Somerset Council has withdrawn £150 million of previously allocated funds from its capital programme that were intended to support the development of Somerset’s new £4 billion gigafactory. Despite this change, construction at Agratas' facility in the Gravity enterprise zone—located between Puriton and Woolavington—is progressing steadily.
The gigafactory is set to create up to 4,000 new jobs when fully operational, marking a significant boost for the local economy. A major milestone was recently achieved with the completion of the steel frame for ‘Building One,’ utilizing 23,000 tonnes of British steel—the same amount used in Wembley Stadium’s construction.
Earlier plans saw the council committing up to £150 million in investment, funded through external borrowing and repaid by retaining business rates generated from the site. This funding aimed to deliver crucial infrastructure upgrades, thereby mitigating risks for private sector investors backing the project.
However, following extensive discussions with Agratas and the Department for Business and Trade (DBT), the council has removed this borrowing commitment from its capital programme. Instead, infrastructure enhancements will now be financed through alternative funding channels.
Nicola Hix, Somerset Council’s Director of Finance and Procurement, emphasized that the council remains dedicated to delivering the necessary infrastructure within the Gravity site. She confirmed that business rates accrued from the gigafactory will be reinvested locally to maximize the site’s potential and promote wider economic growth in the surrounding area.
“In the enterprise zone, additional business rate income generated over the site’s lifetime will be reinvested to support economic expansion,” Hix stated. “This includes investment in skills development and workforce training to connect both existing and new communities with this major investment.”
The initial £150 million was incorporated in the council’s capital budget approved in March 2025, with a structure designed to provide funds “in arrears” after meeting project milestones, such as completing key roads or cycle paths. Up to £55 million of the required funds was expected upfront from government grants, easing financial pressures on the council.
With the revised approach, borrowing is no longer necessary. Discussions regarding grant funding with the DBT are underway and nearing agreement. Once finalized, the council will seek approval to formalize this arrangement, which aligns with the goal of leveraging business rates without incurring upfront debt.
Somerset Council is set to approve its annual budget for the next fiscal year on March 4 in Bridgwater, which will include a 4.99 percent council tax increase for residents to help fund ongoing local services.