the site’s full potential to further support economic growth.
“This will help to improve the future success of the zone and the wider area – for example, by investing in future skills and workforce development, we will ensure the direct connection of existing and new communities to the new investment.”
The council set aside £150m within its capital programme, which was approved in early-March 2025 as part of its annual budget.
A subsequent report which came to the full council in June 2025 indicated that this funding would be provided “in arrears to successful applicants” once key milestones had been met (e.g. once a key road or cycle connection had been completed).
The council had signed an agreement with the Department for Business and Trade (DBT), with up to £55m being provided upfront through grant funding, reducing the strain on the authority’s precarious finances.
The council intended to repay the borrowing by retaining all the business rates it will collect from the Gravity site until 2042, making the £150m commitment “cost-neutral” in the long term.
Ms Hix said that subsequent discussions about the delivery of these improvements had taken place, and that the £150m could be removed from the capital programme as a result.
She explained: “We are developing, with Agratas and the DBT, an alternative way of delivering £150m of value by applying the principle of business rates growth within the enterprise zone, without incurring upfront borrowing.
“Grant funding discussions are well advanced with the DBT. Once agreement is reached, approval will be sought but, on this basis, the need to borrow
has been removed from the capital programme.”
The council will set its annual budget for the next 12 months when the full council meets in Bridgwater on March 4 – a budget which will include a 4.99 per cent council tax rise for all Somerset residents.