G2 Airport Project Environmental Statement Volume 7: Employment Part 1 of 1 Main Text and Appendix 1 to Appendix 4
March 2008
Working with:
Contents 1 Introduction 1 2 Review of proposed development 3 2.1 Introduction 3 2.2 Stansted Airport and the G2 Airport Project 3 3 Policy context 5 3.1 Introduction 5 3.2 National policies 5 3.3 Regional policies 7 3.4 Local policies 10 4 Consultation 11 5 Construction employment assessment 13 5.1 Introduction 13 5.2 Approach 13 5.3 Definition of the assessment area 14 5.4 Construction employment assessment area: baseline 16 5.5 Construction employment assessment area: base case 18 5.6 G2 Airport Project construction employment 24 5.7 Assessment of construction employment effects 26 5.8 Measures to prevent or reduce effects 27 5.9 Residual effects 28 5.10 Enhancement measures 28 6 Operational employment assessment: approach 29 6.1 Introduction 29 6.2 Defining the operational assessment area 29 7 Stansted related employment: baseline 37 7.1 Introduction 37 7.2 Direct on-airport employment 37 7.3 Direct off-airport employment 40 7.4 Indirect employment 41 7.5 Induced employment 42 7.6 Stansted related employment, 2006 42 7.7 Employment on land required by the G2 Airport Project 42 8 Stansted related employment: forecasts 49 8.1 Introduction and approach 49 8.2 Direct on-Airport employment 49 8.3 Direct off-Airport, indirect and induced employment 52 8.4 Total Stansted related employment forecasts 53 9 Assessment area economy: review of economic performance 55 9.1 Introduction and data sources 55 9.2 Economic overview 55 10 Assessment area economy: future employment 63 10.1 Introduction 63 10.2 Labour supply 63 10.3 Labour demand 64 10.4 Labour supply and demand interaction 65 11 Operational employment assessment 69 11.1 Introduction and approach 69 11.2 Employment effects 69 11.3 Assessment of employment effects 70 11.4 Measures to prevent or reduce employment effects 77 11.5 Residual employment effects 77 11.6 Measures to enhance employment effects 77 12 Assessment summary matrices 81 Glossary and abbreviations 85
Tables Table 1: Forecast passenger numbers (mppa), 2006 to 2030 3 Table 2: Construction effects assessment criteria 14 Table 3: Gross Value Added by region, 2006 16 Table 4: Employment by industry and region, 2006 16 Table 5: Construction employment by sub-division (000s), 2006 17 Table 6: Construction employment by occupation (000s) 17 Table 7: Forecasts of construction employment 19 Table 8: Construction employment growth, 2011 to 2015 19 Table 9: Estimates of construction personnel for Olympic Games 21 Table 10: Demand for construction employment from other major projects 24 Table 11: G2 Airport Project construction employment 26 Table 12: Average daily on-site employment 27 Table 13: Allocation of Stansted employees by county/unitary authority, 2003 30 Table 14: Districts accounting for 1% of Stansted workforce 31 Table 15: Employment in the assessment area using survey totals 33 Table 16: Total Stansted employees in the assessment area, 2003 34 Table 17: Distance travelled to work, 1981 to 2001, England 34 Table 18: Forecast place of residence of Stansted employees, 2021 and 2030, % 35 Table 19: Direct on-Airport employment and passenger throughput 37 Table 20: Distribution of employers and employees at Stansted Airport, 2003 38 Table 21: Characteristics of Stansted Airport workforce 38 Table 22: Average salaries of permanent employees by category of employer 39 Table 23: Occupational grouping of permanent employees 39 Table 24: Stansted and assessment area employment by skill level, % 40 Table 25: Distribution of employment by skill levels at BAA London airports, % 40 Table 26: Stansted related income and employment, 2006 42 Table 27: Employment levels in businesses 44 Table 28: Business located on land required by G2 Airport Project 45 Table 29: Business located on land required by G2 Airport Project 46 Table 30: Turnover of businesses 47 Table 31: Employment in businesses located on land required by G2 Airport Project 47 Table 32: Total employment in businesses located on G2 Airport Project land 47 Table 33: Total jobs affected by G2 Airport Project and requirements 48 Table 34: Air traffic, 2003 – 2030 50 Table 35: Direct on-Airport employment productivity assumptions 50 Table 36: Historic rates of productivity growth,% 51 Table 37: Direct on-Airport employment, 2021, 2030 51 Table 38: Assumptions and employment estimates from other second runway studies 52 Table 39: Stansted related employment forecasts, 2021 and 2030 53 Table 40: Population and labour supply, 2001 - 2006 55 Table 41: Employment data, 2001 – 2005 56 Table 42: Distribution of employment by industry, 2006, % 57 Table 43: Average gross earnings, 2006, £ 57 Table 44: Number and distribution of unemployed by occupation sought, December 2006 60 Table 45: Unemployment rates by occupation, December 2006, % 60 Table 46: National insurance registrations, 2006/7 61 Table 47: Labour supply in the assessment area, 2006, 2021 and 2030 (000s) 64 Table 48: Labour supply sensitivity results (000s), 2006, 2021 and 2030 64 Table 49: Forecast labour demand, assessment area, 2006, 2021, 2030 65 Table 50: Labour demand and supply, assessment area, 2006, 2021 and 2030 (000s) 66 Table 51: Sensitivity analysis of labour supply and demand (000s). 2006, 2021 2030 66 Table 52: Job growth 2001 - 2021 (000s) 67 Table 53: Operational effects: assessment criteria 69 Table 54: Effect of G2 Airport Development in each assessment year 69 Table 55: Stansted related employment as a proportion of assessment area labour demand,% 70 Table 56: Forecast place of residence of additional on-Airport employees, 2021 and 2030 71 Table 57: Unemployment numbers and rates, July 2007 74 Table 58: Unemployment in wards around key stations on the Stansted to London railway line (refer to Figure 12) 76 Table 59: Airport Travelcard price zones and costs 78 Table 60: Assessment summary matrix – construction effects 81 Table 61: Assessment summary matrix – existence and operational effects 83
Figures Figure 1: Ten largest UK airports, terminal passengers (000s), 2006 3 Figure 2: Construction employment assessment area 15 Figure 3: Crossrail construction employment by year 22 Figure 4: Average daily workforce 25 Figure 5: Operational employment assessment area 32 Figure 6: Heathrow Airport, % of employees in assessment area, 1975-2004 35 Figure 7: Index of employment, 1998 to 2006 56 Figure 8: Commuting flows to/from the assessment area, 2001 58 Figure 9: Trend in ILO unemployment rates 59 Figure 10: Trend in unemployment rates, 2001 -2007 59 Figure 11: Selected stations and wards on the Stansted to London Railway Line 75 Figure 12: Travel Card map 79
Appendices Appendix 1 Details of other consultations Appendix 2 Questionnaire issued to businesses on land required by the G2 Airport Project Appendix 3 Projections of households, population and labour supply Appendix 4 Analysis of Travelcard
Section 1 Introduction
1 Introduction 1 1.1.1 The Environmental Impact Assessment (EIA) Regulations require that the Environmental Statement (ES) includes a description of the likely significant effects of a development on the population. One of the ways in which the G2 Airport Project would affect the population is through employment. The Airport is an important employment site in the East of England region and the G2 Airport Project is likely to generate a number of types of employment effects: • it would create increased employment at the Airport and in the wider economy during its construction; • it would create increased employment at the Airport and in the wider economy during its operation; and • it would affect employment in businesses which are located on the land required for the G2 Airport Project. 1.1.2 The purpose of this volume of the ES is to assess the likely significant employment effects of the G2 Airport Project. This volume will estimate the employment required during construction and operation of the G2 Airport Project and consider whether there will be sufficient labour available within the local economy to meet the needs of the Airport. The assessment will consider the ways in which employment opportunities at the Airport can be taken up by people in the local economy and will also consider displacement effects within the labour market. The volume will also consider the employment effects which the G2 Airport Project would have on businesses occupying premises on the land that would be taken by the G2 Airport Project. 1.1.3 The employment assessment is structured differently to the other ES volumes as a result of the specific requirements of this topic. There is no assessment of employment effects in 2015 as the G2 Airport Project would just be complete in 2015 and there would not have been sufficient time for significant operational employment to materialise. An assessment is therefore made of the operational employment effects in 2021 and 2030. Adopting 2021 as the first date for assessment is consistent with the end date of the East of England Regional Spatial Strategy2 (RSS) for the region. Analysis of the operational employment effects in 2030 allows an assessment to be made of the completed development. 1.1.4 This volume is structured around the different employment effects as follows: • section 2 sets out a review of the proposed development; • section 3 sets out the policy context for the G2 Airport Project; • section 4 summarises the Scoping Paper and provides feedback from the consultation meetings; • section 5 assesses the employment effects associated with the construction of the G2 Airport Project; • sections 6 - 11 assess the employment effects associated with the operation of the G2 Airport Development, including, at section 7, estimates of the employment that would be lost or displaced as a result of existing businesses located on the land required for the G2 Airport Project; and • a glossary of terms and abbreviations is given on page 85. Approach 1.1.5 The approach adopted for the assessment of the likely significant employment effects during construction (section 5) and operation (sections 6-11) is to: • define the appropriate area for assessment and review the economic performance of the area; • forecast the employment required at the key dates during construction and operation; • forecast the economic performance of the assessment area at the key dates; • assess the employment requirements of the G2 Airport Project against the future performance of the economy to determine if there will be any difficulties in securing the additional employment required by the Airport; and • consider options for ensuring that the employment requirements of the G2 Airport Project can be met. Scope 1.1.6 The G2 Airport Project is defined in section 1.6 of the Introductory Volume (Volume 1) of the ES and covers the G2 Airport Development, stopping up and diversion of local roads, provision of environmental offsetting
1 The Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999 SI 1999 No. 293 (as amended) 2 East of England Plan (Draft RSS) | 1
Section 1 Introduction
works, provision of off-site utilities infrastructure and changes to local air space. The assessment of construction employment effects relates to the G2 Airport Project. However, this employment volume focuses on the G2 Airport Development for the assessment of operational effects as employment is not affected by the airspace changes, and the stopping up and diversion of Airport roads and the provision of off- site utilities do not have any employment effects beyond the employment associated with their construction. . 1.1.7 This volume of the ES only examines the effects of the operation of the G2 Airport Development on employment within the local labour market which is defined as the area from which Stansted draws the majority of its employment. This is explained more fully in section 6.2. Some of these employment effects would arise in the towns and villages immediately around the Airport. The Community and Population Volume of the ES (Volume 5) assesses the likely significant effects on the local community resulting from the G2 Airport Project on 14 parishes surrounding the Airport. The volume covers effects on communities including land based effects, community severance, amenity effects and other population and community factors. It also considers the effects on three towns of Great Dunmow, Bishop’s Stortford and Harlow in terms of population and employment. 1.1.8 The G2 Airport Development would also create wider economic effects which will be assessed in the Economic Impact Report (EIR). The EIR will be submitted following the planning application for the G2 Airport Project. 1.1.9 This volume of the G2 Airport Project ES should be read in conjunction with Volume 1 of the G2 Airport Project ES (hereon referred to as Volume 1). Volume 1 sets out information about the G2 Airport Project and contains plans for which planning permission is sought. It also contains a description of the proposed development, forecast information, information on the Construction Methodology (CM) and the Code of Construction Practice (CoCP). 1.1.10 Likely cumulative effects have been considered in this volume from developments in the construction assessment area with planning permission or where planning permission is likely to be granted. These are listed in section 5 of this volume. These types of effects, sometimes referred to as local cumulative effects, are assessed in this section.
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Section 2 Review of proposed development
2 Review of proposed development 2.1 Introduction 2.1.1 This section provides an overview of the G2 Airport Project. It describes the current position of Stansted within the context of the largest UK airports and sets out the forecast passenger numbers with the G2 Airport Project in place. 2.2 Stansted Airport and the G2 Airport Project
2.2.1 Stansted Airport is the largest airport in the East of England and one of the fastest growing airports in the UK in terms of passenger numbers. Over the past five years the number of passengers moving through the Airport has grown by over 73% from 13.7 million passengers per annum (mppa) in 2001 to 23.7 mppa in 2006. 2.2.2 In October 2007 the Airport was served by 29 scheduled passenger airlines carrying passengers to 161 destinations, the majority of these being provided by the Airport’s principal base carriers of Ryanair and easyJet. In addition to these scheduled airlines, the Airport was served by some 12 charter passenger airlines flying to 23 destinations and 12 scheduled cargo airlines. 3 2.2.3 The 23.7 mppa carried through Stansted in 2006 accounted for 10% of total passengers through all reporting UK airports. As Figure 1 illustrates Stansted (23.7 mppa) is the third largest airport in the UK, and with the exception of Manchester (22.1 mppa), carries more than twice as many passengers as any other airport excluding Heathrow (67.3 mppa) and Gatwick (34.1 mppa). The London Area Airports system4 handled almost 137 mppa in 2006 which is 58% of total UK airport traffic.
Figure 1: Ten largest UK airports, terminal passengers (000s), 2006
Heathrow 67,339
Gatwick 34,080
Stansted 23,680
M anchester 22,124
Luton 9,415
Birmingham 9,056
Glasgow 8,820
Edinburgh 8,607
Bristol 5,710
Newcastle 5,407
Other UK Airports 40,901
- 20,000 40,000 60,000 80,000
2.2.4 The G2 Airport Project (as part of the G2 Project) would increase the passenger capacity of the Airport to 68 mppa which is expected to be achieved by around 2030. This would enable an additional 33 mppa to use the Airport in 2030. Details of the forecast build-up of passengers are shown in Table 1.
Table 1: Forecast passenger numbers (mppa), 2006 to 20305 Base case (No G2) G2 2006 23.7 23.7 2021 35.0 50.5 2030 35.0 68.0
3 Table 8, UK Airports, December 2006, CAA. 4 Defined by CAA and covering Heathrow, Gatwick, Stansted, Luton, London City and Southend. 5 BAA Forecasting and Statistics, October 2007. | 3
Section 3 Policy context
3 Policy context 3.1 Introduction
3.1.1 This section considers the government policies and planning objectives related to the G2 Airport Project. It considers national economic policy, transport policy and policies for regional development. Reference is also made to a specific policy which relates to employment at Stansted Airport. 3.2 National policies Economic Policy 3.2.1 The Government’s principal economic objective is ‘to build a strong economy and a fair society, where there is opportunity and security for all’. This objective is set out in paragraph 1.1 of the 2007 Pre-Budget Report.6 The report also sets out the long term goals (paragraph 1.3) of the Government which are: • sustainable growth and prosperity; • fairness and opportunity for all; • stronger communities and a better quality of life; and • a more secure, fair and environmentally sustainable world. 3.2.2 The importance of transport investment is recognised in the Pre-Budget Report. At paragraph 1.14 it is stated that the Government’s priorities will be to ‘deliver reliable and efficient transport networks that support economic growth’. 3.2.3 The Pre-Budget Report recognises that transport infrastructure supports the efficient working of the economy. The report further links this investment to Britain’s capacity to compete in global markets. It states: ‘Sir Rod Eddington’s Study, published on 1 December last year, reaffirmed the importance of well- targeted investment in transport to the continued success of the UK economy in the global marketplace. The Government has endorsed Rod Eddington’s strategic analysis.’ (paragraph 3.131) Transport policy Air Transport White Paper 3.2.4 UK air transport policy is set out in the Air Transport White Paper (ATWP) - The Future of Air Transport - which was published in December 2003. This document provides a strategic framework for the development of airport capacity in the UK over the next 30 years. 3.2.5 The publication of the ATWP followed, and was informed by, a series of research and consultation papers. The first key economic research paper was a study (the first of two) prepared by Oxford Economic Forecasting (OEF) in 1999.7 This report was prepared for a consortium comprising the DETR (as then constituted) and the main UK airlines and airport operators. The report concluded that aviation is a major economic activity in its own right, that aviation, as part of the transport infrastructure, provides a stimulus to productivity and economic growth and that restrictions on the expansion of aviation would damage the economy. 3.2.6 The first stage of the first OEF report formed part of the analytical background to the DETR Consultation Paper The Future of Aviation published in 2000. This paper sought views on matters to be dealt with in the subsequent White Paper. Topics covered included the effects of aviation on: • consumers; • the economy; • the environment; • regional development; • urban regeneration; • policies on integrated transport; and • policies of local authorities and Regional Development Agencies.
6 HM Treasury – Meeting the Aspirations of the British People: Pre-Budget Report and Comprehensive Spending Review. October 2007 CM7227. 7 Oxford Economic Forecasting - The Contribution of the Aviation Industry to the UK Economy. November 1999. | 5
Section 3 Policy context
3.2.7 In parallel with the above publications, the Government also announced the South East Regional Air Services (SERAS) study which was to assess the demand for airport capacity in the south-east and East of England. The study considered options for the provision of capacity and appraised the economic, environmental and social implications. That study informed the ATWP. 3.2.8 The SERAS study was by led by Halcrow and the detailed workings of the analysis were published in a series of reports. There were four main stages to the SERAS study: • Stage 0: a site search to identify potential new sites to serve the south-east and East of England. • Stage 1: to establish feasible options for the development of capacity at each airport in the south-east and to appraise the options to determine which ones should be carried forward to the next stage. • Stage 2: detailed financial and economic appraisal of the options and combinations of options (packages). • Stage 3: sensitivity testing on selected packages to examine the effects of incorporating environmental costs into air fares, effects on noise and local air quality of alternative assumptions on aircraft performance and some limited revisions to the Airport layouts and capacities in different packages. 8 3.2.9 The SERAS work concluded with the publication of a consultation document in 2003 which set out details of the benefits of air travel, detailed analysis of the individual airports in the south-east and East of England and the economic appraisal of various packages of Airport development over the period to 2030. One of the packages was a second runway which is discussed in section 9 of the document. This document was also informed by a second stage of the first OEF study.9 3.2.10 The ATWP was thus drawn up in the light of an extensive programme of research and consultation. 3.2.11 The ATWP states that air travel is essential to the UK economy and to its continued prosperity. The ATWP states that ‘airport development is a matter of great significance at both national and local levels. The provision of adequate infrastructure and capacity is important for national competitiveness, for regional development, and for people’s ability to travel quickly, easily and affordably to where they want to go.’ (paragraph 1.5) 3.2.12 It acknowledges that ‘in an increasingly competitive global marketplace, Britain’s continuing success as a place in which to invest and do business depends crucially on the strength of our international air transport links’ (paragraph 2.5). It also recognises that ‘not providing additional capacity would significantly damage the economy and national prosperity.’ (paragraph 2.18) 3.2.13 The ATWP also describes the wider context within which the aviation industry operates and makes, amongst others, the following point with regard to the benefits of airports to local and regional economies ‘They attract business and generate employment and open up wider markets’ (paragraph 4.24) 3.2.14 Within the south-east, the ATWP states that ‘On balance, taking into account all relevant factors, and in light of the responses to the consultation, the Government now supports the development of a second runway at Stansted as the first new runway to be built in the South East’ (paragraph 11.40). The ATWP also states that ‘The Government believes the realisation of its regional and sub-regional growth objectives would be strongly complemented by expansion of Stansted’ (paragraph 11.28) 3.2.15 The ATWP thus offers unambiguous support for the G2 Project which will contribute to meeting an identified need for increased Airport capacity in line with the ATWP priority of building the first new runway in the south-east at Stansted. 3.2.16 The ATWP included a commitment to report on progress on the policies and proposals by the end of 2006. Air Transport White Paper Progress Report 10 3.2.17 The ATWP Progress Report (ATPR) was published in December 2006 and draws on the Stern Review, the Eddington Study and a second OEF Study. 3.2.18 The ATPR confirms the strategy of the ATWP, stating that ‘the Government remains committed to the strategy set out in the White Paper: it strikes the right balance between economic, social and environmental goals’ (paragraph 1.2). In relation to Stansted, the ATPR reiterates the conclusion of the ATWP by stating
8 Department for Transport - The Future Development of Air Transport in the United Kingdom: South East 2nd Edition. February 2003. 9 Oxford Economic Forecasting – The Economic Contribution of Aviation to the UK, Part 2, May 2004. 10 Department for Transport, The Future of Air Transport Progress Report, December 2006. 6 |
Section 3 Policy context
that ‘The White Paper made clear that the first priority at Stansted should be to make best use of the existing runway’ (paragraph 5.7). However, it also anticipated that a second runway (the first full length new runway in the south-east in 50 years) would also be needed early in the next decade. 3.2.19 Government policy on aviation continues, in the light of the recent policy reviews on both transport and the environment, to support a second runway at Stansted. 3.3 Regional policies
3.3.1 The regional policy context for the G2 Airport Project is set out in two key documents - the Regional Economic Strategy (RES) (2004) and the draft Regional Spatial Strategy (RSS) (2006). The RES is produced by the East of England Development Agency (EEDA) in partnership with the Regional Assembly and other stakeholders. Its purpose is to assist all of the regional development partners – including local authorities – in identifying and taking appropriate action to promote development of the regional economy. The RSS is prepared by the Regional Assembly and provides the statutory framework for local authorities to produce more detailed local development plans and local transport plans for their areas. 3.3.2 It follows that these two documents (described in more detail below) define planning and development priorities and a framework for local authority decisions on matters including planning and investment. East of England Regional Economic Strategy 2004 Regional Economic Strategy: A Shared Vision 11 3.3.3 The vision for the East of England as set out in the 2004 RES is for ‘A leading economy, founded on our world-class knowledge base and the creativity and enterprise of our people, in order to improve the quality of life for all who live and work here’ (Context and Vision page 9). 3.3.4 The RES identifies three building blocks for achieving this vision: • building on the region’s strengths; • improving areas of average or poor performance; and • capitalising on the distinctive opportunities and challenges. 3.3.5 In terms of building on the strengths of the region, the vision is for the East of England to continue to progress: • the region’s global leadership in science and technology, research and innovation – this includes areas such as biotechnology, pharmaceuticals, engineering, advanced manufacturing and information communications technology (ICT); • its international gateway roles and transport corridors - these include some of the fastest growing ports and airports in the country and major transport corridors; and • the region’s landscapes and environmental assets – these particularly act as a national resource for food, farming and renewable energy. 3.3.6 The RES identifies eight strategic goals of which Goal 6 – making the most from the development of international gateways and national and regional transport corridors – is of particular relevance to development at Stansted. The RES states that ‘The government’s agenda is supporting the sustainable expansion of ports and airports as gateways to international markets. The regional economic strategy seeks to capitalize on the economic and employment opportunities provided by these developments while securing positive and meaningful mitigation measures to address environmental impacts..’ (page 64). 3.3.7 Within Goal 6, Priority One is ‘to take advantage of the opportunities from sustainable airport expansion in the region’ (page 65). 3.3.8 This priority recognises that the ‘region’s airports are important assets which act as drivers for growth and regeneration and will play an important role in improving the region’s competitive strength and attractiveness as a business location and tourism destination’ (page 65). An action from this priority is to ‘sustainably develop the potential of the region’s airports to support job growth and provide business opportunities’ (paragraph 65).
11 East of England Development Agency – A Shared Vision: The Regional Economic Strategy for the East of England. November 2004. | 7
Section 3 Policy context
Review of the Regional Economic Strategy 12 3.3.9 In October 2006, EEDA published a review of progress against the RES goals and priorities and an assessment of the current state of the regional economy. This progress report acknowledges that the importance of regional airports has grown since the ATWP and that ‘the recognition of the importance of the airports and ports as employers and strategic locations for other development in the region has increased since the regional economic strategy was published’ (page 58, Progress Report on the RES) 3.3.10 In September 2007, EEDA published its draft RES for the period to 2031. The final version is due for publication in summer 2008. Regional Spatial Strategy for the East of England 3.3.11 The East of England Plan (draft revision to the RSS for the East of England (RSS14)) was published for public consultation on 8th December 2004. Examination in Public (EiP) of the Draft Plan commenced in November 2005 and finished during March 2006. The Panel published its report and suggested amendments in June 2006. Having considered the Panel’s amendments the Secretary of State published proposed changes to the Plan in December 2006 with further proposed changes published in October 2007. Final approval of the Plan is expected in early 2008. The East of England Plan therefore provides the emerging regional policy framework within which the development proposals should be considered. East of England Plan (Draft Regional Spatial Strategy) December 2004 3.3.12 The East of England Plan sets out the draft spatial strategy to guide development in the East of England up to 2021. The spatial planning vision for the East of England is ‘to sustain and improve the quality of life for all people who live in, work in, or visit the region, by developing a more sustainable, prosperous and outward looking region, while respecting its diversity and enhancing its assets’ (paragraph 3.2, page 11). The draft RSS states that the ‘RSS should assist with the implementation of the RES and that the RES must sit within the spatial planning framework provided by the RSS. In effect the two regional strategies must be complementary’ (page 105, paragraph 6.1) 3.3.13 The draft RSS as submitted to the Secretary of State, proposed job growth (Policy E2) across the East of England of 421,500 over the period 2001 to 2021 and states in paragraph 6.2 that the ‘RES shares this position’. This is referring to the 2004 RES ‘A Shared Vision’. Amongst the influencing factors identified in the draft as supporting this employment growth was the potential for indirect and catalytic impacts of airport expansion particularly associated with Stansted and Luton Airports (page 111, paragraph 6.12, second bullet). Indirect impacts associated with airport expansion relate to additional income and employment in the region which would arise as a result of companies located at the Airport sourcing more goods and services in the region which in turn supports more income and employment. Catalytic impacts refer to the benefits to businesses located in the region from the availability of increased air services through the airports. This is the ‘facilitator’ role of airports which is acknowledged in the Plan at Policy E14. Policy E14 stated that ‘airports have an important and strategic role as drivers in the regional economy and local economy, as well as having significant potential to contribute to meeting regeneration needs.’ (page 119, Policy E14) 3.3.14 The draft RSS also included a number of sub-regional strategies, one of which relates to the Stansted/M11 sub-region, defined as the local authority areas of Epping Forest, Harlow, Uttlesford, Braintree, parts of East Hertfordshire and Broxbourne east of the A10. The vision for this area is ‘to create a sustainable employment-led growth corridor, conserving and delivering a high quality environment by capitalising on its role as a key aviation gateway, realising its potential for sustainable growth and regeneration, and capitalising on its potential as a focus for hi-tech, knowledge-based employment, related to the Cambridge clusters and London.’ (page 84, paragraph 5.122) 3.3.15 Policy ST1 identified a number of drivers for the delivery of the Stansted/M11 sub-regional strategy including ‘the development of key economic clusters and related sectors, based on Stansted Airport and on the potential of the overall M11/A120 corridors.’ (page 85, Policy ST1, bullet point 4)
12 ‘East of England: State of the Regional Economy’ East of England Development Agency, October 2006. 8 |
Section 3 Policy context
East of England Plan Panel Report (June 2006) 13 3.3.16 The Report of the Panel following the EiP made a number of recommendations concerning the policies which are relevant to Stansted. These recommendations are described below. 3.3.17 Policy E2: the Panel considered the increase in jobs over the period 2001 to 2021 of +421,500 to be ‘broadly supportable in the context of a housing increase of 478,000’ (page 100, paragraph 6.7). However, the Panel recommended an increase in housing provision to 505,000 from 478,000 and as a result, considered it appropriate to raise the regional employment target to 440,000. 3.3.18 Policy E14 (now E8) considered the region’s airports. The Panel noted that the future roles of Stansted and Luton Airports are outlined in the ATWP and that future development would be planned in detail through airport master plans. 3.3.19 Policies ST1 to ST7: The Panel recommended the deletion of these policies and suggested the inclusion of a policy for Harlow as a ‘key centre for development and change’. The strategy for Harlow was to promote the renaissance of the town through its development as a regional housing growth point, major town centre and strategic employment location to 2021 and beyond (Policy HA1). Amongst others, the town centre and employment areas were to be developed to ‘attract employment related to the growth of Stansted Airport which does not need to be located there’ (Policy HA1). 3.3.20 In terms of the Stansted/M11 sub-region the Panel state that it is not for the EiP to review Government Policy as contained in the ATWP. ‘For the RSS the main issue is to decide upon the best way to provide for housing, employment and other development associated with the airport and its growth’ (paragraph 5.100). As a second runway would be brought forward through the proper statutory processes, the Panel state that: ‘It is immaterial whether the RSS ‘supports’ one runway or two…We are strengthened in this view by the fact that the draft Plan’s provision for housing and jobs appears adequate to absorb the effects of the Airport’s growth over the Plan period whether with one runway or two.’ (paragraphs 5.100 and 5.101) 3.3.21 The Panel also state that ‘we doubt whether there would be any additional airport-related job growth over and above the level assumed in the forecasts that underlie the draft Plan, especially in the period to 2021’ (paragraph 5.101). These forecasts of job growth were the 421,500 referred to in paragraph 3.3.13 above. Secretary of State’s Proposed Changes to the East of England Plan (December 06) 14 3.3.22 The Secretary of State’s Proposed Changes to the East of England Plan were published in December 2006. The introduction to the RSS identifies the key drivers of policy in the East of England. It states that the RSS responds to a number of regional policy drivers by taking account of a number of factors. In particular it takes ‘account of the 2003 Aviation White Paper, notably the implications of continuing expansion at Stansted and Luton airports’ (Proposed paragraph 1.14). With regard to Policy E2 (now E1) the Secretary of State proposed to increase further the target, from 440,000 to 452,000 jobs. 3.3.23 For the purposes of the employment target, a different grouping of local authority districts is proposed with Stansted falling in the area of Central and North Essex. This area comprises the local authority areas of Uttlesford, Harlow, Braintree, Chelmsford and Maldon. A jobs target of growth of 42,000 is forecast for this area which includes ‘about 11,000 more [jobs] to reflect extra job growth at Stansted Airport (direct jobs) up to 2021 in consequence of moving beyond full use of the existing runway once a second is built’ and ‘about 10,000 more [jobs] at Harlow to reflect regeneration needs there and the potential to attract some indirect Stansted-related job growth.’ (Annex A, paragraph 13, second bullet point) 3.3.24 The Secretary of State also suggests that the following text is inserted into the RSS ‘The ATWP recognises the important role that Stansted and Luton Airports play in the provision of airport capacity in the South East. New capacity at both airports is supported with the first priority to make maximum use of the current facilities… Airport growth will provide a useful catalyst for economic regeneration of nearby towns, notably Harlow….The sum of housing allocations for Harlow, East Herts and Uttlesford Districts should be sufficient for both airport-related and all other housing needs.’ (Proposed paragraphs 4.32 to 4.36).
13 East of England Plan, December 2004, Examination in Public. Report of the Panel. Volume 1. June 2006. 14 Secretary of State’s Proposed Changes to the Draft Revision to the Regional Spatial Strategy for the East of England and Statement of Reasons, December 2006. | 9
Section 3 Policy context
3.3.25 The Secretary of State’s Proposed Changes to the East of England Plan states ‘..At Stansted Airport development for operational and directly associated airport employment will be located at the Airport itself, and land within the airports’ boundaries will be safeguarded for that purpose only. Employment development not directly related to the Airports operation should be located at Harlow and nearby towns identified in local development documents in accordance with the general RSS spatial strategy…’ (Policy E8) 3.3.26 The development of the G2 Airport Project is not only consistent with the RSS, but the RSS relies on the G2 Airport Project to contribute towards its employment targets. Expansion at Stansted is also considered particularly important to the regeneration of Harlow. Secretary of State’s Further Proposed Changes to the East of England Plan (October 07) 15 3.3.27 In October 2007 the Secretary of State published further Proposed Changes to the East of England Plan. These do not affect the policies which are referred to in this volume. 3.4 Local policies
Uttlesford Local Plan (2005) 16 3.4.1 The relevance of the Uttlesford Local Plan to the G2 Airport Project is discussed in the Planning Statement. However, in terms of the location of airport related activity, Policy S4 of the Uttlesford Local Plan (adopted 2005) states that: ‘The boundary of Stansted Airport is defined on the Proposals Map. Provision is made for development directly related to or associated with Stansted Airport to be located within the boundaries of the airport. Industrial and commercial development unrelated to the airport will not be permitted on the site’ and paragraph 16.3 states ‘The zones ensure that all airport direct and associated uses can be accommodated within the airport boundary.’ (paragraph 16.3).
15 The Secretary of State’s Proposed Changes and Further Proposed Changes to the Draft Revision to the Regional Spatial Strategy for the East of England, October 2007. 16 Uttlesford Local Plan Adopted January 2005, Uttlesford District Council. 10 |
Section 4 Consultation
4 Consultation
4.1.1 Although BAA and its consultants understood well the environmental issues relating to the G2 Project, an ES Scoping Paper was prepared that set out information about the proposed G2 development, the topics to be included in the assessment and the methodology for assessing these topics. The approach to preparing that Scoping Paper was guided by the requirements of the EIA Regulations.17 The Scoping Paper was circulated on an informal basis to Stakeholders and follow-up meetings were held between the environmental specialists responsible for undertaking this assessment and various statutory and non-statutory consultees. The Scoping Paper is included as an appendix to Volume 1 (Appendix 14). 18 4.1.2 A Scoping Paper was issued in April 2007 which set out the scope of the proposed assessment of the likely significant employment effects of the G2 Airport Project during its construction and operation 4.1.3 The potential construction employment effects were identified as: • employment and income opportunities for people in the East of England and Greater London; • the potential requirement for labour from outside the assessment area; and • the potential impact on local services of people moving into the area. 4.1.4 The potential operational employment effects were identified as: • employment and income opportunities for people in the assessment area which is defined in section 6.2 of this report; • employment and income lost on land required for airport development. • the effect on the labour market within the operational assessment area; • the effect on the labour market outside the operational assessment area; and • the effect on the assessment area on housing requirements in terms of whether additional housing would be required. 4.1.5 For both the construction and operational assessments, the approach to the assessment was set out with four main stages: • definition of the assessment area; • estimating the G2 Airport Project employment requirement during construction and operation; • estimating future labour supply in the assessment areas; and • estimating future labour demand in the assessment areas. 4.1.6 A meeting was held in September 2007 to discuss the employment and community aspects of the Scoping Paper with representatives from Uttlesford District Council (UDC), East Herts District Council (EHDC), Essex County Council (ECC), Hertfordshire County Council (HCC) and EEDA. 4.1.7 An overview of the approach to the assessment of employment effects was presented. The main points and questions raised by stakeholders at the meeting were: 1. The implications for the construction assessment in terms of the supply of labour of other major construction projects and the house building programme in the East of England. 2. The use of the 2002/3 employment survey for forecasting the future location of employees, given the age of the survey and the lack of more recent data. 3. An assertion that induced employment should not be included as a component of Stansted related employment. 4. An assertion that the analysis should show the employment impacts on the region with and without G2. 5. What productivity assumptions are to be used and will Stansted still be the same type of Airport? 6. An assertion that there should be a strategy for sourcing labour. 4.1.8 The response to these points is provided below: 1. Point 1 is accepted and covered in section 5.5 of this volume. 2. Point 2 is acknowledged and an employment survey will be undertaken in 2008.
17 The Town and Country Planning (Environmental Impact Assessment) (England and Wales) Regulations 1999 SI 1999 No. 293 (as amended). 18 Volume 1, Appendix 14 Environmental Scoping, Tables 17 and 18, G2 Environmental Scoping Paper, BAA, April 2007. | 11
Section 4 Consultation
3. It is standard practice to include estimates of induced employment and the Stakeholders have previously accepted inclusion of induced employment in previous Stansted ESs in 2001 and 2006. Point 3 is therefore not accepted. 4. This volume only addresses the employment effects on the local labour market as this is the area in which the majority of the employment effects of the G2 Airport Development would be felt. Point 4 is therefore not accepted. 5. Point 5 is accepted and is addressed in section 8.2 of this volume 6. Point 6 is accepted and addressed in section 11.4 of this volume in terms of operational employment. The construction labour strategy is set out in section 5.10. 4.1.9 In addition to the meeting with stakeholders, a number of other consultations have been held during the preparation of this volume. The consultations related to the analysis of demographics and labour supply and details are provided in Appendix 1 Details of other consultations.
12 |
Section 5 Construction employment assessment
5 Construction employment assessment 5.1 Introduction
5.1.1 The assessment of the likely significant employment effects of the construction of the G2 Airport Project is presented in this section. As stated in the CM (Volume 1, Appendix 2), the construction of the G2 Airport Project would take place in phases starting in 2011 with the development physically completed in 2030. Phase 1, which is described in paragraph 1.2.3 of the CM, is the largest of the phases and will extend from 2011 to 2015. It is the phase when the level of construction activity and employment requirements would be at their greatest. Section 5.1 of the CM identifies that the logistics for later phases are not presented as the timing of the works will be dependent on the growth of the Airport and passenger demand for additional services. Due to the absence of major earthworks, later phases are not expected to require site-wide logistics and planning to the extent of phase 1. Phase 1 is accordingly the phase assessed in this assessment. This section also has regard to the Code of Construction Practice (CoCP) which details the environmental management and other measures that will be applied during the construction of the G2 Airport Project. 5.1.2 Phase 1 of the G2 Airport Project would increase the capacity of the Airport by about 10 mppa in 2015 to 45 mppa. Phase 1 would include the new runway and associated airfield infrastructure and the terminal building which although built to handle 15 mppa would only be fitted out for 10 mppa in 2015. Phase 1 is scheduled to cover the period 2011 to 2015. 5.1.3 Phases 2 to 4 would each add a further 5 mppa of capacity and are scheduled to be completed by 2017, 2021 and 2024 respectively. Phase 5 would add 8 mppa to the capacity of the Airport and is scheduled to be completed by 2030. 5.2 Approach
5.2.1 The construction assessment examines the effects of the G2 Airport Project during phase 1. The approach to the employment assessment has been to: • define the area for the assessment (section 5.3); • review the recent economic performance of the assessment area with particular focus on construction activity and consider future forecasts of employment in the assessment area (sections 5.4 and 5.5); • estimate the employment requirements for construction of the G2 Airport Project during phase 1 (section 5.6); • assess the likely significant effects of construction of the G2 Airport Project on employment in the assessment area (section 5.7); and • consider measures to reduce, offset or enhance, if necessary (sections 5.8 to 5.10). 5.2.2 Each of these steps is considered in detail in this section and the specific methodology is described at the appropriate step. 5.2.3 There are no recognised significance criteria against which direct and indirect employment effects for both the construction and operational stages of a proposed development can be assessed. This was recognised in Glasson where it is stated that there are ‘...no easily applicable ‘state of local society’ standards against which the predicted impacts of a development can be assessed’.19 A review of other Environmental Statements for large transport projects (eg Crossrail, Thameslink) found that there were no definitions of criteria for assessing significant impacts. The socio-economic assessment of Crossrail20 finds ‘There are no statutory definition of what constitutes a significant impact. For the purposes of this report, a significant impact has been defined as an impact which, either in isolation or combinations of others, should (in the opinion of the Crossrail EIA team) be taken into account in the decision making process. This definition is consistent with what has been adopted for EIAs of other major rail schemes in the UK’ (3.2.22) 21 5.2.4 The socio-economic assessment of Thameslink found that:
19 Glasson J (2001) Methods of Environmental Impact Assessment page 38 ‘Socio-Economic Impacts 1: Overview and Economic Impact’. 20 ‘Crossrail: Socio-Economic Technical Report’ Colin Buchanan and Partners, February 2005. 21 ‘Thameslink 2000 EIA: Socio-Economics Specialist Report’ Temple Environmental Consultants Ltd, February 2004. | 13
Section 5 Construction employment assessment
‘The determination of significance is essentially a qualitative exercise taking account of the following criteria. • Magnitude of change: this entails consideration of the absolute number of people of businesses affected and the size of area in which effects are experience. • Scale of the effect: this entails consideration of the relative magnitude of each effect in its relevant community and/or market context (for example, the effects on local employment are considered in the context of the overall size and characteristics of the local labour market). • Duration of change: more weight is given to long-term, permanent changes than to short-term temporary effects. • Scope for adjustment or mitigation: the socio-economic study is concerned in part with markets. Markets adjust themselves continually to changes in supply and demand and the scope for the change brought about by the project to be accommodated by market adjustments is therefore a criterion in assessing significance. In general, significance effects are those that are considered to be of relevance to the decision-making process’ (paragraph 2.3.8). 5.2.5 To ensure the assessment of effects is undertaken in a meaningful and structured manner the criteria in Table 2 were developed and used in assessing the likely employment effects of the construction of the G2 Airport Project. These criteria are also be used for the assessment of the employment effects of the operation of the G2 Airport Development (sections 6-11). 5.2.6 The approach to the development of the criteria adopts Policy E1 (paragraph 3.3.22) in the RSS which sets a jobs target for the East of England region of creating 452,000 jobs between 2001 and 2021. On this basis, three criteria have been developed and are shown in Table 2. A beneficial effect arises if the G2 Airport Project leads to a net increase in employment at the assessment area level. An adverse effect gives rise to a net reduction in employment in the assessment area. The scale of the effect is described further in the text of the assessment.
Table 2: Construction effects assessment criteria Criteria Description Adverse The effect of the G2 Airport Project is a net reduction in employment in the East of England and Greater London Negligible The effect of the G2 Airport Project on employment is no change in the East of England and Greater London Beneficial The effect of the G2 Airport Project is a net increase in employment in the East of England and Greater London
5.3 Definition of the assessment area
5.3.1 In defining the area from which the labour force is likely to be drawn, it is recognised that the relatively short duration of most construction projects means that construction workers often travel longer distances to work than workers in other industries who attend the same workplace on a daily basis.22 It is expected that the construction workforce for the G2 Airport Project would be drawn from a wider area than the workforce required for the operation of the Airport. 5.3.2 The assessment area for the analysis of the employment effects of the construction of the G2 Airport Project has been defined as the East of England and London regions as construction sites in the East of England and London draw on a similar pool of construction workers.23 This construction employment assessment area is different from the operational employment assessment area which is defined in section 6.2. Figure 2 shows the location of Stansted Airport and the assessment area of the East of England and London.
22 Census of Population data for 2001 show that across the East of England as a whole, 15% of people travel more than 20km to work (excluding people working from home) while 26% of people travelling to work in construction in the East of England travel more than 20km. 23 ‘Workforce Mobility and Skills in the UK Construction Sector, East of England Report’, March 2005. 14 |
N >
East of England
Job Title Stansted Generation 2
Drawing Title Greater Construction London Employment Assessment Area
Drawing Number Revision
Scale
Date Drawn 8 Nov 2008
Checked Approved
Figure 2 Section 5 Construction employment assessment
5.4 Construction employment assessment area: baseline Introduction 5.4.1 This section provides a review of the recent economic performance of the construction assessment area. It draws on official economic statistics eg data published by the Office for National Statistics (ONS). Some economic data are published on a monthly basis and some on an annual basis. The latest data available (September 2007) have been used with the exception of gross value added (GVA) and employment data for 2006 which were published in December 2007. Economic performance 5.4.2 The East of England region is one of the fastest growing regions in the UK in terms of population growth with growth of over 15% between 1981 and 2006 which is double the growth for the UK as a whole.24 The only other region with faster population growth was the south-west with growth of almost 17% between 1981 and 2006. In 2006 the East of England had a population of 5.6 million and accounted for over 9% of the UK population. The East of England is closely integrated with London which, in 2006, had a population of 7.5 million, and accounted for 13% of the UK population. 5.4.3 The East of England and London together with the south-east region play an important role in the UK economy and account for 42% of UK gross value added (GVA). These are the only regions with GVA per head above the UK average. The East of England accounts for 10% of UK GVA while London accounts for 17%. A summary of the results for the East of England and London are shown in Table 3.
Table 3: Gross Value Added by region, 200625 Region Gross Value Added, £million GVA per Head, £ East of England 109,884 19,599 London 196,764 26,192 UK 1,154,959 19,063
5.4.4 In the assessment area of the East of England and London almost 6.4 million people were employed in 2006 which is 24% of total GB employment. The employment structure of the East of England is very similar to GB as a whole, while London has a higher proportion of employment in the service sector and a lower proportion of employment in manufacturing. This employment structure reflects London’s role as a capital city and leading financial and business centre. A summary of employment by broad industrial group is shown in Table 4.
Table 4: Employment by industry and region, 200626 East of England London GB No. (000s) % No. (000s) % No. (000s) % Primary 39.1 1.6 13.0 0.3 384.7 1.4 Manufacturing 260.6 11.0 190.8 4.8 2,863.4 10.9 Construction 126.5 5.3 117.2 2.9 1,257.2 4.8 Services 1,952.5 82.1 3,675.6 92.0 21,815.3 82.9 Total 2,378.7 100.0 3,996.6 100.0 26,320.6 100.0
5.4.5 The construction industry is one of the UK’s largest industries and in 2006 in the East of England employed almost 127,000 people. This represents just over 5% of total employment in the region which is a slightly higher proportion of employment in this industry relative to GB as a whole. Employment in the construction industry in London is at a slightly lower level to the East of England, with the proportion of people employed in construction in London below both the GB and East of England average in 2006.
24 Mid-year population estimates, ONS Crown Copyright (from NOMIS). 25 Regional GVA, December 2007, ONS Crown Copyright. 26 Annual Business Inquiry ONS Crown Copyright (from NOMIS). 16 |
Section 5 Construction employment assessment
5.4.6 Within the assessment area, the number of employees in employment in the construction industry has increased by over 6% between 1998 and 2006 to 244,000 in 2006. This comprises an increase of 30,000 (32%) in the East of England and a reduction of almost 17,000 (-13%) in London. 5.4.7 Table 5 shows the number of people employed within each sub-division of the construction industry in 2006. The largest sub-division is the civil engineering and building construction division. In the East of England and London, this division accounts for between 55% and 58% of construction employees. This sub-sector covers people employed in general construction and civil engineering works; construction of highways, roads, airfields, sports facilities and water projects; and other construction work involving special trades. Within the assessment area, general construction and civil engineering works is the largest component of this sub- sector accounting for over 54,200 employees (75% of the sub-sector) in the East of England and 48,900 employees (77% of the sub-sector) in London.27
Table 5: Construction employment by sub-division (000s), 200628 East of England London GB No. % No. % No. % Site Preparation 1.8 1.5 2.1 1.8 19.2 1.5 Civil Engineering, Building Construction 72.7 57.5 63.9 54.5 676.3 53.8 Building Installation 31.6 25.3 32.9 28.1 346.6 27.6 Building Completion 19.0 15.0 17.3 14.8 196.0 15.6 Renting of Construction/Demolition Equip. 1.5 1.2 1.0 0.9 19.1 1.5 Total Construction 126.5 100.0 117.2 100.0 1,257.2 100.0
5.4.8 The data referred to above relate to employees in employment only ie people employed by a company. However, the construction industry is characterised by relatively large numbers of people who are self employed. Data on the total number of people who are self-employed are available from the Annual Population Survey. Including the self-employed, the total number of people employed in the construction industry in 2006 was 464,300 in the assessment area (237,200 in the East of England and 227,100 in London). Data limitations do not allow analysis of self-employment data by industry sub-division, but total employment (ie including self-employed) can be analysed by occupation using the nine industry groups. This is shown in Table 6.
Table 6: Construction employment by occupation (000s)29 East of England London No. % No. % 1. Managers and officials 30.9 13.0 27.5 12.1 2. Professional occupations 14.2 6.0 16.2 7.1 3. Associate, professional and 10.7 4.5 8.0 3.5 technical 18.0 7.6 17.0 7.5 4. Administrative and secretarial 124.4 52.4 121.2 53.4 5. Skilled trades - - 0.8 0.4 6. Personal service 1.2 0.5 2.0 0.9 7. Sales and customer service 15.3 6.5 15.3 6.7 8. Process, plant and machinery 22.5 9.5 19.1 8.4 operatives 9. Elementary occupations Total construction 237.2 100.0 227.1 100.0
27 Analysis of Annual Business Inquiry data. 28 Annual Business Inquiry ONS Crown Copyright (from NOMIS). 29 Annual Population Survey ONS Crown Copyright (from NOMIS). | 17
Section 5 Construction employment assessment
5.4.9 The majority of people employed in the construction industry in the East of England and London have skilled trades, but Table 6 shows that the industry employs people across most occupational groups. There are over 22,000 people with elementary occupations in the East of England and over 19,000 with elementary occupations in London. Employees with elementary occupations are relatively unskilled people working in construction who could take up labouring or who could participate in training to increase their skill levels. 5.5 Construction employment assessment area: base case
Introduction 5.5.1 The purpose of this section is: • to provide forecasts of future employment demand in construction in the assessment area; and • to describe the other major infrastructure projects which are scheduled to be under construction in the assessment area at the same time as the G2 Airport Project and likely to be competing for construction labour. 5.5.2 The forecasts of future employment in the construction employment assessment area have been obtained from economic models which cover the East of England and London. Economic forecasting is not an exact science and a number of regional models exist. This section uses the information available from the Oxford Economics’ (OE) and the Cambridge Econometrics’ (CE) models which are well-established, reputable forecasting organisations. The use of the two models provides a range for the forecasts of employment. 5.5.3 The sector skills council for the construction industry (ConstructionSkills) also produces forecasts of employment demand and the expected number of training places required to meet this demand. These forecasts have also been taken into account. 5.5.4 The description of other major infrastructure projects in the East of England and London has been assembled from published information and discussions with the relevant project teams. Future labour demand 5.5.5 The industry works closely with the sector skills council and the Construction Skills Network (CSN) produces labour market information to provide a foundation on which to plan for future skills needs. The CSN provides national and regional forecasts of employment requirements within the industry for a range of trades and considers both the demand and supply of workers. It forecasts total employment levels from expectations about construction output and productivity. It forecasts supply by taking account of movements into and out of construction employment. The difference between demand and supply provides an indication of the number of new employees that need to be recruited into construction each year in order to realise forecast output. 30 5.5.6 The CSN provides relatively short-term forecasts for the construction industry. The latest data cover the period 2007 to 2011 and forecast annual average growth in output across the UK of approximately 2.6% per annum. Three regions of the UK are forecast to have above average annual growth in output: • Greater London where growth in output of 4.5% per annum is forecast. This reflects the continuation of strong growth in the housing and commercial sectors and recovery in the infrastructure sector. The forecast assumes that Crossrail is delayed beyond the period of the forecast to 2012, but if Crossrail were to start earlier, infrastructure output in the latter years of the forecast period would be higher. • East of England where growth in output of 3.5% per annum is forecast. The sectors with the highest average annual growth rates include infrastructure and public housing. One of the infrastructure projects boosting output is the proposed extension to the port of Felixstowe. The G2 Airport Project is not identified as part of the forecast output over the period to 2011 as it would not start until 2011. • South-east where growth in output of 3.2% per annum is forecast. Strong public and private housing growth, particularly in the Thames Gateway, is contributing to this growth. 5.5.7 In the period to 2011, construction growth is forecast to be strong in the assessment area. The number of people forecast to be employed in construction in 2011 is shown in Table 7. Growth in employment in the East of England and Greater London is approximately 35,000 in each region over 2007 to 2011.
30 ‘2007-2011 Construction Skills Network: Labour Market Intelligence – Greater London and the East of England’, CSN, Experian and Construction Skills. 18 |
Section 5 Construction employment assessment
Table 7: Forecasts of construction employment31 Employment (000s) Change, 2007-2011 2007 2011 No. % East of England 241.7 277.0 35.3 14.6 Greater London 259.2 294.7 35.5 13.7 Total assessment area 500.9 571.7 70.8 14.1
5.5.8 To meet the forecast demand for construction workers in each of the regions in the assessment area, it is estimated that the following additional workers will be required each year over the 2007-2011 period: • East of England: 9,600 workers per annum; and • Greater London: 10,000 workers per annum. 5.5.9 If the ConstructionSkills forecasts materialise, the number of construction workers in the assessment area in 2011 is forecast to be 572,000 with 277,000 in the East of England and almost 295,000 in Greater London. This would provide a pool of over 570,000 construction workers from which the G2 Airport Project could recruit. Even without the ConstructionSkills forecasts, there are over 464,000 (Table 6) construction workers in the construction employment assessment area at present which would form a pool from which the G2 Airport Project could draw its labour requirements. 5.5.10 Using OE and CE regional economic model outputs, employment demand in the construction sector is forecast to continue growing in the East of England and London between 2011 and 2015. This is shown in Table 8.
Table 8: Construction employment growth, 2011 to 201532 Cambridge Econometrics Oxford Economics No. (000s) No. (000s) East of England +12.3 +16.6 Greater London +12.3 +9.2 Total assessment area +24.6 +25.8
5.5.11 Strong growth in demand for construction employment is forecast in the period to 2011 and this is forecast to continue in the period between 2011 and 2015. Growth in demand of between 12,000 and 17,000 is forecast for the East of England and growth of between 9,000 and 12,000 is forecast for London. By 2015, the total number of people employed in the construction sector in the assessment area is forecast to be around 597,000. Other major infrastructure projects (cumulative effects) 5.5.12 There are a number of major infrastructure projects in the East of England and London which are likely to be underway during phase 1 of the construction of the G2 Airport Project. These major projects are: • Thameslink (underway); • Olympics (underway); • East London Line Extension (phase 1 underway, phase 2 not committed); • Crossrail (waiting parliamentary approval); and • Shellhaven. 5.5.13 These projects may compete for construction labour with the G2 Airport Project and therefore it is important to consider the cumulative effects they may have on construction employment demand. 5.5.14 Consideration has also been given to other local construction projects (paragraphs 5.5.38 to 5.5.43).
31 ‘2007-2011 Construction Skills Network: Labour Market Intelligence – East of England, Greater London, South East’ Construction Skills Network, Experian, Construction Skills. 32 ‘Regional Economic Prospects’ Cambridge Econometrics, July 2007, Oxford Economics Regional Model, March 2007. | 19
Section 5 Construction employment assessment
Thameslink 5.5.15 Thameslink is a confirmed £5.5 billion project to expand the Thameslink rail network in southern England by increasing passenger capacity north-south to and through London. The project would include new stations at London Bridge and Blackfriars and platform extensions at 50 stations outside central London. Thameslink would be constructed in phases with the work covering the period 2007 to 2015. Components of the work are: • platform lengthening in the period 2007 to 2010; • major works at Blackfriars (new station) and Farringdon (platform extension and station redesign) over 2009 to 2011; and • major works at London Bridge (new station and track layout) to start after the Olympics in 2012 and be completed by 2015. 33 5.5.16 The construction of Thameslink is expected to require 11,500 person-years of employment. The ES assumes this is spread over a five year construction period which yields an average demand for construction employment of 2,300.34 The Thameslink ES considered this level of employment to be a ‘significant benefit: the demand would be spread over a wide labour market catchment area and thus is unlikely to result in any adverse effects such as local labour shortages of particular skills’ (Paragraph 5.4.1). 5.5.17 A component of Thameslink which is likely to coincide with the G2 Airport Project is the major works at London Bridge which are scheduled to start after 2012 and be completed by 2015. This element will be competing for construction labour and the new station is likely to require similar skills to those needed for the construction of the new terminal building at Stansted Airport. The skills required for the track work are also likely to be similar to those needed for the G2 rail improvements, although the scale of the G2 rail works is fairly modest by comparison. Olympics 5.5.18 The Olympic Delivery Authority (ODA) is the public body charged with delivering the venues and infrastructure for the Games and long term use after 2012. The focus of the Games would be the Olympic Park in east London which will house the new sport venues. The Park is located in the Lower Lea Valley and after the Games the area would be transformed into the largest urban park created in Europe for 150 years. 5.5.19 Building the Olympic Park is a major engineering and construction project which is scheduled to begin in summer 2008. Over 2007 to 2008 there is a substantial amount of site preparatory work being undertaken including demolition and clearance, the provision of temporary roads and bridges and other utilities. 5.5.20 Additionally, transport links will be upgraded. An extension to the Docklands Light Railway, increased capacity on the Jubilee Line and an upgrade to Stratford Regional Station are all planned for 2007 to 2008. 5.5.21 Over the four year period from 2008 to 2012, five permanent and three temporary venues will be constructed as well as the Olympic Village, and the International Broadcast Centre/Main Press Centre (IBC/MPC) in Hackney. After the Games, in 2013, the planned conversions should take place: the IBC/MPC and Olympic Village converted to residential use and the sports venues adapted for continuing use. 5.5.22 The anticipated total construction personnel demand is just over 18,100 person-years of employment. The majority of the Olympic Park development will occur in advance of the construction of the G2 Airport Project with peak labour requirements in 2010. This is shown in Table 9. 5.5.23 The Olympics project will demand skilled, unskilled, management and professional workers (including architects and engineers). The requirement will fluctuate between 2007 and 2011 at around 2,500 to 3,300 with the exception of the peak in 2010 at almost 5,400. Table 9 also shows the phasing of the components of the project with the infrastructure and utilities aspect having the greatest demand for labour in 2008 and 2009 while the construction of the venues and the IBC/MPC peaks in 2010. The transport enhancements have a relatively steady labour demand over the whole construction period.
33 ‘Thameslink 2000 Environmental Statement: Main Report – Outer Area’, June 2004, Temple Environmental Consultants Ltd. 34 This assessment assumes that this occurs over 2011 to 2015.
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Section 5 Construction employment assessment
Table 9: Estimates of construction personnel for Olympic Games35 Annual person-years of employment 2006 2007 2008 2009 2010 2011 2012 Site preparation 366 982 835 185 21 11 0 Infrastructure/utilities 298 664 1,246 1,094 609 178 0 Transport 90 684 658 712 764 530 0 Landscaping 47 132 183 177 379 368 65 Venues 39 144 370 963 2,306 784 23 IBC/MPC 0 6 8 242 1,312 371 64 Deconstruction 0 0 0 8 8 128 64 Total 839 2,612 3,300 3,379 5,397 2,368 215 Note: Columns do not sum exactly
5.5.24 The infrastructure and utilities element would have similar skills requirements to those required for the construction of the proposed runway in terms of general civil engineering skills. However, the majority of this component of the Olympics project should be completed by the end of 2009/10. As a result, workers from the transport and utilities component of the Olympics project would not be able to move directly from the Olympics to the G2 Airport Project. The requirement for this type of labour for the G2 Airport Project would not be until 2011/12. The Olympics is a major construction project which has a substantial employment requirement. However, the nature of this project is such that there cannot be slippage in the programme beyond 2012 which provides a degree of certainty that the people employed on this project would be available for other projects beyond 2012. East London Line Extension 5.5.25 The existing East London line, an overground rail service, closed in December 2007 for a major upgrade and extension. The following works will be required to deliver phase 1 of the enhanced service and are scheduled to be completed in 2010: • in south London the line will be extended to New Cross, Crystal Palace and West Croydon; • in north London the East London line will connect with the North London line at Dalston Junction and the London Underground at Highbury and Islington which will permit travel around London without going into the city centre; • in east London four new stations will be built; and • new track and signalling equipment will be installed. 5.5.26 Demand for construction personnel was expected to increase in October 2007 to over 600 people. During 2008 demand is expected to be in the range of 1,000 to 1,200 before dropping to around 400 people in 2009. 5.5.27 The profile of the construction personnel is split fairly equally between skilled, unskilled and trades people. The East London line project has contractual requirements to ensure that the diverse communities of east London have the maximum possible opportunity to access work and business through the project. The project has, for instance, links with the Tower Hamlets’ Skillsmatch Construct Your Future course and the Women into Work initiative of ConstructionSkills. 5.5.28 The plans for phase 2 include an extension serving south London between Clapham Junction and Surrey Quays. The proposed timing for phase 2 follows the London 2012 Olympics and Paralympics, but funding is not in place for phase 2 and no information on its employment requirements is available. 5.5.29 Phase 1 of the East London Line Extension should be completed in advance of the G2 Airport Project and should not be competing for labour at the same time. It is possible however, that the training programmes undertaken as part of phase 1 could positively affect the G2 Airport Project. Should phase 2 of the project proceed, it would coincide with the G2 Airport Project.
35 Olympic, Paralympics and Legacy Transformation Planning Application, Table 9.14 Volume 12C – Environmental Statement Part 3, ODA February 2007. | 21
Section 5 Construction employment assessment
Crossrail 5.5.30 Subject to Parliamentary approval, Crossrail will involve the construction of new rail tunnels running east- west through central London connecting directly with existing surface rail routes to Maidenhead and Heathrow in the west and Shenfield and Abbey Wood in the east. By connecting the major London rail terminals of Paddington and Liverpool Street, Crossrail would enable interconnecting mainline train services to cross the centre of London via a number of new purpose-built stations. 5.5.31 If Royal Assent is received by summer 2008, it is expected that full construction would be under-way from 2010 with services commencing in 2017. Construction would take about eight years with the main construction phase taking approximately six years. The construction period is likely to be from the end of 2008 to early 2017. 36 5.5.32 The implementation and staging paper identifies that following site preparation (approximately half a year), and enabling works from the end of 2008 to the end of 2010, the main excavation and civil construction works would take around three and a half years for the principal stations. This would be followed by the installation of equipment, services and systems. 5.5.33 It is estimated that 87,000 person-years of employment would be generated during the construction of Crossrail which is equivalent to 8,700 permanent jobs.37 Employment is forecast to peak in year 3 at around 15,000 person-years and is expected to remain in excess of 10,000 person-years for a five year period (years 2 to 6). It is anticipated that this would be approximately 2010 to 2014. 5.5.34 Figure 3 shows the forecast distribution of Crossrail construction employment by year and main activity. Assuming that Year 1 is 2009, the work undertaken in year 3 (2011) through to year 7 (2015) would coincide with the G2 Airport Project. The main components of the Crossrail project underway at that time are the central stations and the surface work in the east and west.
Figure 3: Crossrail construction employment by year38
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
- 2009 2010 2011 2012 2013 2014 2015 2016
Tunnels Central Stations Systems Surface West Surface East Indirect
5.5.35 If this project proceeds in the timescale outlined above, it would generate a substantial demand for labour at the same time as the G2 Airport Project. Cross London Rail Links has already built relationships with many of the Institutes and Sector Skills Organisations, e. g. Construction Skills Network, CIC-Built Environment and the National Skills Academy. Contractors would be encouraged to consider the use of local labour, however, given the specialist labour required it is anticipated that some of the jobs would be filled from the wider UK or international labour market. Shellhaven 5.5.36 In May 2007 final approval was given to the proposed £1.5 billion London Gateway Port at Shellhaven. When fully developed the port would comprise up to seven container vessel berths and a roll-on roll-off
36 Crossrail Information Paper ‘D15 – Implementation and Staging Information Paper’ 09/12/2005. 37 Crossrail Information Paper ‘D16 – Use of Local Labour Information Paper’, 09/12/05. 38 Figure 7.1 Crossrail: Socio-Economic Technical Report. Colin Buchanan and Partners, Year 1 is assumed to be 2009. 22 |
Section 5 Construction employment assessment
facility along the 2.7km of quayside on the site of the former Shell oil refinery. In addition to the port development there would be a logistics and business park. 5.5.37 It is anticipated that the first container berth would be completed during 2008. The development is expected to be completed in phases to meet market demand over the next 10 to 15 years. Construction employment of almost 6,00039 person-years is estimated. Given the phased development, it is not expected to generate a major demand for labour over the period of the G2 Airport Project. Other local construction projects 5.5.38 In addition to the major transport projects and the Olympics discussed above, there will also be a number of smaller construction projects which are local to Stansted during the period of the construction of the G2 Airport Project. These include: • Port of Felixstowe (awaiting rail link inquiry decision); • Bathside Bay Container Terminal; and • Other construction activity. Felixstowe South Port Reconfiguration 5.5.39 In February 2006, planning permission was granted for the redevelopment of the southern end of the Port of Felixstowe into a new deep-water container terminal. The project would increase the quay length available for container handling by close to 1,000 metres. Together with the expansion of the Port’s Trinity Terminal, total capacity at the Port would be increased by nearly 50%. The Port’s owner needs to enter into binding legal agreements for remote rail works to the rail network as far afield as Yorkshire before construction can commence on the Felixstowe South Reconfiguration. A public inquiry into the proposals to upgrade the Felixstowe branch line serving the Port was held in March 2007 and a decision on the outcome of the Inquiry is expected shortly. 5.5.40 Documents supporting the planning application estimated that 1,900 person-years of employment would be created by the Felixstowe South Reconfiguration over a three year period. It is understood that the contract for the Port will be let in the first quarter of 2008 and that some of the skills will be sourced from outside the UK eg most dredging contractors are based in Holland. The estimate of 1,900 person-years of employment is equivalent to approximately 630 construction workers employed during each year of the project which is a relatively modest construction employment requirement. Assuming a positive decision from the rail link inquiry, this project should be complete in advance of the G2 Airport Project. Bathside Bay Container Terminal 5.5.41 At the end of 2005 the Secretary of State for Transport and the Deputy Prime Minister issued ‘minded to approve’ letters in respect of the £300 million container terminal scheme at Bathside Bay, Harwich. The scheme involves almost doubling the total quay length to 3,000 metres, and enabling the Port to handle up to four deep-sea container vessels simultaneously. 40 5.5.42 Construction employment of 1,900 person-years is expected over the construction period which is not expected to create a large demand for labour in the assessment area. Other construction activity 5.5.43 There will also be construction activity in the housing and commercial sectors. The East of England Plan provides for an additional 508,000 dwellings across the region between 2001 and 2021. Within the four districts of Uttlesford, East Herts, Harlow and Braintree it is estimated that approximately 9,500 dwellings (2,375 per annum) would be constructed over the period 2011 to 201541 which would also place demands on the construction workforce. Many of the skills required for the runway and infrastructure works would be different to those required for house-building, but there would be an overlap with the construction and fit-out of the terminal building.
39 London Gateway Inquiry: Inspectors Report. Volume 2, Para 5.1.1. 40 Bathside Bay Container Terminal. Proof of Evidence of David Cochrane, Roger Tym and Partners, Para 5.3. 41 Of the 9,500 in Uttlesford, East Herts, Braintree and Harlow it is estimated that approximately 5,600 dwellings would be delivered (2011 to 2015) at Bishops Stortford and Harlow (1,400 dwellings per annum); the latter including urban extensions into East Herts and Epping Forest. The quantum of new dwellings being delivered in this period will be influenced by the timing of LDFs and LDDs being adopted. | 23
Section 5 Construction employment assessment
Cumulative employment in the construction industry 5.5.44 The construction industry in the assessment area has experienced considerable growth in recent years and this is forecast to continue over the period to 2015. 5.5.45 Table 10 provides a summary of the total demand for labour arising from the major projects expected to be underway in the assessment area over 2011 to 2015. Crossrail has the largest employment demand which is expected to arise in the early years of the G2 Airport Project. Phase 2 of the East London Line has not been included in the table as funding is not yet committed and the employment requirements are not known.
Table 10: Demand for construction employment from other major projects Project 2011 2012 2013 2014 2015 Thameslink 2,200 2,200 2,200 2,200 2,200 Olympics 2,400 200 - - - Crossrail 15,800 15,000 13,200 10,600 4,200 Shellhaven 600 600 600 600 600 Total 21,000 18,000 16,000 13,400 7,000
5.5.46 In 2006 there were over 464,000 people employed in the construction industry in the assessment area. The demand for employment from these major projects is forecast to be 21,000 in 2011 which would represent 5% of this employment in 2006. If the ConstructionSkills forecasts materialise, the number of construction workers in 2011 is forecast to be 572,000. This is an increase of 22% from the 2006 levels and the requirement of 21,000 from the major projects in Table 10 would account for just under 4% of this total. 5.5.47 The analysis shows that there will be an increased demand for construction labour in 2011 and over the period to 2015, but that the demand from the other major projects represents a small proportion of industry employment in the assessment area. 5.6 G2 Airport Project construction employment Introduction 5.6.1 This section provides an estimate of the likely employment required during the construction of the G2 Airport Project during phase 1 for the reasons set out in paragraph 5.1.1. 5.6.2 The main elements of phase 1 of the construction of the G2 Airport Project are discussed in detail in Appendix 1 of the CM. These are: • preparatory works, enabling works and site establishment: these activities are required to prepare the G2 Airport Development site to enable the development in a timely manner; • earthworks and landscaping: the majority of earthworks will be completed as part of phase 1; • infrastructure services: this will include Airport water, energy and waste infrastructure; • surface access: a number of surface access improvements including the M11 Junction 8b extension, A120 replacement junction, local roads diversions and stopping up, car parking and other surface access changes within the Airport site; • airfield infrastructure: the second runway, associated taxiways, stands and aprons and other airside infrastructure; and • commercial developments: including a hotel, maintenance, cargo and freight facilities. 5.6.3 Figure 4 in the CM provides details of the phasing for these activities. 5.6.4 Total construction related employment associated with the G2 Airport Project comprises the following three elements: • direct employment defined as the people employed constructing the G2 Airport Project; • indirect employment defined as people employed in firms supplying goods and services to contractors of the G2 Airport Project; and • induced employment defined as the employment supported by the expenditure of the direct and indirect employees.
24 |
Section 5 Construction employment assessment
5.6.5 The methodology and estimates of each of these elements of G2 Airport Project construction employment is considered below Direct employment 5.6.6 Direct employment associated with the G2 Airport Project over the 51 month phase 1 programme has been estimated by BAA and is shown in the CM. The estimate of direct construction employment is compared to total construction employment in the assessment area to determine the scale of the effect. 5.6.7 Section 5.3 of the CM shows the average number of daily workers and the peak levels of employment during phase 1. Employment is forecast to peak at approximately 2,800 operatives and 500 professional staff. This peak in employment numbers is expected between months 30 and 42 of the 51 month construction programme. The distribution of the G2 Airport Project construction workforce over the phase 1 period is shown in Figure 4.
Figure 4: Average daily workforce
5.6.8 Figure 4 shows that for the first six months of the programme total construction employment is less than 1,000. Over the next 21 months employment gradually builds up to approximately 2,000 workers. There is then a sharp increase for a 12 month period when a peak of 3,300 workers is required. After month 42, employment falls steadily for the remaining 9 months. Indirect and induced employment 5.6.9 Indirect employment is employment in firms supplying goods and services to the G2 Airport Project. The extent to which there would be indirect employment in the East of England and London would depend on the ability of the assessment area to supply the goods and services required by the construction team. At this stage in the G2 Airport Project it is not possible to identify the extent to which goods and services would be sourced from the assessment area. Procurement of goods and services would be subject to competitive tendering. It is anticipated that many of the materials and structures required would be manufactured off-site, particularly the components for the terminal building. As a result, indirect employment has been estimated using an employment multiplier which is standard practice, particularly in advance of a project when detailed information on the type of goods and services required and the location of key suppliers is not known. 5.6.10 Induced employment in the East of England and London would be supported by the expenditure of the direct and indirect employees in the area. That is, direct and indirect workers would spend part of their salaries in the East of England and London economies which in turn, supports employment in these areas. Induced employment has been estimated using an employment multiplier. 5.6.11 There are no published multipliers for the East of England and London regions, so use has been made of the published Scottish employment multipliers42 as these are up to date multipliers for a regional economy. The indirect and induced multiplier for construction in Scotland is 1.9 which means that for every 100 people employed directly in construction, a further 90 jobs are supported through indirect or induced activities.
42 ‘Input-Output Tables and Multipliers for Scotland 2003’, Scottish Executive, December 2006. | 25
Section 5 Construction employment assessment
5.6.12 The size of the indirect multiplier is influenced by the type of goods and services required and the capacity of the assessment area to supply these requirements. This in turn is affected by the size of the economy in the assessment area ie as the size of the economy increases, the multiplier would tend to rise. The 2006 Scottish Input-Output study contains the most up to date data on multipliers for a region in the UK for the construction industry and is based on detailed information and analysis. Given that no equivalent data are available for the East of England and London, this assessment adopts the figures from the Scottish input- output tables of 1.9. It is considered that the adoption of 1.9 is a conservative assumption because the economy of the assessment area is larger than the Scottish economy. 43 5.6.13 Multipliers have been used in other studies of the impact of large infrastructure projects in the UK. Thameslink 2000 used a regional multiplier of 1.5; the Channel Tunnel Rail Link used a regional multiplier of 1.4 and Crossrail used a national multiplier of 1.5. The multipliers adopted in these studies are not, however, based on recent research. 5.6.14 Once the indirect and induced employment has been estimated, it is compared to total employment in the assessment area to determine the scale of the effect. The comparison is made to total employment and not just construction employment, as indirect and induced employment would arise across many sectors of the economy and not just construction. 5.6.15 To calculate indirect and induced employment, the multiplier (paragraph 5.6.12) has been applied to average direct construction employment over the 51 month period. This yields an estimate of indirect and induced employment associated with the construction of the G2 Airport Project of 1,800. Total G2 Airport Project construction employment 5.6.16 Table 11 provides a summary of the total level of employment associated with the construction of the G2 Airport Project. The figures are based on the average direct employment over the 51 month programme. In addition to 2,000 average direct employees on the Airport site, a further 1,800 indirect and induced employees would be supported throughout the assessment area during the construction activity. Some of these employees would be in firms supplying goods and services to the G2 Airport Project construction site and others would be spread across a range of activities such as retailing and catering.
Table 11: G2 Airport Project construction employment44 Average employment Direct 2,000 Indirect and induced 1,800 Total 3,800
5.7 Assessment of construction employment effects Direct employment 5.7.1 The construction industry has a very mobile workforce with people often working on projects outside the immediate area in which they live. Data from Workforce Mobility and Skills in the UK Construction Sector45 show that across the UK as a whole, 21% of construction workers are working on projects outside the region in which they live. Almost a third (32%) of people working on construction sites in the East of England have their permanent address outside the region and 13% of those working in the East of England lived in London. The East of England has the highest level of ‘imported’ construction workers after London (43%). The region also exports construction workers to other regions with some 29% of those with a permanent address in the East of England working at construction sites outside the region. The Workforce Mobility and Skills survey found that the East of England and London draw on a similar pool of construction workers. 5.7.2 The data in Figure 4 have been used to derive the average number of construction workers required in each year of the G2 Airport Project. These are shown in Table 12. The data in paragraph 5.7.1 indicate that approximately 68% of the workers on construction sites in the East of England would be living in the East of
43 Paragraphs 7.6.8 to 7.6.10 ‘Crossrail: Socio Economic Technical Report’ Colin Buchanan. 44 Tribal Consulting based on average daily workers in Figure 2 of CM. 45 Workforce Mobility and Skills in the UK Construction Sector, East of England Report, Research Report prepared for ConstructionSkills, Department of Trade and Industry (DTI) and ECITB by IFF Research Ltd., March 2005. 26 |
Section 5 Construction employment assessment
England. As the assessment area for the G2 Airport Project includes London and both London and the East of England draw on a similar pool of labour, it is assumed that at least 80% of construction workers would be recruited from the assessment area. Hence, the average number of workers likely to be recruited from the assessment area is between 600 and 2,300 during phase 1. Details are also shown in Table 12.
Table 12: Average daily on-site employment No. recruited from No. recruited from outside Total assessment area assessment area 2011 800 200 1,000 2012 1,500 400 1,900 2013 2,300 600 2,900 2014 2,200 500 2,700 2015 600 200 800 Note: Data rounded to the nearest 100
5.7.3 Comparison of Table 10 and Table 12 shows that the largest employment demands of the G2 Airport Project occur in 2013 and 2014 at a time when the employment demands of the other major infrastructure projects are expected to have decreased from the 2011 peak. 5.7.4 The peak G2 Airport Project employment demand of 3,300 occurs between July 2013 and July 2014 and represents 0.7% of 2006 construction industry employment in the assessment area and 0.6% of forecast construction employment in 2011. Assuming 20% of peak employment is recruited from outside the assessment area, the G2 Airport Project employment peak recruited from within the assessment area accounts for 0.5% of 2006 construction industry employment and 0.4% of forecast employment in 2011 in the construction employment assessment area. 5.7.5 The total employment demand for the major infrastructure projects listed in Table 10 in 2011 is greater than the demand from these projects plus the G2 Airport Project in 2013 when G2 would be at its peak employment level. 5.7.6 The criteria for assessing the employment effects of the construction of the G2 Airport Project are defined in Table 2. Using these criteria the jobs created during the construction of the G2 Airport Project are assessed as beneficial. This analysis has only considered phase 1 of the construction programme, but there will be additional employment opportunities during the other four phases of the project covering the period from 2015 to 2030. Given the scale of peak direct employment, accounting for 0.7%46 of construction employment in 2006, the likely significant effect of the construction of the G2 Airport Project is assessed as a minor beneficial effect. Indirect and induced employment 5.7.7 The assessment area would also benefit from the indirect and induced employment supported by the G2 Airport Project. This employment could cover a wide range of activities and would not be confined to the construction sector. As a result, indirect and induced employment of 1,800 represents a small proportion (0.03%) of total employment (6.4 million) in the assessment area. 5.7.8 Applying the criteria of Table 2 the indirect and induced employment effect of the G2 Airport Project is also assessed as beneficial, but as it is spread across the assessment area, its contribution to total employment is small and is considered a minor beneficial effect. 5.8 Measures to prevent or reduce effects
5.8.1 As the effects on employment have been assessed as beneficial there are no measures required to prevent or reduce effects. A number of measures are being put in place to ensure that adverse effects on the communities in the vicinity of the Airport arising from the additional employment are addressed. These measures are set out in the Community and Population Volume of the ES (Volume 5).
46 Peak direct employment of 3,300 over total construction employment in 2006 (464,300). | 27
Section 5 Construction employment assessment
5.9 Residual effects
5.9.1 The G2 Airport Project is a major infrastructure project requiring 3,300 direct employees at the peak of construction in phase 1. The level of employment is relatively small in relation to the construction industry in the assessment area such that the residual effect is minor beneficial. BAA is committed to putting in place strategies which would maximise the opportunities for the construction employment assessment area economies from the G2 Airport Project which are discussed in section 5.10. 5.10 Enhancement measures
5.10.1 BAA has considered how the construction of the G2 Airport Project can maximise economic opportunities for the local community. 5.10.2 The recent experience of BAA at T5 in terms of the development of a local labour strategy provides a model which can be used as a template for the G2 Airport Project. Following a consultation process, the T5 strategy identified the groups which had the potential to benefit from the construction project. This included unemployed and economically inactive people, people with specific training needs, people who were not traditionally involved in the construction industry, existing construction industry workers who needed to upgrade their skills and school pupils and students. 5.10.3 The requirements of each of these groups vary. The strategy for T5 was developed around the four mechanisms of recruitment, training, education and supply chain development. Examples of the types of initiatives applied during the construction of T5 are provided below. • Recruitment: A dedicated recruitment centre operated by JobCentre Plus. A recruitment database with details of skills and qualification levels which can be accessed by contractors and providing information on skills/trades which are in short supply. • Training: Working with the further education colleges and the Learning and Skills Council to ensure that training provision is aligned with the skills required by the contractors. BAA also committed to providing 10 Modern Apprenticeship schemes a year with each scheme offering a number of training places. • Education: Working with partners (eg Local Education Authorities, Education Business Partnerships) to develop materials for use in schools which could increase the number of school leavers entering the construction industry. Exploring ways in which contractors can develop relationships with universities for graduate opportunities (eg attending job fairs, offering placements to under-graduates). • Supply chain development: Working with partners (eg Business Link) to provide support for local companies wanting to supply the project and meet the standards required by airport companies. 5.10.4 The experience of the T5 project provides a model which can be transferred to the G2 Airport Project to ensure the opportunities for local people are realised and to ensure that the people working on the site are suitably qualified and trained. 5.10.5 The potential for the G2 Airport Project to use labour from some of the construction projects which are scheduled for completion before 2011 would also be considered. The Olympics is the principal major infrastructure project underway in advance of the G2 Airport Project. The programme for the Olympics dictates that the construction of venues and facilities will be completed by 2012 and therefore workers on these projects will be available to work on other construction projects. BAA and its contractors would liaise with the ODA and their contractors to understand the number of employees and skills likely to be available as the construction of the Olympics projects near completion and to map these skills to the requirements of the G2 Airport Project. 5.10.6 Opportunities for maximising the indirect employment in the assessment area are dependent on the ability of companies in these areas to supply the goods and services required by the G2 Airport Project. The opportunities for providing goods and services to the construction site will be governed by competitive tendering procedures. BAA already organises an annual ‘Meet the Buyer’ event where local companies can learn more about the goods and services purchased by the Airport and the procedures required. BAA is committed to maintaining the ‘Meet the Buyer’ event and providing opportunities for companies to enter the supply chain. This would ensure that local companies are able to capitalise on the potential opportunities.
28 |
Section 6 Operational employment assessment: approach
6 Operational employment assessment: approach 6.1 Introduction
6.1.1 Sections 6 to 11 present the assessment of the likely significant effects on employment of the operation of the G2 Airport Development. To assist with ease of reading, the analysis is presented in six sections as follows: • section 6 sets out the approach to the assessment and defines the operational employment assessment area; • section 7 sets out the baseline estimate of Stansted related employment; • section 8 sets out the forecasts of Stansted related employment in the base case and with the G2 Airport Development for the assessment years of 2021 and 2030; • section 9 presents an overview of the baseline economic performance of the assessment area; • section 10 presents the forecasts of employment and labour supply in the assessment area in 2021 and 2030; and • section 11 sets out the assessment of likely significant effects. 6.1.2 The six sections set out the main steps of the approach to the assessment. While there are no published guidelines on assessing the employment effects of airport development, the approach used in this assessment is consistent with the approach used in the South East and East of England Regional Air Services Study (SERAS) and for T5 at Heathrow Airport and Stansted G1. The approach was thoroughly examined at the Heathrow T5 Inquiry and agreed by the local planning authority at the Stansted G1 Inquiry.47 The same approach was used in the 15+ application at Stansted to increase capacity at the Airport to 25 mppa and has also been used as a basis for studies undertaken for the Government Office for the East of England and EEDA, such as that undertaken by Halcrow in 2004.48 6.2 Defining the operational assessment area Introduction 6.2.1 As the operational effect of the G2 Airport Development is being assessed in terms of the labour market, it is necessary to define the area from which the majority of the Airport’s labour force is drawn. In defining the assessment area, data from the latest Stansted Airport Employment Survey49 have been used. This survey provides detailed information on companies and employees who work within the boundary of the Airport. The survey was conducted over December 2002 to March 2003 and the results were published in May 2004. This survey is part of a programme of data collection undertaken by BAA at its London airports. 6.2.2 The survey presents the results for 8,987 airport employees which represent 84.8% of the total number of people working within the Airport boundary in 2003. The passenger throughput of the Airport in 2003 was 18.7 mppa. The BAA survey includes information on the place of residence of the Airport workforce and this information is used to define the area in which the majority of Stansted employees live. Although the published employment survey presents the results by ‘main town’ of residence, the analysis undertaken for the assessment of employment effects is based on postcode information which was provided by BAA. Approach and methodology 6.2.3 Using the 2003 survey of Stansted employees, the following procedures have been followed: • Stansted’s current workforce by place of residence is allocated first to counties and then to individual local authority districts; and • the district share of Stansted employment is then calculated. 6.2.4 Work undertaken for BAA supporting the T5 planning application developed a criterion to define the assessment area for the assessment of the employment effects of Airport development.50 This was agreed
47 Stansted G1, Statement of Common Ground, Uttlesford District Council and BAA Stansted Airport Ltd, April 2007, Paragraph 7.6.6,. 48 Halcrow (August 2004) ‘Employment and Housing Implications of the Second Runway at Stansted Airport’. 49 ‘Stansted Airport Employment Survey, December 2002 – March 2003’, BAA Market Research, May 2004. 50 ‘Heathrow Terminal 5: Assessment of Employment Impact, 1991 – 2016’, BAA Ltd and Heathrow Airport Ltd, 1994. | 29
Section 6 Operational employment assessment: approach
as appropriate at the T5 Inquiry and referred to in the Inspectors Report.51 The 15+ and G1 planning applications at Stansted Airport also used the same criterion and the approach was agreed by the local authorities.52 The criterion is the proportion of the airport’s workforce that is resident within a local authority area. The assessment area for this study is defined as all local authorities having at least 1% or more of the Airport’s workforce as residents. Results 6.2.5 The number of Stansted employees by postcode was analysed using a postcode mapping facility. Table 13 shows the distribution of the Stansted workforce by county in 2003. Essex accounts for over 57% of the workforce participating in the survey and Hertfordshire a further 20%. Out of the 8987 employees, there are 197 employees who did not provide a postcode and therefore, these employees have been allocated to counties/unitary authorities on the basis that they have the same distribution as those employees whose county/unitary authority is known. The results are also shown in Table 13. 6.2.6 Re-allocation of the ‘unknown postcodes’ increases the proportion of the Stansted workforce which is resident in Essex to just under 59% and Hertfordshire’s share of the workforce increases to 21%.
Table 13: Allocation of Stansted employees by county/unitary authority, 2003 Actual allocation Re-allocation of unknown postcodes Number % of workforce Number % of workforce Essex 5,146 57.3 5,261 58.5 Hertfordshire 1,853 20.6 1,895 21.1 London 473 5.3 484 5.4 Suffolk 389 4.3 398 4.4 Cambridgeshire 380 4.2 389 4.3 Norfolk 123 1.4 126 1.4 Thurrock 65 0.7 66 0.7 Kent 39 0.4 40 0.4 Other UK Authorities 322 3.6 329 3.7 Postcode not provided 197 2.2 0 0.0 Total 8,987 100.0 8,987 100.0
6.2.7 Table 14 provides a breakdown of the districts within the counties which account for at least 1% of the Stansted workforce. The 1% cut-off has been defined in terms of the level of employment ie only districts which have 90 employees (1% of 8,987) are included. When allocating the employees to districts there were two categories of people to consider: • people who provided full postcode addresses and who could be allocated to a local authority district; and • people who provided part of the postcode address and could be allocated to a county, but not a district. 6.2.8 The latter includes the people who did not provide a postcode, but were re-allocated to a county on the basis that they had the same distribution as those employees whose county/unitary authority is known. 6.2.9 The people who were known to be in the county were allocated to individual local authority districts on the assumption that they had the same distribution across local authorities as those people whose full post code was known.
51 Heathrow Terminal 5, Inspectors Report, Paragraph 3.2.2, 52 Stansted G1, Statement of Common Ground, Uttlesford District Council and BAA Stansted Airport Ltd, April 2007, Paragraph 7.6.7, 30 |
Section 6 Operational employment assessment: approach
Table 14: Districts accounting for 1% of Stansted workforce County District Number % of Workforce Essex Uttlesford 2,137 23.8 Braintree 1,537 17.1 Harlow 550 6.1 Chelmsford 408 4.5 Epping Forest 200 2.2 Colchester 180 2.0 ‘Rest of’(1) Essex 249 2.8 Total 5,261 58.5 Hertfordshire East Hertfordshire 1,640 18.2 ‘Rest of’(1) Hertfordshire 255 2.9 Total 1,895 21.1 Suffolk St Edmundsbury 211 2.3 ‘Rest of’(1) Suffolk 187 2.1 Total 398 4.4 Cambridgeshire South Cambridgeshire 218 2.4 ‘Rest of’(1) Cambridgeshire 171 1.9 Total 389 4.3 Rest of UK 1,044 11.6 Total 8,987 100.0 Note: All unknown and partial postcodes have been allocated. (1) ‘Rest of’ refers to the remaining districts in the county which individually account for less that 1% of the Stansted workforce
6.2.10 The analysis in Table 14 would yield an assessment area with nine local authority districts namely: Uttlesford, Braintree, Harlow, Chelmsford, Epping Forest, Colchester, East Hertfordshire, St Edmundsbury and South Cambridgeshire. However, Cambridge City Council is completely surrounded by the district of South Cambridgeshire. Therefore to ensure that the assessment area has no ‘gaps’ in its geographical coverage, Cambridge City has been added to the nine districts with 1% or at least 90 Stansted employees. Hence, the assessment area accounts for 79% of the Stansted workforce in 2003 and is shown in Table 15. This table also shows the sub-division of the assessment area into ‘inner’ and ‘outer’ areas on the basis of the higher proportion of the Stansted workforce living in each area and their proximity to the Airport. This is consistent with the 15+ and G1 ES. The assessment area is also shown in Figure 5.
| 31
N >
St Edmundsbury
Cambridge
South Cambridgeshire
Braintree Uttlesford
Colchester East Hertfordshire
Job Title Stansted Harlow Generation 2
Chelmsford Drawing Title Operational Epping Forest Employment Assessment Area
Drawing Number Revision
Scale
Date Drawn 1 Nov 2008
Checked Approved
Figure 5 Section 6 Operational employment assessment: approach
Table 15: Employment in the assessment area using survey totals Stansted employees District Area Number % Uttlesford Inner 2,137 23.8 East Hertfordshire Inner 1,640 18.2 Braintree Inner 1,537 17.1 Harlow Inner 550 6.1 Total inner 5,864 65.2 Chelmsford Outer 408 4.5 Epping Forest Outer 200 2.2 Colchester Outer 180 2.0 St Edmundsbury Outer 211 2.3 South Cambridgeshire Outer 218 2.4 Cambridge Outer 40 0.5 Total outer 1,257 13.9 Total assessment area 7,121 79.2 Note: Columns may not sum due to rounding
6.2.11 The four local authorities, Uttlesford, East Herts, Braintree and Harlow (which comprise the inner area) account for 65% of the Stansted workforce. Excluding these districts, the workforce is quite dispersed. 6.2.12 There are a number of local authorities which account for just less than 1% or 90 Stansted employees. These include: • Haringey 82 employees 0.9% • Enfield 64 employees 0.7% • N Hertfordshire 66 employees 0.7% • E Cambridgeshire 61 employees 0.7% • Havering 60 employees 0.7% • Thurrock 66 employees 0.7% • Tendring 66 employees 0.7% 6.2.13 Haringey meets the criteria of 1% of the workforce if the percentages are rounded, but falls just short in terms of absolute numbers. It is also not contiguous with any of the districts within the assessment area and is therefore excluded. 6.2.14 The analysis above has only covered the Stansted employees who participated in the survey ie 8,987 employees from a total workforce in March 2003 of 10,592. Therefore, the distribution of employees by district in Table 15 has been applied to the on-airport total of 10,592 to yield a total of 8,392 employees living in the operational employment assessment area. This is shown in Table 16 which also shows the proportion of the labour force in each area accounted for by Stansted employees. 6.2.15 Table 16 shows that with the exception of Uttlesford, Stansted employees account for a relatively small proportion of the workforce of each local authority area. In Uttlesford some 7% of the workforce are employed at Stansted while the remaining three districts in the inner area have approximately 2% to 3% of their workforce employed at the Airport. In the outer area districts, Stansted employees account for an even smaller proportion of the district workforce.
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Section 6 Operational employment assessment: approach
Table 16: Total Stansted employees in the assessment area, 200353 Stansted employees District Area Number % As % of district workforce Uttlesford Inner 2,519 23.8 7.2 East Hertfordshire Inner 1,933 18.2 2.8 Braintree Inner 1,812 17.1 2.6 Harlow Inner 648 6.1 1.7 Total inner 6,912 65.2 3.2 Chelmsford Outer 481 4.5 0.6 Epping Forest Outer 235 2.2 0.4 Colchester Outer 212 2.0 0.3 St Edmundsbury Outer 248 2.3 0.5 South Cambridgeshire Outer 257 2.4 0.4 Cambridge Outer 48 0.5 0.1 Total outer 1,481 13.9 0.4 Total assessment area 8,392 79.2 1.4 Note: Columns may not sum due to rounding
Future proportion of the Stansted workforce in the assessment area 6.2.16 As this assessment is considering the effect of the G2 Airport Development in 2021 and 2030, it is important that the assessment area is relevant to the future Stansted workforce. Across the economy as a whole, the distance travelled to work by commuters has increased over time. This is a reflection of improvements in the transport infrastructure and in personal mobility. Table 17 shows the distance travelled by employees to get to work in 1981, 1991 and 2001. In 1981 over 56% of employees travelled less than 5km to work. By 2001 this proportion had reduced to less than 47%. Over this period (1981 to 2001), the proportion of people travelling more than 30km increased from 4% to 8%. Recent data from the National Travel Survey54 also confirms that the average length of a commuting trip increased by 6% over 1995/7 to 2006.
Table 17: Distance travelled to work, 1981 to 200155, England % Employees 1981 1991 2001 Under 5 km 56.3 51.9 46.6 5 to 9 km 22.1 20.9 21.2 10 to 19 km 13.7 15.9 17.7 20 to 29 km 3.6 5.0 6.2 30+ km 4.4 6.3 8.4 Total 100.0 100.0 100.0
6.2.17 The trend at Heathrow is consistent with this evidence for England as a whole, which shows that over time, the airport workforce is drawn from a wider area as the percentage of employees living in the local authorities closest to the airport decreases. Figure 6 illustrates for Heathrow Airport the changes observed in the proportion of all employees living in core districts around the airport. In 1975 almost 90% of all Heathrow employees were resident in districts around the Airport which contained at least 1% of all on-airport employment. By 2004, this proportion had dropped to only 69%. These results reflect many factors
53 Stansted Employment from the 2002/3 Employment Survey, District workforce from the Labour Force Survey covering the economically active of working age. 54 Section 4 ‘National Travel Survey, 2006’, DfT, August 2007. 55 Census of Population, 1981 to 2001. From NOMIS, Crown Copyright. 34 |
Section 6 Operational employment assessment: approach
including improvements in the transport infrastructure, personal mobility and the general increased propensity to commute longer distances to work.
Figure 6: Heathrow Airport, % of employees in assessment area, 1975-2004
100%
90% 89%
80% 77% 74% 69% 70%
60%
50%
40%
Study area as % of all employees as %Studyarea all of 30%
20%
10%
0% 1975 1986 1992 2004
6.2.18 There is evidence that this is starting to happen at Stansted. The proportion of the Stansted workforce living in Uttlesford is reducing while the proportion from other areas is increasing. Outside the study area itself, the proportion of the Stansted workforce resident in Greater London has risen over time. The 1997 survey, for instance, found that 151 employees (2.3% of the workforce) were resident in the London boroughs of Haringey, Enfield, Havering, Waltham Forest, Redbridge, Newham, Barking and Dagenham, Hackney and Tower Hamlets.56 The number of airport employees in these nine London boroughs in 2003 was 35657 (or 4% of the workforce). This trend has been encouraged through the employment initiatives and the BAA Travelcard Scheme. 6.2.19 It is expected that the proportion of Stansted employees’ resident within the employment assessment area would continue to fall over time. The assessment assumes that by 2030 the proportion of the Stansted workforce resident within the assessment area would fall to 70% in 2030. 6.2.20 Analysis of the forecast change in population, the propensity of people in the assessment area to work at the Airport and the regeneration initiatives of the RSS yields an estimate of the proportion of the future Stansted workforce likely to be resident within the assessment area. This is shown in Table 18. The inner area is forecast to account for the majority of employees (almost 60%) in 2030.
Table 18: Forecast place of residence of Stansted employees, 2021 and 2030, % 2021 2030 Inner area 61.0 59.5 Outer area 11.7 10.6 Total assessment area 72.7 70.1 Outside assessment area 27.3 29.9
56 Para 5.24, Addendum to the Environmental Statement for the Proposed Development at Stansted Airport, May 2002, BAA Stansted. 57 Based on actual survey numbers of 8,987. | 35
Section 7 Stansted related employment: baseline
7 Stansted related employment: baseline 7.1 Introduction
7.1.1 The purpose of this section is to define the components of Stansted related employment and set out the estimates of this employment in the baseline year of 2006. The section also provides an estimate of the employment in businesses located on the land required by the G2 Airport Project. 7.1.2 Airport related employment for the assessment of the operational employment effects of the G2 Airport Development comprises four elements. These elements were agreed as appropriate in the assessment of the employment effects of T5 at the T5 Inquiry58 and adopted in the assessment of effects at Stansted when considering the application for additional capacity beyond 15 mppa (15+) and the G1 application. The elements are: • direct on-airport employment: employees of businesses whose activity is directly and solely related to Stansted, whose jobs are based within the Airport boundary; • direct off-airport employment: as above, but with jobs based outside the Airport boundary eg related to flight catering, hotels, freight services and airline offices • indirect employment: employment in firms supplying goods and services to the businesses at the Airport; and • induced employment: employment supported by the expenditure of those employees in the previous three categories. 7.2 Direct on-airport employment Data sources 7.2.1 There are two sources of data on the number of people employed within the Airport boundary: • the Stansted Airport Employment Survey which provides detailed data on the characteristics of the on- airport workforce. This survey is undertaken approximately every five years and the latest available data relates to the period 2002/3 which was published in 2004; and • the annual employment return (count) provides details of the total number of people employed within the Airport boundary, but does not provide information on the characteristics of the workforce. The most recent return is from March 2006. Baseline estimate, 2006 7.2.2 Total direct on-airport employment at Stansted was 11,500 in 2006 which supported a passenger throughput of 23.7 mppa. Direct on-airport employment has been increasing in recent years as passenger throughput increases. A summary of the growth in passengers and direct on-airport employment is shown in Table 19. While passenger throughput has increased by almost 27% over 2003 to 2006, employment growth has been just under 9%. The large increase in passenger throughput relative to employment has been achieved with a rate of productivity growth of 5.3% per annum. This rate is almost three times higher than the UK economy average.
Table 19: Direct on-Airport employment and passenger throughput59 Year Employment Passengers (mppa) Passengers per employee 2003 10,600 18.7 1,760 2004 10,300 20.9 2,030 2005 11,600 22.1 1,910 2006 11,500 23.7 2,060 % Change 2003 to 2006 8.5% 26.7% 17.0 Note: Passenger totals relate to calendar years. Data have been rounded
58 Paragraph 3.2.3, Inspectors Report, T5 Inquiry. 59 BAA Annual Employment Return. | 37
Section 7 Stansted related employment: baseline
7.2.3 The high productivity growth at Stansted reflects the characteristics of the traffic through the Airport ie the low cost carriers have driven the productivity growth at Stansted by increasing the efficiency of all aspects of their operations. Examples of changes in practices which enable productivity growth include the: • use of the internet for all ticket sales; • use of the internet for on-line check-in; and • reduction in services offered eg no access to airline lounges. 7.2.4 The employment data in Table 19 for 2004 to 2006 are taken from the BAA Annual Employment Return. The 2003 figure is taken from the BAA Employment Survey which provides more detailed data in comparison to the Employment Return. 7.2.5 The BAA Employment Survey is also used in the following tables to provide detail on the characteristics of employees at Stansted. As a result, the totals in Table 20 to Table 24 relate to the total number of survey respondents and not the on-airport employment total of 10,592 in 2003. 7.2.6 Direct employment at the Airport is spread across a range of activities and employers. At the time of the Stansted Employment Survey, there were 163 companies providing employment within the boundary of the Airport. Of the 163 companies, 157 companies participated in the survey. The distribution of employers and employees by category of employer is shown in Table 20.
Table 20: Distribution of employers and employees at Stansted Airport, 200360 Employers Employees No. % No. % Airlines/handling agents 25 15.9 2,951 32.8 Government services 7 4.5 273 3.0 BAA Stansted/BAA 1 0.6 894 9.9 Catering and retail 39 24.8 1,096 12.2 Other public passenger services 22 14.0 495 5.5 Cargo, freight, courier services 12 7.6 661 7.4 Building and maintenance contractors 10 6.4 153 1.7 Other Airport related companies 41 26.1 2,468 27.4 All companies 157 100.0 8,991 100.0 Note: Columns may not sum due to rounding
7.2.7 The Airport also provides a range of jobs in terms of temporary/permanent jobs and full-time and part-time working (Table 21). Almost 59% of the Stansted workforce is male, full-time and in permanent employment. However, 8% of the employment is part-time and this is dominated by females (61% of part-time employment).
Table 21: Characteristics of Stansted Airport workforce61 Permanent employees Temporary employees Total Full-time Part-time Full-time Part-time Full-time Part-time Total Males 5,292 239 186 37 5,478 276 5,754 Females 2,706 417 100 14 2,806 431 3,237 Total 7,998 656 286 51 8,284 707 8,991
7.2.8 The range of activities and employers at the Airport is reflected in the range of salaries paid to employees. Table 22 shows that average earnings at the Airport ranged from just under £12,000 in the catering and retail sector to over £25,000 in the building/maintenance and airline sectors. The average salary across all
60 Table 1, Stansted Airport Employment Survey - December 2002 – March 2003, BAA Market Research, May 2004. 61 Tables 2, 5-10, Stansted Airport Employment Survey - December 2002 – March 2003, BAA Market Research, May 2004. 38 |
Section 7 Stansted related employment: baseline
employers in 2003 was £20,700 which is slightly below the workplace average for the assessment area in 2003 of £21,100.
Table 22: Average salaries of permanent employees by category of employer62 Average salary, £ Airlines/handling agents 25,100 Government services 22,800 BAA Stansted/BAA 23,200 Catering and retail 11,600 Other public passenger services 14,500 Cargo, freight, courier services 18,600 Building and maintenance contractors 25,800 Other Airport related companies 20,700 All companies at Stansted 20,700 Assessment area workplace average, 200363 21,100 Note that not all employers were willing or able to provide salary information
64 7.2.9 Across the British economy as a whole, average earnings have increased by 13% between 2003 and 2006. Applying this increase to average earnings at the Airport would yield an average salary of £23,400 in 2006 for Stansted employees. If this estimated salary is applied to the 11,500 on-airport employees in 2006, the total income of Airport employees in 2006 is £269 million. 7.2.10 The distribution of employment across occupational groups is shown in Table 23 which shows that the Airport provides employment opportunities across all occupational groups from managerial level through to elementary occupations.
Table 23: Occupational grouping of permanent employees65 No. employees % 1. Managers and senior officials 772 8.6 2. Professional occupations 728 8.1 3. Associate professional and technical occupations 1,298 14.5 4. Administrative and secretarial occupations 923 10.3 5. Skilled trades occupations 764 8.5 6. Personal service occupations 1,168 13.0 7. Sales and customer service occupations 807 9.0 8. Process, plant and machine operatives 1,182 13.2 9. Elementary occupations 1,317 14.7 Total 8,959 100.0 Note: Columns may not sum due to rounding
7.2.11 The ONS classifies occupational groupings according to their skill specialisation and skill level. Skill levels are approximated by the length of time considered necessary for a person to become fully competent in the performance of the tasks associated with a job. Within the occupational classification, there are four skill levels which are defined66 as follows: • level 1: competence associated with a general education, usually signaled by satisfactory school exam grades. Competent performance of jobs at this level will involve appropriate knowledge of health and safety regulations and possibly short periods of work related training, eg hotel workers, cleaners;
62 Table 11, Stansted Airport Employment Survey - December 2002 – March 2003, BAA Market Research, May 2004. 63 Assessment area based on individual district data from Annual Survey of Hours and Earnings. 64 Whole economy figures from Table 4.6 Economic Trends 637 December 2006 (June 2003 to June 3006). 65 Tribal analysis of information in Table 22, Stansted Airport Employment Survey, Summary of Results, December 2002 – March 2003. 66 Standard Occupational Classification 2000 Volume 1. | 39
Section 7 Stansted related employment: baseline
• level 2: occupations which require knowledge provided via a good general education, but have longer periods of work related training or work experience, eg machine operation, retailing, secretarial; • level 3: occupations which normally require study (post school), but not to degree level, eg skilled engineering and construction trades; and • level 4: professional and managerial positions which normally require a degree or equivalent. 7.2.12 Table 24 provides a comparison of the distribution of Stansted employees with total employment in the assessment area across the four skill levels defined above. Apart from Level 4 employment (professional and managerial), across all other skill levels, the Airport has a higher proportion of employment than the assessment area as a whole. This reflects the skills required by the Airport; a higher proportion of jobs are non-managerial at Stansted than across the assessment area economy as a whole. It is clear that the Airport provides a wide range of employment across all skill levels and occupational groups.
Table 24: Stansted and assessment area employment by skill level, %67 Stansted employment Total employment Level 1 14.7 11.6 Level 2 45.5 37.7 Level 3 23.0 21.0 Level 4 16.7 29.7 Total 100.0 100.0 Note: Columns may not sum due to rounding
7.2.13 The distribution of employment across skill levels at Stansted is broadly similar to the employment distribution at Heathrow and Gatwick which is shown in Table 25. The specific characteristics of each airport will influence the distribution of skills eg airline head offices or maintenance bases may increase the proportion of more highly skilled jobs. The analysis confirms that the airports are providing employment opportunities across all occupational groups and skill levels.
Table 25: Distribution of employment by skill levels at BAA London airports, % Stansted Heathrow Gatwick Level 1 15 11 16 Level 2 46 50 56 Level 3 23 22 18 Level 4 17 17 10 Total 100 100 100 Note: Columns may not sum due to rounding
7.3 Direct off-airport employment Approach 7.3.1 Previous work undertaken for BAA at the time of the 15+ planning application and a study undertaken on behalf of the local authorities68 have found either no or negligible direct off-airport employment at Stansted. An estimate of the level of direct off-airport employment was made as part of the assessment of the employment effects of the G1 application. This estimate of off-airport employment was based on the following approach: • identify possible off-airport companies through internet searches of appropriate business categories and business directories; • undertake a telephone survey of the businesses identified to determine the extent to which they were dependent on the Airport for business; and
67 Tribal Consulting Analysis. 68 ‘Employment and Economic Impact of the Expansion of Stansted Airport’ April 2002, York Consulting for Uttlesford District Council. 40 |
Section 7 Stansted related employment: baseline
• use the results of the survey to provide an estimate of direct off-airport employment for the population of direct off-airport companies as a whole. 7.3.2 The survey work undertaken in 2005 as part of the G1 assessment forms the basis for the 2006 estimate presented in this section. The 2005 survey was used to derive an estimate of direct off-airport employment in the assessment area in 2003 which was the baseline for the G1 employment assessment. The 2006 baseline estimate of direct off-airport employment is updated from the G1 baseline estimate by assuming that direct off-airport employment grows in line with passenger traffic with an allowance for productivity improvements. 7.3.3 Over 2003 to 2006, passenger growth at Stansted was almost 27% (8.2% per annum) from 18.7 mppa to 23.7 mppa. Given this growth in passengers, an increase in off-airport employment could be expected between 2003 and 2006. However, the growth in employment would be lower than the 27% increase in passenger numbers as a result of productivity improvements over 2003 to 2006. Productivity gains have been measured in terms of output per worker for the whole economy69 which was 1.8% per annum for the period 2003 to 2006. 2006 Baseline 7.3.4 Applying this methodology, the level of direct off-airport employment is estimated to be some 300 jobs in 2006. Using average workplace earnings for the assessment area of £22,800 (Table 43) yields income from direct off-airport employment of £7.8 million. 7.4 Indirect employment Approach 7.4.1 The operation of the Airport supports indirect employment in the assessment area through companies based at Stansted buying goods and services in the local economy. Indirect employment can be estimated using either an employment multiplier or by survey work to determine the extent to which companies based at the Airport buy goods and services from the assessment area economy. When a business or development is operational, the use of a survey is preferable as it provides a more robust analysis of the type of goods and services purchased from the assessment area and the level of expenditure. A survey of airport based companies was undertaken during the autumn of 2005 (to support the G1 application) to determine the type of goods and services bought and the level of expenditure in the assessment area. The survey results were applied to all airport companies to estimate the total level of expenditure in the local economy by companies based at the Airport. From this expenditure, estimates were made of the indirect income and employment supported in the assessment area. This analysis yielded an estimate of indirect employment for the G1 baseline year of 2003. 7.4.2 This estimate has been used as the basis for the 2006 estimate of indirect employment. To move from 2003 to 2006, indirect employment requires an assessment of how purchases made by companies at the Airport have grown over 2003 to 2006 and how productivity in the firms supplying these inputs has changed. With regard to the assessment of purchases, it has been assumed that purchases grow at the same rate as traffic growth. For example, the purchases made by a catering company in 2003 would relate to the number of passengers using the Airport at that time. As passenger numbers have increased, purchases would be also be expected to increase. It has been assumed that all purchases grow in line with passenger traffic growth. For productivity, the same data used in the direct off-airport calculation (paragraph 7.3.3) has been used ie average growth in output per worker for the whole economy over 2003 to 2006. Results 7.4.3 Applying the growth in passengers (net of productivity) to the 2003 estimate of indirect employment yields a 2006 baseline estimate of indirect employment for the assessment area of 1,300. The associated income is £29.7 million.
69 Output per worker for the whole economy from Q1 2003 to Q1 2006. | 41
Section 7 Stansted related employment: baseline
7.5 Induced employment Approach 7.5.1 Induced employment is that employment supported by the local expenditure of persons employed directly and indirectly. It is standard practice in economic impact studies to estimate induced employment using an employment multiplier. In this case the multiplier is the relationship between direct and indirect employment arising from Stansted Airport and induced employment. For instance, if every 100 direct or indirect jobs support a further 30 jobs in the local area, then the induced multiplier is said to be 1.3 ie the total number of jobs is 1.3 times the number of direct and indirect jobs. 7.5.2 The value of the multiplier is influenced by the size and structure of the local economy. Economies which are relatively large in output and employment terms, for instance, are assumed to have a greater capability to create induced employment and so have a larger multiplier effect than assumed for smaller economies. 7.5.3 The evidence presented by BAA to the T5 Inquiry used an employment multiplier of 1.3 for the assessment area, however, 20% of Heathrow employees were resident outside the assessment area such that their local expenditure would impact on other local economies and reduce the induced employment supported in the assessment area. Hence, the multiplier was reduced to 1.24. During the Inquiry, a multiplier of 1.27 was agreed as appropriate for the analysis.70 7.5.4 The 15+ planning application at Stansted Airport also used an employment multiplier of 1.3 which was scaled down to 1.24 to reflect the fact that 20% of the Stansted employees were living outside the assessment area. This figure of 1.24 was also adopted for the G1 application and will be adopted for this assessment. Results 7.5.5 Applying the multiplier to the 2006 estimate of direct on-airport, direct off-airport and indirect employment, induced employment is estimated to be 3,100 in 2006 with associated income of £71.7 million. 7.6 Stansted related employment, 2006
7.6.1 Stansted Airport is an important employment site in the assessment area and the East of England with 11,500 people working within the Airport boundary in 2006 and 300 working outside the boundary, but directly related to the Airport. In addition, a further 4,400 people are employed in the assessment area through indirect and induced activities. At 16,200, total Stansted related employment accounts for 2.5% of total employment (employees and self employed) in the assessment area. The income of the 16,200 Stansted related employees is £378 million in the assessment area. Total Stansted related employment in the assessment area in 2006 is shown in Table 26.
Table 26: Stansted related income and employment, 200671 No. jobs Income, £million Direct On-Airport 11,500 269.1 Direct Off-Airport 300 7.8 Indirect 1,300 29.7 Induced 3,100 71.7 Total 16,200 378.3 Note: Columns may not sum due to rounding
7.7 Employment on land required by the G2 Airport Project
Introduction 7.7.1 The land requirements for the G2 Airport extension area are shown in Volume 1 of the ES (Appendix 7 G2 Full Airport Application Drawings) and total 487 hectares for the G2 Airport Project and approximately 170 hectares for sites for offsetting. At present, there are a number of businesses located on this land and the purpose of this section is to estimate the level of employment in these businesses. The businesses
70 Paragraph 3.3.16, T5 Inquiry, Inspectors Report. 71 Tribal Consulting . 42 |
Section 7 Stansted related employment: baseline
considered in this volume are non-farming businesses as farming businesses are dealt with in Volume 2 of the ES (Agricultural Resources). Approach 7.7.2 The approach to estimating the employment effects of the G2 Airport Project on these non-farming businesses has been to: • identify those businesses that would be directly affected by land take; • write to the businesses enclosing a questionnaire (issued June/July 2007); and • assess the employment effects on the basis of the information collected. 7.7.3 The questionnaire (Appendix 2) gathered the following information: • background information on the business; • recent business performance; • customers and markets; • business views of the potential effects of the G2 Airport Project; and • future objectives of the business. 7.7.4 The identification of the businesses was undertaken as part of the community assessment (Volume 5 Community and Population). The BAA property department obtained contact names for the identified businesses (17) within the land take area and contacted these businesses by letter. The letter set out the work which was being undertaken and included a questionnaire to be completed and returned directly to Tribal. Those businesses which did not respond to the initial letter were contacted by telephone by Tribal as part of the follow-up procedures. Where information could not be obtained from the business, a desk based assessment has been made using available information. 7.7.5 In November 2007 a further business (Brookend Farm Livery) was identified as being partially affected by the land take required for the sites for offsetting. A desk-based assessment has been made on the basis of available information. Baseline results 7.7.6 A total of 18 businesses were identified as being affected by land take to the G2 Airport Project. A brief description of each business is provided in Table 28. 7.7.7 Of the 18 businesses identified, 17 were sent questionnaires and a total of 13 responses were received. This included a response from Open Networks Engineering who advised that the Waltham Hall premises were only used for storage and there were no employees at the location. The company advised that the storage facility was not a fundamental requirement for its business. Hence, this business was not considered further which reduces the number of businesses considered to 17. 7.7.8 Of the 17 businesses, three own their premises, while 14 businesses have tenancies with a number of landlords including, amongst others, BAA and Waltham Hall Farm. Of the 14 tenant businesses on short- term leases, 13 of the businesses have leases which are due to expire before 2011. The terms of the lease of the remaining business is not known. 7.7.9 The baseline analysis of these companies is presented below and includes information on the recent performance of the businesses. This analysis is restricted to the twelve businesses responding to the survey. Due to issues of confidentiality, the businesses are not identified individually where data on employment and business performance are presented. The turnover and employment information presented relates to the business site which is within the G2 Airport Project footprint. 7.7.10 Table 27 provides a summary of the number of businesses in each employment sizeband. The sizebands are defined in terms of the number of permanent employees. All businesses responding to the survey are relatively small with no respondents having more than 20 permanent employees. The majority of businesses are very small with less than five permanent employees. In total there are 74 people employed by the twelve businesses with almost 60% of employees working full-time. Two of the businesses employ seasonal staff which across the two companies amounts to 26 employees.
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Section 7 Stansted related employment: baseline
Table 27: Employment levels in businesses Number of employees (permanent) 1-5 6-10 11-20 Total No. of businesses 7 3 2 12 % of businesses 58.3 25.0 16.7 100
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Section 7 Stansted related employment: baseline
Table 28: Business located on land required by G2 Airport Project Location Business name Description of business Waltham Hall Waltham Hall Farms A Cambridge based business which comprises a number of different activities including farming; industrial buildings and offices to let; and storage. Farm The business operates from more than one site in the East of England and owns Waltham Hall Farm which is on land required by the G2 Airport footprint. Waltham Hall Farm comprises a number of units to let and its tenants are covered by this analysis.
Waltham Hall Specialist Insulation Ltd A single site business operating from a unit at Waltham Hall Farm, this is an insulation stockist. The company delivers insulation products and also Farm operates a collection point from its unit at Waltham Hall.
Waltham Hall Galaxi Enterprises Ltd A single site business operating from a unit at Waltham Hall Farm, this is a refurbishment contractor. Farm Waltham Hall Piggott Coach Builders A single site business which manufactures bodywork for commercial vehicles and also repairs and paints commercial vehicles and cars. The Farm Ltd business is a tenant of Waltham Hall Farm.
Waltham Hall The Together Agency A multi-site business operating from a unit at Waltham Hall Farm and other sites throughout the UK. The business is a marketing service agency Farm which provides advertising, direct marketing, web site design and sales promotion services.
Waltham Hall Total Affinity Ltd A single site business operating from a unit at Waltham Hall Farm. The business provides specialist marketing services to major businesses on Farm partnerships
Waltham Hall Winjet Travel and British A single site business operating from a unit at Waltham Hall Farm. This is an independent travel agent offering holidays and travel worldwide and a Farm Virgin Islands Holidays specialist tour operator to the British Virgin Islands Ltd Waltham Hall Acme Transport Services A single site business operating from a unit at Waltham Hall Farm. The main component of the business is school contract transport, but the Farm business also provides private hire cars, mini buses and mini coaches.
Waltham Hall Open Networks A Bishop’s Stortford based business providing network solutions to major corporate and government clients. The company leases a unit at Farm Engineering Waltham Hall Farm, but this is only used for storage. There are no employees at the location.
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Section 7 Stansted related employment: baseline
Table 29: Business located on land required by G2 Airport Project Location Business name Description of business Waltham You’re Furnished covering You’re Furnished operates from a unit at Waltham Hall Farm and offers brand name furniture at discounted prices. The business also Hall Farm Kitchens T/A and incorporates Kitchens T/A and Stillspace from the Waltham Hall unit which provide a kitchen warehouse. Stillspace Ltd Waltham DandD Interiors A business operating from a unit at Waltham Hall Farm. Hall Farm Waltham Speedy Hire Centres A multi-site company providing tools and equipment for hire. It operates from a number of locations in East of England including a unit located at Hall Farm (Southern) Ltd Waltham Hall Farm. Molehill Molehill Green Post Office A single site business located at Molehill Green. The business provides Post Office services and convenience/newsagent retailing and rents its Green Stores premises from Stansted Airport Ltd. This post office has been identified for closure as part of the Royal Mail Network Change Programme.
Molehill The Three Horseshoes A fifteenth century inn in Molehill Green offering food and drinks seven days a week. It is owned by Punch Taverns and has a tenant occupier. Green Molehill Herts Care Ltd Herts Care is part of the Continuum Group which provides a full range of services for young people to local authority partners throughout the UK. Green The business provides a range of services from residential care through to supervised contact and escort/driver transport. The company has two sites affected by the G2 Airport footprint at Molehill Green – Whitewebbs and Conifers providing specialist services for children.
Takeley High House Montessori A single site business providing full day care and education for up to 60 children per day from the age of three months to five years. The business Day Nursery is located at High House Farm in Takeley and rents its premises from Stansted Airport Ltd.
Takely Stansted Guest House and A single site business in Takeley providing bed and breakfast accommodation in seven rooms and a cattery with twelve pens for feline visitors. Bridegfoot Cattery Nr Broxted Brookend Farm Livery A business providing full and DIY livery services. Hill
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Section 7 Stansted related employment: baseline
7.7.11 Almost 60% of businesses reported that their employment levels had remained the same at the site over the last three years. Some 17% reported employment growth of up to 10% with a further 17% reporting employment growth of over 10%. 7.7.12 Table 30 provides a summary of the number of businesses in each turnover sizeband. The business are distributed across all the turnover bands, with the majority (58%) having turnover of less than £500,000. Unlike employment, the majority (75%) of businesses reported that turnover has increased at the site in the last three years with 58% reporting turnover growth of more than 10%.
Table 30: Turnover of businesses Turnover ranges <£50,000 £50,000 – £100,000 £250,000 £500,000 >£1m Not £99,999 - - – £1m Provided £249,000 £4999,999 No. of businesses 0 1 3 3 2 2 1 % of businesses 0.0 8.3 25.0 25.0 16.7 16.7 8.3
7.7.13 As the survey of responses only covered twelve of the 17 businesses located on the land required for the G2 Airport Project, the results have been grossed up to cover the 17 affected businesses. It is estimated that there are a total of 143 jobs in these 17 businesses with the split between full-time and part-time shown in Table 31.
Table 31: Employment in businesses located on land required by G2 Airport Project Full-Time Part-Time Total Permanent 58 47 105 Seasonal 37 0 37 Total 95 47 142
7.7.14 This employment would support indirect and induced employment in the assessment area and this has been estimated by applying an employment multiplier of 1.3 to the total employment in Table 31. This yields an estimate of total employment in the assessment area supported by the 17 businesses located on the land required by the G2 Airport Project of 185. Details are shown in Table 32.
Table 32: Total employment in businesses located on G2 Airport Project land Employment Direct 142 Indirect and induced 43 Total 185
Effect of G2 Airport Project 7.7.15 The premises of the 16 businesses located on the G2 Airport extension area would be demolished and it would not be possible for these businesses to continue at their current location. Only part of the land used by Brookend Farm Livery would be required for the sites for off-setting, but it is assumed that this business could not continue at its present location due to the proportion of land being lost which is estimated to be over 40%. Hence, it is assumed that all 17 businesses would have to move from their current locations. 7.7.16 From the survey of businesses three companies (25% of respondents) reported that they would not continue with their business if the G2 Airport Project proceeds, although one of these businesses is the Post Office which has already been identified for closure by the Royal Mail. Applying the results of the survey to the population of 17 businesses, it is estimated that 20 direct jobs would be lost if the businesses closed as a result of the G2 Airport Project. It is assumed that the remaining 122 direct jobs would relocate elsewhere in the assessment area. | 47
Section 7 Stansted related employment: baseline
7.7.17 The indirect and induced jobs associated with the direct jobs lost are estimated to six jobs, yielding a total of 26 jobs lost as a result of the land requirements for the G2 Airport Project. A summary is shown in Table 33.
Table 33: Total jobs affected by G2 Airport Project and requirements Jobs lost Jobs displaced Total Direct 20 122 142 Indirect and induced 6 37 43 Total 26 159 185
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Section 8 Stansted related employment: forecasts
8 Stansted related employment: forecasts 8.1 Introduction and approach
8.1.1 The assessment of the employment effects of the operation of the G2 Airport Development requires forecasts of the future levels of Stansted related employment for the G2 Airport Development scenario and the base case which represents the situation at Stansted without the G2 Airport Development. 8.1.2 The analysis of Stansted related employment and the wider labour market is undertaken for two assessment years: • 2021 which represents the end date for the current RSS; and • 2030 which represents the date of the completed development. 8.1.3 The methodology for forecasting the four elements of Stansted related employment is described in this section when each element of Stansted related employment is discussed. In describing the methodology, key assumptions and limitations are discussed at the appropriate points. 8.2 Direct on-Airport employment
Methodology 8.2.1 The forecasts of direct on-airport employment are estimated by BAA. BAA splits direct on-airport employment in the forecasting base year (2003) by the Airport function they support. It should be noted that although the baseline for the operational employment assessment in this volume is 2006, 2003 is the base year from which BAA forecasts of direct on-airport employment are made. In terms of providing detailed information on the characteristics of the BAA Stansted workforce, the most recent data are from the 2003 Employment Survey. The fact that the baseline year (2006) is different from the year on which the forecasts are based does not compromise the assessment because it is based on the employment in each of the assessment years with and without the G2 Airport Project. Both the employment estimates (with and without G2 Airport Development) are produced from the same data and using the same approach. 8.2.2 The Airport functions in the BAA forecasting process are: • passenger related staff who deal directly or indirectly with passengers eg cabin crew, check-in personnel; • air traffic movement related staff who are concerned with aircraft operations eg pilots, flight engineers; • air cargo related staff eg aircraft cargo loaders; • traffic related support staff who service more than one of the above areas eg firemen; and • non-traffic related support staff whose work is not specifically related to any of the above eg head office administration, retailing, hotels. 8.2.3 BAA adopts a three step approach to forecasting direct on-airport employment, which is to: • divide total base year employment into the Airport functions which they serve (as defined above); • apply the forecast growth in annual traffic to these categories; and • adjust the forecast to allow for expected gains in labour productivity in each category. 8.2.4 Future levels of direct on-airport employment will be affected by two factors: • the level of traffic through the Airport including passengers, air transport movements and cargo; and • growth in productivity at the Airport which is measured by the change in passengers per employee. 8.2.5 Table 34 provides a summary of the forecast air traffic through the Airport in the baseline (2006), and the assessment years of 2021 and 2030 for the base case and G2 Airport Development.
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Section 8 Stansted related employment: forecasts
Table 34: Air traffic, 2003 – 203072 Passengers (mppa) Air transport Cargo (000s movements (000s) tonnes) Base case 2006 23.7 190.2 228 2021 35.0 264.0 640 2030 35.0 264.0 640 G2 Airport Development case 2006 23.7 190.2 228 2021 50.5 385.5 830 2030 68.0 480.0 1,120
8.2.6 The G2 Airport Development would enable an additional 33 million passengers to use the Airport in 2030 compared to the base case. The additional air transport movements with the development case in 2030 will be about 216,000 and there are forecast to be an additional 480,000 tonnes of cargo. 8.2.7 The other factor affecting the employment forecasts is the assumptions made regarding future productivity. The productivity assumptions were made by BAA and this assessment takes the BAA traffic and employment forecasts as given. However, it useful to examine the productivity assumptions within the employment forecasts as direct on-airport employment is the largest component of total Stansted related employment. This has been done by calculating the ‘implicit’ rate of productivity growth in the base case and G2 Airport Development by examining the change in direct on-airport employment relative to passenger growth. Table 35 shows the average annual rate of productivity growth
Table 35: Direct on-Airport employment productivity assumptions73 Average annual rate of productivity growth Base case, % G2 Airport Development, % 2003 - 2021 1.3 2.0 2003 - 2030 1.1 1.6
8.2.8 The table shows that the implicit productivity growth rates are higher in the development case than in the base case. This will be expected as there would be greater opportunities for productivity growth when air traffic is growing through the Airport. In the G2 Airport Development case, the average annual rate of productivity growth is lower over the longer term (ie to 2030) than the shorter term (ie to 2021). This reflects the very rapid growth in productivity experienced at the Airport in recent years which is expected to continue in the near future, before the rate of productivity growth reduces to a more ‘normal’ longer term trend. 8.2.9 The type of traffic through the Airport in the longer term will affect the rate of productivity growth as the mix of airlines changes and a lower proportion of traffic is accounted for by low cost carriers. The forecast growth in long-haul traffic would also be expected to reduce the rate of productivity growth. Table 36 sets out the average annual rate of productivity growth at Stansted and Heathrow in recent years. Over 1990 to 2006, the average annual rate of productivity growth at Stansted has been very high at over 11%. This is eight times the rate of growth at Heathrow and approximately six times the average rate across the economy as a whole. 8.2.10 In recent years there has been no productivity growth at Heathrow, but this reflects the exceptional circumstances concerning the development of T5 and the fact that the Airport is operating at a passenger throughput in excess of its capacity until T5 opens. Data are not available for Gatwick for the time periods in Table 36, but the average annual rate of productivity growth was 1.7% between 1992 and 2003.
72 BAA Forecasting and Statistics. 73 Tribal analysis of BAA data. 50 |
Section 8 Stansted related employment: forecasts
Table 36: Historic rates of productivity growth,% Heathrow Stansted 1990 to 2006 1.4 11.4 1990 to 1995 3.7 10.8 1995 to 2000 0.9 (1) 11.3 2000 to 2005 -0.3(1) 12.8 2005 to 2006 -0.8 8.1 Note: (1) covers period to/from 2001 as no 2000 data available
8.2.11 In forecasting employment over the long-term, the assumptions made about productivity growth are very important. A high rate of productivity growth applied to a given growth in traffic will reduce the employment forecast compared to the use of a lower productivity rate applied to the same growth in traffic. As stated in paragraph 7.3.3, the average annual rate of productivity growth in the UK economy is around 1.8% per annum. The implied rate of productivity growth in the BAA direct on-airport employment forecasts with the G2 Airport Development is slightly above this rate for the period to 2021 and slightly below for the period to 2030 at 1.6% per annum. Given the changing characteristics of traffic at Stansted in the future, the rates of productivity growth forecast are consistent with the longer terms rates achieved at Heathrow. Direct on-Airport employment forecasts 8.2.12 The forecasts of Stansted related employment in the base case for the two assessment years are shown in Table 37. The forecasts have been prepared using the methodology outlined in paragraphs 8.2.1 to 8.2.4. In 2021, the forecast level of direct on-airport employment in the base case is 15,800 with income of £370 million. This estimate of employment corresponds to a passenger throughput of 35 mppa. Over 2021 to 2030 there is no change in passenger throughput in the base case, but there will continue to be productivity improvements. The effect of this is to reduce the forecast of direct on-airport employment in 2030 in the base case to 15,000 with income of almost £350 million.
Table 37: Direct on-Airport employment, 2021, 203074 Employment Income, £ million 2021 2030 2021 2030 Base case 15,800 15,000 370.2 350.3 G2 Airport Development case 20,100 24,800 469.8 581.1
8.2.13 Forecasts of direct on-airport employment with the G2 Airport Development are higher than the base case in both 2021 and 2030 at 20,100 and 24,800 respectively. Income is also higher in each year. 8.2.14 The forecast of direct on-airport employment with the G2 Airport Development should be adjusted to reflect the loss of employment in businesses which are located on land required by the development. As discussed in paragraph 7.7.15 it is estimated that approximately 25% of the businesses located on the land required by the G2 Airport Project do not plan to continue with their business if the G2 Airport Project proceeds. There would be a loss of employment in these businesses of 20 jobs. There would also be indirect and induced employment lost which would take the total job losses to 26 (Table 33). 8.2.15 The remaining businesses hope to continue from a new location and it is assumed that employment levels are maintained with the relocation of the business. 8.2.16 Given the likely scale of jobs lost in the businesses which intend to close (less than 30 including indirect and induced effects), no adjustments have been made to the direct on-airport employment forecasts as the lost jobs would not affect the total when the numbers are rounded to the nearest 100. 8.2.17 The BAA forecasting model does not allow the on-airport employment forecasts to be broken down by occupation or skill. Table 23 and Table 24 showed that the Airport provides a range of jobs across all occupations and skill levels and this range of jobs would be expected to be maintained as the Airport grows.
74 BAA and Tribal Consulting. | 51
Section 8 Stansted related employment: forecasts
8.2.18 The distribution of Heathrow employment by skill level shown in Table 25 was taken from the 2004 survey of Heathrow employees. This employment distribution by occupation corresponds to a passenger throughput at the Airport of 67.1 mppa. This is similar to the forecast throughput at Stansted in 2030. Hence, it could be concluded that the future distribution of Stansted employment by occupation and skill would be similar to that at Heathrow. This would be a reasonable assumption in terms of a comparable passenger throughput, but it does not take account of technological change which could occur over the period to 2030. 8.2.19 The forecasts in this chapter extend over a period of 25 years and to try reliably to anticipate the occupational structure of the on-airport workforce in 2030 is almost impossible. For example, in 1982 it would have been very difficult to imagine that many people using the Airport in 2007 would be checking-in online, printing their own boarding pass and facing the levels of security at the Airport which everyone faces today. Hence, the specific occupations and skills required by the Airport in 2030 cannot be forecast, but it is not unreasonable to expect that a broad range of skills would be required. 8.2.20 As traffic and productivity assumptions are the key determinants of direct on-airport employment, Table 38 sets out, for comparative purposes, the estimates of direct on-airport employment which have been prepared by other organisations in relation to the second runway at Stansted in 2030. The results are shown for the scenarios in which a third runway is assumed at Heathrow by 2020.
Table 38: Assumptions and employment estimates from other second runway studies Traffic (mppa) Direct on-Airport employment Productivity, % p.a. 2021 2030 2021 2030 (1) CE75 62 70 24,000 22,800 2.9 to 1.6 Halcrow76 67.1 71.777 30,400 28,900 1.75 BAA 51 68 20,100 24,800 2.0 to 1.6 Note: (1) Halcrow data relates to 2031
8.2.21 Comparison of the results for 2021 shows that the BAA direct on-airport employment forecasts are lower than those estimated by Halrow and CE. The productivity assumptions are broadly similar, but there is substantial variation in the passenger throughput with BAA’s passenger throughout at 51 mppa compared to 62 mppa with CE and 67 mppa with Halcrow. 8.2.22 By 2030, the difference in the passenger throughputs is much less between BAA and Halcrow and CE and the BAA forecasts lie between the other sets of forecasts. 8.2.23 The South East Regional Air Services (SERAS) studies to support the Airport Transport White Paper (ATWP) also assessed the employment implications of various runway packages. The SERAS studies yielded a much higher level of on-airport employment that the BAA, Halcrow and CE forecasts, but this is a reflection of the age of the forecasts. The SERAS forecasts are older (relying on 1998 data) and were prepared before the full extent of productivity growth at Stansted became apparent. 8.2.24 Overall, the BAA forecasts of direct on-airport employment with the G2 Airport Development lie within the range of forecasts produced by Halcrow and CE for EEDA 8.3 Direct off-Airport, indirect and induced employment Methodology 8.3.1 The approach to forecasting direct off-airport and indirect employment is to assume that employment grows in line with passenger traffic with an allowance for productivity growth. This is methodology is the same as that used to move from the 2003 G1 baseline employment estimates to the 2006 G2 baseline estimates described in paragraphs 7.3.2 and 7.4.2 for direct off-airport and indirect employment respectively. The BAA traffic forecasts have been assumed, but there is no reason to assume that the on-airport productivity growth
75 ‘Audit of Stansted Growth Assumptions’ York Aviation, August 2004 for Go-East, Table 3.7 and page 49, 76 ‘Employment and Housing Implications of a Second Runway at Stansted Airport’ August 2004, Halcrow, Table 5.5 and Table 2.2, 77 Heathrow delay in 2031, Table b0.5 52 |
Section 8 Stansted related employment: forecasts
will apply off-airport to companies located in the assessment area. As a result, an economy wide average rate of productivity growth of 1.87% per annum has been adopted for the analysis78. 8.3.2 Induced employment is forecast using the employment multiplier. As discussed in paragraph 7.5.4 the multiplier of 1.3 was reduced to 1.24 in 2006 to reflect the fact that 20% of the Stansted workforce was living outside the assessment area. As the assessment period progresses, it has been assumed that the proportion of the Stansted workforce living in the assessment area would reduce to 70% by 2030. The induced multiplier has been reduced appropriately to reflect the lower proportion of Stansted employees drawn from the assessment area. Forecasts 8.3.3 Applying these approaches yields the estimates of direct off-airport, indirect and induced employment shown in Table 39 below. 8.4 Total Stansted related employment forecasts
8.4.1 Table 39 shows the forecasts of Stansted related employment in 2021 and 2030 in the base case and with the G2 Airport Development. 8.4.2 The G2 Airport Development would support total Stansted related employment of 27,700 in 2021 and 33,800 in 2030. The income associated with this employment would be £645 million and £785 million in 2021 and 2030 respectively. Without the G2 Airport Development total Stansted related employment is forecast to be 21,500 in 2021 and 20,000 in 2030. The lower employment in 2030 reflects the continuation of productivity gains between 2021 and 2030 while traffic remains constant. Income would also be lower and is forecast to be £501 million and £466 million in 2021 and 2030 respectively.
Table 39: Stansted related employment forecasts, 2021 and 2030 Employment Income 2021 2030 2021 2030 Base case Direct on-Airport 15,800 15,000 370.2 350.3 Direct off-Airport 400 300 8.8 7.3 Indirect 1,500 1,200 33.2 28.1 Induced 3,900 3,500 88.9 80.1 Total STN related 21,500 20,000 501.0 465.8
G2 Airport Development Direct on-Airport 20,100 24,800 469.8 581.1 Direct off-Airport 500 600 12.5 14.3 Indirect 2,100 2,400 47.9 54.6 Induced 5,000 5,900 114.6 135.3 Total STN related 27,700 33,800 644.8 785.2
8.4.3 All components of Stansted related employment are higher with the G2 Airport Development than in the base case in 2021 and 2030. The additional direct on-airport employment with the G2 Airport Development accounts for the majority of the additional income and employment
78 Average annual rate of productivity growth over 1977 to 2004. | 53
Section 9 Assessment area economy: review of economic performance
9 Assessment area economy: review of economic performance 9.1 Introduction and data sources
9.1.1 This section describes the economic characteristics of the economies of the East of England and the assessment area. Data for the overview of economic performance have been obtained from official sources eg the Office for National Statistics (ONS). The latest available data at September 2007 have been used with the exception of the Annual Business Inquiry (ABI) employment data for 2006 which became available in December 2006 and enables all information to be presented for the baseline year of 2006. 9.2 Economic overview Population and labour supply 9.2.1 The assessment area lies within the East of England region which has one of the fastest growing populations of any UK region with growth of 15% between 1981 and 2006. This is more than double the rate of growth for the UK as a whole. The population of the assessment area was 1.2 million in 2006 with 0.4 million in the inner area and almost 0.8 million resident in the outer area. Population growth in the assessment area as a whole has been 0.5% per annum over 2001 to 2006 which is just below the rate for the East of England. Table 40 shows the resident workforce in the assessment area.
Table 40: Population and labour supply, 2001 - 200679 Area 2001 (000s) 2006 (000s) % Change % Change per annum Population Inner area 409.4 418.4 2.2 0.4 Outer area 773.0 791.9 2.4 0.5 Assessment area 1,182.4 1,210.3 2.4 0.5 East of England 5,388.1 5,606.6 4.1 0.8 Resident workforce Inner area 214.8 221.4 3.1 0.6 Outer area 397.2 412.6 3.9 0.8 Assessment area 612.0 634.0 3.6 0.7
9.2.2 Labour supply in the assessment area has grown by 3.6% over 2001 to 2006 with the outer area having slightly higher growth than the inner area. Employment 9.2.3 In addition to population growth, employment in the assessment area has also been growing between 2001 and 2006. Figure 7 shows how employment in the East of England and the assessment area (comprising the inner and outer areas) has changed over 1998 to 2006. Between 1998 and 2003, the inner, outer and assessment area experienced an increase in employment which was greater than across the East of England as a whole. In 2004, the inner, outer and assessment areas all experienced a slight decline in employment which was reversed by 2005 and continued into 2006. The drop in employment in the inner area was greatest at almost 3.8% which was not offset by the increase in employment over 2004 to 2006. The East of England as a whole, has experienced a much lower level of employment growth over 1998 to 2004 (0.9% per annum over the six years), although employment grew more quickly over 2004 to 2006 at 2.2%.
79 2001 population: mid-year estimates. ONS Crown Copyright. 2006 population and all labour supply figures: Entec. | 55
Section 9 Assessment area economy: review of economic performance
Figure 7: Index of employment, 1998 to 2006
1998 = 100 12 0
115
110
10 5
10 0
95
90
85 1998 1999 2000 2001 2002 2003 2004 2005 2006
Inner Outer Assessment Area East
9.2.4 In 2006 over 571,000 people were employed in the assessment area which represents 24% of employment in the East of England. Employment in the assessment area has increased by over 6% since 2001 which has been driven by employment growth in the outer area; details are shown in Table 41. Between 2001 and 2003 there was employment growth of almost 5% across the inner, outer and whole assessment area which was substantially above the average growth for the East of England. However, while the East of England grew more quickly between 2003 and 2006, growth in the assessment area was much reduced and included a decline in employment in the inner area. Outer area employment growth was also significantly lower in this period.
Table 41: Employment data, 2001 – 200580 Employment (000s) % Change 2001 2003 2006 2001-2003 2003-2006 2001-2006 Inner area 171.9 179.7 177.4 4.5 -1.3 3.2 Outer area 365.3 382.8 393.7 4.8 2.8 7.8 Assessment area 537.2 562.4 571.1 4.7 1.5 6.3 East of England 2,266.1 2,304.7 2,378.7 1.7 3.2 5.0
9.2.5 The distribution of employment by industry in the assessment area and the East of England in 2006 is shown in Table 42. The distribution of employment in both areas is very similar with the exception of the sector which covers public administration and education reflecting the presence of Cambridge University in the assessment area.
80 Annual Business Inquiry ONS Crown Copyright (from NOMIS) 56 |
Section 9 Assessment area economy: review of economic performance
Table 42: Distribution of employment by industry, 200681, % Assessment area East of England Agriculture and fishing 1.0 1.3 Energy and water 0.3 0.4 Manufacturing 11.0 11.0 Construction 5.3 5.3 Distribution, hotels and restaurants 22.9 25.0 Transport and communications 5.2 6.3 Banking, finance and insurance 20.9 20.3 Public administration, education 28.9 25.5 Other services 4.5 4.9 Total 100.0 100.0
9.2.6 Total employment in the assessment area includes employees in employment and the self-employed. Data on the number of self-employed people are not available from the same data source as employees in employment. Self-employment in the assessment area was 81,900 in 200682 which yields a total employment figure of 653,000 in the assessment area in 2006. Earnings 9.2.7 Average gross weekly earnings can be measured in two ways – first as a residence-based estimate which shows the average earnings of people living in the area (who may commute elsewhere for work) and second, as a workplace-based estimate which shows the average earnings of people working in the area. Table 43 shows that on both the residence-based and workplace-based measures, average earnings are higher in the assessment area than across the East of England. Residence-based earnings are over 11% higher and workplace-based earnings are 3% higher. 9.2.8 There is a difference of £74 per week between residence and workplace-based earnings in the assessment area which reflects the effect of commuting patterns on earnings in the assessment area. Using the data in Table 43, average annual residence and workplace earnings in the assessment area are estimated to be £26,600 and £22,800 respectively.
Table 43: Average gross earnings, 200683, £ Source: Residence based, £ Workplace based £ Weekly earnings Annual earnings Weekly earnings Annual earnings Inner area 526.0 27,400 454.7 23,600 Outer area 504.7 26,200 431.3 22,400 Assessment area 512.4 26,600 438.3 22,800 East of England 461.5 24,000 425.5 22,100 Note: Earnings data include full-time and part-time employees
Commuting 9.2.9 The only source of detailed information on commuting is the Census which was last undertaken in 2001. Although now somewhat dated, the following points can be made about the level of commuting from the assessment area in 2001: • some 439,600 people were living and working in the assessment area;
81 Annual Business Inquiry ONS Crown Copyright (from NOMIS). 82 Annual Population Survey, ONS Crown Copyright (from NOMIS). 83 Individual district data from the Annual Survey of Hours and Earnings. Assessment area figures estimated by Tribal using individual district .data. | 57
Section 9 Assessment area economy: review of economic performance
• some 156,200 people were commuting out of the assessment area with the majority (51%) going to destinations in Greater London. A further 42% were commuting to destinations elsewhere in the East of England; • some 127,600 people were commuting into the assessment area with the majority (78%) from places elsewhere in the East of England; and • the assessment area was a net exporter of labour with out-commuters exceeding in-commuters by over 28,000. 9.2.10 Hence, the large commuting flows show that the assessment area has a high degree of interaction with its neighbouring areas and regions. This is shown in Figure 8.
Figure 8: Commuting flows to/from the assessment area, 200184
Commuters to assessment area
From Greater London 16,650 From rest East of England 99,630 From rest UK 11,350 Total in-commuters 127,630
Assessment area
Non-commuters 439,600 In-commuters 127,630 Out-Ccommuters 156,240 Net flow (in-out) -28,610
Commuters from assessment area
To Greater London 80,330 To rest of East of England 64,960 To rest of UK 10,950 Total out-commuters 156,240
Unemployment 9.2.11 Unemployment levels and rates can be measured using either the International Labour Organisation (ILO) definition or the claimant count definition. The ILO definition is a count of jobless people who want to work, are available for work and are actively seeking employment and it is calculated from survey data. Claimant count is a measure of the number of people who are claiming unemployment related benefits and is based on the administrative records of Jobcentre Plus.
84 2001 Census of Population. 58 |
Section 9 Assessment area economy: review of economic performance
9.2.12 The ILO is the official estimate of unemployment published by ONS and Figure 9 shows the trend in unemployment rates between 2001 and 2006. The ILO unemployment rate in the assessment area has been relatively stable between 2001 and 2006 in the range 3.3% (2001) to 4% (2002). In 2006 it was 3.6%. The East of England rate has been slightly higher at between 3.8% and 4.7% throughout the period and was 4.7% in 2006.
Figure 9: Trend in ILO unemployment rates85
% 5
4
3
2
1
0 2001 2002 2003 2004 2005 2006
Assessment Area East of England
9.2.13 The claimant count measure of unemployment is a more narrow measure as it excludes some people who are unemployed but not entitled to claim benefits or who choose not to claim benefits. As the data for the claimant count measure of unemployment is based on administrative records, the data are more ‘current’ than the survey based measure and there is more detailed information available. 86 9.2.14 The claimant count unemployment rate in the assessment area is very low at 1.4% (July 2007 ) compared with 1.8% for the East of England. This rate is effectively a rate of full employment and represents 10,700 people unemployed with 7,000 in the outer area and 3,700 in the inner area. The trend in unemployment rates between 2001 and 2007 is shown in Figure 10. Both the assessment area and the East of England have experienced little change in rates over the period.
Figure 10: Trend in unemployment rates, 2001 -2007
% 5.0
4.0
3.0
2.0
1. 0
0.0 2001 2002 2003 2004 2005 2006 2007
Assessment Area East of England
9.2.15 Comparison of Figure 9 and Figure 10 shows that the ILO measure of unemployment is more than twice the claimant count rate in both the assessment area and the East of England. 9.2.16 The assessment area claimant count unemployment rate is slightly lower than the rate for the East of England and this has been the position throughout the period 2001 to 2007. In July 2007, the only local
85 2001 to 2003 are from the Labour Force Survey, 2004 to 2005 are from the Annual Population Survey. All rate are calculated as a proportion of the working age population. 86 Claimant Count, National Statistics On-Line. | 59
Section 9 Assessment area economy: review of economic performance
authority within the assessment area with an unemployment rate above the East of England average was Harlow with a rate of 3.0%. This relatively poor economic performance in Harlow is one of the factors which has led the draft RSS to identify the district as a key centre for development and change. Policy SS5 identifies Harlow as a priority area for regeneration and HA1 in the Secretary of State’s proposed changes suggests a strategy which will secure the regeneration of Harlow. 9.2.17 The distribution of unemployment in the assessment area by occupation sought is shown in Table 44. The table shows that almost 27% of the total unemployed in the assessment area are seeking work in the occupational group. Indeed, the majority of jobs sought by the unemployed are in lower skilled groups (groups 7-9 in Table 44).
Table 44: Number and distribution of unemployed by occupation sought, December 200687 Inner area Outer area Assessment area No. % No. % No. % 1. Managers and senior officials 250 6.4 430 5.8 680 6.0 2. Professional occupations 150 3.8 360 4.8 510 4.5 3. Associate professional and 280 7.2 630 8.4 910 8.0 technical 505 12.9 985 13.2 1,490 13.1 4. Administration and secretarial 485 12.4 925 12.4 1,410 12.4 5. Skilled trade occupations 215 5.5 395 5.3 610 5.4 6. Personal service occupations 520 13.3 1,030 13.8 1,550 13.6 7. Sales and customer services 450 11.5 700 9.4 1,150 10.1 8. Process, plant and machine 1,045 26.8 2,015 27.0 3,060 26.9 operatives 9. Elementary occupations Total 3,900 100.0 7,470 100.0 11,370 100.0 Note: Data have been rounded and people whose occupation is unknown have been excluded.
9.2.18 Table 45 shows the unemployment rates by occupational group in the assessment area including the inner and the outer areas. The rates represent the number of people unemployed by occupational group as a proportion of the total number of people employed and unemployed by occupational group. Across all occupations, the rate of unemployment is 1.8% in the assessment area. For the elementary group (group 9), the rate of unemployment is over two and a half times higher at 5.1%.
Table 45: Unemployment rates by occupation, December 200688, % Inner area Outer area Assessment area 1. Managers and senior officials 0.6 0.6 0.6 2. Professional occupations 0.6 0.5 0.5 3. Associate professional and technical 1.0 0.9 0.9 4. Administration and secretarial 1.9 2.2 2.1 5. Skilled trades occupations 1.8 2.5 2.2 6. Personal service occupations 1.5 1.3 1.3 7. Sales and customer services 3.3 4.3 3.9 8. Process, plant and machinery operatives 2.7 3.1 3.0 9. Elementary occupations 4.9 5.1 5.1 Total 1.8 1.9 1.8
87 ONS Crown Copyright. 88 Estimated by Tribal based on ONS data. 60 |
Section 9 Assessment area economy: review of economic performance
9.2.19 The data shows that the unemployed in the assessment area are looking for jobs with relatively low skill levels. Migrant workers 9.2.20 On 1 May 2004, ten countries – Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia – joined the EU. From that date, nationals of Malta and Cyprus have had full free movement rights and rights to work, throughout the EU. However, the UK Government put in place transitional measures to regulate the other eight countries nationals’ access to the labour market (via the Worker Registration Scheme (WRS)). 89 9.2.21 In total there have been 682,940 applications made under this WRS between May 2004 and June 2007 across the UK as a whole. East Anglia had the greatest number of workers registering with employers in the area accounting for 15% of the total (96,920 workers). Over 40% of these workers were employed in administration and business services activities. 9.2.22 Between May 2004 and June 2007 almost 691,000 applications were received for national insurance (NI) numbers across the UK with almost 66% of applications from Polish nationals. These applications include all claims from nationals of the accession countries and are not restricted to those required to register with the WRS. The East of England accounted for 61,800 applications which is 9% of total applications. London received the highest number of applications at over 175,400 (25% of total applications). 9.2.23 Data are available by region and local authority on the number of NI registrations of non-UK nationals in 2006/7 and are shown in Table 46. Across the East of England, NI registrations of non-UK nationals account for 1% of the population. The position in the assessment area is similar, although very slightly lower in the inner area.
Table 46: National insurance registrations, 2006/7 NI registrations (000s) Population (000s) NI as % of population Inner area 3.33 418.4 0.8 Outer area 8.36 809.1 1.0 Assessment area 11.69 1,227.5 1.0 East of England 53.37 5,541.6 1.0
89 ‘Accession Monitoring Report A8 Countries: May 2004 to June 2007’ Home Office Border and Immigration Agency, 2007. | 61
Section 10 Assessment area economy: future employment
10 Assessment area economy: future employment 10.1 Introduction
10.1.1 The forecasts of total Stansted related employment must be placed within the context of developments in the wider assessment area labour market. This section estimates the future level of labour supply and demand within the assessment area. 10.2 Labour supply Methodology 10.2.1 Labour supply is defined as the number of persons in work or looking for work in the assessment area. The supply of labour is dependent upon: • resident population of working age; and • the proportion of the population who wish to work as measured by the economic activity rate. 10.2.2 The actual labour supply available to employers in the assessment area is dependent upon the number of local residents who also choose to work in the area and the number of people not resident in the area but who commute into the assessment area from surrounding districts and regions. Overall, the labour supply available to employers is likely to change over time according to variations in three factors: • size and profile of the resident population; • economic activity rates in the area; and • commuting patterns to and from the area. 10.2.3 Figure 8 provided details on commuting patterns in the assessment area and highlighted the extent to which the assessment area is integrated with neighbouring economies ie London. 10.2.4 Appendix 3 provides details of the methodology adopted for forecasting labour supply. 10.2.5 In forecasting future labour supply, one of the inputs is the forecasts of dwelling provision over the period to 2030. The Secretary of State’s Proposed Changes to the East of England Plan provide details of dwelling provision to 2021 and the East of England Regional Assembly (EERA) has advised that these figures should be used for projection purposes. In the absence of explicit guidance on what assumptions should be made for the period from 2021 to 2030, the current projections assume a continuation of the development rate for 2006 to 2021. Further details are provided in Table 1 in Appendix 3. 10.2.6 Given that the dwellings figures in the Secretary of State’s Proposed Changes to the East of England Plan are to be considered a ‘minimum’ housing requirement, two sensitivity tests have been undertaken: • A 10% increase in dwellings post 2016; and • A 10% increase in dwellings post 2021. 10.2.7 The results of these tests are also shown in Appendix 3. Labour supply forecasts 10.2.8 Using the methodology outlined in Appendix 3, Table 47 sets out the labour supply forecast for the assessment area. Over the period from 2006 to 2021 the workforce resident in the assessment area as a whole is forecast to increase by over 87,100 (13.7%) with approximately one third of the increase occurring in the inner part of the assessment area. Between 2021 and 2030, the resident workforce in the assessment area is forecast to increase by a further 65,000. Overall, labour supply in the assessment area is forecast to increase by approximately 25% over 2005 to 2030.
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Table 47: Labour supply in the assessment area, 2006, 2021 and 2030 (000s)90 % Change 2006 2021 2030 2006 to 2021 2006 to 2030 Inner 221.4 250.2 271.5 13.0 22.6 Outer 412.6 470.9 515.1 14.1 24.8 Total assessment area 634.0 721.1 786.6 13.7 24.1
10.2.9 As stated in paragraph 10.2.6 two sensitivity tests were applied to the dwellings provision and the labour supply figures resulting from these sensitivities is shown in Table 48. Comparison of Table 47 and Table 48 shows that a 10% increase in dwellings from 2016 yields an increase in labour supply of 5,500 and 12,000 in the assessment area in 2021 and 2030 respectively. A 10% increase in dwellings from 2021 yields and increase in labour supply of 8,000 in 2030.
Table 48: Labour supply sensitivity results (000s), 2006, 2021 and 203091 10% Dwelling increase from 2016 10% Dwelling increase from 2021 2006 2021 2030 2006 2021 2030 Inner 221.4 252.0 276.2 221.4 250.2 274.6 Outer 412.6 474.7 522.5 412.6 470.9 520.0 Total assessment area 634.0 726.6 798.6 634.0 721.1 794.6
10.3 Labour demand Methodology 10.3.1 Forecasting labour demand and employment over a period of more than 20 years is a complex process. One of the methodological weaknesses of employment forecasting for the assessment area is that the techniques cannot model accurately how any change in labour demand will translate into changes in resident employment. Yet modelling this inter-relationship is important to forecasting the labour market outcome in terms of employment. 10.3.2 For example, if labour demand increases in the assessment area, the resultant change in resident employment (ie employed persons living in the area) will depend on the labour supply response from people living in the area and the general labour market situation. If there is high unemployment, low activity rates and available residential accommodation to absorb in-migration, the additional labour demand is likely to translate into additional resident employment. If however, there is low unemployment, high activity rates and little capacity to absorb in-migration, increased labour demand is likely to result in a change in commuting patterns and action by employers to increase labour efficiency such that there is less impact on resident employment. 10.3.3 Most long-run employment forecasts cannot model the complex relationship between an increase in labour demand and the corresponding change in resident employment such that the forecasts are, in effect, forecasts of labour demand rather than resident employment. 10.3.4 Labour demand forecasts are available for the East of England as a whole from a number of multi-sectoral regional models eg Oxford Economics (OE) and Cambridge Econometrics (CE). The OE and CE forecasts for the East of England have been used as the basis of the forecasts of labour demand in the assessment area. OE and CE produce forecasts of labour demand for the East of England from their regional models for the period to 2017 and 2020 respectively. Forecasts for the East of England to 2021 and 2030 have been derived as follows: • calculate the average annual rate of employment growth by industry over 2006 to 2017/2020 (as appropriate); and
90 Entec – Appendix 2, Table 4. 91 Entec – Appendix 2, Tables 4a and4b. 64 |
Section 10 Assessment area economy: future employment
• assume that employment continues to grow at this rate over the period to 2021 and 2030. 10.3.5 This methodology provides labour demand forecasts for the East of England for 2021 and 2030. To derive estimates of labour demand for the assessment area, the East of England models have been used in conjunction with the following approach: • calculate the assessment area’s share of East of England labour demand by industry in 2006; • calculate the change in employment by industry in the East of England over the period from 2006 to 2021 and 2030; and • apply the assessment area share of labour demand in 2006 to the change in forecast employment by industry to derive forecast labour demand in 2021 and 2030. Labour demand forecasts 10.3.6 Table 49 shows the forecasts of labour demand in the assessment area for 2021 and 2030. The labour demand forecasts based on the CE model show an increase of almost 88,000 over the period 2006 to 2021 with the inner area accounting for almost 27,000 of the increase. A further increase in labour demand of almost 58,000 is forecast for the assessment area between 2021 an 2030. 10.3.7 The forecasts prepared using the OE model are slightly higher than those prepared using the CE model for both the inner and outer area throughout the assessment period. The difference increases as time progresses which is a reflection of the methodology in that any difference occurring in the period to 2021 is compounded as the assessment time period moves from 2021 to 2030.
Table 49: Forecast labour demand, assessment area, 2006, 2021, 203092 Labour demand (000s) % Change 2006 2021 2030 2006 to 2021 2006 to 2030 CE based forecasts Inner 205.9 232.9 250.4 13.1 21.6 Outer 447.2 507.8 547.9 13.6 22.5 Total assessment area 653.1 740.7 798.3 13.4 22.2
OE based forecasts Inner 205.9 236.1 259.0 14.7 25.8 Outer 447.2 520.2 574.4 16.3 28.4 Total assessment area 653.1 756.3 833.5 15.8 27.6
10.3.8 Both sets of forecasts are predicting labour demand to increase in the assessment area by between 22% and 28% by 2030 with slightly higher growth in the outer area compared to the inner area. In absolute terms, the growth in labour demand in the inner area is between 45,000 and 53,000 over this period. The outer area growth is forecast to be between 101,000 and 127,000 between 2006 and 2030. 10.4 Labour supply and demand interaction
10.4.1 As discussed in paragraphs 10.3.1 to 10.3.3 most long run forecasts of employment are labour demand forecasts, because the models cannot accurately predict how people living in and outside the area will respond to changes in labour demand. The models on which the labour demand forecasts are based have no supply-side constraints whereas the labour supply forecasts are constrained by the number of dwellings in the area. Nevertheless, a comparison of labour demand and supply is made and the labour market position in the operational employment assessment area is provided in the table below.
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Table 50: Labour demand and supply, assessment area, 2006, 2021 and 2030 (000s) Supply minus demand 2006 2021 2030 CE based forecasts of demand Inner +15.5 +17.3 +21.1 Outer -34.6 -36.9 -32.8 Total assessment area -19.1 -19.6 -11.7
OE based forecasts of demand Inner +15.5 +14.1 +12.5 Outer -34.6 -49.3 -59.3 Total assessment area -19.1 -35.2 -46.9
10.4.2 In 2006, labour demand in the assessment area exceeded resident labour supply, although the position between the inner and the outer areas was very different. Within the inner area, there was an excess of labour supply over demand of over 15,000 while there was an excess demand in the outer area of almost 35,000. 10.4.3 The unconstrained labour demand forecasts for 2021 and 2030 show a continuation of these trends. Using the CE based labour demand forecasts, the excess of labour supply over labour demand in the inner area is forecast to increase to over 21,000 by 2030 while the excess demand in the outer area is forecast to reduce slightly in absolute terms. The higher labour demand forecasts derived using the OE model still show an excess of supply over demand in the inner area in 2030, but the absolute number is reduced to just over 12,000. The excess demand over supply in the outer area is also larger with the OE forecasts. 10.4.4 While recognising that the labour supply and labour demand comparison is not comparing like with like because there are no supply constraints to the demand forecasts, the analysis shows that the inner part of the assessment area is forecast to have excess supply at the two assessment dates of 2021 and 2030. This implies that residents of the inner area would have to commute outside the area to take up employment. 10.4.5 The comparison of the labour supply sensitivity results with the two sets of labour demand are shown in Table 51.
Table 51: Sensitivity analysis of labour supply and demand (000s). 2006, 2021 2030 Supply minus demand 10% Dwelling increase from 10% Dwelling increase from 2016 2021 2006 2021 2030 2006 2021 2030 CE based demand forecasts Inner +15.5 +19.1 +25.8 +15.5 +17.3 +24.2 Outer -34.6 -33.1 -25.4 -34.6 -36.9 -27.9 Total assessment area -19.1 -14.1 +0.3 -19.1 -19.6 -3.7
OE based demand forecasts Inner +15.5 +15.9 +17.2 +15.5 +14.1 +15.6 Outer -34.6 -45.5 -51.9 -34.6 -49.3 -54.4 Total assessment area -19.1 -29.7 -34.9 -19.1 -35.2 -38.9
10.4.6 The effect of the sensitivity test is to increase the excess of supply over demand in the inner part of the assessment area and to reduce the excess of demand in the outer part of the assessment area. Using the CE based labour demand forecasts, the assessment area as a whole moves to a position of almost balance in 2030 if there is a 10% increase in dwellings from 2016. With a 10% increase in dwellings from 2021 there is a slight excess of demand over supply in 2030.
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10.4.7 With the OE based forecast of labour demand the assessment area as a whole continues to have an excess of demand over supply, but the imbalance is reduced with the two sensitivity tests. The inner area has a larger excess of supply and the outer area has a lower excess of demand. Comparison with RSS 10.4.8 The local authorities in the G2 Airport Development employment assessment area are included in a number of district groupings in the Secretary of State’s proposed changes to the East of England Plan. Table 52 shows the indicative targets for net growth in jobs for the period 2001 to 2021 for the local authorities within the assessment area. Some of the authorities are in groups with local authorities not covered by this assessment area, but it is not possible to separate out the relevant authorities.
Table 52: Job growth 2001 - 202193 (000s) District grouping Total job Av. annual growth job growth Cambridgeshire (Cambridge, S Cambs, E Cambs, Huntingdon, Fenland) 75.0 3.8 Haven Gateway – Essex (Colchester, Tendring) 20.0 1.0 London Arc – Essex (Epping Forest, Brentwood) 14.0 0.7 Central and North Essex (Harlow, Uttlesford, Chelmsford, Braintree, Maldon) 42.0 2.1 North and East Herts (N Herts, East Herts, Stevenage) 18.0 0.9 Rest of Suffolk (Mid Suffolk, St Edmundsbury, Forest Heath) 18.0 0.9 Note: assessment area local authorities are shown in bold
10.4.9 It is clear from the table that despite the excess labour demand in the outer assessment area, further job growth is proposed in the draft RSS for the local authorities which form the outer part of the employment assessment area. Cambridge and South Cambridgeshire in particular form part of a district grouping where substantial employment growth is proposed. 10.4.10 Three of the four districts in the inner assessment area form part of the Central and North Essex group where a job growth target of 42,000 is proposed. In formulating the jobs growth targets, the Secretary of State started from a target of 21,00094 for Central and North Essex and proposed to add: • ‘About 11,000 more to reflect extra job growth at Stansted Airport (direct jobs) up to 2021 in consequence of moving beyond full use of the existing runway once a second is built.’ ; and • ‘About 10,000 more at Harlow to reflect regeneration needs there and potential to attract some indirect Stansted-related job growth’ (Paragraph 13, Annex A, Secretary of State’s Proposed Changes to the East of England Plan, December 2006) 10.4.11 The employment requirements of the G2 Airport Development are clearly a part of the RSS job target and from Table 49 it is clear that labour demand is forecast to increase in the assessment area over the period to 2030.
93 Policy E1, The Secretary of State’s Proposed Changes to the Draft Revision to the Regional Spatial Strategy for the East of England and Statement of Reasons, December 2006. 94 The Secretary of State’s Proposed Changes to the Draft Revision to the Regional Spatial Strategy for the East of England and Statement of Reasons, Part 1, Annex A, December 2006. | 67
Section 11Operational employment assessment
11 Operational employment assessment 11.1 Introduction and approach
11.1.1 This section assesses the effect of the G2 Airport Development in employment terms against the base case in the two assessment years. The additional employment associated with the G2 Airport Development is then considered relative to the wider labour market in the assessment area. 11.1.2 As explained in paragraph 5.2.5 criteria specific to this assessment have been developed. The effect of Stansted related employment in 2021 and 2030 on the assessment area will be considered in relation to the jobs target for Central and North Essex of 42,000 (paragraph 3.3.23) which is part of Policy E1 of the draft RSS. 11.1.3 A beneficial effect makes a positive contribution to Policy E1 with the distinction between major and minor a reflection of the scale of contribution. An adverse effect contradicts Policy E1 through a reduction in employment with the distinction between major and minor a reflection of the scale of contradiction. The criteria for assessing the operational employment effects are shown in Table 53.
Table 53: Operational effects: assessment criteria Criteria Description Adverse The effect of the G2 Airport Development is a net reduction in employment in the local assessment area defined in section 7.2 Negligible The effect of the G2 Airport Development is no change in employment in the local assessment area Beneficial The effect of the G2 Airport Development is a net increase in employment in the local assessment area
11.2 Employment effects
11.2.1 A summary of the effect of the G2 Airport Development in each of the assessment years of 2021 and 2030 in terms of income and employment is shown in Table 54. In 2021 additional employment associated with the G2 Airport Development is just over 6,000 higher than the base case. By 2030, the G2 Airport Development will support additional employment of 13,800 and additional income of almost £320 million in the assessment area. The majority of the additional employment would be direct on-airport employment.
Table 54: Effect of G2 Airport Development in each assessment year Employment Income, £ million 2021 2030 2021 2030 Direct on-Airport +4,300 +9,800 +99.6 +230.8 Direct off-Airport +100 +300 +3.8 +7.0 Indirect +600 +1,200 +14.7 +26.5 Induced +1,100 +2,400 +25.7 +55.2 Total +6,200 +13,800 +143.8 +319.4 Note columns may not sum due to rounding
11.2.2 In 2006, Stansted related employment accounted for 2.5% of total employment in the assessment area. The proportion of total employment in the assessment area accounted for by the G2 Airport Development and base case in each assessment year is shown in Table 55. In the base case, the Stansted related employment is forecast to account for 2.8% of total labour demand in 2021 before falling back to approximately 2.4% in 2030. With the G2 Airport Development, Stansted related employment will increase its contribution to total labour demand and account for approximately 4% to 4.2% of assessment area labour demand in 2030 depending on the forecast of labour demand adopted. The G2 Airport Development is forecast to account for approximately 1.6% to 1.7% of total assessment area labour demand in 2030 and 8%
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of the forecast increase in labour demand over 2006 to 2030 using the mid-point forecasts of labour demand in 2006 and 2030 in Table 49.
Table 55: Stansted related employment as a proportion of assessment area labour demand,% Base case G2 Airport Development Impact of G2 CE based forecasts 2021 2.9 3.7 +0.8 2030 2.5 4.2 +1.7
OE based forecasts 2021 2.8 3.7 +0.9 2030 2.4 4.1 +1.7
11.3 Assessment of employment effects Assessment in 2021 11.3.1 The additional employment in 2021 associated with the G2 Airport Development is 6,200 with the majority (69%) of the additional employment on-airport. The total additional jobs would contribute to Policy E1 of the RSS which has set a job growth target for the East of England region of 452,000 between 2001 and 2021. The additional jobs on–airport would contribute to the target set for Central and North Essex of 42,000 jobs. The labour market position in the inner area is forecast to be one of excess labour supply. The excess of supply over labour demand is forecast to be in the range 14,100 to 17,300 (Table 50). 11.3.2 The approach to developing the regional economics models does not make it easy to be specific about whether or not the G2 Airport Development is included in the labour demand forecast. The labour demand models are built on past trends and to the extent that current Stansted employment is included in the base year labour demand forecast, it could be expected to be included in the forecast labour demand as it is derived from past trends. The employment associated with the G2 Airport Development lies comfortably within the excess labour supply over demand. This assumes that labour demand does not include the G2 Airport Development, but given the reliance on past trends when forecasting labour demand this is a conservative assumption as past employment growth at Stansted will have influenced the current labour demand forecasts. 11.3.3 Hence, in 2021, the G2 Airport Development would provide employment opportunities which would help to balance the labour supply/demand position in the inner area. 11.3.4 A summary of the forecast place of residence of the additional on-airport workforce is provided in Table 56. In 2021 it is forecast that 61% of the direct on-airport additional employees would be resident in the inner area of the assessment area. This represents 2,600 of the additional 4,300 on-airport employees. The additional employment in Harlow in 2021with the G2 Airport Development is almost 400 compared to the base case. This increase in employment for residents of Harlow is a positive contribution towards the regeneration of the town. 11.3.5 The level of G2 Airport Development on-airport employment resident within the inner part of the assessment area would represent 1% of the total resident workforce of the inner area in 2021 and 9% of the forecast increase in resident labour supply in the inner area between 2006 and 2021. The additional on-airport employment resident in the inner area of 2,600 is well below the forecast excess of labour supply of between 14,100 and 17,300 in 2021. The benefit of the majority of additional on-airport jobs being taken up by residents of the inner area is that their travel to work journeys would be minimised. 11.3.6 The excess labour supply forecast for the inner area implies that it is unlikely that the G2 Airport Development would generate pressures in the labour market such that there would be adverse effects on other local companies.
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Table 56: Forecast place of residence of additional on-Airport employees, 2021 and 203095 2021 2030 No. % No. % Uttlesford 900 21.0 1,900 19.5 East Hertfordshire 700 17.2 1,600 16.5 Braintree 600 14.0 1,200 12.5 Harlow 400 8.8 1,100 10.9 Inner assessment area 2,600 61.0 5,800 59.5 Chelmsford 200 3.7 300 3.3 Epping Forest <100 1.6 100 1.3 Colchester <100 1.6 100 1.4 St Edmundsbury <100 1.9 200 1.7 South Cambridgeshire 100 2.5 200 2.5 Cambridge <100 0.4 <100 0.4 Outer assessment area 500 11.7 1,000 10.6 Total assessment area 3,100 72.7 6,800 70.1 Outside assessment area 1,200 27.3 3,000 29.9 Total 4,300 100.0 9,800 100.0 Note: Columns may not sum due to rounding
11.3.7 In 2021 it is forecast that 500 of the direct on-airport jobs would be taken up by residents of the outer part of the assessment area which represents 0.6% of resident labour supply in the assessment area. Although the outer part of the assessment area is forecast to be in a position of excess labour demand, the additional on- airport employment forecast to be drawn from this area is relatively small (in absolute terms) and represents a small proportion of the workforce in the area. 11.3.8 In 2021, the G2 Airport Development would increase employment in the operational employment assessment area by 6,200 which would contribute to Policy E1 within the RSS by creating employment. Approximately 72% (or 3,100) of the additional on-airport employment is forecast to be taken up by residents in the operational employment assessment area which represents 0.4% of assessment area labour supply. The majority of these additional jobs are forecast to be taken up by residents of the inner area which is forecast to be in a position of excess labour supply. The additional G2 Airport Development jobs would help to reduce the excess of labour supply in the inner area. Assessment in 2030 11.3.9 The additional employment in 2030 associated with the G2 Airport Development is 13,800 with the majority (71% or 9,800) of the additional employment on-airport. The total additional jobs would contribute to Policy E1 of the RSS to increase employment in the East of England. 11.3.10 A summary of the forecast place of residence of the on-airport workforce is provided in Table 56. In 2030 it is forecast that just under 60% of the direct on-airport additional employees would be resident in the inner area of the assessment area. This represents 5,800 of the additional 9,800 on-airport employees. The Table shows that by 2030 Harlow is forecast to have almost 1,100 more employees with the G2 Airport Development than the base case. This is a benefit to policy HA1 of the RSS which aims to regenerate Harlow. Comparison of the number of direct on-airport employees forecast to be living in Harlow in 2030 with the 2002/3 survey shows that the number is set to increase from 650 to over 2,700. This is an increase of over 400% and reflects the potential for residents of Harlow to take up the employment opportunities at the Airport. 11.3.11 The level of G2 Airport Development on-airport employment resident within the inner part of the assessment area would represent 2.1% of the total resident workforce of the inner area in 2030 and 11.6% of the forecast increase in resident labour supply in the inner area between 2006 and 2030. The additional on-airport
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employment resident in the inner area of 5,800 is within the forecast of excess labour supply of between 12,500 and 21,100, assuming that the G2 Airport Development is not included in the labour demand forecast. As stated in paragraph 11.3.2, this is a conservative assumption as past employment growth at Stansted will have influenced the labour demand forecasts. 11.3.12 The G2 Airport Development would also increase indirect and induced employment in the operational employment assessment area. While the place of residence of the indirect and induced employees is not known precisely, the additional indirect and induced employment in 2030 is 1,200 and 2,400 respectively. The additional indirect employment could also contribute to the regeneration of Harlow in accordance with Policy HA1 of the Secretary of State’s proposed changes to the draft RSS, which seeks to develop the town centre and employment to ‘attract employment related to the growth of Stansted Airport, which does not need to be located there.’ 11.3.13 In 2030 it is forecast that over 1,000 of the direct on-airport jobs would be taken up by residents of the outer part of the assessment area which represents 0.2% of resident labour supply in the assessment area. Although the outer part of the assessment area is forecast to be a position of excess labour demand, the additional on-airport employment forecast to be drawn from this area is relatively modest and represents a small proportion of the workforce in the area. Companies located in this part of the assessment area can also draw on labour from areas outside the assessment area. This is highlighted in Table 52 which shows the groupings the outer assessment area local authorities fall into in terms of the Secretary of State’s proposed changes to the RSS. 11.3.14 The outer area also has high levels of out-commuting with over 99,300 people living in the outer area in 2001, but working in local authorities which do not form part of the assessment area. The additional direct on-airport jobs at Stansted forecast to be taken up by outer area residents represent 1% of the outer area out-commuters. 11.3.15 Across the assessment area as a whole in 2030 the G2 Airport Development would increase employment by 13,800 with approximately 70% (or 6,900) of the additional on-airport employment forecast to be taken up by residents in the assessment area. This represents 0.9% of assessment area labour supply. The majority of these additional direct on-airport jobs are forecast to be taken up by residents of the inner area which is forecast to be in a position of excess labour supply. The additional G2 Airport Development jobs should make a positive contribution to reducing the labour supply/demand imbalance in the inner area. Labour market adjustments 11.3.16 Labour markets adjust to changing economic circumstances in many different ways. The increase in employment associated with the G2 Airport Development may result in the following adjustments: • increases in labour supply and the activity rate of the assessment area such that a higher proportion of the population are working or seeking work; • reductions in the number of people who are unemployed; and • increases in commuting into the area and decreases in commuting out of the area. Labour supply and activity rates 11.3.17 Labour supply is forecast to increase in the assessment area and this was considered in Table 47. However, the range of job opportunities available at the Airport in terms of part-time working, temporary and seasonal positions may be of interest to people not currently economically active. While it is unlikely that many of the additional on-airport employees would be recruited from people who are not currently economically active, a small number of people may consider that the type and nature of the jobs available would make it beneficial to the individuals to take up employment at the Airport. 11.3.18 The operational employment assessment area currently has high activity rates which are above or close to the national average and any further increase in activity rates may therefore be difficult to achieve. However, the characteristics of the jobs at the Airport discussed in Table 21 may be attractive to people who are not currently economically active. For example, approximately 8% of current on-airport jobs are part-time and this type of job may be of interest to someone not currently economically active, but perhaps looking to return to the labour force eg lone parents or carers. This is not expected to be a major source of labour but there could be opportunities for certain groups in the local economy.
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Reductions in unemployment within the assessment area 11.3.19 The assessment area has a very low rate of claimant count unemployment: 1.4% in July 2007. The current rate of unemployment corresponds to approximately 10,700 unemployed persons. This rate effectively represents full employment in the assessment area as the unemployment rate cannot fall to zero as there will always be some ‘frictional’ unemployment as people move between jobs. 11.3.20 The forecast additional Stansted related employment associated with the G2 Airport Development is 6,200 in 2021 and 13,800 in 2030. Of this total, 4,300 and 9,800 are on-airport jobs in 2021 and 2030 respectively. The forecast number of on-airport employees to be drawn from the assessment area was shown in Table 56. In 2021 3,100 on-airport employees associated with the G2 Airport Development are forecast to be living in the assessment area. This number is forecast to rise to 6,800 by 2030. 11.3.21 It would not be realistic to assume that the overall rate of unemployment could fall much from its current position. However, as Table 45 demonstrated, there are relatively high rates of unemployment in the assessment area when the analysis considers the characteristics of the unemployed. In the inner area there were over 1,000 people unemployed in the lowest skilled occupations (elementary occupations) and over 2,000 people unemployed in the outer area. This represents an unemployment rate in this occupational category of over 5%. There are also relatively high rates of unemployment in the assessment area in some of the other lower skilled occupations (process, plant and machinery operative, sales and customer service). 11.3.22 The distribution of on-airport employment by occupational level (Table 23) shows that 37% of the on-airport workforce are in the lower occupational categories. This would suggest that 3,600 of the additional 9,800 jobs on–airport in 2030 would be in the lower skill categories and the type of jobs which the 5,800 unemployed people in the assessment area looking for work in these occupations could be trained to do. Training is considered in paragraph 11.6.6 as part of the employment strategy. 11.3.23 While unemployment in the operational employment assessment area is low, the characteristics of the unemployed show higher rates of unemployment by skill. Given the wide range of skills required by the Airport, there would be an opportunity for some of the unemployed in the operational assessment area to take up employment at the Airport with appropriate training. Reductions in unemployment outside the operational employment assessment area 11.3.24 Table 56 also shows that a proportion of the on-airport workforce are forecast to be drawn from outside the operational employment assessment area. People who are unemployed in some of the neighbouring local authorities could benefit from the opportunities created by the G2 Airport Development. The local authorities considered are: Essex: • Tendring; • Thurrock; Hertfordshire: • Broxbourne; • North Hertfordshire; Greater London: • Barking and Dagenaham; • Enfield; • Hackney; • Havering; • Newham; • Redbridge; • Tower Hamlets; and • Waltham Forest. 11.3.25 The number and rates of unemployment in these areas based on claimant counts are shown in Table 57 for July 2007. The areas have been divided into three categories to reflect their potential as a source of labour.
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Table 57: Unemployment numbers and rates, July 200796 Category LA area Number Rate High Tower Hamlets 8,100 5.5 Hackney 7,200 5.2 Haringey 7,200 4.6 Newham 7,500 4.6 Medium Waltham Forest 5,800 3.9 Barking and Dagenham 3,500 3.5 Enfield 6,200 3.5 Low Tendring 1,900 2.6 Redbridge 4,000 2.5 Thurrock 2,100 2.3 Havering 2,400 1.7 Broxbourne 900 1.6 North Hertfordshire 1,000 1.3
11.3.26 The districts assessed as ‘medium’ and ‘high’ potential districts have unemployment rates well above the rates for the districts within the operational employment assessment area. The areas with the greatest unemployment rates are those within Greater London with two of these districts having rates of unemployment above 5%. 11.3.27 Analysis of the characteristics of the unemployed in the four districts with the highest rates of unemployment in Table 57 shows that there is an above average proportion of long-term unemployment ie persons who have been unemployed for more than one year. This is particularly true of Tower Hamlets (28%) and Haringey (26%) where over a quarter of the unemployed are long-term unemployed. The average for the UK is 17%. The analysis of the usual occupation of the unemployed in these four districts shows that the unemployed are dispersed across a range of occupations. 11.3.28 There are clearly a significant number of unemployed persons in these North London boroughs. Given the rail link between Stansted and London, people in these North London boroughs could take up employment at the Airport using public transport. The wards adjacent to the southern part of the rail link are shown in Figure 11. 11.3.29 The Stansted Express train only stops at Tottenham Hale; but it stops at a limited number of stations during peak periods. The local train makes a number of additional stops. Table 58 provides an analysis of the level of unemployment in the wards adjacent to the railway stations between Stansted and London. Three of the key railway stations are identified as Tottenham Hale, Hackney Downs and Liverpool Street.
96 Claimant Count, ONS from NOMIS.
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N
Ward London Borough 1. Northumberland Park Haringey Chesthunt > 2. Bruce Grove Haringey 3. Tottenham Hale Haringey Theobolds Grove 4. Tottenham Green Haringey
Chesthunt 5. Higham Hill Waltham Forest 6. Hackney Downs Hackney 7. Stoke Newington Central Hackney
Enfield Lock 8. Hackney Central Hackney Turkey Street 9. Dalston Hackney 10. Queensbridge Hackney 11. Haggerston Hackney Enfield Brimsdown Town 12. Bethnal Green North Tower Hamlets Southbury 13. Bethnal Green South Tower Hamlets Ponders End 14. Weavers Tower Hamlets Bush Hill Park 15. Spitalfields and Banglatown Tower Hamlets
Lower Edmonton
Silver Street Angel Road
White Hart Lane 1 Northumberland Park 5 Bruce Grove 2 3 Tottenham Hale
Seven Sisters 4
Job Title Stamford Hi;ll Stansted Generation 2
Clapton Stoke Newington Drawing Title 7 Rectory Road 6 Selected Stations and Wards on Stansted - Hackney Downs London Railway Line 9 8 Drawing Number Revision 10 London Fields Scale 11 Cambridge Heath Date Drawn 12 1 Nov 2008 14 Checked Approved 13 Bethnal Green Liverpool Street 15 Figure 11 Section 11 Operational employment assessment
Table 58: Unemployment in wards around key stations on the Stansted to London railway line (refer to Figure 12) London Ward name Station Number Unemployment Borough unemployed rate Haringey Northumberland Park Tottenham 750 9.2 Bruce Grove Hale 594 7.2 Tottenham Hale 617 7.3 Tottenham Green 565 6.8 Waltham Forest Higham Hill 369 5.1
Hackney Hackney Downs Hackney 438 6.1 Stoke Newington Central Downs 361 4.9 Hackney Central 461 6.4 Dalston 520 7.0 Queensbridge 412 6.0 Haggerston 400 5.5 Tower Hamlets Bethnal Green North Liverpool Street 414 5.2 Bethnal Green South 504 5.4 Weavers 453 5.9 Spitalfields and 513 8.8 Banglatown
11.3.30 The table shows that in the five wards surrounding Tottenham Hale (in the districts of Haringey and Waltham Forest), almost 2,900 persons are unemployed. Further, in three of the five wards, the unemployment rate is above 7%. A similar picture emerges for both Hackney Downs and Liverpool Street where there are approximately 2,600 and 1,900 unemployed persons respectively, in the vicinity of each station. Again, a number of the wards record an unemployment rate of above 6%. In particular Spitalfields and Banglatown records an unemployment rate of almost 9%. 11.3.31 The table confirms the earlier analysis that there is a substantial pool of unemployed persons outside the operational employment assessment area, but within commuting distance of the Airport using public transport. 11.3.32 One of the difficulties in matching available persons to jobs at the Airport could be the cost of travel between these stations and Stansted, particularly since the jobs that could be suitable for some of these unemployed persons may initially be lower paid jobs. However, BAA Stansted operates a Travelcard scheme which provides discounted travel for all employees in possession of a Stansted Airport identification pass. This scheme offers substantial savings on the cost of travel to the Airport by selected bus, coach and train routes and is considered further in paragraphs 11.6.3 to 11.6.5. 11.3.33 Total unemployment in the vicinity of the three key stations was 7,400. If 50% of the on-airport workforce living outside the operational employment assessment area in 2021 and 2030 were recruited from these wards, it would account for 8% and 20% of the unemployed from these wards around the main stations. Commuting 11.3.34 Figure 8 provided an analysis of the commuting patterns of the assessment area residents. The analysis found that in 2001 some 156,200 people were commuting out of the assessment area and 127,600 people were commuting into the assessment area such that the assessment area was a net exporter of labour. 11.3.35 These large commuting flows show that the assessment area has a high degree of interaction with its neighbouring districts and regions. The majority of out-commuters are going to destinations in Greater London and for many of these people it would not be realistic to assume that they would stop commuting to London to take up employment at the Airport. However, the very large flows of people into and out of the
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operational employment assessment area suggests that there could be some limited scope to increase labour supply through commuter draw-back. If 10% of the on-airport workforce living in the assessment area in 2021 and 2030 were recruited by commuter draw-back, it would represent 0.2% and 0.4% respectively of the 2001 level of out-commuting. Overall assessment of employment effects 11.3.36 Using the criteria set out in Table 53, the likely significant effects of the G2 Airport Development on employment are assessed as beneficial in each of the assessment years of 2021 and 2030 in terms of increasing employment and contributing to the employment objectives of the RSS. The G2 Airport Development would create an additional 6,200 and 13,800 jobs in 2021 and 2030 respectively. The majority of the additional employment is on-airport and would make an important contribution to the job growth target for Central and North Essex such that the G2 Airport Development operational employment effect is assessed as a major beneficial effect. 11.3.37 The majority of the additional on-airport employment jobs are forecast to be taken up be residents of the inner part of the operational employment assessment area which in both 2021 and 2030 is forecast to be in a position of excess labour supply. The G2 Airport Development would therefore contribute to reducing the labour supply/demand imbalance in the inner assessment area. 11.3.38 The G2 Airport Development is likely to offer a range of jobs, some of which would be part-time, seasonal or temporary and could be attractive to people not currently economically active, but who could be looking to return to the labour force eg lone parents. 11.3.39 The G2 Airport Development also provides a range of jobs for people with relatively low skill levels which are the type of jobs required by the pool of unemployed people in the operational employment assessment area. There are unemployment rates of over 5% for the lowest skilled group in the operational employment assessment area. There are also relatively large pools of unemployed people in close proximity to the Airport, but outside the operational employment assessment area. 11.3.40 By 2030 Harlow is also forecast to account for an increasing share of on-airport employment which would contribute to Policy H1 of the draft RSS. The additional indirect employment would also contribute to that aspect of the policy which aims to encourage other employment related to the growth of Stansted to Harlow. 11.4 Measures to prevent or reduce employment effects
11.4.1 As the effects on employment have been assessed as beneficial there are no measures required to prevent or reduce effects. 11.5 Residual employment effects
11.5.1 Using the criteria set out in Table 53, the residual likely significant effects of the G2 Airport Development on employment remains beneficial in each of the assessment years of 2021 and 2030 in terms of creating a net increase in employment and contributing to the employment objectives of the RSS. The G2 Airport Project would create additional 6,200 and 13,800 jobs in 2021 and 2030 respectively. The majority of the additional employment is on-airport and would make an important contribution to the job growth target for Central and North Essex. Given the scale of the increase in employment the effect is considered a major beneficial effect. 11.5.2 The majority of the additional on-airport employment jobs are forecast to be taken up by residents of the inner part of the operational employment assessment area which in both 2021 and 2030 is forecast to be in a position of excess labour supply. The G2 Airport Development would therefore contribute to reducing the labour supply/demand imbalance in the inner assessment area. 11.5.3 By 2030 Harlow is also forecast to account for an increasing share of on-airport employment which would contribute to Policy H1 of the draft RSS. The additional indirect employment would also contribute to that aspect of the policy which aims to encourage other employment related to the growth of Stansted to Harlow. 11.6 Measures to enhance employment effects
11.6.1 The likely significant employment effect of the G2 Airport Development is assessed as major beneficial, but this section considers the initiatives which Stansted Airport Limited could establish to ensure that the employment opportunities available as part of the G2 Airport Development are taken up to maximum effect.
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Section 11 Operational employment assessment
Stansted initiatives 11.6.2 Stansted Airport Limited has a number of current initiatives which could be continued and expanded to ensure that the benefits of the G2 Airport Development are maximised for local residents and businesses. These initiatives include the Airport Travelcard and the Stansted Employment Strategy. Airport Travelcard 11.6.3 Stansted Airport offers up to 80% off monthly / annual travel costs to and from the Airport through its Travelcard scheme. The Airport Travelcard provides discounted travel for all employees on selected bus, coach and train routes. There are four price zones covered by the Airports Travelcard, offering unlimited travel within the price zone (plus lower value zones) at any time. Table 59 provides details of the costs of the Travelcard within the four zones. Table 59 shows the routes within the various price zones. Appendix 4 contains analysis of the take up of the Travelcard.
Table 59: Airport Travelcard price zones and costs Price zone Cost per month Cost per year Green £44 £440 Pink £55 £550 Blue £77 £770 Purple £110 £1,100
11.6.4 Analysis of sales of the Airport Travelcard is presented in Appendix 4 and shows that sales of Travelcards to employees at the Airport increased as follows between July 2005 and July 2007: • Inner assessment area: 71% (321 cards); • Outer assessment area: 71% (27 cards); and • Greater London: 44% (141 cards). 11.6.5 The analysis shows that the scheme is an important initiative in encouraging persons to travel within the operational employment assessment area to the Airport using public transport and in encouraging people from outside the operational employment assessment area, and particularly the North London boroughs, to take jobs at the Airport. Stansted employment strategy 11.6.6 To support the planning applications made by Stansted Airport Limited in 1998 and 2001 for permission for capacity expansion to 15 mppa and 25 mppa respectively, the Airport developed an Employment Strategy. A number of initiatives were developed to enhance skills and recruitment to the Airport including: • a pre-employment training programme lasting five days and covering customer service, communications, interview skills and an introduction to employment sectors; • roadshows and jobfairs in local towns involving airport companies; • working with Jobcentre Plus including the development of marketing materials, links to High Street job centres, staff briefings; • working with other economic development partners to take advantage of the employment opportunities offered by the Airport; and • the Employment Forum which is part of Stansted S106 obligation and is held annually with speakers addressing issues identified during the year. 11.6.7 These examples highlight the range of initiatives BAA has been involved with to support the employment growth of the Airport and these initiatives would be developed as required to support the G2 Airport Development. BAA is committed to the continuation and development of the Employment Strategy to ensure that the employment demands of the G2 Airport Development can be met and the opportunities for local people can be maximised.
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Section 12 Assessment summary matrices
12 Assessment summary matrices
Table 60: Assessment summary matrix – construction effects Description of effect and Measures to prevent or CONSTRUCTION Residual effects Offsetting Enhancement significance criteria reduce effects PHASE 1 G2 AIRPORT DEVELOPMENT Increased Minor beneficial None Minor beneficial Accommodation and labour employment during strategy construction LATER PHASES G2 AIRPORT DEVELOPMENT Increased Minor beneficial None Minor beneficial Labour strategy employment during construction
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Section 12 Assessment summary matrices
Table 61: Assessment summary matrix – existence and operational effects EXISTENCE AND Description of effect and Measures to prevent or Residual effects Offsetting Enhancement OPERATION significance criteria reduce effects INTERIM YEAR G2 AIRPORT PROJECT Increase in Major beneficial None Major beneficial None Labour strategy employment of 6,200 Travelcard in 2021 COMPLETED DEVELOPMENT G2 AIRPORT PROJECT Increase in Major beneficial None Major beneficial None Labour strategy employment of Travelcard 13,800 in 2030
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Glossary and abbreviations Economic Activity Rate The proportion of the population who wish to work Gross Value Added A measure used in estimating Gross Domestic Product (GDP) which represents the value of good and services becoming available from economic activity. It is a key measure of the state of the whole economy Local labour market The area from which Stansted draws the majority of its employment Productivity Growth Growth in output per unit of input employed ABI Annual Business Inquiry ATWP Air Transport White Paper CE Cambridge Econometrics CM Construction Methodology CSN Construction Skills Network EERA East of England Regional Assembly EiP Examination in Public G2 Airport Development Expansion of Stansted Airport to provide a wide-spaced second runway and associated buildings and infrastructure. G2 Airport Project The G2 Airport Development together with other developments and measures as follows: stopping up and diversion of local roads; provision of off-site utilities; provision of sites for offsetting; and changes to airspace. G2 Project The G2 Airport Project together with other developments which are the subject of separate procedures and environmental statements as follows: G2 Airport Access from the M11 and A120, and the Stansted Rail Improvement Project. GDP Gross domestic product GLA Greater London Authority GVA Gross value added IBC/MPC International Broadcast Centre/ Main Press Centre ICT Information Communications Technology ILO International Labour Organisation mppa Million passengers per annum NOMIS National On-Line Manpower Information System ODA Olympic Delivery Authority OEF Oxford Economic Forecasting, now known as Oxford Economics (OE) ONS Office of National Statistics RES Regional Economic Strategy RSS Regional Spatial Strategy SERAS South East and East of England Regional Air Service Study T5 Terminal 5 WRS Workers Registration Scheme
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Appendix 1 Details of other consultations
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Appendix 2 Questionnaire issued to businesses on land required by the G2 Airport Project
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Appendix 3 Projections of households, population and labour supply
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Appendix 4 Analysis of Travelcard
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