5. Place
This note accompanies workbook 5, Place, and provides high level commentary on what the information illustrates.
Congestion Times
Congestion is one of the main perceived barriers to economic growth in the West of England. It is estimated that congestion costs the West of England economy approximately £350m per year and is expected to rise to almost £600m by 2016.
Congestion times decreased in the West of England between 2008 and 2010 but were beginning to increase again in 2011. Congestion in the West of England is higher than it is for England and Great Britain, but broadly follows the same trend pattern. If left unaddressed the cost of congestion to the local economy will increase, and perceived congestion can act as a deterrent to new businesses locating in the areas or act a driver for businesses to move out of the area.
Investment in Transport
Between 2009/10 and 2013/14 it is estimated that there would have been £209m capital investment into transport in the West of England (approximately £42m per annum). The amount of capital investment is expected to increase over the next 5yrs (2014/15 – 2018/19) to an estimated £347m (approximately £62 per annum).
It is estimated that the amount of capital investment into transport per head in the West of England was within the range of £38.25 and £39.25 per head between 2009/10 and 2013/14. The amount of expenditure per head is expected to increase and is estimated to be within the range of £59.84 and £62.25 per head over the next 5years.
Broadband Speeds
The economic benefits of broadband access and speed are widely recognized, these include:
- Productivity improvements and GVA uplift.
- Allows businesses to reach a Global Market Place.
- Provides more options to compare prices and shop for suppliers.
- Time saved through purchasing online, e-conferencing etc.
- Ability to promote your business through front facing website, advertising, blogs etc.
Broadband take-up and speeds vary widely across the West of England. Unsurprisingly Bristol has the widest availability of superfast broadband at 90.3%; however take-up of super-fast broadband is only 12.8%. North Somerset has the lowest availability of superfast broadband at 42.8%, with take up at 4.6%. Increasing the availability and take-up of super-fast broadband is a critical component of boosting the local economy.
However, it is also important to increase digital inclusion. Access to a home computer and computer literacy skills can improve educational performance can significantly bolster lifetime earnings. Access to a computer can significantly increase employment opportunities. It is estimated that between 75%and 90% of jobs require at least some computer use. Being online also increases individual’s opportunities to search and apply for jobs.
Historical Housing Completions
Historical housing completion rates for the West of England demonstrate some peaks and troughs, partly linked to changing housing market conditions and partly linked to the development of large housing sites. Nevertheless there has been a steady increase in completions seen since 2000/2001; however the number of housing completions in the West of England decreased following the recession in 2008.
Affordable Housing Completions (through the planning system)
As with all housing completions the number of affordable housing completions varies annually. The West of England Strategic Housing Market Assessment (2009) found that lower supply levels in the West of England and nationally will increase house prices and therefore decrease affordability, (or the proportion of younger households able to afford to rent in the open market). There is a need to ensure that a lack of housing does not exacerbate potential future labour shortages, threaten the competitiveness of the area and lead to the growth of unsustainable long distance car commuting.
The West of England Authorities working with key stakeholders and partners are committed to reviewing the SHMA to help inform strategic planning. There are practical timing issues, regarding the publication of census information , which will be required to input into any assessment, and the anticipated confirmation of housing allocations in adopted local plans (as current Core Strategies are finalised/progressed).
Housing Commitments
As of the 31st March 2012 there were some 20,734 dwellings with planning permission in the West of England which were either under construction or had not started yet. At this time construction had started on 3,035 dwellings (14% of the commitments), with the remaining 17,699 (86%) yet to commence.
In order to accelerate delivery of housing sites with planning permission the West of England Infrastructure and Place Group has established a working group to develop a Housing Delivery Protocol. This group is looking at a number of stalled sites where the underlying causes of the delay are unknown to explore the barriers/issues holding up delivery on the site and to see if pragmatic solutions can be developed to remove the barriers and accelerate delivery.
Average House Prices v’s Average Earnings
The occupational make up of some parts of the West of England economy comprises of some low wage occupations. Increased demand for housing has in part contributed to increased house prices and this has not been matched by an increase in earnings. Median house prices across the partnership area therefore significantly out-strip median annual earnings, making it increasingly difficult for first time buyers to get onto the ‘housing ladder’ as well as for those in lower paid work.
In January 2013 the Centre for Cities published their Cities Outlook 2013 report. A focus of this report was the economic benefits associated with house building. An insufficient supply of housing can restrict labour market mobility, raise business costs and exacerbate inequality – constraining economic growth[1]. The report states that the specific ways in which housing will impact on economic performance depends on the individual city context.
The study states that in a strong economy such as Bristol and the wider West of England housing shortages and rising housing prices can put a brake on economic growth – placing pressure on existing infrastructure, raising business costs, exacerbating skill shortages and preventing people from moving to a successful city. The West of England LEP and the partner UA’s recognise the importance housing and planning, play in economic growth.
Employment Completions
Office
Annual levels of office development completions in the West of England averaged about 50,500 sq m gross per annum between 1996 and 2012. As with the industrial completions, there are considerable fluctuations year on year. However, the bulk of the completions have been in the North Fringe and Bristol City Centre. In 1996/97 there was a spike in office completions following the completion of two large sites in the North Fringe (MOD Abbey Wood and Axa Sun Life – now Friends Provident).
Office development in Bristol City Centre was moderate in the mid-1990s, due to the property market being drawn to large greenfield development opportunities in the North Fringe. Over recent years, however, there has been a renewed interest in City Centre office development, primarily in large redevelopment projects, such as Bristol Harbourside and the Temple Quarter Enterprise Zone.
The North Fringe has experienced large-scale development over the last 20 – 30 years, both in housing and employment. Again, office completions in this area have fluctuated, but over recent years there has been a general decrease. This more modest rate of development is likely to continue as a result of fewer sites coming forward and policy initiatives to rebalance the West of England economy. Development opportunities in the North Fringe need to be considered alongside the need to balance and redirect development to other key strategic locations.
B&NES has seen a comparatively small amount of new office development in recent years, with an annual completion rate of around 2,000 sq m gross. In the past, Bath City Centre has not attracted a great deal of speculative development, partly due to constraints posed by historical and environmental assets within the area. However, the Enterprise Area at Bath Riverside is likely to attract significant new office development in the medium term.
Recently, there has been ‘market demand’ created for office development at locations close to the M5 in the Portishead area in North Somerset. Strategic sites in South Bristol and J21 in North Somerset provide local employment opportunities in these locations and ease development pressures in the North Fringe. The trend of diverting some of the out-of-town office demand, from the north of Bristol towards North Somerset locations along the M5 including Portishead, Clevedon and Weston-super-Mare as well as to Bristol City Centre remains a key locational policy driver.
Industrial
There has been an annual average completion rate of 28.7ha of Industrial development completions in the West of England between 1996 and 2012. There can be extreme variations between completions year on year. Between 2000/01 and 2006/07 completions were generally below the long-term average; however, since 2007/08 completions have in the main been higher than the average, following the completion of a number of large sites. The majority of these completions have been located in Avonmouth, Severnside and Royal Portbury, which over recent years have seen the development of large warehousing and distribution centres; there has also been significant industrial development in the North Fringe, Emersons Green Area B and at Westerleigh Business Park Yate.
Employment Commitments
Office
The supply of land available for office development is unevenly distributed across the West of England. Development activity in Bristol and South Gloucestershire has slowed since the start of the recession. Additional supply is expected to come forward in the future through office refurbishments, the letting of space, which is currently vacant, and further planning applications in response to market demand.
In North Somerset (primarily Weston-super-Mare) there is a significant supply of sites to meet aspirations for employment-led growth up to 2026 and beyond, reflecting also the trend for
increased growth in locations along the M5 corridor. In B&NES the modest annual completion rate of office development means that there is an adequate supply to meet their local needs.
Industrial
Over recent decades there has been a marked decrease in many traditional manufacturing and industrial use classes within urban areas such as Bristol, Bath and Weston- super-Mare; this is in line with a national trend of reduced manufacturing. As illustrated by the future supply of industrial land across the West of England is unevenly distributed. The bulk of the provision is identified in South Gloucestershire, with a large proportion accounted for in Severnside.
In contrast the Core Strategy for Bath and North East Somerset anticipates that there will continue to be a contraction of industrial floorspace in Bath and the Somer Valley, with no net change planned for Keynsham.
Of the industrial land identified in Bristol the majority is committed to industrial development at Avonmouth. Bristol’s Core Strategy does not promote any new allocations of industrial land in Avonmouth, focusing instead on regeneration of the existing industrial area.
Redevelopment of secondary industrial sites will not always result in intensification of employment uses. However, it is expected that significant net gains will be achieved through a combination of redevelopment, extension to existing units and infill development that maximises the efficient use of land.
The potential to achieve a sufficient strategic provision of industrial land is impacted/dependent upon the following issues:
· Maximising the economic potential of Avonmouth / Severnside having regard to sustainability considerations.
· Understanding the whole picture - completion rates alone are not a sufficient estimate of the future supply of industrial land as these rates overlook the contribution redevelopment and ‘churn’ of existing sites make to the available stock.
· Changes in market demand mean use classes such as waste treatment sites and regional distribution centres, are quickly taking up land in Avonmouth and Severnside. These use classes take up large areas of land but employ relatively few people. This current trend means that land is taken up quickly /no longer available and fewer more ‘traditional’ industrial uses are coming forward in this area.
· Land at Avonmouth and Severnside is constrained by flooding, environmental and transport issues, and these issues may affect some of the land identified for industrial development.
· The safeguarding of industrial land in areas outside of Avonmouth and Severnside is of continued, ongoing importance across the West of England in particular those areas where evidence suggests there is a continued market demand. Market intelligence is required to understand future demand from business. This will help to provide a more comprehensive picture of future land requirements across the West of England.
Vacant Property
As of May/June 2013 approximately 21% of the West of England’s office stock was vacant. Vacancy rates vary across the West of England with Bristol and North Somerset having a vacancy rate of 24.8 and 23.0 respectively. Vacancy rates across the West of England are less high for industrial and retail premises at 8.7 and 8.3 respectively; however, again there are variations across the four authorities.
Office and Industrial Take-up
Office – Awaiting data
Industrial - Industrial take-up has remained relatively stable since 2008 with around 170 -200 industrial transactions a year.
Headline Rents
Office – office rents in the greater Bristol area have steadily increased since 2000 and currently stand at £27.50 psf, an increase of £8 psf. Rents have increased due to demand for premises in the area. Following the recession in 2008 office rents did decrease marginally in 2009 but soon recovered.
Industrial – Industrial rents have shown a recent decline falling from £6.15 psf for a 50,000 sq ft unit in 2011 to £6 psf in 2012. This decline is mirrored for a 20,000 sq ft unit which went from £6.40 psf in 2011 to £6.30 psf in 2012.
Retail – retail rents in the Bristol area have been much more volatile and have fluctuated since 2000. As of 2012 retail rents stood at £180 psf , it should be noted that headline rents increase around the festive period.
[1] Cities Outlook 2013, p14; Centre for Cities.