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East Loughborough Heritage Quarter

Economic Assessment Part One: The Economic Impact of the Great Central Railway

November 2014

www.focus-consultants.co.uk

Focus Offices CLIENT: Charnwood Borough Council NOTTINGHAM Regeneration and Economic Development Officer Focus House Planning and Regeneration Millennium Way West Charnwood Borough Council Phoenix Park Council Offices Nottingham NG8 6AS Southfield Road Tel: 0115 976 5050 Loughborough E-mail: [email protected] LE11 2TX Website: www.focus-consultants.co.uk

Client Lead: Dave Hankin LEICESTER Email: [email protected] 101 Princess Road East

Leicester LE1 7LA PREPARED / AUTHORISED BY: Tel: 0116 275 8315 Focus Consultants E-mail: [email protected] Focus House Website: www.focus-consultants.co.uk Millennium Way West LINCOLNSHIRE Phoenix Park Focus House Nottingham Resolution Close NG8 6AS Endeavour Park Boston Focus Contact: Heather Frecklington, Associate Lincolnshire PE21 7TT Tel: 0115 976 5050 Tel: 01205 355 207 Email: [email protected] E-mail: [email protected] Website: www.focus-consultants.co.uk PROJECT: East Loughborough Heritage Quarter

LONDON DOCUMENT TITLE: Part One: The Economic Impact of the Great Central 88 Kingsway Railway Holborn London DATE: November 2014 WC2B 6AA Tel: 0203 4022166 AUTHORISED BY: Heather Frecklington, Associate E-mail: [email protected] Website: www.focus-consultants.co.uk SIGNATURE:

© Focus Consultants 2010 LLP

East Loughborough Heritage Quarter Economic Assessment: Part One

CONTENTS Page Nr

Introduction and Project Brief 2

1.0 A Socio Economic Baseline of East Loughborough 3

2.0 Socio Economic Analysis 3

3.0 Strategic Context 6

4.0 Picturing Loughborough 10

5.0 Current Economic Impact of Great Central Railway 12

6.0 Review of Existing Data on the Economic Impact of Tourism on the UK, Leicestershire and Charnwood Economies 17

7.0 Economic Impact Calculations – The Economic Impact of Great Central Railway on Charnwood 19

8.0 Economic Impact of Great Central Railway on Charnwood Borough 26

9.0 The Current Economic Impact of Great Central Railway on Loughborough 27

10.0 Summary – Economic Impact of Great Central Railway on Charnwood and Loughborough 32

APPENDICES

Appendix 1 - Full Project Brief

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Introduction and Project Brief

Focus Consultants was appointed in March 2014 by Charnwood Borough Council to undertake a Study to appraise the economic impact of the Great Central Railway (GCR) on the local economy of Loughborough and Charnwood alongside the development of options to see how this can best to maximised to enable GCR to act as a catalyst for the East Loughborough Heritage Quarter.

The Charnwood Borough Council Corporate Plan 2012-2016 sets out a commitment to supporting the East Loughborough Industrial Heritage Quarter as a priority project. For the purposes of this study, the area defined as East Loughborough is outlined in red below.

The full brief is included at Appendix 1.

This report constitutes Part 1 of the Study and looks at the current economic impact of GCR on Loughborough and Charnwood.

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1.0 A Socio Economic Baseline of East Loughborough 2.0 Socio Economic Analysis

The Great Central Railway headquarters are in the Hastings Ward of This section reviews statistics for the Lemyngton Ward, the Hastings Ward and Loughborough, Leicestershire. The ward was named after the Hastings family, Charnwood including: population, average pay, labour supply and occupation. who were Lords of the Manor from the 15th century and who owned much of this area. In that day the area was defined by parkland and some big estates such as Population the Beeches and Elms estates, from which present day roads take their names. Following the industrial revolution Hastings Ward became home to some of the The table below shows the population of the wards in East Loughborough most prestigious industrial heritage in Loughborough including Herbert Morris Ltd, compared with Charnwood, the East Midlands and England Average. Taylor’s Foundry and the Towles Factory.

Hastings Ward, together with the neighbouring ward of Lemyngton, are classed as "Loughborough East" a Priority Area of Leicestershire County Council due to high levels of deprivation and barriers to housing and services. In terms of heritage Loughborough East was one of the key centres for hosiery manufacture and heavy engineering in the 19th and 20th centuries, home to the Brush Factory a locomotive business of 1879 which later built aircraft in the First and Second World Wars. Source: ONS 2011 Census Dating further back, the area houses the Old Rectory, a 13th century manor house and one of the oldest Rectories in the country. The table shows that the Lemyngton Ward and the Hastings Ward notably differ notably in their population split. There are more young people in the Lemyngton However in the 21st Century Loughborough East is a hotspot for crime - Ward which is reflected in the fact that more of the residents living there are accounting for 17% of all crime in Charnwood Borough - and includes the economically active in comparison to the Hastings Ward. The Hastings Ward is unhealthiest wards in Charnwood in terms of lifestyle behaviour. In terms of home to a larger proportion of people above the age of 45. This reflects the higher ‘educations, skills and training deprivation’, Parts of Loughborough East has been proportion of retired people living there (11%) compared to Lemyngton Ward identified as amongst the 2% most deprived Lower Super Output Areas nationally. (8.1%).

The figures also show that the population split by age for Charnwood is similar to the East Midlands and UK averages. With over 20% of Charnwood’s population over 60, there is a significant pool of those who are likely to be retired and could therefore commit significant time to volunteering at the facility.

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Average Pay Labour Supply

The average pay of residents in Charnwood is shown in the table below. The table below shows the labour supply in Lemyngton Ward and Hastings Ward compared to that in Charnwood, Leicestershire, the East Midlands and Great It can be seen that in terms of average pay Charnwood is close to the UK figures Britain. but significantly above the East Midlands average. This suggests that disposable income is relatively high compared to the other areas of the East Midlands.

GCR need to capitalise on the benefits of having a catchment of local residents with above regional average earnings. Ensuring that these residents choose to visit GCR, and therefore spend their money in local attractions rather than leave the district, will have a significant impact on the local economy.

GCR and other local attractions should therefore continue to develop activities that encourage repeat visits from locals, ensuring that they are not tempted to leave the district. Source: ONS annual population survey

It is clear that Charnwood is performing well in terms of labour supply, with a higher number of people economically active than both the East Midlands and GB averages and only just short of the Leicestershire average.

However, the two wards in East Loughborough, particularly the Hastings Ward, have significantly lower levels of economic activity than Charnwood, Leicestershire, the East Midlands and Great Britain.

Unemployment is lower than the regional, national, Leicester and Leicestershire average.

Source: ONS annual survey of hours and earnings - resident analysis

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Employment by Occupation

The table below shows employment by occupation. It can be seen that Charnwood has a higher percentage of residents in more highly skilled employment than the East Midlands and GB average. However, both the Lemyngton Ward and the Hastings Ward have a lower percentage of residents in more highly skilled employment than Charnwood, the East Midlands and Great Britain. They more resemble the occupation levels seen in Leicester. Predictably, both wards have more people in lower skilled employment. This demonstrates the need for investment in East Loughborough, both in infrastructure and in terms of skills training.

Source: ONS Census 2011 and ONS Annual Population Survey 2013

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3.0 Strategic Context

This section summarises in brief the priorities of key stakeholders in the area in Loughborough East is identified as a ‘Priority Neighbourhood’ in which social terms of both economic and social objectives. exclusion and general deprivation need to be reduced.

3.1 Local Strategies Furthermore, the Plan states that “the east of Loughborough has pockets of derelict and neglected land. Whilst they contribute to deprivation they also provide Charnwood Local Plan 2006-2028 Core Strategy an opportunity that can support generation”

The Charnwood Local Plan sets out a series of strategic aims to establish how the Charnwood Borough Council Corporate Plan 2012-2016 Charnwood Borough will grow over the next 15 years. Below are some of the most applicable aims of the strategy to the regeneration of the East Loughborough area. The Corporate Plan sets out the overarching priorities of the Council, one of which is the promotion of growth and prosperity.  To be one of the most desirable places to live, work and visit in the East Midlands It is the intention of the Council to support economic development and regeneration  To preserve the landscape, the special buildings, heritage and ecology of the within the Borough. Relevantly, it aims to promote rural tourism through supporting area priority projects, including East Loughborough’s Industrial Heritage Quarter.  To ensure the community will have a sense of ownership and increased pride in their local areas due to strong neighbourhood planning Charnwood Borough Council Regeneration Strategy (2012)  To provide more employment opportunities for local people including high skilled, better paid jobs The Regeneration Strategy identifies priorities for physical regeneration within  To provide better access to jobs and services, with a choice to walk or cycle. Charnwood. It sets out the vision for the area: “For longer trips Charnwood will be known for its excellent connections by bus or rail, including a restored Great Central Railway” “In 2033 Charnwood as a place will be ... a vision of green, with countryside in the heart of our towns and vibrant villages nestled in the heart of the forest, each with The Plan identifies ‘heritage pressures’ as being a major threat to the region, its own distinct character” The Strategy states that key to this objective is making especially to the industrial heritage of Loughborough, much of which is found in the sure the local economy is strong and vibrant, with emphasis put on supporting a eastern parts of the town. Particularly, it recognises the Great Central Railway, the prosperous and thriving business community, embracing innovation and enterprise, Grand Union Canal and the Bell Foundry as having a significant role in and providing a wide range of employment opportunities across the Borough. Charnwood’s tourism offer, all of which are in the east of Loughborough.

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The East Loughborough’s Industrial Heritage Quarter is identified as a priority area 3.2 Regional Strategies for reinvigoration: The LLEP Economic Development Strategy for Leicester and Leicestershire “Reinvigorating neighbourhoods where the previous industrial heritage has declined will be a real opportunity to provide a long lasting legacy through the The strategic economic priorities highlighted in this report are: regeneration of pockets of vacant and derelict land within the East Loughborough Neighbourhood Priority Area. There is potential to deliver in the region of 400  Increasing productivity and private sector job growth homes (at least 30% affordable), local employment opportunities, workspace,  Creating a balanced and sustainable knowledge-based economy community facilities, heritage assets, canal corridor enhancements and public  Addressing the physical requirements for success realm improvements. In addition there is the opportunity to deliver 18 ha of  Raising skills levels and educational attainment landscaped parkland. The Great Central Railway already represents a major  Providing effective business support tourism asset and local regeneration opportunities may contribute to its heritage  Stimulating investment and international trade value and wider commercial potential.”  Growing the Green Economy and investing in our communities.

Charnwood Blueprint for Tourism 2011-2014 Leicestershire County Council: Supporting Businesses 2013

The Blueprint envisions the establishment of Charnwood and the Loughborough The paper outlines the strategies of the County Council for promoting economic area within the broader context of the Leicestershire tourism ‘destination’ attracting growth. staying leisure and business visitors from across the UK and from abroad. One of its overarching aims is to get more local people into jobs and raise the skills Charnwood is positioned as being ‘the best of all worlds’, conveying its diverse levels of residents. range of tourist offers. Tourism is also stated to be a key sector to be supported by the Council and aims

to increase the number of leisure and business tourism visitors to the county, as One of the key propositions identified to bolster the region’s tourism offer is the well as the spend by visitors, and to improve the range and quality of attractions, ‘Heritage Corridor’ with the Great Central Railway as an anchor for this offer. It is facilities and accommodation. imagined that the East Loughborough Heritage Quarter would play a major role in this proposition.

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Tourism Strategy for Leicester and Leicestershire 2011-2016 The LSOAs below are identified as ‘Monitoring Areas’:

The Strategy envisions that over this five year period the tourism/ hospitality sector  Loughborough Centre South of Leicestershire will deliver sustained and sustainable growth and play an  Loughborough Shelthorpe West increasingly significant role in the success of the economy.  Loughborough Shelthorpe North  Woodthorpe. It defines four main themes addressing the local tourism industry’s ambitions: 3.3 National Strategies 1. expanding the quality of Leicestershire as a destination 2. the positioning of Leicestershire to distinguish it from its competitors Delivering a Golden Legacy: A growth strategy for inbound tourism to Britain 3. improving customer service through training and improved skills 2012-2020, Visit Britain 4. ensuring up to date intelligence and data. The growth strategy aims for 9 million additional visits a year in 2020; £8.7 billion Leicestershire County Council: Neighbourhood Priority Areas (2007) additional visitor spend annually; and support for 200,000 additional jobs across the UK per annum. Leicestershire County Council has identified 19 ‘priority areas’ in need of development and regeneration. The strategy identifies Britain’s strong associations with culture and heritage as one of six opportunities to increase tourism. Loughborough East is identified as one of these priority areas. This area is made up the wards Loughborough Hastings, Loughborough Lemyngton and Furthermore, it identifies six strategy workstreams, one of which is “product”. Under Loughborough Shelthorpe. The following LSOAs within this region are marked as this work stream, the development and promotion of regional products is ‘intervention areas’: recognised for its importance.

 Loughborough Meadow Lane Government Tourism Policy 2011, DCMS  Loughborough Midland Station  Loughborough Canal South The Policy sees rebalancing the economy as an important task for the tourism  Loughborough Bell Foundry industry.  Loughborough Central Station.

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This involves identifying areas of the country with top-quality visitor attractions which can provide a compelling visitor experience to rival London.

On an international stage, “culture and heritage” is the only criteria in which the UK is in the top five. However, it is pointed out that competition from new heritage destinations abroad is growing and competition can only get tougher in the future. The Policy states that Britain can’t rely solely on its culture and heritage to maintain its ranking as an attractive tourist destination. However, this sector must also be improved in order to compete on an increasingly competitive international stage. Raising the standard of these attractions is an essential part of increasing the tourist appeal of Britain.

Department for Business, Innovation and Skills, Rigour and Responsiveness in Skills, 2013

The report points to youth unemployment and skills shortages, particularly in engineering and computing, as undermining social mobility in Britain. It aims to develop the skills of people in Britain to be globally competitive by raising the standard of skills across the UK through the provision of quality apprenticeships and training.

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4.0 Picturing Loughborough East

4.1 Industrial Heritage

East Loughborough has three key industrial heritage sites; the Works, the Bell Taylor’ Foundry Foundry and the Towles Factory. Rising to fortune during the Industrial Revolution, these sites have fallen into disuse. In 1839, Loughborough became the home of Taylor’s Foundry, now the largest bellfoundry in the world. The Works Members of the Taylor family have been operating The Works factory on the Grand Central Canal the business since 1784. was once a base for Herbert Morris Ltd, a company which manufactured lifting gear and The Foundry remains in business but has a operated internationally. Today the factory is financially uncertain future. Its roof is in need of some £3m redevelopment. largely unused and is in need of significant repairs. The Towles Factory

The Towles Factory was once part of the dynamic The canal-facing side of the building is derelict; the windows have been smashed hosiery industry in Loughborough. This building is and bricked over. ‘Herbert Morris’ is now unreadable. now in use as a furniture recycling business.

The Co-operative Motor Group use part of the building as a garage, providing vehicular servicing and repairs. Most of the building, however, is unused currently available to let at £40,000 per annum. The space in question is advertised as a 19,976 ft sq warehouse.

A previous application to put flats on this land was refused.

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Merlin Archery

While not ‘industrial heritage’ as such as it continues to operate, Merlin Archery no longer holds a prominent position and the factory on Great Central Road is in poor condition. It is notable though, as shown below, that some companies have capitalised on this and housed themselves in parts of the old factory – a sculptor and a gym.

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5.0 Current Economic Impact of Great Central Railway 5.1 Methodology

Great Central Railway (GCR) is one of the most successful and iconic tourist The methodology used to undertake this work has been outlined below. attractions in the East Midlands Region. Currently operating from Loughborough to Leicester North at the edge of the city boundary, it attracts Review of existing data for heritage railways and other heritage attractions – approximately 125,000 visitors per year and has an annual turnover of existing data on other heritage railways and other attractions has been reviewed to approximately £2.9M. Visitor numbers and income have increased steadily provide an understanding of the economic impact that they have had in other since the decision was made six years ago to transform the business from a locations. This provides a benchmark for GCR. facility aimed mainly at railway enthusiasts into a family orientated attraction offering a year round series of themed events and activities. It now employs Existing situation analysis – the existing situation analysis investigates the over 50 full time equivalent employees including apprentices in engineering, current economic and social conditions within which GCR is currently operating. It catering and marketing. highlights any areas that GCR could develop to increase its economic impact.

This economic impact assessment has been designed to allow us to understand The economic impact of GCR – this section investigates the economic impact of the contribution that GCR makes to the local economy of Charnwood. It follows GCR to the Charnwood area. (This is based on levels of operation, staffing and recognised approaches. The calculations undertaken draw upon national and spend remaining relatively static). Calculations have been undertaken using local data and standard methodology in order to provide a variety of statistics recognised methodologies and national statistics including: the economic value about the economic impact of the proposed development. Figures calculated that the current visitors bring to the economy, the additional jobs that this creates include the numbers of indirect and direct jobs created and the increased visitor and the economic value of the volunteers. spend in the local economy.

This report has been informed using high level analysis of existing visitor figures, existing expenditure, staffing and volunteering.

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5.2 Review of Exiting Data for Heritage Railways and Heritage Attractions

This section reviews the all party parliamentary group report on ‘The Social and The table below shows how GCR compares to some of the key figures across Economic Value of Heritage Railways, 2013’, to provide an understanding of the these one hundred and eight heritage railways. impacts generated by Heritage Railways. How GCR compares to the Average of the 108 Heritage Railways

It highlights the economic impact that Heritage Railways have had in other parts Total across all Average of the GCR 108 railways 108 railways of the UK, providing a benchmark against which GCR can be measured. Number of Passengers 7,100,000 65,741 124,000 This section also looks at the broader impacts of heritage regeneration on Paid Staff (FTE) 3,713 34 50 communities identified through the Social Impacts of Heritage Led Regeneration Volunteers 18,529 172 500 2008 Report. Route Miles 536 4.96 8.5

5.2.1 The All Party Parliamentary Group report on the Social and It can be seen that GCR is performing well compared to the average in terms of Economic Value of Heritage Railways heritage railways. The number of passengers is higher than average (almost

double), it supports significantly more paid staff than the average and offers In July 2013, The All Party Parliamentary Group on Heritage Railways significantly more volunteering opportunities. commissioned a report on the Social and Economic Value of Heritage Railways.

It highlighted the following statistics:

UK Heritage Railways Statistics (as at 2011)  Number of railways - 108  Number of passengers - 7.1 million  Earnings - £92 million  Paid staff (full time equivalent) - 3,713  Volunteers - 18,529  Route miles - 536

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5.2.2 Benefits of Heritage Railways 5.2.3 Economic Benefits of Heritage Railways

The report also highlights the following economic benefits that heritage railways The report goes on to quantify the following economic benefits of Heritage can have on an area. Many of these are applicable to GCR and to the Railways: Charnwood area. ‘Heritage Railways can make a major contribution to the economies of the areas Heritage Railway Characteristics they serve both in terms of attracting tourism and of substantial spending on local service. Research undertaken for a number of railways suggests a mean benefit to 1. They are major tourist attractions in their own right and attract many day the local economy of around 2.71 times the railways turnover. In aggregate, this trips and long stay visitors. This generates economic activity in the area by would suggest that the economic benefit nationally is just under £250 million.’ supporting accommodation and catering providers as well as through supporting local retailers. The table below shows this in more detail.

2. Paid staff live in the area and spend their income locally. Economic Impact of Heritage Railways across the UK Heritage Railway Annual Economic Economic value 3. Volunteers on the railway bring business to local enterprises in the same turnover value to turnover ratio way that visitors do. Ffestiniog and Welsh £4,994,000 £4,200,000 0.84

Highland Railways 4. The railway itself spends significant sums locally on the provision of goods and services, including local rates. West Somerset Railway £2,670,000 £5,000,000 1.9 Severn Valley Railway £5,371,952 £10,350,000 2.11 5. The railway provides employment, skills training and a productive outlet for North York Moors Railway £5,000,000 £30,000,000 6.0 volunteers, both those who have retired from full time employment and Average 2.71 those of school or college age. Using this mean economic value to turnover ratio we can calculate that GCR, with 6. In many cases the railway does provide a public transport service or a an annual turnover of approximately £2,900,000, should be producing an economic “tourist transport” service, in some cases providing car free access to value of approximately £7,859,000 per annum. This only provides a high level sensitive rural areas or small towns. indication of what the economic impact could be and needs further investigation as the report goes onto highlight:

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‘The standard deviation for the calculation above equalled 1.96, which stems 5.3 Social Impacts of Heritage Led Regeneration 2008 from the wide range of results from individual railways. This is due to the lack of Report: undertaken by ELA Palmer Heritage a standardised method of measuring the impact, which would produce more credible and comparable results. Currently heritage railways in Britain rely on a It is important to highlight that heritage led regeneration can create a number of economic and social impacts that are difficult to quantify. Whilst they are not wide range of ways of measuring this impact, ranging from studies conducted included in the economic impact calculations undertaken later in this report it is by local universities, to studies by local authorities, and those by private worth highlighting these potential impacts so that they can be used to inform research providers.’ any future decision making processes or planning at GCR.

It is clear from the table that the North Yorkshire Moors Railway The Social Impacts of Heritage Led Regeneration highlights some of these significantly increases the average figure. This needs to be considered impacts: when any comparisons are made.  The regeneration of a heritage area is often seen as a change for good, and can kick start a ‘ripple-effect’ of further regeneration.  The increase in attractiveness of the heritage area in turn increases the confidence of communities, and results in stronger social capital. Community cohesion, in particular, can be achieved when a well-loved heritage feature or built environment is regenerated with the active participation of the community in planning through effective consultation.  The common aim and interest introduces new social networks, and allows a community to have some ownership of the project; this will encourage greater civic pride, social responsibility, and an identifiable community value.  Qualitative evidence gathered by the Heritage Lottery Fund when evaluating their Young Roots funding scheme suggests that individual participants in heritage education projects do find the experience inspiring. The benefits to the young people involved in projects ranged from confidence building, to a desire to use skills and knowledge in the future.

It would be useful for GCR to capture this more qualitative information through consultation with the local community. This could then be used to inform any future decision making processes.

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Review of Heritage Railway and Heritage Led Regeneration Data – Key Points

The All Party Parliamentary Group on Heritage Railways commissioned a report on the Social and Economic Value of Heritage Railways. It highlighted that the average economic turnover to ratio from the railways included in the study was 2.71.

Applying this figure to GCR, which has an annual turnover of £2,900,000, suggests that the economic value of the railway should be £7,859,000. This only gives a high level indication/ idea of what the economic impact could be.

In addition to the measurable economic benefits, heritage attractions also generate impacts which are difficult to quantify but still have a positive on the local economy including:

 Increased community cohesion  Increased civic pride  Increased social responsibility

Consultation with the local community will be used to capture this more qualitative information, which could then be used to inform any future decision making processes.

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6.0 Review of Existing Data on the Economic Impact of  The 31.1 million overseas visitors who came to the UK in 2012 spent £18.6 Tourism on the UK, Leicestershire and Charnwood billion. These figures represent a 1% increase in volume and 4% (nominal) Economies increase in value compared with 2011.

This section highlights existing data to demonstrate the impact that tourism has  In 2012 GB residents took: on the local and national economy. These statistics are used later in the report  57.7 million holidays of one night or more, spending £13.8 billion to inform the economic impact calculations.  18.9 million overnight business trips, spending £4.5 billion.

 45.1 million overnight trips to friends and relatives, spending £5.1 billion. 6.1 The Value of Tourism 2013 – Visit Britain 6.2 Go Leicestershire Website The Visit Britain Value of Tourism Report highlights the following key points: The Go Leicestershire website highlights the following:  It is estimated that tourism was worth £127 billion in 2013 (equivalent to 9% of the UK’s GDP).  Tourism has traditionally been perceived as a ‘hidden industry' in Leicester and Leicestershire. However, with the latest figures showing that the industry  It supports over 3.1 million jobs (9.6% of all jobs). contributes over £1.3 billion to the local economy and with strong signs for future growth, it is vital that the industry continues to receive significant  The marginal revenue required to create a job in UK tourism is estimated to investment in the future. be around £54,000.

 The economic impact of tourism in Leicester in 2012 was £482.72 million, up  Britain will have a tourism industry worth over £257 billion by 2025. from £474 million in the previous year. For Leicestershire, the economic impact value was £911.89 million in 2012, compared to £928.82 million in 2011.  Tourism’s impact is amplified through the economy, so its impact is much wider than just the direct spending levels. Deloitte estimates the tourism  Key findings for Leicester and Leicestershire: GVA multiplier to be 2.8 – meaning that for every £1,000 generated in direct  Economic impact of tourism £1.394 billion tourism GVA there is a further £1,800 that is supported elsewhere in the  Tourist numbers 28.692 million economy through the supply chain and consumer spending.  Tourist days 34.620 million

 Jobs supported by tourism activity 19,604

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6.3 Charnwood, Blueprint for Tourism, 2011 - 2014

This report highlights the following tourism characteristics for Charnwood:

 Over 27 specified visitor attractions.

 A tourism workforce of over 3,408 jobs (full time equivalents), employed in over 900 businesses.

 In excess of 5.6 million visitors every year, amounting to well over 6.4 million visits (including locals), spending £220 million between them, and approximately 91% visiting for the day.

Review of Tourism Statistics – Key Points It is clear that tourism has a major impact on the local economy, both directly and indirectly. Key impacts include:

 Visitor spend in the local economy  Direct jobs created  Indirect jobs created  Spend on goods and services

Each of these factors has been considered in the economic impact assessment calculations for GCR.

With the value of tourism to the UK economy set to almost double by 2025, GCR needs to ensure that they are capitalising on their assets and developing their offer with this future increase in demand in mind.

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7.0 Economic Impact Calculations – The Economic Impact of Great Central Railway on Charnwood

This section identifies the economic impact that GCR will have on the Charnwood economy over the next five years. The figures that have been Economic impacts on Charnwood of GCR the next five years calculated are:  Projected spend in the economy from visitors to GCR over the next five years  Visitor spend in the Charnwood economy generated by visitors to GCR - £19,457,325  Indirect jobs created through spend in Charnwood by visitors to GCR  The impact of the GCR spend on goods and services  Economic value of spend on goods and services to the economy over the  Economic value of the volunteers at GCR. next five years - £1,979,418

The headline figures are shown opposite and the calculations are explained in  Existing jobs sustained over the next five years – 50 jobs more detail later in the section.  Indirect jobs created through spend in the local economy by visitors to GCR Our research has been designed to calculate the total effect of Great Central over the next five years - 389 Railway. This means considering a wide range of consequential or induced effects as well as the immediate effects.  Number of volunteering opportunities per year for the next five years – 500

To ensure that a true and accurate picture is created we have excluded the  Economic value of volunteering over the next five years - £8,619,125 impact of Charnwood residents who visit the site from our calculations as it is considered they will have very limited economic impact (the rationale for this is explained over the page).

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7.1 Visitor Spend in the Local Economy

To calculate the current visitor spend in the local economy we must first For the purposes of estimating the impact of the spend of the visitors to GCR only establish the existing number of visitors to GCR and understand who they are the ‘visitors from Leicester and Leicestershire, (excluding Charnwood), ‘East and where they come from. The annual current visitor numbers to the site is Midlands’ ‘Rest of the UK’ and ‘International’ visitor projections are taken account 124,000. A recent survey was undertaken to analyse where the visitors came of. Visitors from Charnwood are excluded. The reasons for this are detailed from. The visitor numbers are shown in the table below. below:

These assumptions are also based on the fact that research shows that 9% of Visitors from within Charnwood – To ensure we do not count any displaced visitors to Charnwood are overnight visitors. spending from local visitors it is prudent not to include them in the calculations to avoid any unjustified inflation of the figures. 7.1 Current Visitor Numbers This is because visitors who are resident in the local area, if not visiting GCR, Segment % Associated could potentially have chosen to do something else in Charnwood and would Visitor therefore be spending their money elsewhere, e.g. in the local shops, restaurants Numbers or at another nearby tourist facility. (As the earlier research highlighted there are Visitors from Charnwood 7% 8,680 over 27 visitor attractions in Charnwood). Day trippers

Visitors from Leicester and Leicestershire 41.5% 51,460 If, for example, a local Charnwood based visitor has a budget of £10. If they (Excluding Charnwood), Day trippers choose to visit GCR then that money will directly support GCR. If they choose to East Midlands Based Visitors (excluding Leicester 17.5% 21,700 visit another tourist attraction also in Charnwood and spend their £10 then it would and Leicestershire) directly support the alternative attraction. But, £10 will still have been spent in the Day trippers Charnwood economy – there will be no overall additional spend in the area. Rest of UK visitors, Day trippers 25% 31,000

Rest of UK visitors, Overnight stays 8% 9,920

International visitors 1% 1,240 Overnight stays

Total Visitors 100% 124,000

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7.1.1 Visitor Spend – Day Trippers (excluding Charnwood) Leakage This is the proportion of outputs that benefit those outside of the intervention’s The potential spend of day trippers to GCR can be calculated by multiplying the target area or group, i.e. the spend by visitors to GCR which is spent outside of number of visitors, by average tourism spend, by a displacement factor. These the local area. A leakage factor of 20% has been assumed. elements are explained below:

Visitor Spend from Day Trippers can then therefore be calculated by: Number of Visitors

It is estimated that there are currently 104,160 day trippers to GCR (excluding Number of Day Trippers x Average spend per trip x Displacement Factor x visitors from Charnwood). Leakage

Spend Per Head 104,160 x £32.33 x (1-0.10) x (1-0.20) = £2,424,595 Research shows that in 2012, 1.5 billion day trips were taken to English destinations with spending of some £48.5 billion. This is an average spend per It can be assumed that the visitor spend in the local economy generated by day tripper of £32.33. (Source: Visit England 2012 GB Day Visitors Report) these visitors is £2,424,595.

Displacement 7.1.2 Visit Spend - UK Based Overnight Visitors Displacement can be defined as ‘the proportion of intervention outputs accounted for by reduced outputs elsewhere in the target area’. The impact of The impact of the UK based overnight visitors who combine their visit with a stay in displacement for this research is that GCR may currently have a negative the area can be calculated by multiplying the number of tourists, by average impact on visitor numbers at some of the other tourist attractions in Charnwood as visitors to the county may choose to visit GCR rather than the other tourism spend, by a displacement factor. These elements are explained below: attractions. Number of Visitors In order to ensure that this displacement is taken into consideration when There are approximately 9,920 visitors to GCR who combine their visit with an calculating the economic impact of GCR on the surrounding area a overnight stay in the area. displacement factor of 10% has been applied. This assumes that 10% of day trippers to GCR would have chosen to visit another of Charnwood’s local Spend Per Head attractions had they not have been visiting GCR. The other 90% would have The Great Britain Tourism Survey looks at GB Domestic Tourism. It showed that in visited an attraction outside of the area. 2012 the average number of nights of a UK visit to The East Midlands is 2.78, with an average spend of £158 per trip.

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Displacement Displacement As previously, a displacement factor of 10% has been applied. Assuming again that there is a 10% displacement.

Leakage Leakage As previously, a leakage factor of 20% has been assumed. As previously, a leakage factor of 20% has been assumed.

We can therefore calculate that the visitor spend in the local economy from We can calculate that the visitor spend potential for international visitors per these overnight stays is: year is:

9,920 x £158 x (1-0.10) x (1-0.20) = £1,128,499 1,240 X £379 X (1-0.10) x (1-0.20) = £338,371

It can be assumed that the visitor spend in the local economy generated Total Visitor Spend by these visitors is £1,128,499. Using these figures, the total additional visitor spend in the Loughborough and 7.1.3 Visitor Spend – International Visitors Charnwood economy from visitors to GCR is:

Day Trippers - £2,424,595 GCR also attracts visitors from overseas. The value of the ‘International Visitor’ UK Overnight visitors - £1,128,499 spend is calculated by multiplying the number of tourists, by tourism spend by a International - £338,371 displacement factor. These elements are explained below: Total = £3,891,465

Number of Visitors Visitor numbers are relatively static at GCR so to calculate the impact over the next five years we have simply multiplied this figure by five. There are currently 1,240 visitors to GCR from overseas per annum.

5 year visitor spend = £19,457,325 Tourism Spend The ONS International passenger Survey shows that in 2011 there were 1,021,000 total visits to the East Midlands from international visitors, spending a total of 8,957,000 nights and a total spend of £387,000,000. This gives an average spend per visit of £379. (Note 2011 figures have been used it was estimated that the 2012 Olympics skewed the 2012 figures)

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7.2 Employment

The other key economic impact that GCR has on the local area is by providing Total Employment Impact employment in the local economy. The key element of this is the indirect jobs that are currently sustained through the spend in the economy. This can be Direct Impact - There are currently 50 employees at GCR, we can assume this calculated by dividing the visitor spend in the local economy generated by would remain relatively stable over the next 5 years. visitors to GCR by the level of spend required to sustain a new job. This is shown in more detail below: Indirect Impact - Using the figures above we can assume that the indirect employment impact of GCR over the next five years would be: Direct Jobs - These are currently approximately 50 employees at GCR. £19,457,325/ £50,000 = 389 jobs will be sustained in the local economy. Indirect jobs – Indirect jobs are jobs that are already being sustained by GCR as a result of the spend of its existing visitors in the local economy, for example in shops and restaurants. 7.3 Impact of Spend on Goods and Services

Visit Britain statistics show that a new full time equivalent tourism job is created The Economic value of the Independent Museum Sector Toolkit produced by and sustained with every £50,000 increase in tourism revenue in the economy. DC Research suggests that it is possible to express the impact of a museums spending on goods and services in terms of economic value to their local and We know that the total visitor spend expected to be generated by visitors to regional economies. The calculations for this are shown below: GCR over the 5 years is £19,457,325 GCR currently spends approximately £2.8 Million per year on goods and The number of indirect jobs sustained through this spend can therefore be services – the breakdown is shown in the table below. calculated by dividing the spend in the economy that is created by the existing visitors by the spend required to sustain a new job.

Using these figures we can assume that the indirect employment impact of the project would be:

£19,457,325/ £50,000 = 389 jobs will be sustained in the local economy.

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Current spend per annum on goods and services Leakage – the proportion of outputs that benefit those outside of the intervention’s Area of business Cost of supplies and services target area or group, for example the spend by GCR on its goods and services Staff costs 921,377 outside of the local area. Applying DC research suggests we use a Leakage of Marketing 201,885 75%. Catering & retail purchases 403,004 Coal, diesel, water 233,821 Displacement – Displacement can be defined as the proportion of intervention Insurance, Utilities & Security 156,680 outputs accounted for by reduced outputs elsewhere in the target area. Applying P/Way; Infrastructure repairs 279,100 DC research suggests we use a Displacement of 37.5% Signalling 10,132 These factors can be applied to the current spend by GCR to calculate wider Loco Transport 26,000 economic impact this brings. The formula to be applied is shown below: Loco shed costs 110,000

Other, hire costs, transportation, admin, 473,173 £2,815,172 x (1-0.25) x (1-0.75) x (1-0.375) x 1.2 = £395,884 general expenses

Total £ 2,815,172 Impact of Spend on Goods and Services

The DC research toolkit suggests that the wider impact of this total spend in the The impact of GCR’s spending on goods and services in terms of economic value wider economy can be calculated if we apply a number of factors. These are: to their local and regional economies over the next five years is £1,979,418

The Multiplier Effect – the further economic activity associated with additional local income and local supplier purchases. Applying DC research suggests we use a Multiplier of 1.2

Deadweight – deadweight accounts for what would happen anyway without the intervention – the position in terms of target outputs that would occur if the intervention was not implemented. Applying DC research suggests we use a dead weight of 25%

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7.4 Volunteering

The economic impact of the volunteers to the local area can be calculated by multiplying the number of volunteers by the hours worked per year and the gross average wage. This is explained in more detail below:

There are currently 500 volunteers at GCR.

In August 2010, Museums, Libraries and Archives published a research paper looking at Volunteering in the MLA sector. The data shows that within the MLA sector, museums and galleries provide the average hours per volunteer annually at approximately 265 hours per volunteer.

According to previous research in the report, the average gross hourly wage in Charnwood is £13.01.

Using these assumptions, the existing economic value per year of volunteering to the local economy is estimated to be as follows:

500 volunteers x 265 hours x £13.01 = £1,723,825

Therefore over the next 5 years this will be £1,723,825 x 5 = £8,619,125

Economic Value of Volunteering The economic value per year of existing volunteering to GCR over the next five years is £8,619,125

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8.0 Economic Impact of GCR on Charnwood Borough The table below shows how this compares to the other baseline figures for other railways. The table below shows the economic impact of GCR on Charnwood over the next 5 years. Economic Impact of Heritage Railways across the UK Heritage Railway Annual Economic Economic value Economic Impacts Of Great Central Railway Over The Next Five Years turnover value to turnover ratio OUTCOMES Economic impact over the Ffestiniog and Welsh £4,994,000 £4,200,000 0.84 next five years Highland Railways Projected spend in the economy from £19,457,325 visitors over the next 5 years West Somerset Railway £2,670,000 £5,000,000 1.9 Severn Valley Railway £5,371,952 £10,350,000 2.11 Impact of spend on goods & services £1,979,418 North York Moors Railway £5,000,000 £30,000,000 6.0 over the next 5 years Direct jobs sustained over the next 5 50 jobs Great Central Railway £2,900,000 £6,011,174 2.07 years New Average Including 2.58 Indirect jobs created through additional 389 jobs GCR spend in the local economy Number of volunteering opportunities per 500 Whilst GCR is slightly lower than the average of the five railways considered year it must be noted that the North Yorkshire Moors Railways significantly skews Economic value of volunteering over the £8,619,125 this figure. If the North Yorkshire figures are not included then it is clear that next 5 years GCR is making a very good return on its investment for the local area.

The sum of the economic benefits for the local economy including: Projected spend in the economy from visitors over the next 5 years, Impact of spend on goods & services over the next 5 years and Economic value of volunteering over the next 5 years is £30,055,868.

Per year this equates to £6,011,174.

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9.0 The Current Economic Impact of GCR on Current Visitor Numbers

Loughborough Segment % Associated Visitor Having calculated the economic impact of GCR on Charnwood, this section Numbers calculates the economic impact of GCR in its existing state on the town of East Midlands Based Visitors (excluding Leicester 17.5% 21,700 Loughborough. The findings are shown below. and Leicestershire)

Day trippers 9.1 Visitor Spend in the Local Economy Rest of UK visitors, Day trippers 25% 31,000 Previously we assumed that 7% of visitors were from Charnwood. Here we have Rest of UK visitors, Overnight stays 8% 9,920 used a pro-rata calculation to assume that 36% of these i.e. 2.5% of visitors will be from Loughborough. This is based on the fact that approximately 36% of International visitors 1% 1,240 Charnwood’s population are based in Loughborough. This also assumes that Overnight stays residents of Loughborough are no more likely to visit GCR than residents of the Total Visitors 100% 124,000 district.

9.1.1 Visitor Spend – Day Trippers The resultant split of visitors assumed on these principles is shown below:

The potential spend of day trippers to GCR can be calculated by multiplying the Current Visitor Numbers number of visitors, by average tourism spend, by a displacement factor and by a Segment % Associated leakage factor. Visitors from Loughborough have been excluded from these Visitor calculations. It is assumed that Loughborough residents, if not visiting GCR could Numbers be spending their money in local shops and restaurants, this spend would be going Visitors from Loughborough 2.5% 3100 into the local economy regardless of GCR.

Visitors from Charnwood 4.5% 5,580 Number of Visitors Day trippers (Excluding Loughborough) Day It is estimated that there are currently 109,740 day trippers to GCR (excluding trippers visitors from Loughborough). Visitors from Leicester and Leicestershire 41.5% 51,460 (Excluding Charnwood), Day trippers

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Spend Per Head Visitor Spend from Day Trippers can then therefore be calculated by: Visit England Research shows that in 2012, 1.5 billion day trips were taken to English destinations with spending of some £48.5 billion. This is an average spend Number of Day Trippers x Average spend per trip x Displacement Factor x per day tripper of £32.33. Leakage Factor

Displacement 109,740 x £32.33 x (1-0.05) x (1-0.50) = £1,685,250

Displacement can be defined as ‘the proportion of intervention outputs accounted It can be assumed that the visitor spend in the local economy generated by for by reduced outputs elsewhere in the target area’. The impact of displacement these visitors is £1,685,250 for this research is that GCR may currently have a negative impact on visitor numbers at some of the other tourist attractions or in the local shops etc. A low 9.1.2 Visit Spend - UK Based Overnight Visitors displacement factor has been applied as it is assumed that many of the visitors will come specifically for GCR – i.e. if they were not visiting GCR then they would not The impact of the UK based overnight visitors who combine their visit with a stay in be spending in the local area. the area can be calculated by multiplying the number of tourists, by average

tourism spend, by leakage, by a displacement factor. These elements are In order to ensure that this displacement is taken into consideration when calculating the economic impact of GCR on the surrounding area a displacement explained below: factor of 5% has been applied. This assumes that 5% of day trippers to GCR would have chosen to visit Loughborough had they not have been visiting GCR. Number of Visitors The other 95% would have visited an attraction outside of the area. (note: a 10% There are approximately 9,920 UK based visitors to GCR who combine their visit displacement factor was applied when considering the figures for the implications with an overnight stay in the area. on Charnwood) Spend Per Head Leakage The Great Britain Tourism Survey looks at GB Domestic Tourism. It showed that in This is the proportion of outputs that benefit those outside of the intervention’s 2012 the average number of nights of a UK visit to The East Midlands is 2.78, with target area or group, i.e. the spend by visitors to GCR which is spent outside of the an average spend of £158 per trip. Loughborough area. A relatively high leakage factor has been applied as it is anticipated that a significant number of people will spend money outside of the Displacement area, either by visiting shops or restaurants outside of Loughborough. A leakage As previously, a displacement factor of 5% has been applied. This assumes that 95% of these visitors would not have visited Loughborough were it not for GCR. factor of 50% has been applied. (note: a 20% leakage factor was applied when considering the figures for the implications on Charnwood).

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Leakage Displacement A leakage factor of 60% has been assumed. This takes into consideration that Assuming again that there is a 5% displacement. visitors may not choose to stay overnight in Loughborough but may choose another hotel in the surrounding area. Leakage A high leakage factor of 85% has been applied – this represents the fact that only a We can therefore calculate that the visitor spend in the local economy from these small proportion of international visitors will choose to stay in Loughborough. overnight stays is: We can calculate that the visitors spend potential for international visitors per year 9,920 x £158 x (1-0.05) x (1-0.60) = £595,597 are: 1,240 X £379 X (1-0.05) x (1-0.85) = £66,969 It can be assumed that the visitor spend in the local economy generated by these visitors is £595,597 It can therefore be assumed that the visitor spend in the local economy from International visitors is £66,969 9.1.3 Visitor Spend – International Visitors Total Visitor Spend

GCR also attracts visitors from overseas. The value of the ‘International Visitor’ Using these figures, the total additional visitor spend in the Loughborough and spend is calculated by multiplying the number of tourists, by tourism spend, by a Charnwood economy from visitors to GCR is: displacement factor, by a leakage factor. These elements are explained below: Day Trippers - £1,685,250 Number of Visitors UK Overnight visitors - £595,597 There are currently 1,240 visitors to GCR from overseas per annum. International - £66,969 Total = £2,347,816 Tourism Spend The ONS International passenger Survey shows that in 2011 there were 1,021,000 Visitor numbers are relatively static at GCR so to calculate the impact over total visits to the East Midlands from international visitors, spending a total of the next five years on Loughborough we have simply multiplied this figure 8,957,000 nights and a total spend of £387,000,000. This gives an average spend by five. per visit of £379. (note: 2011 figures have been used as it was estimated that 5 year visitor spend = £11,739,080 the 2012 Olympics skewed the 2012 figures)

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9.2 Employment 9.3 Impact of Spend on Goods and Services

Another key economic impact that GCR has on the local area is providing The Economic value of the Independent Museum Sector Toolkit produced by DC employment in the local economy. The key element of this is the indirect jobs that Research suggests that it is possible to express the impact of a museum’s are currently sustained through the spend in the economy. This can be calculated spending on goods and services in terms of economic value to their local and by dividing the visitor spend in the local economy generated by visitors to GCR by regional economies. The calculations for this are shown below: the level of spend required to sustain a new job. GCR currently spends approximately £2.8 Million per year on goods and services. Based on the fact that Visit Britain statistics show that a new full time equivalent tourism job is created and sustained with every £50,000 increase in tourism The DC research toolkit suggests that the wider impact of this total spend in the revenue in the economy and we know that that the total visitor spend expected to wider economy can be calculated if we apply a number of factors. These are: be generated by visitors to GCR to Loughborough over the 5 years is £11,739,080. The Multiplier Effect – the further economic activity associated with additional We can therefore calculate that indirect jobs created = £11,739,080/£50,000 local income and local supplier purchases. Applying DC research suggests we use = 234 a Multiplier of 1.2

Direct Jobs - There are currently approximately 50 employees at GCR. Based on Deadweight – deadweight accounts for what would happen anyway without the the fact that 36% of Charnwood’s population live in Loughborough we have intervention – the position in terms of target outputs that would occur if the therefore assumed that 18 of the direct jobs benefit Loughborough residents. intervention was not implemented. Applying DC research suggests we use a dead weight of 25% Total Employment Impact Leakage – the proportion of outputs that benefit those outside of the intervention’s Direct Impact – 18 direct jobs for Loughborough residents target area or group, for example the spend by GCR on its goods and services outside of Loughborough. Applying DC research suggests we use a leakage of Indirect Impact – 234 indirect jobs benefiting Loughborough residents 85%. (Note: this is 10% higher than the figure used for Charnwood to reflect the fact that much of the spend will take place out of Loughborough)

Displacement – Displacement can be defined as the proportion of intervention outputs accounted for by reduced outputs elsewhere in the target area. Applying DC research suggests we use a Displacement of 37.5%

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These factors can be applied to the current spend by GCR to calculate wider 9.4 Volunteering economic impact this brings. The formula to be applied is shown below: The economic impact of the volunteers to the local area can was calculated to be £2,815,172 x (1-0.25) x (1-0.85) x (1-0.375) x 1.2 = £237,530 £1,723,825 per year.

Impact of Spend on Goods and Services This figure remains the same whether we consider the economic value to Charnwood or Loughborough as all of the benefits will be felt in Loughborough. The impact of GCR’s spending on goods and services in terms of economic value is £237,530. Over the next five years this equates to £1,187,651. What we estimate is the economic contribution of Loughborough residents. If we pro-rata this figure based on population, we can assume that 36% of volunteers are from Loughborough. This equates to a contribution of £620,577.

Over the next 5 years this will be £620,577 x 5 = £3,102,885

Economic Value of Volunteering

The economic value per year of existing volunteering to GCR from Loughborough Residents over the next five years is £3,102,885.

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10.0 Summary - Economic Impact of GCR on Charnwood and Loughborough

Economic Impacts Of Great Central Railway Over The Next Five Years

OUTCOMES Charnwood Loughborough

Projected spend in the £19,457,325 £11,739,080 economy from visitors over the next 5 years Impact of spend on goods £1,979,418 £1,187,651 & services over the next 5 years Direct jobs sustained over 50 jobs 18 jobs the next 5 years Indirect jobs created 389 jobs 234 jobs through additional spend in the local economy Economic value of £8,619,125 £3,102,885 volunteering over the next (of Charnwood (of Loughborough 5 years Residents) Residents)

To put this in some context, in 2013, there were around 60,000 employee jobs in Charnwood. Over 5 years, Great Central Railway in its current state will directly or indirectly create or sustain over 500 jobs and therefore account for around 1% of the total jobs.

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Appendix 1 Full Project Brief

East Loughborough Heritage Quarter Economic Assessment: Part One

Appendix 1 - Full Project Brief

East Loughborough Heritage Quarter / CGR Consultancy

Project Outline and Specification

Charnwood Borough Council, through its corporate plan, commits to supporting  Requiring development adjacent to the Grand Union Canal to contribute to an economic development and regeneration through working together with partners to active waterfront with public access enable the delivery of a range of priority projects. Among those projects is the regeneration of East Loughborough’s Industrial Heritage Quarter focused upon an  Supporting proposals that enhance the landscape and biodiversity value of the area of terraced housing and ageing industrial buildings with related heritage and former Allsopps lane refuse tip and provide for public access. leisure assets in the form of the Great Central Railway, Grand Union Canal, Taylor’s bell foundry and access to adjoining countryside. The Great Central Railway is potentially a major diver for the regeneration of the heritage quarter. The Company currently operates a programme of heritage rail The commitment to that regeneration is carried forward through the Charnwood services along 8 miles of former main line track between Loughborough and Regeneration Strategy, adopted in September 2012 and the Charnwood Local Plan Leicester North (Birstall). The Company has ambitious proposals for the development Core Strategy 2006 – 2028, submitted on 20 December 2013. of the railway including:

Policy CS7 of the Core Strategy sets the strategic policy framework for the  “Bridging the Gap:” the reunification of the surviving sections of the GCR to create regeneration of the area by: a continuous 18 mile long line from Nottingham (Ruddington) to Leicester (Birstall). Initial work has already commenced in partnership with Network Rail to  Supporting development which conserves and enhances the heritage and restore the bridge over the Midland Mainline. Subsequent phases of work will see tourism value of Loughborough’s Industrial Heritage Quarter the restoration of the embankment and canal crossing to restore full connectivity by the spring of 2018.  Supporting proposals to reconnect the Great central Railway at Railway Terrace and deliver a direct connection into the Midland Mainline Railway  Relocation of the Loughborough Locomotive Shed: the reunification project will necessitate the relocation of the existing engine sheds which are used for  Supporting development which enhances the tourism potential of our heritage restoration and the maintenance of operational locomotives. Options are under assets, including the Great Central Railway and Grand Union Canal consideration for the relocation of restoration operations but a maintenance facility will continue to be required at Loughborough necessitating the acquisition of accessible track side premises.

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 Training and Business Development: Allied to restoration and maintenance The aim of the consultancy is to provide expert advice to the Borough Council in activities are opportunities for developing and delivering an engineering skills order to understand the existing and potential value of the Great Central Railway to and apprenticeships programme and developing business linkages with the local economy of Loughborough and Charnwood and to deliver a route map for companies requiring access to the railway for testing purposes. the growth and expansion of operations at Loughborough linked to the wider potential for encouraging and supporting regeneration across the East Loughborough Heritage  Railway Heritage Museum: a £15 million heritage museum is planned at the Quarter. southern terminus of the GCR which will accommodate locomotives and carriages on loan from the National Railway Museum along with other artefacts. Key outcomes / deliverables required: Rather than static exhibits it is intended that some stock should operate along the line effectively creating a “living museum” of the entire railway corridor. The An appraisal of the economic impact of the GCR upon the local economy of project is the subject is a heritage Lottery Funding bid for £10 million with a Loughborough and Charnwood. projected completion date of May 2019. Preparation of a business case and delivery framework for the expansion of the GCR Loughborough Railway Station and maintenance sheds have traditionally formed the at Loughborough to include: fulcrum of the GCR’s operations in Charnwood delivering valuable but un-quantified benefits to the Loughborough economy. However, its status as a major tourism  Restoration of the embankment and canal crossing to complete the connection to destination together with its potential to act as a catalyst for the regeneration of the CGR (North) heritage quarter may be diminished by the programme of competing attractions  Relocation of the engine maintenance sheds along the remainder of the extended line.  Provision of off street visitor car parking  Scope for enabling or stimulating wider regeneration initiatives within the East Opportunities for growth at Loughborough to accommodate both operational Loughborough Heritage Quarter expansion and to cater for anticipated growth in visitor numbers is constrained by  Indicative costs and delivery mechanisms within the context of local opportunities land availability. Subject to the demonstration of a satisfactory business case that  Anticipated costs, funding and delivery mechanisms for individual projects, with constraint might be addressed through the assembly of suitable land through the clear action planning for delivery. acquisition of local brown field sites and the relocation of track side businesses. The maximum budget for this commission is £20,000.

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Create and Deliver

East Loughborough Heritage Quarter

Economic Assessment Part Two: The Potential Economic Impact of GCR and Wider Potential for East Loughborough

November 2014

www.focus-consultants.co.uk

Focus Offices CLIENT: Charnwood Borough Council NOTTINGHAM Regeneration and Economic Development Officer Focus House Planning and Regeneration Millennium Way West Charnwood Borough Council Phoenix Park Council Offices Nottingham NG8 6AS Southfield Road Tel: 0115 976 5050 Loughborough E-mail: [email protected] LE11 2TX Website: www.focus-consultants.co.uk

Client Lead: Dave Hankin LEICESTER Email: [email protected] 101 Princess Road East

Leicester LE1 7LA PREPARED / AUTHORISED BY: Tel: 0116 275 8315 Focus Consultants E-mail: [email protected] Focus House Website: www.focus-consultants.co.uk Millennium Way West LINCOLNSHIRE Phoenix Park Focus House Nottingham Resolution Close NG8 6AS Endeavour Park Boston Focus Contact: Heather Frecklington, Associate Lincolnshire PE21 7TT Tel: 0115 976 5050 Tel: 01205 355 207 Email: [email protected] E-mail: [email protected] Website: www.focus-consultants.co.uk PROJECT: East Loughborough Heritage Quarter

LONDON DOCUMENT TITLE: Economic Assessment and Options Appraisal – 88 Kingsway Part Two: The Potential Economic Impact of GCR and Wider Potential for East Holborn Loughborough London WC2B 6AA DATE: November 2014 Tel: 0203 4022166 E-mail: [email protected] AUTHORISED BY: Heather Frecklington, Associate Website: www.focus-consultants.co.uk

SIGNATURE: © Focus Consultants 2010 LLP

East Loughborough Heritage Quarter Economic Assessment: Part Two

CONTENTS Page Nr

Introduction and Project Brief 2

1.0 Future Development for Great Central Railway 3

2.0 Economic Impact of the Developments on Charnwood Borough 5

3.0 Economic Impact of the Developments on Loughborough 13

4.0 The Challenges to Realising this Impact 19

5.0 Options for Addressing Constraints and Maximising Economic Impact for Loughborough and Charnwood 20

6.0 Delivering the East Loughborough Industrial Heritage Quarter 24

7.0 Conclusions 28

APPENDICES

Appendix 1 - Full Project brief

Appendix 2 - Outline Business Plan for the reunification of the GCR line

Appendix 3 – Outline Costings

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Introduction and Project Brief

Focus Consultants was appointed in March 2014 by Charnwood Borough Council to undertake a Study to appraise of the economic impact of the Great Central Railway (GCR) on the local economy of Loughborough and Charnwood alongside the development of options to see how this can best to maximised to enable GCR to act as a catalyst for the East Loughborough Industrial Heritage Quarter.

The Charnwood Borough Council Corporate Plan 2012-2016 sets out a commitment to supporting the East Loughborough Industrial Heritage Quarter as a priority project. For the purposes of this study, the area defined as East Loughborough is outlined in red below.

The full brief is included at Appendix 1.

Part 1 of the Study looked at the current economic impact of GCR on Loughborough and Charnwood. This found that over 5 years the value of GCR on the Charnwood economy is almost £30m and the impact on the Loughborough economy is just over £16m.

This report constitutes Part 2 of the Study and aims to look at what the impact of Great Central Railway could be as a result of some major projects planned by Great Central Railway and how this impact could be maximised to achieve the Borough Council’s ambition for the East Loughborough Industrial Heritage Quarter.

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1.0 Future Development for Great Central Railway

Having assessed the economic impact of GCR on the Charnwood economy in Part A reconnected GCR has the potential to become one of the most important One of this report, Part Two now looks at the future. GCR has ambitious plans heritage railways in the UK as well as one of the region’s top tourist attractions. which can be broken down into two key areas - the reunification of the Great Central Railway Line and the establishment of a new Heritage Railway Museum in Project Components: Leicester City. These are now considered in turn: The reunification of the Great Central Railway is known as "Bridging the Gap" - a 1.1 Reunification of the Great Central Railway reference to the need to undertake some complex engineering works to reconnect two sections of the former Great Central Railway in Loughborough and create a At present the Great Central Railway is divided into 2 sections: continuous 18 mile line from Nottingham to Leicester.

 An 8.5 mile line runs from Leicester to the Great Central Station in The plan is to use this project to make Leicestershire and Nottinghamshire into a Loughborough. This section is operated by GCR plc and governed by the major tourist destination with the Great Central Railway, as the only remaining David Clarke Railway Trust (DCRT). double tracked main line in preservation becoming the finest heritage railway in the UK.  A second section of line runs from a point north of Loughborough to Ruddington which is south of Nottingham and a former MOD depot which has The reconnected railway could also offer an alternative passenger transport route been designated a heritage centre. This section is operated by GCRN with for communities along the line, and the termination of the route in Ruddington, assets owned controlled by East Midland Railway Trust (EMRT). Nottingham, could easily link to the extension to the City tram system and service housing developments planned for Clifton, West Bridgford and Beeston, alleviating The two railways have agreed to work towards merging both their operating pressure on the road network. companies and trusts into a single trust and one operating company. Currently the 2 railways are managed quite differently with the Southern section a more This ambitious plan will require a complex feat of civil engineering to reinstate a successful tourism business whilst the Northern section is more orientated towards 500 metre stretch of track that was removed at the closure of the line in the 1960s, traditional heritage railway enthusiasts, with fewer visitors and fewer facilities. which will also entail the removal and relocation of the current locomotive engineering workshop. The other elements of the project include: Together the two sections of the Great Central Railway will create a continuous 18 mile railway from Ruddington in Nottingham to Leicester.

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 Embankment and connection to the GCRN line at the northern abutment Benefits: the draft Business Case for Bridging the Gap, prepared by GCR, is at Appendix 2 and provides the details and assumptions behind the annual headline  A box girder bridge over the Midlands Main Line and deployment of second figures of: hand bridge sections to span Railway Terrace New passengers 52,332  Embankment and access to the bridge will need to accommodate a car park New visitors 54,708 built on the former GCR embankment Additional income £1,134, 892  New bridge over Railway Terrance – this road is the entrance to the council Jobs created at GCR 12 recycling centre and requires clearance of 5.3 metres Business Development Opportunities a rail testing facility / rail charter trains  Embankment – this will need to comply with flood prevention regulations as the Hermitage Brook and flood defences are close by 1.2 Heritage Railway Museum at Leicester North  Canal bridge over the grand Union Canal – it is anticipated this can be repaired in situ. The other significant project which the GCR is undertaking is the creation of a Cost: Until recently the cost seemed prohibitive. However, the planned new heritage railway museum at its electrification of Midland Mainline has provided GCR with an opportunity to enter terminus at Leicester North. This project into a partnership with Network Rail whereby NR will rebuild the bridge over MML is being developed in partnership with as a community project. NR’s contribution will provide project management Leicester City Council and the National services and absorb possession costs by combining work with the electrification Railway Museum in York and a programme. partnership agreement has been signed between the organisations. Also, by involving volunteers - who successfully reinstated the Mountsorrel branch at a fraction of the cost estimated by Atkins - GCR can further reduce costs and The museum will house locomotives, rolling stock, artefacts and documents from provide work experience for aspiring rail engineers. Working in this way, the cost the National Collection. The museum will form one of the largest collections of its of the whole reunification project is now estimated to be £6.5-£8m - a significant kind in the UK bringing together items which relate to the story of GCR and its reduction from the £15m calculated by Atkins in 2009. relevance to the history of Leicester and Leicestershire.

Training providers and the University of Loughborough have also seen the Uniquely, through its design, visitors will be able to arrive and depart directly from opportunity offered by the project for work placements for undergraduate within the museum as the heritage line is incorporated into the footprint of the engineers, apprentices and pupils from local schools. The schools themselves see building. Restoration and conservation of the museum’s artefacts will take place in reunification as a once in a lifetime ‘live’ STEM project which engages young public view and interactive displays will relate the stories behind the exhibits. The people and inspires them to consider careers in rail engineering, construction, museum will create 9 new direct jobs at GCR, provide volunteering opportunities planning, civil engineering, law, quantity surveying, health and safety. and bring additional income from tourism into the local economy.

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2.0 Economic Impact of the Developments on Charnwood Borough

This section identifies what the economic impact of GCR will be on Charnwood if the GAP project and Leicester North Museum take place.

The calculations undertaken are: predicted visitor spend in the Charnwood economy, predicted indirect jobs through spend in the economy, predicted impact of spend on goods and services and the predicted economic value of volunteering.

2.1 Projected Visitor Numbers

The table below predicts the numbers of visitors anticipated over the first five years following the museum development and the GAP Projects. We have split the visitor numbers based on the assumptions made in the museum business plan.

Note: these figures include existing visitor numbers

Year 1 Year 2 Year 3 Year 4 Year 5

Additional 58,132 57,632 54,815 53,971 54,708 Visitors GAP Project

Additional visitors 230,000 220,192 212,601 210,421 210,421 museum Total 288,132 277,824 267,416 264,392 265,129

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The table below shows the split of visitors anticipated following both programmes and the associated visitor numbers.

% visitor Visitors From Year 1 Year 2 Year 3 Year 4 Year 5 Total numbers Loughborough 0.03 8643.96 8334.72 8022.48 7931.76 7953.87 40886.79

Charnwood (excluding Loughborough) - 0.05 14406.60 13891.20 13370.80 13219.60 13256.45 68144.65 Day trippers

Leicester and Leicestershire (excluding 0.34 97964.88 94460.16 90921.44 89893.28 90143.86 463383.62 Charnwood) Day trippers

East Midlands (Excluding Leicester and 0.19 54745.08 52786.56 50809.04 50234.48 50374.51 258949.67 Leicestershire) Day trippers

Rest of the UK Day trippers 0.25 72033.00 69456.00 66854.00 66098.00 66282.25 340723.25

Rest of the UK - Overnight visitors 0.08 23050.56 22225.92 21393.28 21151.36 21210.32 109031.44

International Visitors 0.03 8643.96 8334.72 8022.48 7931.76 7953.87 40886.79

Education 0.03 8643.96 8334.72 8022.48 7931.76 7953.87 40886.79

Total Visitors 1.00 288132.00 277824.00 267416.00 264392.00 265129.00 1362893.00

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2.1.1 Visitor Spend – Day Trippers (excluding Charnwood) Leakage This is the proportion of outputs that benefit those outside of the intervention’s The potential spend of day trippers to GCR can be calculated by multiplying the target area or group, i.e. the spend by visitors to GCR which is spent outside of the number of visitors, by average tourism spend, by a displacement factor by a local area. A leakage factor of 20% has been assumed. leakage factor. These elements are explained below: Visitor Spend from Day Trippers over the first five years can then therefore Number of Visitors be calculated by: It is estimated that there will be 1,063,056 day trippers to GCR (excluding visitors from Charnwood). Number of Day Trippers over the first five years x Average spend per trip x Displacement Factor x Leakage Spend Per Head Research shows that in 2012, 1.5 billion day trips were taken to English 1,063,056 x £32.33 x (1-0.10) x (1-0.20) = £24,745,392 destinations with spending of some £48.5 billion. This is an average spend per day 2.1.2 Visit Spend - UK Based Overnight Visitors tripper of £32.33.

The impact of the UK based overnight visitors who combine their visit with a stay in Displacement the area can be calculated by multiplying the number of tourists, by average Displacement can be defined as ‘the proportion of intervention outputs accounted tourism spend, by a displacement factor, by a leakage factor. These elements are for by reduced outputs elsewhere in the target area’. The impact of displacement explained below: for this research is that GCR may currently have a negative impact on visitor numbers at some of the other tourist attractions in Charnwood as visitors to the Number of Visitors county may choose to visit GCR rather than the other attractions. There will be approximately 109,031 visitors to GCR over the first five years who

combine their visit with an overnight stay in the area. In order to ensure that this displacement is taken into consideration when calculating the economic impact of GCR on the surrounding area a displacement Spend Per Head factor of 10% has been applied. This assumes that 10% of day trippers to GCR The Great Britain Tourism Survey looks at GB Domestic Tourism. It showed that in would have chosen to visit another of Charnwood’s local attractions had they not 2012 the average number of nights of a UK visit to The East Midlands is 2.78; with have been visiting GCR. The other 90% would have visited an attraction outside of an average spend of £158 per trip. the area. Displacement As previously, a displacement factor of 10% has been applied.

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Leakage We can calculate that the visitor spend potential for international visitors per year As previously, a leakage factor of 20% has been assumed. is:

We can therefore calculate that the visitor spend in the local economy from these 40,887 x £379 x (1-0.10) x (1-0.20) = £11,157,244 overnight stays is:

109,031 x £158 x (1-0.10) x (1-0.20) = £12,403,367 Total Visitor Spend

2.1.3 Visitor Spend – International Visitors Using these figures, the total visitor spend in the Charnwood economy from the

museum and GAP developments over five years is: GCR also attracts visitors from overseas. The value of the ‘International Visitor’ spend is calculated by multiplying the number of tourists, by tourism spend by a Day Trippers - £24,745,392 displacement factor, by a leakage factor. These elements are explained below:

UK Overnight visitors - £12,403,367 Number of Visitors

There are anticipated to be 40,887 international visitors to GCR over the next five International - £11,157,244 years.

Total = £48,306,003 Tourism Spend

The ONS International passenger Survey shows that in 2011 there were 1,021,000 total visits to the East Midlands from international visitors, spending a total of

8,957,000 nights and a total spend of £387,000,000. This gives an average spend per visit of £379. (note 2011 figures have been used as it was estimated that the 2012 Olympics skewed the 2012 figures)

Displacement As previously, a displacement of 10% has been applied.

Leakage As previously, a leakage factor of 20% has been assumed.

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2.2. Projected Additional Employment 2.2.2 Direct new jobs

Employment Impact The following new jobs are key to the new offer and have been included in the Business Plans for the GAP Project and the Museum. The other key economic impact of the GCR redevelopment plan will be the job creation potential in the local economy. Number of Museum - New Positions Created positions There will be 3 key elements to this: General Manager 1

Volunteer Coordinator 1  Construction jobs Learning and Engagement Coordinator 1.5  Direct new jobs within GCR Marketing and Business Development Manager 1  Indirect jobs through additional spend in the economy Visitor Services Manager 1 2.2.1 Construction jobs Front of House 2.5 Curatorial and Interpretation 0.5 Museum Project - This project has a total construction cost of £11,500,000 Caretaker/ Maintenance 0.5

Total 9 GAP Project - This project has a total construction cost of £6,480,000

Number of Total Construction Costs = £17,980,000 GAP Project - New Positions Created positions

Operations Manager 1 According to the Construction Industry Council, construction provides 28.5 jobs per £1 million invested (short term – 1 year positions). Therefore we can estimate that Marketing Officers 2 the construction jobs created are: Catering/ Charter operations 5 Testing and other Commercial Sales 1 17.98 x 28.5 = 512 jobs (short term - 1 year). Signalling 1 Testing and P/way 2

Total 12

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2.2.3 Indirect Jobs through additional spend in the economy 2.3 Impact of Spend on Goods and Services

Indirect jobs will be created as a result of increased spending by the visitors in the The economic value of the Independent Museum Sector Toolkit produced by DC local economy, for example in our shops and restaurants and through supply Research suggests that it is possible to express the impact of a museums chains. spending on goods and services in terms of economic value to their local and regional economies. Visit Britain statistics show that a new Full Time Equivalent tourism job is created and sustained with every £50,000 increase in tourism revenue in the economy. The high level business case developed by GCR suggests that the museum will spend £5,425,559 on top of its existing spend on goods and services in the first We know that the total visitor spend expected to be generated by visitors at GCR is five years after completion of the redevelopment project. expected to be £48,306,003. The business plan for the GAP project suggests that an additional £3,797,300 will The number of indirect jobs created through additional spend in the economy can be spent in addition to existing spend. therefore be calculated by dividing the additional spend in the economy that will be This is an additional £9,222,859 spent on goods and services. created through the development of the GCR project by the spend required to sustain a new job. The Multiplier Effect – the further economic activity associated with additional local income and local supplier purchases. Applying DC research suggests we use Using these figures we can assume that the indirect employment impact of the a Multiplier of 1.2 project would be: Deadweight – deadweight accounts for what would happen anyway without the £48,306,003/ £50,000 = 966 jobs created and sustained. intervention – the position in terms of target outputs that would occur if the intervention was not implemented. Applying DC research suggests we use a Impact on Employment deadweight of 25%

Number of Jobs Created and Sustained over the next 5 years: Leakage – the proportion of outputs that benefit those outside of the intervention’s

target area or group, for example the spend by GCR on its goods and services  Construction jobs created = 512 outside of the local area. Applying DC research suggests we use a Leakage of  Indirect Jobs through additional spend in the economy = 966 75%  Additional new jobs (excluding the existing) within the Museum and GAP

project = 21

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Displacement – Displacement can be defined as the proportion of intervention 2.4. Volunteering outputs accounted for by reduced outputs elsewhere in the target area. Applying DC research suggests we use a Displacement of 37.5% GCR is highly committed to developing and enhancing its volunteer programme as a result of the two projects. Furthermore, through the project GCR is hoping to These factors can be applied to the current spend by GCR to calculate wider recruit an additional 100 new volunteering opportunities per year. An increase economic impact this brings. The formula to be applied is shown below: from 500 to 600.

£9,222,859 x (1-0.25) x (1-0.75) x (1-0.375) x 1.2 = £1,296,964 The economic impact of the volunteers to Charnwood can be calculated by multiplying the number of volunteers by the hours worked per year and the gross Impact of Spend on Goods and Services average wage. This is explained in more detail below: In August 2010, Museums, Libraries and Archives published a research paper The Additional impact of GCR’s spending on goods and services in terms of looking at Volunteering in the MLA sector. The data shows that within the MLA economic value to their local and regional economies over the next five years is sector, museums and galleries provide the highest number of average hours per £1,296,964 volunteer annually at approximately 265 hours per volunteer.

If we add this to the existing then the total impact for Charnwood will be: According to previous research in the report, the average gross hourly wage in Charnwood is £13.01. £1,296,964 + £1,979,418 = £3,276,382 Using these assumptions, the additional economic value over the first year of volunteering to Charnwood as a result of the redevelopment project is estimated to be as follows:

600 volunteers x 265 hours x £13.01 = £2,068,590.

Over the next 5 years this will be £2,068,590 x 5 = £10,342,950.

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The table below shows that the estimated value of volunteers as a result of the GAP project is:

Section Revised cost Value of in-kind contribution from estimate NR, Contractors and GCR FJD - 2014 volunteers £ £

A60 bridge and 1,250,000 connection /embankment Bridge over MML 800,000 3,000,000 Bridge over Railway 1,100,000 Terrace Embankments x 2 2,450,000 Canal Bridge repair 450,000 250,000 Track, signals 430,000 500,000 Total 6,480,000 3,750,000

Volunteering

The economic value over the next five years of the volunteers at GCR if the development takes place is £10,342,950 +£3,750,000 = 14,092,950

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3.0 Economic Impact of the Developments on The impact of displacement for this research is that GCR may currently have a Loughborough negative impact on visitor numbers at some of the other tourist attractions or in the local shops etc. This section looks at the impact on Loughborough as a result of the GAP and Leicester North Museum projects A low displacement factor has been applied as it is assumed that many of the visitors will come specifically for GCR, if they were not visiting GCR then they 3.1 Projected Visitor Numbers would not be spending in the local area.

3.1.1 Visitor Spend – Day Trippers In order to ensure that this displacement is taken into consideration when calculating the economic impact of GCR on the surrounding area a displacement The potential spend of day trippers to GCR can be calculated by multiplying the factor of 5% has been applied. This assumes that 5% of day trippers to GCR number of visitors, by average tourism spend, by a displacement factor by a would have chosen to visit Loughborough had they not have been visiting GCR. leakage factor. Visitors from Loughborough have been excluded from these The other 95% would have visited an attraction outside of the area. calculations. It is assumed that Loughborough residents if not visiting GCR could be spending their money in local shops and restaurants, so this spend would be Leakage going into the local economy regardless. This is the proportion of outputs that benefit those outside of the intervention’s target area or group, i.e. the spend by visitors to GCR which is spent outside of the Number of Visitors Loughborough area. A relatively high leakage factor has been applied as it is It is estimated that there are will be 1,131,201 day trippers to GCR (excluding anticipated that a significant number of people will spend money outside of the visitors from Loughborough) over the first five years. area, either by visiting shops or restaurants outside of Loughborough. A leakage factor of 50% has been applied. Spend Per Head Research shows that in 2012, 1.5 billion day trips were taken to English Visitor Spend from Day Trippers can then therefore be calculated by: destinations with spending of some £48.5 billion. This is an average spend per day tripper of £32.33. Number of Day Trippers x Average spend per trip x Displacement Factor x Leakage Factor Displacement Displacement can be defined as ‘the proportion of intervention outputs accounted 1,131,201 x £32.33 x (1-0.05) x (1-0.50) = £17,371,570 for by reduced outputs elsewhere in the target area’.

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3.1.2 Visit Spend - UK Based Overnight Visitors 3.1.3 Visitor Spend – International Visitors

The impact of the UK based overnight visitors who combine their visit with a stay in GCR also attracts visitors from overseas. The value of the ‘International Visitor’ the area can be calculated by multiplying the number of tourists, by average spend is calculated by multiplying the number of tourists, by tourism spend by a tourism spend, by a displacement factor. These elements are explained below: displacement factor. These elements are explained below:

Number of Visitors Number of Visitors There will be approximately 109,031 visitors to GCR who over the first five years There are anticipated to be 40,886 visitors to GCR from overseas over the first five who combine their visit with an overnight stay in the area. years.

Tourism Spend Spend Per Head The Great Britain Tourism Survey looks at GB Domestic Tourism. It showed that in The ONS International passenger Survey shows that in 2011 there were 1,021,000 2012 the average number of nights of a UK visit to The East Midlands is 2.78, with total visits to the East Midlands from international visitors, spending a total of an average spend of £158 per trip. 8,957,000 nights and a total spend of £387,000,000. This gives an average spend per visit of £379. (note: 2011 figures have been used as it was estimated that Displacement the 2012 Olympics skewed the 2012 figures) As previously, a displacement factor of 5% has been applied. This assumes that 95% of these visitors would not have visited Loughborough were it not for GCR. Displacement Assuming again that there is a 5% displacement. Leakage A leakage factor of 60% has been assumed. This takes into consideration that Leakage visitors may not choose to stay overnight in Loughborough but may choose A high leakage factor of 85% has been applied – this assumes that only 15% of the another hotel in the surrounding area. overnight visitors will choose to stay in Loughborough.

We can therefore calculate that the visitor spend in the local economy from these We can calculate that the visitor spend potential for international visitors per year overnight stays is: is:

109,031 x £158 x (1-0.05) x (1-0.60) = £6,546,221 40,886 X £379 X (1-0.05) x (1-0.85) = £2,208,150

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3.2.1 Construction jobs Total Visitor Spend Museum Project - This project has a total construction cost of approximately Using these figures, the total additional visitor spend in the Loughborough and £11,500,000 Charnwood economy from visitors to GCR is: GAP Project - This project has a total construction cost of approximately Day Trippers - £17,371,570 £6,480,000

UK Overnight visitors - £6,546,221 Total Construction Costs = £17,980,000

International - £2,208,150 According to the Construction Industry Council, construction provides 28.5 jobs per £1 million invested (short term – 1 year positions). Therefore we can estimate that Total = £ 26,125,941 the construction jobs created are:

17.98 x 28.5 = 512 jobs (short term - 1 year). 3.2 Employment Assuming that 36% of these go to Loughborough – 184 The other key economic impact of the GCR redevelopment plan will be the job creation potential in the local economy. 3.2.2 Direct new jobs

There will be 3 key elements to this: In the previous section we have highlighted that 21 new jobs will be created.

 Construction jobs Given that 36% of Charnwood Residents live in Loughborough we have used a  Direct new jobs within GCR pro-rata calculation to assume that 36% of these will be for Loughborough  Indirect jobs through additional spend in the economy residents – this is 8 jobs.

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3.2.3 Indirect Jobs through additional spend in the economy 3.3 Impact of Spend on Goods and Services

Indirect jobs will be created as a result of increased spending by the visitors in the The Economic value of the Independent Museum Sector Toolkit produced by DC local economy, for example in shops and restaurants and through supply chains. Research suggests that it is possible to express the impact of a museums spending on goods and services in terms of economic value to their local and Visit Britain statistics show that a new Full Time Equivalent tourism job is created regional economies. The calculations for this are shown below: and sustained with every £50,000 increase in tourism revenue in the economy. Following the completion of both projects, it is anticipated that an additional The number of indirect jobs created through additional spend in the economy can £9,222,859 will be spent on goods and services in the first five years. therefore be calculated by dividing the additional spend in the economy that will be created through the development of the GCR project by the spend required to The DC research toolkit suggests that the wider impact of this total spend in the sustain a new job. wider economy can be calculated if we apply a number of factors. These are:

Using these figures we can assume that the indirect employment impact of the The Multiplier Effect – the further economic activity associated with additional project would be: local income and local supplier purchases. Applying DC research suggests we use a Multiplier of 1.2 £ 26,125,941 /£50,000 = 522 jobs created and sustained. Deadweight – deadweight accounts for what would happen anyway without the Impact on Employment intervention – the position in terms of target outputs that would occur if the intervention was not implemented. Applying DC research suggests we use a Number of Jobs Created and Sustained over the next 5 years: deadweight of 25%

 Construction jobs created = 184 Leakage – the proportion of outputs that benefit those outside of the intervention’s  Indirect Jobs through additional spend in the economy = 522 target area or group, for example the spend by GCR on its goods and services  Additional new jobs (excluding the existing) within the Museum and GAP outside of Loughborough. Applying DC research suggests we use a leakage of project =8 85%. (note: this is 10% higher than the figure used for Charnwood to reflect the  Existing jobs = 18 fact that much of the spend will take place out of Loughborough)

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Displacement – Displacement can be defined as the proportion of intervention 3.4 Volunteering outputs accounted for by reduced outputs elsewhere in the target area. Applying DC research suggests we use a Displacement of 37.5% The economic impact of the volunteers to the local area was calculated to be 14,092,950 over the next five years. These factors can be applied to the current spend by GCR to calculate wider economic impact this brings. The formula to be applied is shown below: This figure remains the same whether we consider the economic value to Charnwood or Loughborough as all of the benefits will be felt in Loughborough. £9,222,859 x (1-0.25) x (1-0.85) x (1-0.375) x 1.2 = £778,178 What we estimate is the economic contribution of Loughborough residents. If we If we also include the existing spend for Loughborough on the existing goods and pro-rata this figure based on population, we can assume that 36% of volunteers services of - £1,187,651 are from Loughborough.

Total Impact - £1,187,651 + £778,178 = £1,965,829

Economic Value of Volunteering The economic value per year of volunteering to GCR from Loughborough Residents over the next five years is £5,073,462.

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3.5 Summary

Economic Impacts Of Great Central Railway Over 5 years after completion of GAP and Museum projects

Without the Museum and GAP Project With the Museum and GAP Project

OUTCOMES Charnwood Loughborough Charnwood Loughborough

Projected spend in the economy from £19,457,325 £11,739,080 £48,306,003 £ 26,125,941 visitors over the next 5 years

Impact of spend on goods & services £1,979,418 £1,187,651 £3,276,382 £1,965,829 over the next 5 years

Direct jobs sustained over the next 5 50 jobs 18 jobs 50 existing plus a further 21 18 existing plus a further 8 years jobs jobs

Construction Jobs n/a n/a 512 184

Indirect jobs created through 389 jobs 234 jobs 966 jobs 522 jobs additional spend in the local economy

Economic value of volunteering over £8,619,125 £3,102,885 £14,092,950 £5,073,462 the next 5 years (of Charnwood Residents) (of Loughborough Residents) (of Charnwood Residents) (of Loughborough Residents)

To put this in some context, in 2013, there were around 60,000 employee jobs in Charnwood. Over 5 years after completion of the GAP and Leicester North Museum Projects Great Central Railway will directly or indirectly create or sustain over 1,000 jobs and therefore account for around 1.7% of the total jobs. This compares to major local employers such as Brush which employs around 1,000 people and 3M employing around 800 people in Loughborough.

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4.0 The Challenges to Realising this Impact

The economic impact assessment demonstrates there could be significant Capacity to support future aspirations: The Bridging the Gap project opens up economic benefits for Charnwood and Loughborough as a result of the major future development opportunities for GCR including attracting trackside testing proposed investments of the GAP project and Leicester North Museum. In addition companies to Loughborough and the development of a railway skills centre. Again the draft business plan identifies additional potential benefits in terms of new the lack of land for development available to GCR will constrain this. passengers, additional visitors, significant additional income, job creation and the development of further business opportunities. Summary: GCR wishes to maintain its headquarters at Loughborough. It is the largest of the working stations and has been the base for GCR operations since it However, the Loughborough station site presents a number of challenges to GCR reopened as a heritage railway. However the lack of parking provision and which could limit the achievement of all the potential economic benefits if these are availability of land in the locality is a serious constraint and will prevent not addressed: Loughborough from maximising the full economic potential of the Museum at Leicester North and Bridging the Gap. These constraints will mean some of the Car Parking: The key issue is that GCR does not own any significant areas of land economic impacts identified above will inevitably end up benefiting areas other near the station to enable the site to be developed - in particular to create a visitor than Loughborough if not addressed. car park. Currently there is no visitor parking with all visitors having to park on the street, and GCR know from feedback that this is not what people expect from an attraction of this nature and that it deters people from making a return visit. In addition, whilst the local community have been very understanding and patient to date, any increase in the number of cars parking on the street is likely to start causing ill feeling.

Locomotive Engineering Shed Relocation: The Bridging the Gap project will result in the railway line running through where the current Locomotive Engineering Shed is located. There is therefore a requirement for this to be relocated. Ideally this will be a much enhanced Locomotive Shed with better maintenance and training facilities with public access. Alternatively, a smaller running shed could be provided if necessary. The preference is for this to be located at Loughborough but there is currently no land available to house it.

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5.0 Options for Addressing Constraints and Maximising Economic Impact for Loughborough and Charnwood

In order to help address the constraints identified above, an analysis was undertaken to identify potential development sites within the defined East Loughborough area as well as identifying local businesses that may be interested in relocating or potentially have land which could be made available. The map below shows the sites identified.

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5.1 Consultation with local businesses

The following businesses were consulted with, all of whom are located in close From these discussions, a list of potential development site options was identified. proximity to Great Central Railway: These are described below.  David Hewitt and Stephanie Howarth – Needhams Windows (site reference: 1)  Henry Price – Great Central Trading Park (site reference: 2)  Graham Francis – Anstey Wallpaper Company (site reference: 3) Name: Junction of Wharcliffe Road and  Dave Sangwine – Harlequin (site reference: 3) Great Central Road Map Reference: 4 Whilst the businesses consulted with were generally very supportive of GCR and Ownership: Jelson Limited see the growth of GCR’s presence at Loughborough as a very positive thing, all felt Size: 2.84 acres they were unable to assist with addressing the development constraints other than Current Use: Currently a cleared site on a very temporary basis such as proving occasional car parking spaces. This Planning history: The site has planning was because either they don’t have any spare land available on their site or wish to consent for residential development. Under the terms of the planning consent the keep it for their own future business growth. site needs to provide 30% affordable housing - 75% of this for rent and 25% for shared ownership. An application for full planning permission for 41 dwellings was 5.2 Potential sites for development rejected in 2013.

In addition to the local businesses identified above, consultation was undertaken Comment: As the site has outline planning approval for residential development, with other local landowners / stakeholders including: the land value is high and this is likely to be prohibitive for GCR in the open market. However, as it sits adjacent to the GCR station, this could be an important site in  Allan Fisher – Nottingham Community Housing Association addressing the constraints identified above.  Adrian McInnes – William Davis  John Casey – Charnwood Borough Council  Colin Bailey – Charnwood Borough Council  Simon Pappril - Canal and River Trust  David Towle – Environment Agency  Lili Tabiner – Great Central Railway.

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Name: Windmill Road and Moor Lane Map Reference: 5 Name: Great Central Road Allotments and Ownership: Sowden Investments Limited, Recreation Land FS Protector Limited and H.J Gallagher Map Reference: 6 and L. Gallagher. Ownership: Charnwood Borough Council Size: North East Quadrant 4.34 acres, Current Use: Allotments with 51 plots South East Quadrant 0.73 acres, South managed by Charnwood Borough Council. West Quadrant 4.76 acres They are well used, currently fully occupied Current Use: Part vacant, part recycling and waste facility. Previous use of with a 3 year waiting list. currently vacant areas was warehousing and industrial. Comment: As a well used, Local Authority managed allotment site, it is very Planning history: The site has full consent for 38 houses on the South West unlikely the site will be made available for rent or sale to GCR due to high level of Quadrant and outline permission for further housing and for a site recreation demand for allotment plots. provision with, within it, a site for a community development. The development would provide some 100 detached, semidetached and terraced houses overall. Name: Clarence Street Map Reference: 7 The north east quadrant of the application site is to be dedicated for use as a Ownership: Metropolitan Housing Trust community building and public park land and a Section 106 agreement is in place Size: 2.7 acres Current Use: Currently a cleared site, between the owners and Charnwwod Borough Council. The land is to be former Richard Roberts Fabrics Limited transferred to the Council, or its nominees for a nominal consideration upon the Planning history: The site has planning occupation of the first dwelling. permission for residential development

comprising 113 one, two and three bedroom flats and 5 four bedroom 3 storey Comment: Given the planning consents on the site, it is unlikely that any of the dwellings and 13 two bedroom 2 storey dwellings with associated parking and land would be available for sale or rent to GCR and costs are likely to be landscaping. prohibitive given the residential planning consent. Comment: As the site has planning approval for residential development, the land value is high and this is likely to be prohibitive for GCR in the open market. Whilst it is an important site in East Loughborough, it is considered that it is too far away from GCR to help address the constraints identified above.

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Name: Allsopps Lane The following opportunities have therefore been identified as the preferred options Map Reference: 8 based on the following criteria: Ownership: Charnwood Borough Council Size: 47 acres  Proximity to Great Central Railway Current Use: The former domestic  Availability refuse tip off Allsopps Lane extends to  Opportunity for Charnwood Borough Council to intervene. approximately 19ha (47 acres). Tipping activities have ceased and the Junction of Wharcliffe Road and Great Central Road: This is an important site site has been capped with imported as it could act as a gateway site to the Industrial Heritage Quarter. The site could material in readiness for its restoration be used to provide car parking for GCR, however, given its size and proximity to Planning history: N/A GCR, this represents a significant opportunity for the Borough Council to intervene and deliver a wider scheme as part of the Industrial Heritage Quarter. Comment: Built development is not possible on the site due to its former use as a refuse tip. It may however be possible to provide surface parking adequate to Windmill Road and Moor Lane: Part of this site is subject to a Section 106 address the needs of GCR. Due to its location, it could also provide car parking agreement for the provision of a community building and a public park land. The facilities for other uses in the area. The site would involve a short walk to GCR land is to be transferred to the Council, or its nominees for a nominal consideration which might not be suitable to all visitors. upon the occupation of the first dwelling. The precise use of the site is to be determined but there might be the opportunity to consider the wider community 5.3 Preferred Options benefits that could be secured in association with the GCR or to help deliver the Council’s commitment to an Industrial Heritage Quarter. Having reviewed the opportunities identified above, it is considered very unlikely that it will be possible to meet GCR’s land requirements within the open market. Great Central Road Allotments and Recreation Land: This site is in the However, a number of opportunities have been identified where Chanwood ownership of Charnwood Borough Council and is in close proximity to GCR. Borough Council have the opportunity to intervene and help address the Therefore there is the opportunity for the Council to use this site for an alternative development constraints facing GCR as well as opening up wider opportunities for purpose if the value of doing so can be demonstrated. the regeneration of East Loughborough as a Industrial Heritage Quarter, in line with the ambitions set out in the Council’s Corporate Plan. Allsops Lane: This former domestic refuse tip is in the ownership of Charnwood Borough Council and is a large area of open space. The site cannot be built on but could be provided as a landscaped recreation and amenity area with some car parking to support GCR and other activities in the area. The Council have the opportunity to develop this site to meet the aspirations for the area as an Industrial Heritage Quarter.

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6.0 Delivering the East Loughborough Industrial Indicative Cost: £2.25-2.5 million, including sculpture park, (please see Heritage Quarter appendix 3 for assumptions)

Intervention by Charnwood Borough Council on one or more of the sites identified  Sculpture park within the new recreational space with sculpture trail around the above not only offers the opportunity to support GCR to maximise its potential area - this would add to the growing number of sculpture parks and trails economic impact for Loughborough and Charnwood but also opens up the around England that offer a wide variety of artworks in a different ambient opportunity to kickstart the wider regeneration of the East Loughborough area as a landscape, including the Yorkshire Sculpture Park, the New Art Centre in heritage quarter. Wiltshire, Kielder Water and Forest Park Northumberland, Burghley House and Gardens Lincolnshire and Grizedale Forest Park Cumbria amongst others. The vision of this area could be “to celebrate East Loughborough’s industrial Common to all is the planning of the Parks, where resident culture is integral heritage by enhancing the character of the area through the redevelopment of and where the spaces are managed and designed with the input of local derelict and vacant land and property and creating opportunities for residents and people, and the sculptures created by local artists to reflect the local visitors to enjoy the area as a cultural and leisure destination in the town which communities. Sculpture Parks are a growing phenomenon to support celebrates its industrial heritage.” community goals in the arena of arts, culture, parks and open spaces and to

respond to the need for more public open space. In good weather they often As part of this work, consultation has been undertaken with a range of local become the focus of community meetings, workshops, design charettes and partners to understand what other initiatives are planned, or could be developed, to park planning. They also support economic goals, stimulating visits to local take advantage of the increase in the number of visitors in the area and to enhance businesses, shops and restaurants. the offer to encourage more people to visit.

Indicative Cost: included above From this consultation, a number of potential projects have been identified:

 Recreational Space: this has particularly arisen in the context of the former  Links with Grand Union Canal - the Canal and River Trust believe there is refuse tip on Allsopps Lane considered above. Consultees felt there was a lack strong synergy between their work and GCR as rail and water enthusiasts tend of public open space in Loughborough East, and that access to the surrounding to be from similar backgrounds. They also have strong support - in January countryside is limited, but that the restoration of Allsopps Lane to informal 2014 annual winter maintenance of the lock in East Loughborough turned into parkland, community woodland and wildlife habitats would be beneficial and popular event with many hundreds of local people turning up. The Trust possible with the assistance of grant aid and voluntary agencies. It was also believe there are options to integrate canal and rail journeys with joint ticketing mentioned that the site may also be suitable for an Ecology Park with small to do part of the trip on the canal and part on the railway, as well as to improve scale visitor facilities. The point was made that any works would need to the canal facilities and provide moorings to encourage canal travellers to stop include fencing to prevent trespass onto operational railway land. over in Loughborough.

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Additionally there believe there is potential in improving the footpath network  Enhanced visitor facilities at Great Central Railway: With increased number of and introducing signage to take forward the growing national interest in visitors in the area, there may be potential to further enhance the visitor "Gongoozlering" - the hobby , much like trainspotting, that can extend to all facilities at GCR to act as a gateway to the area and direct people to other aspects of canals, including canal artwork, locks, history and technology. attractions / facilities in the locality or to direct people into the town centre. The station is already well served with a buffet, shop and small museum but with Indicative Cost: £75,000-£100,000 (please see appendix 3 for assumptions) increased vibrancy in the area, it may be appropriate to expand these or to identify additional facilities that people would like to see provided at  Industrial Heritage Quarter: GCR’s Bridging the Gap project features in both Loughborough. Examples could include facilities for larger corporate events, the Charnwood Local Plan 2008 -2028 and the Tourism Blueprint for facilities for film crews which could also showcase the use of the railway in film Charnwood. The Great Central Railway is close to many of Loughborough’s for visitors and potential outside facilities such as a railway garden. A cost renowned factory sites – Ladybird Books, Brush, 3M and the Bell Foundry all estimate has been produced on the basis of converting GCR’s Lovett House to contributed to Loughborough’s reputation as a centre of engineering and new visitor facilities. manufacturing excellence. The Charnwood Local Plan has a vision for creating

an Industrial Heritage Quarter to develop sites around GCR’s main station to Indicative Cost: £100,000-£125,000 complement Bridging the Gap in partnership with the Canal and River Trust,

the Bell Foundry Museum and the Carillion. Bringing new visitors to the area Together the developments at GCR and these complementary projects could will be a catalyst to achieving further development of the quarter. create a powerful critical mass in Loughborough East to give the area an identity

as a genuine tourist attraction to create an economic impact beyond that already  Heritage Trail: the first step in the creation of the Industrial Heritage Quarter highlighted and create significant job and wealth creation opportunities to this could be a Heritage Trail running from Queens Park to the High Street / Church disadvantaged area. Gate and then on to the Parish Church which can then later be extended to the

Industrial Heritage Quarter and Town Centre. Queens Park has the original Great Paul Bell Casting, and there are numerous smaller bell cases which could be used to lead the trail. This will help improve the connections between East Loughborough and the rest of the town and encourage visitors to the town centre to visit East Loughborough and also help to draw GCR visitors into the town.

Indicative Cost: £50,000-£75,000 (please see appendix 3 for assumptions).

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6.1 Delivery Mechanisms

The vision and indicative projects set out above can only be achieved through a For the heritage trail, the Our Heritage or Heritage Grants programme would be the partnership approach to include Charnwood Borough Council, Great Central most appropriate. http://www.hlf.org.uk/looking-funding/our-grant-programmes Railway, the Canal and River Trust and private developers to name a few. Potential external funding opportunities to deliver this vision include: Landfill Communities Fund: This tax credit scheme enables operators of landfill sites to contribute money to enrolled Environmental Bodies (Ebs) to carry out Leicester and Leicestershire Enterprise Partnership (LLEP): In the LLEP’s projects that meet environmental objects contained in the Landfill Tax Regulations. Strategic Economic Plan, five Growth Areas have been prioritised in Leicester and Leicestershire which offer the greatest opportunities for economic growth. This The principle of the LCF is that it ‘offsets’ some of the negative impacts of living includes Loughborough. Single Local Growth Funding through the LEP has very close to a landfill site. There are six main areas of work that can be already been secured for GCR’s Bridging the Gap project so further investment undertaken when utilising LCF monies including ‘the provision, maintenance or would need to make the case for building on this. http://www.llep.org.uk/ improvement of a public park or other general amenity’.

Arts Council England: It may be possible to secure funding from the Arts The most common way to receive funding is to approach a Distributive Council towards the Sculpture Park proposals although focus of capital funding Environmental Body (DEB). DEBs operating in Loughborough include Violia currently is prioritised on the consolidation and improvement of the existing arts Environmental Trust http://www.veoliatrust.org/ and Biffa Award. http://www.biffa- infrastructure, rather than investing in significant expansion or new buildings. For award.org/ the 2015-2018 period, the Arts Council has a small capital grants programme for grants of between £100,000 and £499,999 and a large capital grant scheme for Community Infrastructure Levy: The Community Infrastructure Levy came into grants over £500,000. In addition, the Grants for the Arts Programme which force in April 2010. It allows local authorities in England and Wales to raise funds provides grants of up to £100,000 can provide smaller amounts of capital funding. from developers undertaking new building projects in their area. The money can be http://www.artscouncil.org.uk/funding/ used to fund a wide range of infrastructure that is needed as a result of development. This includes new or safer road schemes, flood defences, schools, Heritage Lottery Fund: If works to historic buildings were to form part of the wider hospitals and other health and social care facilities, park improvements, green regeneration of the area or a heritage trail was developed, it may be possible to spaces and leisure centres. The Government has decided that this tariff-based secure funding from the Heritage Lottery Fund. There are a number of different approach provides the best framework to fund new infrastructure to unlock land for funding streams including the Heritage Enterprise Scheme which funds projects to growth. There may be opportunities for Charnwood Borough Council to secure rescue neglected historic buildings and sites and unlock their economic potential. funding towards supporting GCR’s aspirations or the wider Industrial Heritage Quarter initiatives from developers through the Community Infrastructure Levy.

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6.2 Action Plan

The key actions needed to take forward the opportunities identified in this report include:

 Charnwood Borough Council to decide if it wishes to proactively intervene in the East Loughborough area.  Work with Great Central Railway and other partners to draw up a brief of requirements  Complete an options appraisal of the sites identified above to assess the best fit with the brief  Develop a project brief for the preferred site or sites  Complete feasibility study for the preferred site to establish a fully costed scheme and funding strategy  Develop an implementation plan for securing / releasing the site for development  Secure funding from a range of internal and external funders.

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7.0 Conclusions

The Great Central Railway currently delivers over £6 million of economic benefits to Charnwood Borough Council a year, sustaining a minimum of 78 local jobs. The ambitious development plans of GCR will only add to this, potentially increasing this figure to between £30 million and £65 million over the first five years after completion depending on the timescales for implementing the Bridging the Gap and Leicester North Museum projects. This level of investment would also create between 486 and 966 local jobs in an area identified as a priority by Leicestershire County Council in recognition of its economic challenges.

GCR has a strong preference to remain in Loughborough - the original home of the Railway and a town to which it has many historical and contemporary ties. However to realise the development plans the Trust needs to address the fundamental issues highlighted in this report either at the Loughborough sites or alternative locations along the line.

In summary GCR needs to overcome the challenges of creating fit for purpose visitor parking and bringing forward new land for the relocation of the Locomotive Shed as well as to accommodate future growth aspirations and opportunities.

Assisting GCR to overcome these constraints offers Charnwood Borough Council the opportunity to initiate the wider regeneration of East Loughborough which could bring significant economic benefits for both Loughborough and Charnwood.

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Appendix 1 Full Project Brief

East Loughborough Heritage Quarter Economic Assessment: Part Two

Appendix 1 - Full Project Brief  Requiring development adjacent to the Grand Union Canal to contribute to East Loughborough Heritage Quarter / CGR Consultancy an active waterfront with public access

Project Outline and Specification  Supporting proposals that enhance the landscape and biodiversity value of the former Allsopps lane refuse tip and provide for public access. Charnwood Borough Council, through its corporate plan, commits to supporting economic development and regeneration through working together with partners to The Great Central Railway is potentially a major diver for the regeneration of the enable the delivery of a range of priority projects. Among those projects is the heritage quarter. The Company currently operates a programme of heritage rail regeneration of East Loughborough’s Industrial Heritage Quarter focused upon an services along 8 miles of former main line track between Loughborough and area of terraced housing and ageing industrial buildings with related heritage and Leicester North (Birstall). The Company has ambitious proposals for the leisure assets in the form of the Great Central Railway, Grand Union Canal, development of the railway including: Taylor’s bell foundry and access to adjoining countryside.  “Bridging the Gap:” the reunification of the surviving sections of the GCR to The commitment to that regeneration is carried forward through the Charnwood create a continuous 18 mile long line from Nottingham (Ruddington) to Regeneration Strategy, adopted in September 2012 and the Charnwood Local Leicester (Birstall). Initial work has already commenced in partnership with Plan Core Strategy 2006 – 2028, submitted on 20 December 2013. Network Rail to restore the bridge over the Midland Mainline. Subsequent phases of work will see the restoration of the embankment and canal Policy CS7 of the Core Strategy sets the strategic policy framework for the crossing to restore full connectivity by the spring of 2018. regeneration of the area by:  Relocation of the Loughborough Locomotive Shed: the reunification project  Supporting development which conserves and enhances the heritage and will necessitate the relocation of the existing engine sheds which are used tourism value of Loughborough’s Industrial Heritage Quarter for restoration and the maintenance of operational locomotives. Options are under consideration for the relocation of restoration operations but a  Supporting proposals to reconnect the Great central Railway at Railway maintenance facility will continue to be required at Loughborough Terrace and deliver a direct connection into the Midland Mainline Railway necessitating the acquisition of accessible track side premises.

 Supporting development which enhances the tourism potential of our heritage assets, including the Great Central Railway and Grand Union Canal.

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 Training and Business Development: Allied to restoration and maintenance potential for encouraging and supporting regeneration across the East activities are opportunities for developing and delivering an engineering Loughborough Heritage Quarter. skills and apprenticeships programme and developing business linkages with companies requiring access to the railway for testing purposes. Key outcomes / deliverables required:

 Railway Heritage Museum: a £15 million heritage museum is planned at the An appraisal of the economic impact of the GCR upon the local economy of southern terminus of the GCR which will accommodate locomotives and Loughborough and Charnwood. carriages on loan from the National Railway Museum along with other artefacts. Rather than static exhibits it is intended that some stock should Preparation of a business case and delivery framework for the expansion of the operate along the line effectively creating a “living museum” of the entire GCR at Loughborough to include: railway corridor. The project is the subject is a heritage Lottery Funding bid for £10 million with a projected completion date of May 2019.  Restoration of the embankment and canal crossing to complete the connection to CGR (North). Loughborough Railway Station and maintenance sheds have traditionally formed  Relocation of the engine maintenance sheds the fulcrum of the GCR’s operations in Charnwood delivering valuable but  Provision of off street visitor car parking. unquantified benefits to the Loughborough economy. However, its status as a  Scope for enabling or stimulating wider regeneration initiatives within the major tourism destination together with its potential to act as a catalyst for the East Loughborough Heritage Quarter regeneration of the heritage quarter may be diminished by the programme of  Indicative costs and delivery mechanisms within the context of local competing attractions along the remainder of the extended line. opportunities  Anticipated costs, funding and delivery mechanisms for individual projects, Opportunities for growth in Loughborough to accommodate both operational with clear action planning for delivery. expansion and to cater for anticipated growth in visitor numbers is constrained by land availability. Subject to the demonstration of a satisfactory business case that The maximum budget for this commission is £20,000. constraint might be addressed through the assembly of suitable land through the acquisition of local brown field sites and the relocation of track side businesses.

The aim of the consultancy is to provide expert advice to the Borough Council in order to understand the existing and potential value of the Great Central Railway to the local economy of Loughborough and Charnwood and to deliver a route map for the growth and expansion of operations at Loughborough linked to the wider

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Appendix 2

Great Central Railway’s Outline Business Plan for the reunification of the GCR line

East Loughborough Heritage Quarter Economic Assessment: Part Two

DRAFT May 2014 Great Central Railway plc Reunification of the GCR line Outline Business Plan

Introduction

The purpose of this outline business plan is to begin the process of defining the This document therefore focuses on describing the current activities of GCR plc key benefits to be derived from the reunification of the two sections of Great and the projected growth based on the assumption that following reunification, the Central Railway to create a continuous 18 mile railway from Ruddington current business model of GRC plc will be adopted by the new operating company. (Nottingham) to Leicester. A reconnected GCR will become one of the most (A further business plan will be developed for the Northern section to examine the important heritage railways in the UK as well as one of the region’s top tourist economic potential of further developing the Ruddington site and opening stations attractions. and halts along the line south to Loughborough.)

Currently the line is divided into 2 sections. An 8.5 mile line runs from Leicester to The key aims of the business plan are: the Great Central Station in Loughborough. This section is operated by GCR plc and supported by the David Clarke Railway Trust (DCRT). A second section of line runs from a point north of Loughborough to Ruddington (south of Nottingham  Visitor Development: to outline the growth potential in terms of increasing and a former MOD depot which has been designated a heritage centre). This visitor numbers to the railway and the provision of additional services to section is operated by GCRN with assets owned controlled by East Midland increase visitor spend in the local economy. Railway Trust (EMRT).  Other business activity: to consider the potential for expanding GCR’s other The two railways have agreed to work towards merging both their operating current activities – rail industry testing, filming, photography and companies and trusts into a single trust and one operating company. Currently the freight/passenger transortation 2 railways are managed quite differently with the Southern section a more successful tourism business whilst the Northern section is more orientated towards  Income and Expenditure Assumptions: To summarise the projected income traditional heritage railway enthusiasts, with fewer visitors and fewer facilities. and expenditure anticipated from the expansion of activities and additional facilities which the reunified line will provide.

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 Future business model: To consider the approach being taken to merge the 2 Locomotive Shed and Carriage and Wagon Works are centres of engineering current operating companies and 2 Trusts to create one single operating excellence where some of the rarest locomotives, carriages and rolling stock are company and one Trust. carefully and professionally restored and brought back to life. Our themed activities – Peppa Pig, Teddy Bear Picnic, Steam Galas, War Weekends and Santa  Governance and Management: To consider the future governance and Specials are always packed with visitors of all ages from far and wide. management arrangements and the actions needed to implement these. Whilst we are custodians of some of the most treasured examples of our great  Risk Assessment: To outline the proposed measures to mitigate against risks industrial heritage, we also embrace the opportunity of working with the modern which could impact on the delivery of the project. railway industry. Our business has expanded to offer commercial rail testing facilities, apprenticeships, training, engineering services, locomotive and carriage Current Situational Analysis overhaul.

The Great Central Railway is one of Leicestershire’s most successful, iconic tourist As a result, over the past two years there has been continued growth of almost attractions. It is the UK’s only double track, mainline heritage railway. Our aim in 20% per annum and since 2009, we have invested over £2.5m in infrastructure and recent years has been to develop GCR as a family orientated business where other projects. We currently employ over 100 local people (50 fte) and are young and old enjoy access to some of the best preserved locomotives, rolling supported by over 600 volunteers. We have developed an apprenticeship scheme stock and memorabilia from a bygone era. As a result our turnover has risen from and our youth training policy is one of the main reasons we successfully attract £1.5m in 2007 to £2.9m in 2013/14. Our visitor numbers have grown to over young people to work at GCR. Many of these work in our catering services but we 125,000 per year (2013) from 71,000 in 2007 and our catering has an annual have apprentices in engineering and marketing and more posts in development turnover of close to £1m. We estimate that our contribution to the local economy is over £7.58m per annum (based on research published by the All Party Our fleet of iconic locomotives and rolling stock Parliamentary Group on Heritage Rail in July 2013) GCR has acquired an outstanding reputation for its restoration and maintenance of The growth of GCR has been remarkable since the early days in 1969 when the some of the rarest and best loved locomotives and carriages from the Age of Mainline Preservation group met after the closure of the Great Central Railway. Steam. Sections were rented from British Rail until the line was purchased under the formation of GCR (1976) Ltd., a public company. Since then, teams of volunteers With low labour costs, substantial volunteer input and a dedicated team of have worked tirelessly to restore and maintain the stations, track and facilities experienced engineers, GCR’s fleet of locomotives are kept running in top along the 8.5 miles from Loughborough to Leicester. Each station is beautifully condition throughout the year. The services of our team are also called upon by preserved combining original features with modern visitor facilities. Our other heritage railways and over a 3 year period, we restored the Nation’s Oliver

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Cromwell on behalf of the NRM on schedule, to the highest standard and at a Activities: fraction of the cost of commercial companies. It has just completed its 5-year mid- GCR is open all year round with steam and diesel locomotives running every term overhaul and is due back on mainline service. weekend. From Easter onwards, trains run during the week too and a programme of events caters for the whole range of our visitors. Steam and Diesel Galas cater We currently have engine restoration and repair facilities at Loughborough with a for the heritage railway enthusiast, Peppa Pig, Santa Specials, Teddy Bears Picnic, loco shed which spans the end of the railway track just north of Loughborough Easter Bunny and Summer Fun days are aimed at families. station. With the reunification of the line, this facility will be moved and investigations are underway to ascertain the best location to site this facility. On Train Dining services: Our on train catering facilities allow the discerning diner to enjoy a sumptuous meal Rothley station yard is the location of our Carriage and Wagon works which is in carriages which hark back to the golden age of luxury travel. Currently dining equipped to restore to refurbish and restore our fleet of carriages. Facilities here trains operate every Saturday evening and Sunday lunchtimes are limited but additional space for storage is being created at Swithland and also within the planned museum at Leicester North. Corporate Hire/Charters: Over the past 2 years the Charter business has grown from virtually nothing to Our award winning services making a significant contribution to the income of GCR plc. Parties of all sizes can be accommodated in our fleet of carriages, ranging from a small observation coach Developing GCR into a family focused business has evolved over the past 5 years to a rake of carriages catering for 85 guests. and we are now open all year round with a programme of events aimed at all interests and age groups. Whatever the age of our visitors, everyone is captivated Testing: by the evocative sights and sounds of gleaming locomotives and carriages The railway is used for testing engines, rolling stock, components and equipment. weaving their way across the Leicestershire landscape. The line from Loughborough to Leicester is capable of testing diesel locomotives up to a speed of 75mph and steam locos to 60 mph – the only heritage railway to Each of the stations between Loughborough and Leicester has a tearoom/café with offer this facility. Clients include: Network Rail, Brush, EWS, SERCO and additional attractions at each location. Mercedes Benz  Loughborough Station has a café, emporium, retail outlet, ticket office and museum  Quorn has a café, turntable, restored features such as coal staiths and cattle docks.  Rothley has a miniature railway, the C & W works and a café.  Leicester North has a restaurant and training /business units at Greenacres

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Filming: A number of films and TV programmes have used GCR as a location. Recently Skills and Apprenticeships BBC filmed an episode of Casualty and previously Top Gear was filmed at GCR. GCR employs 6 apprentices directly in all areas, engineering, catering, In addition, photographic charters bring in a steady source of income as each party administration and marketing. In addition, in partnership with ARC training and is comprised of up to 40 photographers – bringing an additional benefit in café formerly with Vital, 56 apprentices have been trained in rail operations at GCR’s income. Greenacres site. The latter are predominantly NEETs and the majority secure work with companies such as Network Rail and London Underground. DATEX Current Activities 2013 – 2014 (Awaiting Auditors Report) Driver Training Experience is a regular source of income with different categories on offer from Bronze, Silver and Gold. This generates approximately £100,000 per Activity Gross Income No of visitors Comments year. £ Ticket Sales, 1,131,694 82,687 Average income ordinary fares, per passenger: Training/Apprentices: special events, £12.87 A partnership exists with a training provider to train apprentices using classrooms galas etc at Greenacres and track access for practical elements of the courses. In the past DATEX, photo 99,808 1,165 18 months over 50 apprentices have been trained and further courses are planned charters for the future. On train Dining & 733,658 29,679* An estimated 1/3rd cafes of café visitors at Retail: Quorn, Rothley There are two main retail outlets at GCR’s station in Loughborough. A shop which and LN do not sells merchandise relating to GCR and an Emporium which is staffed by volunteers purchase train and sells items donated to the GCR. The emporium therefore makes 100% profit tickets – this figure is based on a and represents 21% of the total income from retail. In addition Gift Aid is also formula: total Café claimed from the emporium sales. income /£3.50 per head spend / 1/3rd

Photographic 19,803

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Activity Gross Income No of visitors Comments *Griddle car available on selected trains £ ** Seasonal variations charters Testing /Contract 168,104 Fare Structure: Engineering The following fares apply: Lineside permits 8,683 All day rover ticket (adults) £15 Platform tickets 35, 664 Retail 168,900 All day rover tickets (seniors/concessions) £13 School and group Inc in ticket sales 5,500 All day family rover (2 + 3) £34 visits All day family rover (1 + 3) £23 Members & 544,059 5,000 Special all in family tickets £20 - Teddy bears’ Shareholders, picnic, school other income holiday offers Total 2,910,373 124,031 Under 5’s Free

Train journeys Trains predominately run at weekends with more frequent services between April Analysis of current visitor profile and October. Weekday openings tend to be during school holidays and for special events. An online version of the Timetable is updated regularly. Galas and other Train passengers events generally run over a 3 – 4 day weekend.

Month Visitors Events Loughborough – Ordinary trains * Dining Trains February 2103 2913 Half term Leicester rtn January 6 trains Sat & Sun 1 x dining train Sat & March 7779 Swap meet; Peppa Pig Sunday April 7134 Easter Children’s event; February, March, 7 trains Sat & Sun 2 x dining trains Sat & Swithland Gala November Sun May 3837 Diesel gala; Steam World April – October 8 trains Sat & Sun 2 x dining trains Sat & June 9223 Moshi Monsters, War Sun Weekend, mini steam Selected Weekdays ** 6 trains – average between 1 and 3 days gala mid week July 4643 Teddy’s picnic August 7624 Teddys picnic; Peppa Pig

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Month Visitors Events Expenditure 2013-2014 Notes Sept 6192 Peppa Pig; Diesel Gala; £ Beer Festival Depreciation 84,905 Oct 5746 Steam Gala Loco Transport 26,000 Nov 8010 Halloween; Bonfire Night; Loco shed costs 110,000 Mini Steam Gala; Santa Other, hire costs, 473,173 Dec 14350 Santa transportation, admin, Jan 2014 5236 Winter Gala general expenses Total 2013 -2014 82,687 Total 2,900,076

The average number of visitors per week is 2,385 of which 1,590 are train Visitors - Geographical locations passengers Analysis undertaken by Focus 2013 showed that visitors to the GCR originated from the following areas: The average number of passengers per train is 89 Leicester and Leicestershire 48.5% Rest of the East Midlands 17.5% Financial Performance 2013 – 2014 Rest of the UK 33% International 1%

Expenditure 2013-2014 Notes Governance £ The Great Central Railway is owned and operated by GCR plc a not-for-profit Staff costs 921,377 company with an asset lock that prohibits payment of dividends or distribution of Marketing 201,885 profits to shareholders. Catering & retail purchases 403,004 Coal, diesel, water 233,821 GCR is managed by a Board of Directors through whom all key decisions are Insurance, Utilities & 156,680 made. The Board consists of: Security Mr M Gregory – President P/Way; Infrastructure 279,100 Mr D Morgan – Chairman repairs Mr W Ford – Managing Director Signalling 10,132 Mr R Patching – General Manager

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Mr E smith - Safety The site at Ruddington was a former MOD base with extensive track work, Prof. D Wilcock buildings and storage facilities that was finally closed by the MOD in the late Mr K Byass 1980s. The local authority acquired the whole of the site for the development of a Mr M Sheppard country park, and set aside 11 acres for the development of the Heritage Centre. Volunteers first accessed the site in 1989, and in June 1995 following extensive Day to day management of the railway is overseen by the Managing Director land reclamation works, GCRN signed a formal lease with the local authority for William Ford who is supported by a management and staff team of approximately occupation of the Heritage site. 50 fte employees. Working alongside the staff is a team of approximately 600 volunteers who undertake a range of duties. In 2008 EMRT was incorporated to acquire the freehold of the Heritage site and following negotiations with the local authority and MOD the purchase of the site GCR plc is supported in its work by the Friends of the Great Central Mainline the was finally completed in 2010. railway’s membership organisation which raises funds for the GCR projects including through membership subscriptions. The 9.5 mile line to Loughborough is currently single track and has direct access to the National Network via a chord onto the Midland Mainline. The remaining stations The David Clarke Railway Trust (DCRT) which was formed in 2004 also supports between Nottingham and Loughborough were closed, demolished and partly GCR and is owner of many of the assets. The DCRT has no operational role. developed by British Rail, however a station facility remained at Rushcliffe Halt that has been restored. In addition a loading bay and shelter was constructed at the Charnwood Borough Council are the landlords, owning the land and buildings, halt adjacent to the British Gypsum (BG) plant at East Leake to facilitate the leasing these to GCR on a 99 year lease ( of which over 61 years remain) unloading of DSG from freight wagons that access the plant via the chord from the Ruddington – Great Central Railway (Nottingham) National Network. An arrangement with British Gypsum to transport DSG from their plant at East Leake via the GCRN track and onto the mainline at Loughborough The northern section of the Great Central Railway comprises a track bed brings in £150,000 per annum. The current arrangement is not embedded in a approximately 9.5 miles in length, and an 11 acre Heritage Site at Ruddington just formal contract although it represents the major source of income flowing into south of Nottingham. The railway track bed and the Heritage site are owned by GCRN. East Midlands Railway Trust (EMRT) and line is operated by Great Central Railway (Nottingham) Ltd (GCRN) which owns the ‘operational’ assets (rail, sleepers, rolling Opportunities exist to further develop the Heritage site. In addition, GCRN is one of stock). the few Heritage Railways that enjoys regular commercial freight business off the National Network, and there are also opportunities to develop the freight business with the addition of finished product leaving the BG site at East Leake.

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Nottingham Society of Model and Experimental Engineers THE BUSINESS CASE FOR THE GAP The Nottingham Society of Model and Experimental Engineers (NSMEE) was founded in 1929 and is one of the longest established societies in the UK. From ‘Bridging the Gap’ – the Reunification of the GCR railway from Leicester to humble beginnings, the growing membership has risen to approximately 250, Ruddington whose interests span the many aspects of model engineering as well as horology. The Great Central Railway aims to become the finest in the UK and unique, being The society also enjoys a strong, active volunteer base that participates in work at the only remaining double-tracked main line in preservation. To achieve this, GCR the Heritage Centre alongside their GCRN colleagues. has embarked on the realisation of a long term ambition – to reconnect two sections of the former Great Central Railway in Loughborough and create a The society’s principal contribution to the Heritage site is the miniature railway continuous 18 mile line from Nottingham to Leicester. This will also provide direct extending to almost half a mile in length that attracts casual visitors to the site from access onto the mainline railway network for the southern section. the adjacent country park. The roadway network throughout the site offers opportunities for those members who own miniature traction engines, and ‘road As well as transforming the Great Central Railway into a major UK tourist runs’ through the country park are a particular feature of the regular traction engine attraction, the reconnected railway could offer a number of commercial and rallies. community benefits. Firstly as an alternative passenger transport route for communities along the line. The extension to the Nottingham tram system will The society has been developing a strong relationship with the National Railway terminate just a mile from Ruddington and with extensive housing development Museum (NRM), and recently took on loan the miniature steam locomotive ‘Taw’ planned for Clifton, West Bridgford and Beeston likely to put additional pressure on that forms part of the NRMs National Collection. the existing road network, a link between the tram and GCR’s Ruddington termini, could help alleviate road congestion. The new extended line will also offer There are opportunities to extend the miniature railway and develop museum additional facilities to the rail industry for testing locomotives, rolling stock and facilities to display some of the vast collection of miniature artefacts owned by the components. NRM, creating a complementary attraction to the planned railway museum at Leicester North, providing an opportunity for families to spend a weekend exploring When the Great Central Railway closed in the 1960’s a 500 metre section was the 18 mile railway. removed including bridges (one spanning the Midland Mainline railway) together with embankments, track and signals. Over time, the remaining structures have fallen into disrepair. In 2009, Atkins were commissioned to conduct a feasibility study to examine various projects which could help GCR become more sustainable. A number of projects were considered but Bridging the Gap was the only potential project predicted to be financially viable.

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Reinstating the 500 metre section will be a complex feat of civil engineering and Until recently the cost seemed prohibitive. However, the planned electrification of also necessitates the removal and relocation of the locomotive engineering Midland Mainline has provided GCR with an opportunity to enter into a partnership workshop. with Network Rail whereby NR will rebuild the bridge over MML as a community project. NR’s contribution will provide project management services and absorb It is simpler to describe the project as comprising of 7 sections, each with its own possession costs by combining work with that associated with the electrification features and engineering constraints. programme.

From North to South By involving our volunteers (who successfully reinstated the Mountsorrel branch at a fraction of the cost estimated by Atkins) we will further reduce costs and provide 1. Bridge over the A60 – currently carries British Gypsum DSG on one of two work experience for aspiring rail engineers. Working in this way, the cost of the tracks only, poor state of repair on disused track and repairs needed to the whole reunification project is now estimated to be in the region of £6.5m – 7m - a bridge structures. Suffers frequent lorry strikes. signifcant reduction from the figure of £15m calculated by Atkins in 2009. 2. Embankment and connection to the GCRN line at the northern abutment 3. New bridge over the MML – utilising recycled NR bridges from Reading In further discussions with NR, Charnwood Borough Council, training providers and 4. Embankment and access to the bridge will need to be realigned to the University of Loughborough, the opportunity to offer work placements for accommodate preci Spark car park which was built on the land of the former undergraduate engineers, apprentices and pupils from local schools has led to an GCR embankment agreement in principle to work jointly on the whole Gap project over a longer 5. New bridge over Railway Terrance – this road is the entrance to the council timescale. recycling centre therefore requires a clearance of 5.3 mtrs to allow for skip lorries For local schools the project will provide a once in a lifetime ‘live’ STEM project 6. Embankment – will need to ensure that the materials and construction complies which engages young people and inspires them to consider careers in rail with flood prevention regulations as the Hermitage Brook and flood defences engineering, construction, planning, civil engineering, law, quantity surveying, are close by health and safety. 7. Canal bridge over the grand Union Canal – anticipated this can be repaired in situ Progress to March 2014

A contract with Network Rail was signed in October 2013 under which, Network Rail will design and erect (using sub contractors) a replacement bridge over the Midland Mainline Railway.

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The aim is to reduce costs to a minimum by combing work on the GCR project with planned possessions associated with the MML electrification project. Network Rail Section Revised cost estimate Value of in-kind have assembled a team of volunteers to work on the project as part of their FJD - 2014 contribution from NR, community development activities. This will keep costs to a minimum with £ Contractors and GCR essential work on moving signals, rebuilding the abutments and central piers volunteers undertaken alongside the electrification work. £ A60 bridge and 1,250,000 Furthermore as contractors are appointed as part of Control Period 5 (Network connection Rail’s period in which the MML electrification will be completed), individual /embankment companies are being asked if they wish to work on the GCR project at a reduced Bridge over MML 800,000 3,000,000 rate or pro-bono basis. So far, we have received support from Xeiad (a company Bridge over Railway 1,100,000 specialising in conducting inspections in difficult situations) to conduct the Terrace inspection assessment of the canal bridge at no cost and the Canal and River Embankments x 2 2,450,000 Trust which has waived its fees for administering inspections above its waterways. Canal Bridge repair 450,000 250,000 Network Rail has also promoted the project across the network with a view of Track, signals 430,000 500,000 securing track, signals and other materials which are being removed as part of the Total 6,480,000 national rail upgrade work. Timetable To summarise, the project is now anticipated to cost far less than previously quoted by Atkins (2009) and Birze (2010) (which re-priced the work using Atkins’ Completion of bridge over MML Summer 2015 £10m - £12m figures as a baseline). The figures below are the latest estimate by Detailed planning for remaining sections Oct 2014 FJD Consultants 2014. Canal Bridge restoration March 2015 A60 bridge repair Dec 2016 Embankments, Bridge over Railway Terrace Summer 2017 Track, signalling Dec 2017 Application of TWAO Jan 2018 Line open Spring 2018

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Strategic Context

Leicester and Leicestershire Economic Partnership – Strategic Economic Loughborough’s Industrial Heritage Quarter: The Great Central Railway is Investment Plan close to many of Loughborough’s renowned factory sites – many of which are now long gone. Ladybird Books, Brush, 3M and the Bell Foundry contributed to Local Economic Partnerships are business led organisations tasked with Loughborough’s reputation as a centre of engineering and manufacturing developing and supporting growth in their area and channelling government and excellence. The reunification of the two sections of GCR will be the catalyst for EU funding into activities which will create employment, stimulate inward developing the proposed Heritage Quarter in Loughborough East, regenerating an investment and support business growth. The LLEP has recently published its area of the town which is considered run down and cut off from the town centre’s Draft Strategic Economic Plan in which it outlines the sectors which are particularly more thriving economy. This area of Loughborough was once the location of relevant to the Leicester and Leicestershire economy. Leisure and Tourism is a numerous engineering and manufacturing businesses, now long gone but which sector which has potential for significant growth and both the Bridging the Gap and have left behind a number of shabby, derelict and contaminated sites. A Heritage the GCR Museum at Leicester North are identified as key priority projects in the Quarter, centred around GCR and including the Grand Union Canal and the Bell SEP. Whilst tourism growth is a key priority for the LLEP, the number of tourists Foundry will transform these sites to provide considerable economic benefits. In extending their stay over two or more days remains a challenge. Bridging the Gap terms of socio-economic measures, the Hastings Ward (where the project is will provide a facility for rail tours - estimated to bring 4 tours with 200 people each based) is one of the 3 most deprived in Loughborough, therefore the project will per year with each visitor requiring an overnight stay in a local hotel. With an provide employment and work experience opportunities to local residents and effective joint ticketing scheme involving other attractions in the City and County, business creation opportunities to serve what will become a significant tourist the number of overnight stays can be further extended. Similarly rail testing attraction and rail industry facility. currently extends over 2 – 3 days with crews of 6 – 10 people per company staying overnight in local accommodation. With the estimated growth in rail testing this will The unified GCR will create an additional 12 FTE jobs within the railway – on top of further increase business tourism and associated hotel accommodation. the 100 FTE already employed. The wider benefits (currently being evaluated) will generate additional employment opportunities in local businesses such as Charnwood Borough Council suppliers, local shops and traders. Most of our volunteers and employees live in Leicestershire. Our renovation projects mainly utilise locally based builders, our Bridging the Gap is highlighted as a priority project in CBC’s Corporate Plan 2012 - graphic design work is undertaken by a company based in Birstall and our 16, Core Strategy, Regeneration Strategy and Charnwood Local Plan 2008 -2028 materials are locally sourced. as well as the Tourism Blueprint for Charnwood. Bridging the Gap is regarded as the pivotal project to kick-start the regeneration process in East Loughborough.

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Innovation in the Rail Industry Engineering and signalling constraints across the ‘Gap’ and the single track line between Loughborough and Ruddington prevent the line continuing as a double Great Central railway is currently used as a facility for testing for the rail industry. track beyond the Canal Bridge. This, together with a current lack of visitor facilities Recent links with the regional Transport iNet based at the University of along the northern section, will limit the number of trains and services which can be Loughborough have opened discussions in working together to promote the commercially and practically operated. availability of EU grant funding for SMEs working in R & D for the rail sector and providing them with testing facilities at GCR. This is likely to open up further However, it is anticipated that weekends and the year round events will be popular opportunities for GCR to become directly involved in promoting innovation and and a joint marketing service will be implemented to coordinate a year round linking companies directly to Network Rail and its contractors working on the calendar of events and activities. Bridging the Gap project. The proposed time table below is based on the estimated number of trains and Bridging the Gap - Outline Business Case associated passenger numbers for the first 5 years. After this period, with additional investment to develop facilities at Ruddington, we anticipate visitor (CAVEAT)– The following analysis is based on the assumption that no additional numbers increasing year-on-year. improvements have been made to facilities at the Ruddington terminus and therefore the anticipated growth in business is kept within conservative Proposed Timetable – 2018 – 2022 – Loughborough to Ruddington Return parameters. Month No of Journeys Passengers (89 p/train) In addition, this outline business plan does not factor in the proposed opening of a January Weekends – 3 24 2,136 new heritage railway museum at Leicester North for which a separate outline trains per day (inc 1 business plan has been developed. dining train per weekend) Feb- December 384 34,176 (Once HLF funding for the museum is secured a more detailed business plan will Weekends– 4 trains per be developed to incorporate both developments.) day rtn (inc 2 dining trains per weekend) Visitor development – proposed services - Loughborough – Ruddington Mid Week services 10 180 16,020 The reunification of the GCR is a long anticipated and wished for project is heritage weeks x 3 days per week railway circles and therefore it is anticipated that in the first 2 years of service, x 6 trains per day rtn visitor numbers will be increased due to the novelty of being able to traverse the Total 588 52,332 ‘Gap’ for the first time in over 40 years.

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Projected additional visitors 5 years Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 £ £ £ £ £ x 100 trains Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 p/annum Train 52,332 52.332 49,715 48,721 49,208 Testing 160,000 180,000 200,000 200,000 250,000 passengers -5% -2% +1% Rail 80,000 80,000 80,000 80,000 80,000 Rail 800 800 800 800 800 Charters @ Charters £20k per charter 4 per year Group visits 14,000 14,000 12,000 12,800 14,000 average @ £4 200 p/head passengers British 100,000 100,000 100,000 100,000 100,000 Testing 1,500 1,500 1,300 1,250 1,200 Gypsum Datex Total 977,320 997,320 1,019,007 1,038,731 1,134,892 Groups 3,500 3,000 3,000 3,200 3,500 and Expenditure schools Total 58,132 57,632 54,815 53,971 54,708 Yr 1 Yr 2 Yr 3 Yr 4 Yr5 £ £ £ £ £

Additional Income from an enhanced line to Ruddington Staff costs 355,000 362,300 369,545 376,945 384,482 Marketing 65,415 65,415 66,723 68,057 69,418 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Catering 60,000 62,000 64,000 66,000 68,000 £ £ £ £ £ P/Way 72,000 72,000 74,000 75,000 78,000 Passenger 523,320 523,320 522,007 535,931 565,892 Train 102,000 102,000 102,500 103,000 104,000 Fares (£10 operations average rtn) Dining 100,000 100,000 105,000 110,000 125,000 Security, 78,000 80,000 82,000 84,000 86,000 income insurance, Average 40 utilities diners @ Total 732,415 743,715 758,268 773,002 789,900 £25 p/head

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Summary Table Rail testing facilities in the UK are limited with few companies able to offer the services which are available at GCR. In the Midlands, Network Rail’s facility at Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 High Marnham (Tuxford, Notts) provides 10.5 miles with a speed limit of 50 mph; £ £ £ £ £ Old Dalby is now used extensively by London Underground with limited capacity to Income 977,320 977,320 1,019,007 1,038,731 1,134,892 accommodate other companies; Wyvern Rail, Derbyshire offers 9 miles and a 25 Expenditure 732,415 743,715 758,268 773,002 789,900 mph speed limit; Barrow Hill, Chesterfield has a 1 mile track for testing. The Surplus 244,905 233,605 260,739 269,729 344,992 advantage Old Dalby, High Marnham and Wyvern have is access to the national rail network, which Bridging the Gap will provide for GCR, making it a leading FTE Jobs created at GCR facility for the rail sector – and more centrally based with good road access as an  1 x Operations manager alternative transportation option.  2 x Marketing officers  5 x Catering/Charter operations GCR will recruit an additional member of staff to market and manage the  1 x Testing and other Commercial Sales anticipated growth in rail testing which is currently managed by one part-time  1 x Signalling member of staff.  2 x Testing and P/way Recent developments include registering GCR on the national rail testing database Other Business Development opportunities and forming a relationship with the Transport iNet based at Loughborough University to forge links with SMEs engaged in R & D for the rail industry. Rail Testing Facility The new 18 mile line will become one of the longest testing lines in the UK. Direct Rail Charter Trains access to the mainline rail network will significantly expand the rail testing capacity Steam rail charter trains are a growing business with companies looking for new of GCR as we will be able to accommodate multi-unit vehicles which will be able to routes to add to their tours. This market is both national and international and access our facilities by rail. Currently only single units, transported by road can be several companies have discussed including GCR in their itineraries. Its location in accommodated. GCR is unique in that our double track line allows for higher speed central England provides opportunities for overnight stays in local hotels. We testing of up to 75 mph for diesel locomotives and 60 mph for steam locomotives. estimate that at least 4 tours per year, each with 200 passengers could We also receive enquiries from and seek to help engineering companies producing conservatively be accommodated. equipment for the rail industry looking to relocate to sites with direct access to GCR. One company is looking to grow its workforce from 6 to 25 (highly skilled engineers) if it secures suitable premises in Loughborough.

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A new state-of-the-art rail engineering locomotive works and training centre Risk Assessment

As an infrastructure project, bridging the Gap will unlock further projects which will Nature of Risk Probability Potential How the risk will be deliver economic benefits: H/M/L impact minimised Failure to raise Low Reduce match Appeal to members The relocation of the locomotive shed (which will subsequently be relocated) contribution from funding launched in June 2013 provides an opportunity for the creation of a new purpose built rail engineering supporters/individuals contribution has exceeded training workshop facility. Three colleges and a university have expressed an expectation but the interest in a partnership with GCR and suitable sites are being scoped. The rail momentum must be industry in the Midlands is set to grow and GCR’s partnership with Network Rail maintained. Continue provides a route to employment for students and apprentices. We estimate a with news stories, likely facility could train 100 students and provide employment for 20 apprentices per to increase once annum. (Based on numbers achieved at Greenacres training facility 2012-13). construction starts (This project will be subject to a separate business plan) Failure to secure Medium Failure to Recruit funding Future Business Model – Governance and management – merging Trusts funding from other complete the specialist to maximise and Operating companies sources project and fund raising. open the line Review funding Discussions are advanced between the two trusts, DCRT and EMRT and the two strategy operating companies GCR plc and GCRN to merge. In the first instance, the two operating companies will merge followed by the merging of the trusts. Whilst GCR Capital cost overrun Low/medium Failure to Value engineering plc employs staff, GCRN is run exclusively by volunteers. It is recognised that the achieve project across capital budget operation of an 18 mile line (which is likely to coincide with the opening of the new Unexpected Low/medium Incur Close coordination heritage railway museum) will require a step change in the governance and technical, additional between NR and management of the united railway. Part of the merging process will require a environmental or costs consultant engineers, restructuring at managerial level to ensure that the new company is financially geological problems increase project stable and continues to grow. To this end, a team of managers from both management input companies are setting out the principles for merging and highlighting areas for further development and closer working.

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Nature of Risk Probability Potential How the risk will be Wider economic benefits – To be added April 2014 H/M/L impact minimised An economic impact assessment to look at the wider economic impact of GCR on Delays in merging 2 Medium Failure to Continue negotiations the local economy has been commissioned by Charnwood Borough Council in operating companies deliver with GCRN and EMRT March 2014 to be completed by April 2014. This study will demonstrate both the enhanced and ensure each stage current contribution and the anticipated impact of the Bridging the Gap project service and is effectively achieve communicated to Heritage Railway Museum at Leicester North projected members. Work The other significant project which the GCR is undertaking is the creation of a new income through Champions heritage railway museum at its terminus at Leicester North. This project is in and communicate partnership with Leicester City Council and the National Railway Museum in York. benefits to their organisation Opening of the Mountsorrel Branch line – 2014

Failure to achieve Medium Reduced Increase marketing In recent years, a group of volunteers has been restoring the branch line from the GCR to the Mountsorrel Quarry. This is now nearing completing and will operate additional visitor income activities in weekend trains to and from a proposed country park which is currently being numbers Nottinghamshire, work developed on former quarry land. Once operational, the line will attract an with local attractions, additional 200-400 visitors each weekend at an estimated ticket price of £5 per improve facilities at head. This will generate an additional £100,000 per annum towards GCR’s overall Ruddington income.

To summarise we anticipate that ‘Bridging the Gap’ will deliver the following: Key personnel – paid Low/medium Lack of Build a robust

and/or volunteer continuity in management team Outputs leave the project the delivery of comprising of  Create 12 new FTE direct jobs project volunteers and paid  Provide 100 new and additional volunteering opportunities (estimated economic staff, provide personal value) development  45 temporary construction jobs 92 years duration) opportunities and  Estimated 250 indirect jobs  10 work experience opportunities with NR and other contractors develop a succession  10 STEM activities with local schools plan  £5.48m private sector leverage.

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Outcomes:  A major enhanced tourist attraction bringing an additional 53,000 visitors to the area per annum  The regeneration of Loughborough East leading to the creation of a Heritage Quarter  An extended rail testing facility for the UK and overseas rail sector  Relocation of businesses to key employment sites along the GCR corridor.

Next Steps

An Economic Impact Assessment, currently commissioned by Charnwood Borough Council will be published in April 2014. This will assess GCR’s current impact on the local economy and the potential impact following the reunification of the railway. The study will look at the barriers for growth in Loughborough and the opportunities for developing adjacent sites to generate additional economic benefits.

A full Business Plan will be developed which will look at the wider operational capacity of the GCR post reunification and with the added new heritage railway museum at the Leicester North terminus, weaving in the various strands of activity and strengthening the partnership with other organisations.

A full financial appraisal will be undertaken to incorporate the wider expansion plans for the railway and assess the total income and expenditure potential.

Further feasibility work will be undertaken to assess the economic potential of the Ruddington site and how this could also benefit the economy of Nottinghamshire – with potential impact on Leicestershire’s economy.

GCR is undertaking a wider survey of its visitors to provide more in depth understanding of our visitor profile. Further consultation is taking place with volunteers, shareholders and other contributors to secure their commitment to supporting the growth programme including bridging the gap.

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Appendix 3

Outline Costings

Charnwood/GCR Works

Works Scope Approx area Rate/Lump Sum Total Cost Assumptions ££

assumed area stated as 47Acres (19 Allowance for general landscaping 19 Hectares 20,000 380,000 hectares or 190,000m2), assumed that this has been capped and so allowance only for cultivating ground,applying fertilizer etc and seeding with Parks type grass general planting allowance

Planted area - general planting 19000 m2 20 380,000 assumed 10% of total park area

Woodland 19000 m2 30 570,000 assumed 10% of total park area assumed 3% of park area - resin bound Paths 5700 m2 75 427,500 gravel or similar. Benches 50 Nr 400 20,000 general assumption Recreation Space - Allsops Lane general assumption - includes panels and graphic development etc. Simple plinth Interpretation panels 20 Nr 1500 30,000 arrangement assume accessed off existing recycling centre so no allowance for access roads etc. Car Park 100 Cars 2,250 225,000 Surface level car park with landscape areas.

Length approximated off drawing to unreliable Fence to Railway boundary 350 metres 30 10,500 scale will need to be confirmed. Chain link type fencing.

assumed 10 number sculptures at budget of Sculptures 10 Nr 20 200,000 £20k per sculpture Total of above assumptions 2,243,000 Say £2.25 - 2.5 Million

NMP12‐010/Outline Costings November 2014 Charnwood/GCR Works

Works Scope Approx area Rate/Lump Sum Total Cost Assumptions ££ Very notional allowance to provide stabilised Sheet piling to stabilise canal bank 300 m2 150 35,000 canal bank for approximately 100m. Sheet piling assumed 3m deep.

Canal Links improvement Edge hardstanding assumed hardcore 1 m x 2m deep, concrete Item 25,000 25,000 1m x 1m deep, mooring posts etc

Signage etc Item 10,000 10,000 general allowance

Total of above assumptions 70,000 Say £75 - 100k

NMP12‐010/Outline Costings November 2014 Charnwood/GCR Works

Works Scope Approx area Rate/Lump Sum Total Cost Assumptions ££

Indicator Posts 12 Nr 750 9,000 Assumed 12 Nr

Heritage Trail Assumed number, includes allowance for Interpretation Panels 12 Nr 2,500 30,000 graphic development/editing and suitable plinth

Leaflets/promotional materials Item 5,000 5,000

Total of above assumptions 44,000 Say £50 - 75k

NMP12‐010/Outline Costings November 2014 Charnwood/GCR Works

Works Scope Approx area Rate/Lump Sum Total Cost Assumptions ££ Assumed basic building finishes and services are ok - alllowance for development and construction of small Small Ground floor exhibition space 20m2 1,000 20,000 display area (areas assumed as no plans available). Nature of display largely graphice based. Assumed basic building finishes and services are ok - alllowance for development and construction of small Small Ground floor Retail Space item 15,000 15,000 retail area (are unknown as no plans available). Allowance for display Enhanced Facilities at GCR fitsments and basic till/cash handling arrangements Assumed basic building finishes and services are ok - alllowance for development and construction of small Upstairs exhibition area 40 m2 1,500 60,000 display area (areas assumed as no plans available). Nature of display largely graphice based but additional allowance for some limited AV/interactives Total of above assumptions 95,000 Say £100 - 125k

NMP12‐010/Outline Costings November 2014