CITY REGION COMBINED AUTHORITY

To: The Chair and Members of the Combined Authority

Meeting: 17 October 2014

Authority/Authorities Affected: All

EXEMPT/CONFIDENTIAL ITEM: No

REPORT OF LEAD OFFICER FOR ECONOMIC DEVELOPMENT

FREIGHT AND LOGISTICS HUB UPDATE

1. PURPOSE OF REPORT

1.1. This report provides Members with an update on the Freight and Logistics Hub following the publication of the Liverpool City Region Growth Deal in July 2014

2. RECOMMENDATIONS

2.1. It is recommended that the Liverpool City Region Combined Authority:

(a) Note the Deal struck between the City Region and Government to progress further the concept of a Freight and Logistics Hub;

(b) Welcome the £46m of Government funding for a number of transport schemes intended to increase the City Region’s capacity to increase employment levels in the freight industry;

(c) Request that officers continue to refine plans for all schemes in order to develop full business cases for each project;

(d) Note the enhanced engagement with Department for Transport, Network Rail and Highways Agency which the Growth Deal secures;

(e) Reaffirm the previously approved commitment within the Liverpool City Region Growth Plan submission for Government to continue to work with the City Region on the development of a multi-model solution to improving Port Access;

(f) Request the Chair of the Combined Authority to write to Government reaffirming the City Region’s Growth Plan priorities are Freight and Logistics in light of potential further Growth Deal opportunities as well as the emergent agenda of One North and ‘Northern Powerhouse’ infrastructure investment opportunities; and

(g) Receive regular further updates as the programme develops.

3. BACKGROUND

3.1. The Liverpool City Region has identified the freight and logistics industry as one of the key transformational business sectors to underpin the City Region’s economic development. The Local Enterprise Partnership and other City Region partners have developed the concept of a ‘Freight and Logistics Hub’ to underpin a number of projects considered critical to accelerating the City Region’s performance within the sector. The Hub was a key element of our Strategic Economic Plan and of the Growth Deal struck with Government in July 2014.

3.2. This report updates Members on the success of the Growth Deal with regards to the Freight and Logistics Hub and sets out the work streams currently underway to deliver the plans through to fruition.

4. THE FREIGHT AND LOGISTICS HUB

4.1. The global logistics industry and in response, that of the UK, is currently being transformed. The widening of the Panama Canal and the £340m private sector investment in the Liverpool2 project opens up huge economic opportunities for the City Region, the Atlantic Gateway, the North of England and the UK as a whole.

4.2. With globalisation continuing, partners in the City Region including the private sector, have recognised this opportunity and have developed the concept of the SUPERPORT – the inter-connections between the port, airport, road, rail and logistics assets that in combination represent a nationally strategic and important freight and logistics hub in close proximity to the second largest population centre in the UK as well as the manufacturing heartland with considerable export potential.

4.3. When submitting the Growth Deal in March the LEP included a ‘Freight and Logistics Hub project and Access to the project. This was in response to the changing nature of the logistics industry in the UK, and the opportunity it provides to create jobs and growth, and builds on the £340m private sector investment in Liverpool2 and £600 million investment in Mersey Gateway. These are critical elements of the City region’s long-term SUPERPORT approach:

(a) The Liverpool2 project is a £340m investment creating a deep water berth configured to simultaneously handle two “New Panamax” 13,500 TEU vessels matching the capacity of the widened Panama Canal which is due to open at the end of next year. The facility has been designed to be future proof with the potential to handle the very largest “Triple E” class vessels of 18,500+ TEUs with further investment. This Liverpool2 Project is already under construction and is an immediate opportunity to be captured; the result will be that Port of Liverpool will be able to handle 95% of the global container fleet.

(b) The Mersey Gateway is a six lane crossing which is in the Top 100 Global Infrastructure projects as compiled by KPMG; and seeks to bring forward and connect key logistics and freight sites throughout the City Region (with close linkages to adjacent areas especially within Cheshire and Warrington) to create jobs and stimulate economic growth.

4.4. Both these projects complement the wider Atlantic Gateway initiative and the aspirations of the Cheshire and Warrington LEP and Greater Manchester LEP for job creation resulting from expanding freight capacity while the Liverpool City Region LEP is already working closely with partners in West Lancashire so that they too can capture potential job benefits. The ‘Freight and Logistics Hub’ therefore extends beyond our City Region boundary precisely because the changing market demand creates the size and scale of opportunity that can impact and transform the North of England economy as a whole. The recognition of this wider impact is evidenced by our existing cross LEP collaboration and a recent logistics study commissioned by New Economy in Manchester to identify opportunities from the investment in the Port of Liverpool. Investing, nationally, in such a project reduces national business costs, reduces national CO2 emissions and critically, can reduce congestion on the already over-congested transport network of the South East. Our freight and logistics hub and improving port access priorities should be recognised as a national growth and job creation opportunity.

4.5. Schemes in support of the Freight and Logistics Hub were a key feature within the Strategic Economic Plan submitted to Government earlier in the year by the LEP. In addition to a request to co-invest in a number of transport schemes which would link job creation sites to the wider transport network, the City Region undertook to continue to engage the public and private sector in the development of the SUPERPORT project, to address access to the Port of Liverpool across a full range of modes, and to co-ordinate and prioritise transport investment to ensure access to a number of key sites was maximised across the City Region.

5. THE LIVERPOOL CITY REGION GROWTH DEAL

5.1. The Growth Deal, struck between government and the Liverpool City Region in July 2014, secured for the City Region £46m for the Freight and Logistics Hub. This together with locally invested funds, will ensure that key freight and logistics sites with the capacity to accommodate a significant uplift in job numbers are fully integrated into the wider transport network, facilitating the flow of both goods and labour. The award is summarised below with additional details in Appendix One:

Funding awarded 2015/16 Knowsley Industrial Park £5.6m Knowsley Expressway £4.0m Newton-le-Willows station £16.6m

Funding awarded 2016/17 Halton Curve £10.4m M58 Junction Improvements £5.5m Maghull North Station £6.2m North Liverpool Key Corridors £13m

5.2. The Growth Deal presented the schemes above as key elements of transport connectivity within the City Region that would stimulate economic growth and create jobs. The Deal premised its job growth numbers on a presumption that the increased freight entering the UK via the Port of Liverpool would be able to be distributed to key sites within Sefton and also other City Region locations based on

improved Port Access. The allocation of the £46m of resource to schemes, including the M58 Junction improvements and Maghull North Station improvements and well as the ‘North Liverpool Key Corridors’ improvements (spanning Liverpool and Sefton) are all allocated on this premise. It must be noted, these schemes have an allocation dependent on full business case preparation including economic impact.

5.3. Consultancy work by Oxford Econometrics commissioned by the LEP estimated the economic impact of sites throughout the City Region resultant of bringing forward a Freight and Logistics Hub with improved Port Access. This included Dunningsbridge Road East, Atlantic Park, Senate Business Park, and Port of Liverpool Sites and Hinterland in Sefton, as well as sites such as Stonebridge and Estuary in Liverpool, 3MG in Halton, Parkside in St. Helens and Knowsley Industrial Park in Knowsley, and Wirral International Business Park in Wirral. The work estimated that the sites associated with the Freight and Logistics Hub project could bring forward over 20,000 net new jobs within the City Region. The work estimated that sites within Sefton could house over 1,500 net new jobs. The work is consistent with a recently commissioned demand study for SUPERPORT sites throughout the City Region and adjacent areas (such as West Lancashire) which estimated an overall demand need for 783 – 808 hectares of employment land for logistics and associated manufacturing facilities with the potential to create up to 30,000 jobs. The Oxford Econometrics work did not consider new jobs created at the Port itself.

5.4. The jobs opportunities from logistics operations are particularly accessible to young people and those with entry level skills and Hugh Baird College in Sefton has recently developed a ‘Port Academy’ to assist young people into work in the Port and Logistics sector.

5.5. The jobs numbers included in the Growth Deal submission are dependent on a ‘market shift’ of operations to the Liverpool City Region and the ability to transfer goods from the Port to employment locations. Recent market dynamics have started to demonstrate that there is confidence in the Liverpool City Region offer with new developments underway on a speculative basis and rental values for B8 logistics space increasing. Take up of space has gained momentum including at sites outside the Liverpool City Region with sites such as Omega in Warrington creating job opportunities that might have been captured within the City Region area.

5.6. In addition to the funding commitments, the Deal commits DfT and Network Rail to proactive engagement with the LEP in future planning and franchise specification in order to ensure that the importance of rail freight for the region is captured as part of the rail industry’s long term planning process.

5.7. On the road network, the Deal commits the Highways Agency to developing more collaborative approaches to promoting national and local growth and to building strong working relationships with the LEP, Combined Authority and constituent local authorities.

5.8. To that end, the Highways Agency is a member of the City Region’s Transport Advisory Group and the Port Access Steering Group and has recently

commissioned a multi-modal study to examine the impact of freight movements on the region’s transport network.

5.16 It is important to note that the schemes to be funded within the Growth Deal are subject to approval by the Combined Authority, following application of the Assurance Framework. All schemes are subject to the development of satisfactory Business Cases, which will be submitted to the Authority for consideration and approval from December 2014 onwards as they reach completion. Government allocations of resource remain dependent on completion of such business cases.

6. RESOURCE IMPLICATIONS

6.1 Financial

There are no immediate financial impacts on the Combined Authority from this report.

6.2 Human Resources

There are no human resources implications arising from the recommendations within this report.

6.3 Physical Assets

There are no implications on the physical assets of the Combined Authority as a result of the recommendations in this report.

6.4 Information Technology

There are no information technology implications arising as a result of the recommendations in this report.

7. RISKS AND MITIGATION

7.1 DfT allocations via the Growth Deal are allocated on the final completion of full business cases and based on job creation opportunities. The City Region needs demonstrate a commitment to all Growth Deal projects for the funding to be drawn down. There is also a risk that employment benefits associated with the Freight and Logistics Hub might be lost from the constituent authorities of Sefton, Liverpool, Knowsley, St. Helens, Wirral, and Halton, as well as in adjacent areas and the wider North, if freight imported via the Port of Liverpool is not able to be distributed to key sites

7.2 Government is currently changing the way the Highways Agency operates. It will become a government-owned company responsible for operating, managing and improving the strategic road network based upon an agreed five year investment strategy. Failure to include key City Region schemes within that strategy means that they cannot be funded until the next investment period. Key City Region schemes need therefore to be promoted to the Highways Agency now for them to be included.

8. EQUALITY AND DIVERSITY IMPLICATIONS

8.1 There are no equality and diversity implications arising as a result of the implementation of the recommendations in this report.

9. COMMUNICATION ISSUES

9.1 Should the recommendations be approved, the Chair of the Combined Authority will write to Government in support of the Growth Deal schemes.

10. CONCLUSION

10.1 This report has provided the Combined Authority with an update on the delivery of the Liverpool City Region Freight and Logistics Hub.

GED FITZGERALD Lead Officer: Economic Development

Contact Officers: Mike Palin, Liverpool City Region Local Enterprise Partnership (0151 237 3899)

Appendices: Appendix One – schemes to be funded in 2015/16 and 2016/17 through the Growth Plan

Background Documents:

Appendix One

Detail of schemes funded through the Growth Plan

For investment in 2015/16 Knowsley Industrial Park £5.6m Government investment £0.6m local investment

Knowsley Industrial Park is strategically positioned in terms of its close proximity to major transport infrastructure, including the M57, A580, Potters Rail Terminal and the region’s airports. Its sheer scale makes it crucial to the prosperity of the Liverpool City Region. The levels of deprivation close to the site are significant and the Park accounts for 27% of total employment within the Borough, highlighting the importance of ensuring it retains and enhances its employment position. The scheme proposes a series of enhancements to movement and access, together with the promotion of gateway and key corridor development sites to facilitate a positive image of the Industrial Park.

Knowsley Expressway £4m Government investment £1m local investment

The A5300 Knowsley Expressway and A562 Speke Road provide a crucial link to key established and developing employment sites such as the 3MG Mersey Multi-Modal Gateway, the New Mersey Crossing, Liverpool John Lennon Airport and Jaguar Land Rover. However, severe congestion, road safety issues and network resilience at the A5300/A562 junction significantly impedes movement to and from such high growth employment sites. This proposed scheme seeks to address the current and severe congestion, safety and network resilience issues at this junction.

Newton-le-Willows Interchange £14.4m Government investment £1.4m local investment

The project will deliver a fully accessible rail station with lift access to both platforms. The ticket office will be relocated, the park and ride car park will be extended and a bus interchange developed. Cycle parking will be provided also. The project will tie in with the current electrification upgrade taking place on the line and provide a strategic hub linking St Helens and the east of /west of Greater Manchester with Manchester and the east of England and the Northern Hub work currently being undertaken.

For investment from 2016/17 Halton Curve £10.4m Government investment

The Halton Curve is a railway line running from Frodsham Junction (north of Frodsham station) to Halton Junction (south of Runcorn station), providing a link from the North Wales Coast Line to the Liverpool branch of the West Coast Main Line. The scheme would allow normal operation of the line in both directions for both freight and passengers, addressing the current situation where with the exception of a parliamentary train infrequent freight services only use the line, and in a northbound direction only. Full restoration of the Curve would have significant impacts linking markets in North Wales and Chester into Liverpool.

M58 Junction Improvements £5.5m Government investment

The existing grade separated junction enables movements onto the M58 northbound carriageway and movements off the M58 southbound carriageway. The proposed scheme will improve the junction by providing additional slip lane facilities to accommodate all possible traffic movements. It will support commercial and residential development in Maghull, increasing employment and facilitating new, more accessible development.

Magull North Station £6.2m Government investment

Proposals to provide a fully step free railway station having Secure Stations Accreditation with two platforms, lifts and stepped (or ramped) access. Ticket office. Two on-street bus stops. Cycle routes from School Lane and Park Lane, parking and storage. Car Park of about 200 spaces. Railway service to be typically every 15 minutes in each direction to (1) Liverpool and (2) Ormskirk. Vehicular access already provided to the site via an aborted scheme involving the Ministry of Justice and Sefton Council.