Liverpool City Region Combined Authority
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LIVERPOOL 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 Port of Liverpool 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.