WORK IN PROGRESS
This post looks at the Employment Land Assessment and aims to place it (and my responses to it) in the context of other parts of the Evidence Base.
As an overriding view, this document does not purport to be a strategy document for employment land – it aims to spell out the need for employment growth based on assumed population growth and it identifies where employment land is today and where more land needs to be provided to meet demand.
My main issue with this is that it is an organic approach to a situation that has been failing for many years, where a radical and ambitious approach is required. Failing areas such as Walnut Tree Close and Woodbridge Meadows may well be better served as a new residential quarter, whereas, properly connected, these businesses may have greater success in the other established business centres or even a new centre in the Borough.
On page 12 of the Report there is an assessment (Table 1) of the effectiveness of the Employment Policies in the 2003 Local Plan:
- Policy E1 FAILED
- Policy E2 Some Success
- Policy E3 PARTIAL FAILURE
- Policy E4 FAILED
- Policy RE15 Some success at BTRE Vokes, FAILURE at Peasmarsh
This should be the clearest possible indicator that organic solutions will probably be insufficient.
Corporate Real Estate Executives for major companies have taken Guildford off the list of destinations for headquarters or significant operations due to two main longstanding issues:
- TRAFFIC CONGESTION
- LACK OF HOUSING THAT WORKERS CAN AFFORD
The Local Plan gives us a perfect opportunity to rebalance the policy environment and marketing Guildford as OPEN TO BUSINESSES
Guildford Urban Area has three principal employment centres:
- Town Centre (Friary & St Nicholas Ward) – 23.5% of the employment floor area accommodating 31.4% of the employees*
- University & Research park (Onslow Ward) – 25.7% and 39.6%
- Slyfield (Stoke Ward) – 26.6% and 12.7%
(figures from Table 2, p19)
* approximately 12% of the Town Centre Floor Space was noted in the ELA (Table 49) as available on the market in July 2013
Each of these areas has major constraints to business and enterprise growth –
Town Centre has major congestion issues throughout but especially in the Walnut Tree Close – Woodbridge Meadows corridor (325,000 square feet of space accommodating 511 employees). Here the traffic congestion is so bad that it can take over an hour at peak times to get out onto the local road network. Unsurprisingly, business have taken opportunities of lease expiries and break options to relocate – typically away from Guildford.
University & Research Park is also blighted by traffic congestion but mainly as a result of strategic failures of the A3. Again, reports of 45 minutes to an hour to leave the research park area put a great strain on an otherwise exemplary business environment for high-technology companies (knowledge industries).
Slyfield has more industrial property than offices but relies on good quality logistics links to major highways. Traffic is once a gain an issue here – a link to the A3 would be a partial solution but there also needs to be a much better public transport link from early morning to mid/late evening to ensure that employees can get to Slyfield for shift work and non-standard hours.
Each of these locations can be resolved with careful and wider-reaching planning – a Master Plan for the wider town centre; a Master Plan for the University Quarter (including the proposed or potential westward extension of the town); a Slyfield Master Plan to include potential expansion both northwards and southwards (as noted in the SHLAA and my commentary on Jacobs Well in particular).
These Master Plans should enable communication between themselves to ensure they do not preclude each other’s solutions but they should form Area Action Plans and be brought forward with the Local Plan as Development Plan Documents.
Above all, the Employment Strategy needs to be bolder than envisioned in the ELA – and the Economic Strategy needs to be more defined than the ‘Economic Vision’ document forming part of the Evidence Base.
One final point in the introduction to my response: There needs to be a strong policy decision taken as soon as possible to establish how Guildford Borough Council will handle applications under the new General Development Order regulations that will allow conversion of office buildings to residential. This is a key issue when considering the propensity to attract businesses to Guildford and to provide enough jobs for a growing local population. Whilst this is referred to in 2.3 (p13), there is no clear direction offered or recommendation made. Guildford Borough Council could make such a statement and reinforce it through the Planning Committee pending the production and adoption of the Local Plan so as to avoid any undesirable or uncontrolled erosion of the commercial footprint.
There is nothing particularly controversial (or exciting) in the Introduction except that NO REFERENCE IS MADE IN THE INTRODUCTION TO THE RECENT CHANGES IN GDO REGULATIONS GOVERNING THE (AUTOMATIC) DEVELOPMENT RIGHT TO CONVERT OFFICE SPACE INTO RESIDENTIAL USES AS A POTENTIAL THREAT TO COMMERCIAL FOOTPRINT.
At 1.1 the ELA states that it “assesses how much employment land we are likely to need within Guildford Borough to 2031.”
Stage One – Taking Stock (p9)
This section begins with a Policy Context – looking at National, County and Local Authority policies.
At 2.1.5 the Report cites Paragraph 161 of the NPPF which explains the need to assess the “needs for land or floor space for ECONOMIC DEVELOPMENT” and the need to asses the “existing and future supply of land…to meet the identified needs.”
Neither the Economic Strategy nor the ELA seeks to identify an ambitious target for growth by attracting specific industries or sectors to Guildford. It seems only the University has such a strategy and its strategic Business Plan is not taken into account in the ELA or as an informative document in the Evidence Base. This should be addressed in the Evidence Base (whilst it is currently under development) so as to ensure that Guildford is capable of attracting and retaining businesses to be located in the town or its major business areas or elsewhere in the Borough.
Stage One does not give any indication of the prize to be won by Guildford Borough Council of being able to keep a large portion of incremental business rate growth – which could go a long way towards bringing about the infrastructure improvements we need in order to attract and retain businesses. THERE IS, IT SEEMS, A VIRTUOUS CIRCLE WHICH HAS BEEN IGNORED IN THE ELA.
At 2.1.9 the five bullet points in the Economic Strategy (2013-2031) are set out, namely, Leadership, Infrastructure, Enterprise, Innovation, and Skils & Employment.
It is unfortunate that the Economic Strategy does not specifically focus on ATTRACTING businesses to relocate to Guildford to replace those lost whilst the infrastructure and housing problems were getting progressively worse.
At the footnote (2) to 2.2.1 (p11) the definition of ‘deliverable’ should be consistent with other definitions and uses of the same word across the Evidence Base.
At 2.4.4 the Report refers to the Enterprise M3 (EM3) Strategy for Growth document (final document published April 2013).
The suite of documents is available below:
From these there are some clearly emphasised comments:
- “The Enterprise M3 area is an important economy and a successful economy against a range of indicators, and a place where businesses have wanted to locate and grow.”
- “The March 2013 announcement by the Defence Secretary concerning the Basing Plan and the restructuring of army bases will result in a £100m boost for Aldershot with new bases and accommodation for troops returning from bases in Germany.”
- “In 2013 there is more than 800,000 square metres of vacant industrial and office space which could, if full, house 50-70,000 jobs.”
There are some clearly identified issues set out in the Introduction:
- It is a high cost location for businesses and their employees (it is ranked 8th out of 48 localities in respect of cost base – based on research by Local Futures).
- The growth of the labour force is not keeping pace with the potential growth of business, especially as there is significant out-commuting to London (the area is only ranked 39th out of 48 localities in respect of the growth of the labour force);
- Although improvements to transport have improved accessibility to Heathrow, uncertainty over the longer term plans for London’s airports will inevitably impact on the investment and location decisions of businesses;
- There are growing problems of unreliable transport connections by road and rail with increased congestion and journey times on some routes;
- There is a need for essential investments in infrastructure and the built environment, to meet the needs of local businesses, adapt to climate change and create a low carbon economy;
- The innovation infrastructure is stretched and would need to expand if growth ambitions were to be met – occupancy rates at Surrey Research Park are already 95%;
- There is a shortage of larger (25 hectare plus) sites – only two across the Enterprise M3 area. This may prevent the relocation of major businesses and discourage sizeable inward investment projects;
- In situ business growth is constrained for land and planning reasons. Some larger businesses have not always had close relationships with local public sector partners to help remove constraints to growth (including in situ expansion, tailored skills programmes and collaborations with research agencies);
- Provision and take-up of reliable and high speed broadband has been a major issue reported by rural businesses in the Enterprise M3 area;
- In aggregate terms there is not a problem with the stock of office and industrial floorspace, much of it high quality. Market demand has been weak but there are other factors determining demand including high rentals. Some of the vacant space should be considered for other uses to avoid surplus property having a detrimental impact on local services and market perceptions of the area.
One main part of the Strategy is:
“Infrastructure and Place: Many of the constraints on business growth concern infrastructure – road and rail ‘bottlenecks’ causing congestion and slow/unreliable journey times, limitations on the capacity of the rail network, a shortage of housing for local workers, differential supply of reliable high speed broadband, access and capacity issues in relation to Heathrow and Gatwick airports. These are current problems that will worsen without investment.“
The strategic actions include:
4. Promote inward investment – especially in key sectors (2015-2020: work with property industry and local authorities to promote availability of industrial and commercial space)
5. Develop visitor economy, with a focus on business tourism
6. Drive innovation in all that we do, fostering a culture of entrepreneurship combined with driving business growth in niche sectors such as aerospace/space, cyber security, digital economy and pharmaceuticals (target: Strengthen the innovation brand and develop an average of 30 new businesses involved in knowledge networks per year.
7. Increase supply of labour, especially high level skills capacity
9. Establish an effective housing development strategy channelling investment, using a new Housing Investment Board (Targets: Boost level of housing completion year on year; Increase affordability of housing; Support housing in proximity of key economic centres/infrastructure; Support conversion of unused office space to housing.
10. Address congestion, along with road, rail and air bottlenecks (Target: Prioritisation of funding and the overseeing of the delivery of major local transport schemes).
WHILST THIS MAY BE A QUESTION OF STYLE OVER SUBSTANCE, I FEEL MUCH MORE SHOULD HAVE BEEN MADE OF THE AIMS AND TARGETS OF EM3 AND HOW THE LOCAL PLAN COULD/SHOULD HELP TO DELIVER STRATEGIC OUTCOMES.
Much of the character of the Borough’s economy is left to Appendix B (p80). Of note in the highlights at 2.5 to 2.7 are:
- The assessment of job numbers and job creations are five years out of date (2002 to 2008). This refers to the 2009 Guildford Economic Study and not to the most recent Economic Strategy Report. The Evidence Base should be Up to Date and Integrated (NPPF)
- At 2.6.1 the Report refers to a local business survey conducted in 2008. This is, once again five years out of date and circumstances are fundamentally different now. The Evidence Base should be Up to Date and Integrated (NPPF).
- At 2.7 the Report refers to eighteen sites identified as strategic employment sites. These are listed in Appendix T (p150) and characterised in Appendix U (from p155). There is no attempt to consider any linkages between employment sites and, by and large, the information is superficial rather than strategic.
Stage Two – Estimating Future Employment Land Requirements
This section considers three approaches to estimate demand:
- Employee Demand
- Employee Supply
- Projections of Past Take-up of Employment and Economic Development Land
Approach 1 – Employee Demand
The Report uses an “average estimate of floor space per employee” to calculate the amount of employment floor space that will be needed. From my professional experience, this is a rather blunt instrument with which to carry out exploratory surgery.
New ways of working (referred to in the Report as “Smart Working”) are actually making projected demand rather difficult to estimate. In some business sectors, corporate real estate executives are targeting ratios like one desk per two or more employees for offices; at the same time, retailers adopting a click and collect or home delivery service are typically employing more people in the same footprint.
On the other hand, a major trend towards self-storage facilities means that only very few people are employed in a fairly substantial facility.
At 3.3 (Employee Demand Forecast 1: Economic Downturn Forecast) the forecast was recorded as having been made in Spring 2010 – three years ago and five years before the Local Plan is expected to come into force. The forecast only covers the period to 2026 and so the officers have applied a projection for the balance of five years.
These analyses are spelt out in Table 3 – 2031 Forecast Adjustments (p24) in which an assessment of employment numbers is made and then applied to a 2009 baseline of typical space use density, leading to a total from Table 4 – Extra Floor Space and Land Required 2006 to 2031 (p25) which actually only estimates additional floorspace and not land take.
This summary of 36,000 square metres of net floor space required (which seems a very low number for a 25-year period under any circumstances) is not translated into the amount of land erquired to accommodate it in this scenario.
3.3.16 says: “We hope the majority of the [General Industrial] land will be re-used for [Business] or [Storage and Distribution] but if the location is totally unsuitable it may be released for other uses such as residential“. It seems odd to have a statement of hope rather than prediction or assertion in a Report such as this.
At 3.4 (Employee Demand Forecast 2: Strong Economy Forecast) the figures were drawn from a 2008 forecast by Experian – even further out of date from the commencement of the Local Plan. This forecast, ranging from 2007 to 2017 has been projected by officers to run through to 2031 (140% longer than the original range).
According to this approach, the net additional floorspace required (again no land requirement estimate is provided) is 164,000 square metres – a 24.22% increase in the current floor areas summarised in Table 2 (p19).
At 3.5 (Employee Demand Forecast 3: Mid-range Forecast) officers have derived a mid-range forecast which, for most figures with some rounding, seems to be a mathematical average rather than a mid-range economic forecast.
According to this approach the requirement is 99,000 square metres of space and, yet again, no reference to the likely land requirement to accommodate this requirement over the Plan period.
Approach 2 – Employee Supply Based Forecasts
The principal high level comment to make about this approach is that, whilst it considers the propensity and likelihood for new residents to commute to other employment centres (especially London) it fails to take into account major growth areas such as Aldershot (which is receiving large numbers of troops returning from Germany – with their families including, potentially, working wives). Appendix Q does show data from the 2001 Census and the 2011 Census data is not yet available.
Furthermore, the Retail Demand Study (Roger Tym & Partners) suggests that there is latent demand by 2021 for more than 60,000 square metres of town centre retail space. This will absorb some of the employees [but has not been modelled in this Report.]
It may well be that this section of the evidence base will need to be thoroughly reassessed in 2014 upon publication of the 2011 census data to understand the current origins and destinations of economically active members of the community, and having regard to Economic Impact Assessments prepared as part of applications for planning permission for the North Street development.
Figures taken from The Office of National Statistics (ONS) – particularly at Tables 10 and 11 do not take account of the gradual increase of the state pension age being introduced over the life of the Local Plan. This will inevitably increase the number of people of working age and should be factored into a demand-side study such as this.
At Table 15 – Employee Supply Forecast – Extra Floor Space Required 2010 to 2031 – a figure of floor space per worker for the various sectors is set out. This is interesting inasmuch as it suggests that the current space use allocations will subsist for the next twenty years or so – property industry evidence shows that some sectors are trending down (notably offices which shows the largest supply) and some are flat or increasing. What is not clear is what assumptions should be made to accommodate and attract the types of businesses set out in the EM3 strategy – notably, aerospace/space, cyber security, digital economy and pharmaceuticals.
Approach 3 – Comparing Forecasts Against Past Commercial Floor Space Take Up
Generally the content of this section is logical – there must be some question as to how much store should be set by previous organic growth versus a strategic plan to grow.
At 3.8.10 there is a section on B8 (Warehousing) demand for which has varied considerably between 1998-2004 and 2005-2008. The key question is whether there is any means by which to assess likely future growth (or inhibit it if other employment growth is preferred) or whether the Local Plan will need to be sufficiently flexible to accommodate it if necessary. It should be noted that the growth of internet shopping means that regional distribution centres are likely to be in greater demand rather than less.
Factors Impacting upon New Job Creation and the Need for Additional Floor Space
The trends considered are Off-shoring and Home-Shoring. There is a further trend of Near-Shoring (although for our purposes since Guildford is a high-cost centre, it is likely this will operate in similar fashion to off-shoring.
The key consideration for Guildford is that it is likely to attract the residual (head office or similar) functions with a higher value-add. One potential issue for this will be that Guildford will find it difficult to provide relatively unskilled white collar jobs – the typical activities that tend to be off-shored. A major analysis should be undertaken to establish how to either up-skill young workers or to attract a wider range of businesses despite the higher underlying costs of living and being in Guildford.
There is little current evidence to show that trends in home-working are either permanent or lead to reduced floor area in the long term. It is clear that home-working (or perhaps hub-working – explained below) have the propensity to reduce space use. Some of the older office stock may well not lend itself to the type of flexibility required for home-working to lead to structural space reduction – for example, older network cabling, poor layouts, etc., can be a major constraint for businesses wishing to do more with less space.
Hub-working is a new trend for individuals to gather in a working environment (more formal than the ‘Starbucks’ office) and, whilst it uses space, this could be provided in community facilities across the Borough rather than in established business centres.
Stage 3 – Comparing the Forecasts with Past trends for Employment Land
Figure 7 (p47) maps the trend lines modelled in the three approaches above for Offices:
The ELA Report correctly identifies the vision in the Guildford Borough Economic Strategy (2013-2031) for Guildford to have “world class businesses with capacity to expand…” and “an evolving and vibrant economy”.
The ELA, however, sets its recommended provision at between the medium and high levels in Approach One above, rather than look at the previous provision as a target. It does, however, state that the policy will be monitored and the ELA updated on a three-yearly basis.
I would recommend that the provision should be capable of providing more than the target based upon demand but not less than the lower threshold. this should enable tired old buildings and locations to be eliminated and relocated without companies having to leave the area to transform and grow.
It is worth highlighting that the likely incremental Business Rate receipts to Guildford Borough Council from an increase in office floor area of 65,000 to 110,000 square metres would be in the region of £8m to £12m per year by 2031. This could provide a good revenue from which to fund infrastructure improvements.
Figure 8 (p49) shows a similar analysis of Industrial floor space, but on this chart the demand and trend are declining.
There is a considerable gap between the trend line and the employee forecast lines and, despite the downward trend and forecast, the ELA is recommending a modest increase in industrial floor space by 20,000 square metres over the Local Plan period. I think this is appropriate and, even more desirable, it is to Guildford’s benefit if the quality of the supply were to be substantially improved.
Once again, the ELA recognises the remarks in the Guildford Economic Strategy, and this time looks to provide scope for a greater amount of space than trend or forecast to help realise the goals of that strategy.
Figure 9 (p52) shows an analysis of Distribution and Storage floor space.
Even more so than for Industrial space, there is a major disparity between the historic trend line and the employee demand lines. This is the third of three charts which has historic trend above employee demand and this would tend to suggest that the employee demand is either underestimated or that Guildford’s economy is close to saturation point.
Given the comments about the regional economy and targets for growth, it is reasonable to deduce that the employee demand figures are simply wrong.
The ELA does at least conclude that the target floorspace should be between the trend and demand forecasts at 40,000 -70,000 square metres.
Baseline Floor Space Requirements
The ELA Report deduces that the total floor space to be provided needs to be between a range of 105,000 square metres (10.5 Hectares) to 200,000 square metres (20.0 Hectares).
I have modelled the totals for the three property types below, together with the ELA recommended range:
Clearly, the upper limit of the ELA recommendation does not provide sufficient space to maintain trend and, for a Local Plan relying on or promoting growth, this seems to be a weakness in the Evidence Base. There should be a t least enough total space to meet the previous trends and Land Allocation strategies should ensure good quality, connected space is provided to set Guildford’s businesses at or above regional and national norms.
Below I have reproduced the Press Statement issued by Guildford Borough Council on release of the ELA:
“Employment land study makes case for economic growth
Today, we have released a study into how much land we need to provide local jobs in the future. The Employment Land Assessment has found there is currently not enough employment land to meet future growth needs in our borough.
The research is one in a series of evidence-based documents that will support the development of the Local Plan for our borough. Together, the documents look into the availability of land for housing and business growth over the next 20 years.
“This evidence will help us understand how we can protect local jobs in the coming years and attract new jobs to the area,” says Cllr Monika Juneja, Lead Councillor for Planning and Governance.
“The new Local Plan must protect existing major employment sites. It also needs to ensure employers have a degree of choice and flexibility when looking for new premises to ensure they can operate efficiently.
“If we don’t provide enough space for future growth, existing businesses could move out of the borough and new businesses may not be able to establish themselves,” she added. “We need to make sure existing small local companies, emerging businesses and large companies are able to invest in our community.
“We don’t want people to have to leave the borough to find jobs – we want to preserve the vibrant, thriving economic life of our borough, now and in the future.”“
The ELA, in failing to recommend the provision of employment land at even the same rate as previous trend, far from ‘making the case for Economic Growth’ seems to limit the propensity for Guildford to grow through the Plan period. This does not seem to be the panacea suggested in the press statement.
Meeting the Need for Additional Floor Space
There is regular reference in the Report to the poor quality of much of the existing employment accommodation and this is rightly remarked on in 4.6.3 in the context of a shortage of Grade A Office Space in the Borough “which is needed to attract inward investment in the borough and meet goal (sic) to ‘ensure that Guildford borough will be the top-performing economy in Surrey in the years up to 2031 and beyond’ (Guildford Borough Economic Strategy 2013-2031)“.
This section of the report examines vacant premises as at July 2013 and unimplemented planning permissions as at January 2013. It puts these into the following table (Table 28)
This shows a total available supply that, based on historic trends would run out in 2020 and, at the ELA assessment of High Demand, would run out in 2022 (as shown below).
The analysis in this section of the ELA does not account for any businesses who might be attracted to Guildford if the strategies likely to be adopted in the Local Plan are successful in terms of resolving the long-standing issues identified in the Economic Strategy, namely, traffic congestion and housing affordable to workers.
This all seems to show that there will be a substantial shortfall through the Plan Period.
Having arrived at an “Absolute Maximum” supply level of 135,600 sqm by a combination of the figures above and by the more efficient use of the existing buildings, the report then goes through a Reality Check at 4.10. This revises the figure down to 74,300 sqm.
At this level of supply we will have run out of available space between 2017 (trend) and 2019 (high) as shown below:
The ELA then goes into Stage Four – Meeting the needs medium to long
There is a minor discrepancy between 4.10.9 (which notes there are seven potential additional sites) and 5.1.8 and Table 32 which both say eight.
NOTE; In my comments on the SHLAA and the SPR, I noted that we should consider a more extensive increase in Slyfield. This taken with the Onslow/Shalford ward extension at Blackwell Farm (H1 and H2 of the GBCS) should be able to accommodate the level of commercial space required.
The ELA concludes on page 69 that for 2013 to 2031 we should make a provision of between 105,000 and 200,000 sqm of office/industrial/warehousing space, further concluding that:
“6.1.5 If we do not protect our existing major employment sites from alternative development proposals: the borough may increasingly have a dormitory role with increasing levels of (net) out-commuting, there may be a reduction in available local job opportunities for local residents which is particularly important for those who are less well qualified to travel outside the borough for employment, locally grown businesses may be forced to locate and/or relocate outside the borough as a result of lack of choice and availability of sites and premises.
6.1.6 We believe the new Local Plan needs to strongly protect its locally strategic employment sites identified in figure 3 (p14) and table 2 (p15). This would comply with the National Planning Policy Framework (paragraph 21) which states councils should
“set criteria, or identify strategic sites, for local and inward investment to match the strategy and to meet anticipated needs over the plan period”.
Loss of these sites to alternative uses runs the risk of constraining employment growth, limiting economic diversification and fuelling a significant imbalance between the size of the resident workforce and the number of locally available jobs.”
There are 23 appendices to the Report and most of these have not been carefully reviewed in this commentary.
Appendix B – Employment and Industrial Characteristics Review of Guildford
On page 81 the ELA refers to a July 2010 Lambert Smith Hampton office report but reports 2012 take-up.
On page 82 the Lambert Smith Hampton data on Industrial and Distribution is from March 2011 and includes the comment “The general shortage of industrial land could herald the return of speculative development in late 2011/early 2012.” This clearly did not happen and must call into question the accuracy of the remaining data and any assumptions formed on the basis thereof.
On page 83 Figure 1 shows the Regional property Markets in the South East from a CBRE market study of 2007 – well out of date.
On page 84 Lambert Smith Hampton’s office report from page 81 is duplicated – and again at page 149
On page 85 the LSH industrial and distribution report from page 82 is duplicated and again at page 149.
On page 134 the 2007 CBRE figure from page 83 is repeated.
Wearing my Corporate Real Estate hat, there is no indication from the ELA that Guildford is open to attracting major new business, and this needs to be properly discussed in the Issues and options consultation. If we wish to attract larger businesses and be once again a focus for headquarters as well as having a thriving small and medium sized business sector, we will absolutely need to be bolder with our numbers and strategy, taking more of a leaf out to the EM3 book and setting an objective to compete with all other regional centres. This, however, needs to be done in a sensitive and well-thought way to avoid having a surfeit of empty space and a failing market such as Bracknell is suffering from in the present market.