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Economic Prosperity Strategy 2013-2029 Introduction Evidence Base This document sets out evidence behind the Maldon District Council District Economic Profile Economic Prosperity Strategy 2013- 2029. Maldon is a rural district situated along the Essex Coast. It has a diverse Unless stated otherwise, the economic profile; there are strengths in knowledge based production information set out in this document and professional/business services, and a resilient retail sector is based on independent reports. particularly in Maldon town. The leisure sector has expanded, and parts of the District are able to benefit from tourism.
There are 23,900 jobs within the District, with predominant employment sectors being; manufacturing, public administration, retail, professional and business services, construction, and, accommodation and food services.
Geography and Infrastructure
Located close to the A12, 45miles from London and near the city of Chelmsford many parts of the Maldon District are particularly prosperous. A branch train line runs through the south of the District connecting the economy to London via Liverpool Street Station. Other parts of the District are rural in character, with restricted road access and more limited transport options.
Demographics
Maldon District has an aging population demographic. This will create opportunities in the healthcare and care sectors, but may reduce the size of the working population.
Economic Governance
Maldon District Council shares responsibility for economic development with Essex County Council and the South East Local Enterprise Partnership. The Council sits in a range of other partnerships pertinent to economic growth including; sub-regional partnerships (Haven Gateway and Heart of Essex) and collaborates with business organisations such as the Essex Chamber of Commerce, Federation of Small Businesses (FSB), Think Local (Maldon District) Ltd, Maldon Business Association, Burnham Chamber of Trade and Commerce and others. Given this varied landscape it is essential that partners coordinate closely to maximise the impact on the local economy.
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1. Introduction
i. In 2012 Maldon District Council undertook to review its support for the local economy and committed to developing an Economic Prosperity Strategy to map a route to future economic growth.
ii. The Maldon District Economic Prosperity Strategy is a suite of three documents;
1. The Economic Prosperity Strategy is a public facing document that sets out the high level vision for supporting economic growth in the District and aligns with the objectives of the Local Development Plan 2. The Implementation Plan, runs for three years before being reviewed and replaced. These plans will contain greater detail regarding the timescales, costs, risks etc for the delivery of projects and interventions set out in the Strategy. 3. This Evidence Base Report summarises the independent evidence upon which the Economic Prosperity Strategy is based, and makes a detailed assessment of the local economy. In addition, this Evidence Base Report contains a detailed evaluation of economic growth forecasts which are used to establish a jobs growth target and provide a guideline for future employment land requirements. iii. The report is divided into the following sections:
1) Introduction
2) Policy and Evidence Base; Literature Review
3) Drivers of Change in a Global Economy
4) Maldon District Local Economic Overview:
• Key Facts and Figures • Key Sector; Employment • Key Sectors; Output (GVA) • New Business Growth • Skills • Economic Geography • Strategic Transport Infrastructure Development • Demographics and Change • Land Supply
5) Comparing the District:
• Heart of Essex; Authorities Compared • Conditions for Growth; Assessing Maldon District As a Location for Economic Development
6) Future Growth Scenarios:
• Assessing Future Employment Growth Scenarios • Establishing an employment growth target • Adapting sector forecasts to reflect the jobs target • Translating sector targets into employment land requirements
7) Conclusions and Recommendations
8) Appendices
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2. Policy and Evidence Base; Literature Review
2.1 A number of policy documents and independent reports were examined to support the development of the Economic Prosperity Strategy. The key documents are summarised below:
2.2 Heart of Essex Economic Futures (2012)
2.3 This report assesses the past and projected future economic performance of local authority areas within the Heart of Essex sub-region.
2.4 The study uses data extracted from the ‘Experian Megafile’, which expands upon ONS data by modelling additional data for non-VAT registered businesses. As such, this data suggests there are 4,300 businesses in the Maldon District, a figure significantly higher than the ONS data which records 2,900 VAT registered firms.
2.5 The Heart of Essex report provides an analysis of the relationship between demographic forecasts, projected housing growth, and the corresponding outcomes of workforce size and economic growth. For Maldon District, the report analyses two possible future scenarios; Dwelling Constrained and Sector Derived. Using the same model an additional scenario was commissioned at a later date. The assumptions and outcomes of the scenarios are summarised below;
2.6 Dwelling Constrained Scenario – which takes Experian’s baseline projection for economic growth in the Maldon District and assumes that the number of future new dwellings constructed a year (200) falls short of the number needed to maintain a workforce (i.e. working age population) which is the same size as in 2012. This scenario forecasts a long-term decline in employment levels (-400) from 2012-2031, with a modest gain in economic output.
2.7 Sector Derived New Nuclear Scenario – treats the dwelling constrained scenario as the baseline, but assumes that significant interventions and investment to support key sectors, and the construction of a new nuclear power station at Bradwell will result in 2,600 net additional jobs being created by 2029.
2.8 Additional Sector Derived No New Nuclear Scenario – using the dwelling constrained scenario as the baseline, Maldon District Council commissioned Experian to run a further growth scenario. This scenario assumes the same level of interventions in key sectors as the Sector Derived Scenario, but removes the assumption that a new nuclear power station will be built at Bradwell and withdraws the corresponding multiplier effects. This assumes a growth of 1,200 net additional jobs by 2029.
2.9 Essex Economic Growth Strategy (2012)
2.10 The Essex Economic Growth Strategy (EGS) outlines Essex County Council’s vision for supporting economic growth in Essex. Formally adopted by Essex County Council and being implemented from the 2013-2014 financial year, the EGS indicates that the County Council will concentrate on developing economic productivity, prosperity, innovation and employment growth.
2.11 The EGS provides an appraisal of Essex’s role within the changing global economy and sets out an ambition “to make Essex the location of choice for business”, based on its proximity to London and transport links. The EGS will prioritise support for 4 key sectors projected to have significant potential for growth; ports and logistics, advanced manufacturing, renewable energy and health/care.
2.12 The EGS proposes four themes upon which interventions will concentrate. These are: 1) enterprise and innovation, 2) education, skills and employability, 3) infrastructure and 4) locations for growth.
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2.13 Of particular note is the ‘locations for growth’ theme. This theme suggests that Essex County Council will prioritise support for infrastructure development in major urban locations. As a rural District, Maldon is not considered a location for growth in the EGS. 2.14 Greater Essex Integrated County Strategy (2010)
2.15 This policy document underpins an initiative to coordinate and articulate infrastructure priorities across the local authorities in Greater Essex. As with the Essex Growth Strategy, the Integrated County Strategy (ICS) supports the policy of concentrating resources on economic growth in those parts of Essex which it would deliver the greatest economic impact.
2.16 Supporting the ICS is an Essex wide economic infrastructure delivery plan. Through this plan authorities prioritise and agree which infrastructure projects they will pursue. It is vital that projects within the Economic Prosperity Strategy (as well as applicable infrastructure priorities in the LDP) are aligned with those listed on the ICS infrastructure delivery plan, as this plan is increasingly viewed as the gateway to funding and finance to support infrastructure delivery.
2.17 Maldon District Rural Gap Analysis (2010)
2.18 This report examines the local rural economy, identifying weaknesses and future opportunities for the Maldon District. It argues that many agricultural businesses in the District are at risk from fluctuating food prices and climate change, and related problems such as disease outbreak. The report notes that many agricultural businesses are suffering from restricted access to finance and may face significant challenges relating to changes to the Common Agricultural Policy (CAP). The study goes on to note that small, tenant farmers are particularly vulnerable.
2.19 The study recognises that many agri-businesses are looking to diversify their operations. Indeed, some 70 per cent of the farms in Essex have already diversified. Some existing diversification projects in Maldon District involve the conversion of redundant buildings into holiday lets, offices and wedding venues. Other businesses have moved into niche food production or have followed a path of vertical integration, by incorporating a value-adding process into their business (e.g. they have opened a farm shop to retail their products). The viability of changing the use of a redundant agricultural building into a different use (i.e. turning a barn into an office) depends in part on levels of remoteness. This means that rural diversification through ‘change of use’ of (for example) redundant farm buildings to an alternative commercial use, is more likely to be successful in less remote areas.
2.20 Maldon Hotel and Pub Accommodation Futures (2010)
2.21 This study examines the Maldon District’s hotel and pub accommodation offer, and considers the scope for expanding the accommodation offer in the District. The report notes that the quality of the accommodation in the District varies significantly from business to business, but overall the quality is low. In assessing future demand, the author of the independent study contacted a range of national hotel chains. The results of this investigation found that the District is not viewed as a tourist destination by any national hotel chain and that there was no basis for commercial investment by a major hotelier on that basis. In addition, the report notes that as the population (both of Maldon Town and the District as a whole) is fewer than 100,000 people, there is lack of critical mass to sustain a larger hotel development at the quality end of the market.
2.22 While the report suggests it’s unlikely that an upmarket hotel chain will invest in the District, it did note that there was probably enough demand to support a budget hotel. This demand would primarily come from corporate overnight stays during the week, and people visiting family and friends, and attending weddings during the weekend. However, it’s likely that a budget hotel would displace some small businesses operating in the local bed and breakfast market.
2.23 Maldon District Employment Land Review (ELR) (2009)
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2.24 This report reviews the availability of and demand for employment land in the Maldon District. The review notes concerns about slow uptake of employment land in isolated areas. It suggests that future employment land allocations should seek to provide for a diversity of uses, and encourage the development of modern offices and industrial units to serve SMEs. 2.25 While the ELR does not call for significant new allocations of employment land, the study recognises there is a need to raise the quality of employment sites (both developed and allocated) and that there is a qualitative local demand for employment sites around Maldon Town.
2.26 Maldon District Local Development Plan (LDP), 2013-2029. Preferred Options Consultation (2013)
2.27 Setting out Maldon District Council’s preferred vision and approach to spatial development over the next 15 years, this document will have significant implications for local economic development. For example, the LDP sets the framework for housing growth, and the level of housing growth has implications for demographic projections. In turn, demographic changes will have a corresponding effect on the size of the working age population in the Maldon District, with implications for the supply of labour for businesses.
2.28 The LDP also sets out the primary locations for new employment land as part of strategic growth areas around Maldon and Burnham-on-Crouch. Part of the role of the Economic Prosperity Strategy is to articulate the support needed to attract investment into these strategic growth areas.
2.29 Bradwell Socio-Economic Study; Baseline Report, Impact Assessment and Action Plan (2012)
2.30 Produced by Regeneris Consulting, this suite of documents was commissioned by Maldon District Council and Magnox Ltd, to ascertain the impact of the accelerated decommissioning of Bradwell Nuclear Power Station. The impact assessment found that the plant’s transition to its ‘care and maintenance’ phase will reduce output in the local economy by some £54m GVA and result in the loss of around 900 jobs in the District (though approximately 500 are contractors, most of whom will relocate to other decommissioning nuclear power stations). More intangible effects include; the loss of the plant as a vehicle for the up-skilling of the local workforce, reduced demand for local accommodation and a general loss of income in the local economy.
2.31 The Bradwell Socio-Economic study also provides a broader analysis of the wider economy in Maldon District. This assesses the strengths and weaknesses of the economy. It notes that Maldon District is largely rural, with infrastructure constraints that curtail economic growth in parts of the District. However, it notes that the District has strengths in advanced manufacturing and agriculture, which will need to be supported if they are to develop further. The report notes that visitor economy is felt (by local residents) to be important in the District, but cautions that the area is not seen as a tourist destination and lacks a clear USP. Home working is seen to be relatively prevalent in the District and the rollout of superfast broadband will provide opportunities for growth that are less contingent on transport infrastructure.
2.32 Miscellaneous Documents and Statistical Releases
2.33 In addition to the studies and policy documents listed above, a wide range of other sources have been used to compose this Evidence Base and to develop the Economic Prosperity Strategy. These include statistical information from the Office of National Statistics (ONS) and NOMIS, as well as reports such as:
• Essex Sector Propositions; Advanced Manufacturing (2012) • Economic Impact of Tourism; Maldon District (2010) • Essex Business Survey; Maldon District Results (2010) • Causeway Retail Impact Assessment (2010) • Bournemouth, Dorset and Poole Workplace Strategy and Delivery Plan (2008)1 • Employment Land Reviews – Guidance Note (2004)
1 This report was used to provide a methodology to assess employment land requirements. 5
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• Employment Densities Guide (2010) • East of England Forecasting Model (2011) • Local Futures, Place Profile Maldon District (2010) • Retail Monitoring Survey, Maldon District Council (2012)
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3. Drivers of Change in the Global Economy
3.1 In an era of globalisation, international competition and rapid technological change, businesses in Maldon District will increasingly be affected by distant events. The most significant change in the global economy is the growth of a number of emerging economies, including China, India and Brazil, and smaller economies such as Turkey and Indonesia. The reputation of these countries in developing a competitive advantage in mass production, lower value manufacturing and services is well documented and has driven the migration of jobs from the West. However, BRIC countries are increasingly moving up the value chain into high-tech sectors. China has taken a state-led approach and is directing resources into the development of seven key sectors; alternative fuel cars, biotechnology, environmental and energy-saving technologies, alternative energy, advanced materials, new-generation information technology and high-end equipment manufacturing. India, is positioning itself as a centre for high-tech start-ups in computer services, mobile phone technologies, and business process outsourcing. The West will find itself increasingly competing to retain and develop high-tech sectors, in which the emerging economies will increasingly play a role.
3.2 Whilst the rise of the BRICs is transforming the global economy, it is important to recognise that the growing wealth of emerging economies will result in increasing demand for investment opportunities in the west. Chinese investment in the Port of Felixstowe is an example of such investment and as restrictions of Chinese foreign investors are lifted, the scope of FDI attributed to mainland Chinese investors is likely to expand significantly.
3.3 Similarly, the growth in real wages in emerging economies is creating a new and enormous middle class, with growing purchasing power. This is creating export markets for western goods and services. Markets in which western companies have been particularly successful include luxury branded consumer goods and high-tech engineering products. The projected growth of consumption in BRIC markets will transform the balance of global patterns of consumerism. Indeed, by 2030 it is estimated that total spending by the middle classes outside North America and Europe will be five times what it is today (Essex County Council, 2012). Western producers are increasingly penetrating these growing consumer markets to offset weak demand in developed economies. However the development of indigenous branded products is likely to challenge the dominance of European and American luxury brands. Indeed, China has made the development of internationally recognised brands a priority and firms such as Huawei, and Levono, are frontrunners in Chinese brand development.
3.4 Another developing trend, which is beginning to play an important role in the British economy, is ‘on- shoring’. This describes the return of some industries to developed economies. The primary driver of on- shoring is the aforementioned increase in in wages in BRIC and other emerging economies. Higher labour costs, combined with increasing transportation costs, and lower levels of productivity compared to advanced economies is eroding the competitiveness of certain producers in emerging economies and making production in the west more appealing. Typically, on-shoring occurs where an established western business out-sourced all, or part of their operation, to China or another emerging economy. As the west becomes more competitive, businesses that on-shore often re-establish operations in the same town or city in which they were formerly based. For example Youngman Group, based in Maldon, has recently chosen to increase their UK production instead of their Chinese operation.
3.5 Of course, a counter-argument to on-shoring is that as consumer markets develop in emerging economies, there may be an increasing cost incentive to be close to these markets, which would balance out the impact of rising costs. Indeed, in practice, it’s likely that on-shoring will be greatest where the benefits of being close to home markets are largest, and where productivity differences are most significant. As such, it appears that the occurrence of on-shoring will correlate to the idiosyncrasies of the industrial sector in question, the nature of the product and the corresponding effect on the cost of shipping. Another related factor is the exchange rate. The prolonged devaluation of Sterling has made some UK exports more competitive and this has supported the expansion of exporting businesses in the Maldon area. However, it is unclear if the historical upward trend in the value of Sterling will return in the medium to long term. If the value of the pound does rise significantly, the extent of on-shoring is likely to be less. 7
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3.6 An on-going trend, in the UK and global economy, is likely to be the growth in demand for a highly skilled workforce. Developments in technology and production techniques, and the emergence of the knowledge economy, are creating an increasing number of jobs that require highly educated workers with appropriate skill-sets. This trend is a key driver of competitiveness in local and regional economies, but it also corresponds with a trend in the labour market known as ‘hollowing-out’. This term describes how many medium-skilled jobs in manufacturing, and increasingly the service sector, have been (or will be) automated out of existence, whilst the number of high-skill occupations and low-skill employment increases. As Governments across the globe to confront this trend, they increasingly compete to increase the proportion of people with high-level skills. Indeed, China alone produced 6.6 million graduates in 2011 (Essex County Council, 2012).
3.7 In the short term the expansion of higher education and the corresponding increase in the proportion of the workforce who hold high-level qualifications, may depress employment opportunities and wages for graduates. This has been seen in the UK where the proportion of recent graduates in lower skilled jobs rose from 26.7% in 2001 to 35.9% at the end of 2011. However, in the longer term we can expect that demand for workers with higher level skills will increase. Indeed, the insufficient supply of highly skilled workers is already creating bottlenecks in parts of the British and local economy (see paragraphs 4.72-4.78).
3.8 Changes in the demographic structure of western countries and certain emerging economies (notably China), is resulting in an ageing population. An aging population will create significant challenges, as Governments seek to provide care services and increase the age at which workers can expect to retire. Yet, whilst the aging population is without doubt one of the greatest issues facing the UK, the challenge to create effective solutions for managing a large elderly population will create new markets in medical technologies and care.
3.9 The capacity of Governments to stimulate economic development is another significant factor in Maldon District, Essex and throughout the UK. The recession has placed significant pressures on government budgets and this has reduced the availability of funding for regeneration and infrastructure projects. However, even when austerity programmes are completed, it’s likely that government spending will remain lower than the recent historical trend. This will be particularly challenging, as the ageing population will to reduce the size of the tax base and increase gross pension liabilities. Within this context the capacity of governments in the west to deliver major infrastructure and economic development initiatives will be limited. This will increase the importance of private sector and foreign investment.
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4. Maldon District Local Economic Overview
4.1 In order to understand the economy of the Maldon District and exploit opportunities for growth, it’s necessary to understand the detailed mechanics of the local economy and to contextualise the District within a regional, national and global context. The following section of this evidence base document provides an analysis of available economic intelligence. A summary of the key statistics is encapsulated in figure 1.
4.2 Key Facts and Figures
Fig 1. Key Facts
Size 138 Square Miles Maldon District Local Development Plan Preferred Options (2012)
Population 62,500 Heart of Essex; Economic Futures Study 2012
Employment 23,900 Heart of Essex; Economic (in the Futures Study 2012 District)
Net out 8,000 ONS Travel to Work Data commuting (2001) population
Average Maldon District East Great Britain Nomis (2013) (pounds) (pounds) (pounds) Incomes of people Gross weekly pay Full-time workers 503.7 495.2 507.6 working Male full-time 572.3 538.7 548.1 within the workers Female full-time 482.4 425.9 449.0 District workers
JSA 845 people or 2.5% Nomis (2013) Claimants
Unemployed 1600 (modelled data)
Total ‘Wants 4900 a job’
Workforce NVQ 4+ 24.3% Annual Population Survey Education (2012) Level NVQ 3 16.4%
NVQ 2 21.8%
NVQ 1 11.8%
Trade Apprenticeships 7.4%
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Other Qualifications 8.5%
No Qualifications 9.8%
4.3 Key Sectors; Employment
4.4 The Maldon District supports a wide range of businesses that generate a diverse range of jobs, but 75% of businesses in the District employ four staff or fewer. For this reason, it is useful to group businesses into sectors. By amalgamating businesses into a sector typology it’s possible to see the contribution of sectors in terms of employment and output (GVA).
Fig 2. Total Employment in Maldon District (2012) 5000 Fig 2. Employment by Sector: Maldon District (2012) 4500 4000
3500 3000 2500 2000 Employees 1500 1000 500 0
Heart of Essex Economic Futures (2012) Experian Megafile (2012)
4.5 Figure 2 indicates that employment in the Maldon District is characterised by preponderance towards several key sectors. These are;
Public Services and administration (including health, education and social care) comprise the largest employment sector, with nearly 4,500 jobs.
Professional and other private services companies employ over 4,200 people.
Wholesale and retail services are the third largest employer, with 2,500 employed in retail and over 1,000 employed in wholesale.
Manufacturing accounts for around 3,400 jobs, meaning that per head of population, more people work in manufacturing than anywhere else in Essex (Heart of Essex Economic Futures, 2012)
Construction is a major employer accounting for over 2,700 jobs in the District.
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Accommodation, food services and recreation employ approximately 2,400 people in the District.
4.6 Tourism is not defined as a specific sector in statistical returns. However, the Office of National Statistics (ONS) estimates that around 10% of businesses in Maldon District are linked to the tourist trade. It is important to qualify this by recognising that the importance of tourism to each business varies greatly.
4.7 Key Sectors; Output
Fig 3. Total Output (GVA) in Maldon District (2012)
250 Fig 3. Gross Value Added (2012)
200
150
£ Millions 100
50
0
Heart of Essex Economic Futures (2012), Experian Megafile (2012)
4.8 Definition: Gross Value Added (GVA) is a measure of goods and services produced in an area. It is a commonly used metric in the fields of economic development and spatial planning. The GVA created by particular company can be approximated by adding operating profit and costs associated with employment such as salaries and national insurance (these costs are collectively known as ‘compensation for employment’ or COE). On a macro scale, GVA for a region or local economy can be estimated from the gross turnover/revenue associated with an area. On average GVA is 30-35% of gross revenue (with considerable variance between sectors). Therefore the output of a particular sector or economic area is approximately 1/3 of turnover.
4.9 Professional and Private Services companies produce the largest amount of wealth in the Maldon District, with this sector being worth over £200 million GVA.
4.10 Manufacturing and Construction sectors are also important sectors, with each producing around £130 million of GVA in 2012.
4.11 Wholesale and Retail, and Public Services are also important in terms of their overall contribution to the District’s economy (respectively; £109 million and £119 million).
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4.12 The value of the visitor economy must be calculated differently, because (as previously noted) ‘tourism’ is not measured as a single business sector2. Therefore the approach taken in this analysis is to understand the value of the visitor economy by translating a modelled estimate of visitor spending (revenue) into GVA (output). This allows for the value of tourism to be contextualised against the overall output of the local economy.
4.13 Using data from the report Economic Impact of Tourism (Tourism South East, 2010), and data from the Experian database underlying the Heart of Essex Economic Futures Report (2012), and translating values into 2008 prices (to make the two datasets comparable) it is possible to establish the contribution of visitor spending to the Maldon District Economy (measured in GVA).
4.14 The calculations below illustrate the value to be equivalent to 5.08% of total output (measured as Gross Value Added).
Fig 4. Calculating the Value of Visitor Spending (GVA) Value Calculation Notes
£163,507,000 Total Visitor Spend in Maldon District (direct 2010 Economic Impact of Tourism (2010-11 and induced) in 2010 results prices) £152,470,277 Inflation Adjusted 2010 Economic Impact of Tourism (adjusted to Total Visitor Spend in Maldon District (direct results, adjusted to 2008 prices to 2008 prices and induced) allow comparison with GVA figures to allow from Heart of Essex Economic comparison) Futures Report (which already adjusts figures to 2008 price values)
£45,741,083 In sectors such as retail and accommodation Revenue is not the same as output (Spending (tourist sectors) GVA is approximately 30% of (i.e. value or wealth created) converted to revenue (spending) output GVA) GVA is 30% of revenue (visitor 30% of £152,470,277 = £45,741,083 spending) in retail/ accommodation/leisure sectors Visitor Maldon District GVA (adjusted to 2008 prices) is Maldon District’s total output is spending = £900,000,000 (GVA has remained stable since £0.9Bn GVA 5.08% of 2010) GVA £45,741,083/£900,000,000 = 0.050823425 X100 =5.08% Economic Impact of Tourism (Tourism South East, 2010); Heart of Essex Economic Futures Report (2012); Maldon District Council’s analysis
2 For example, when measuring the number of jobs in an area the ONS notes that “Tourism consists of industries that are also part of the services industry”. Thus to avoid counting jobs twice, the ONS simply described a certain percentage of jobs total jobs as ‘tourism related’. 12
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4.15 Further Sector Analysis
4.16 Manufacturing and engineering remains a significant sector in the Maldon District and 9% of all businesses are in production. A location quotient (LQ) analysis reveals that the concentration of manufacturing in the Maldon District is significant nationally, with manufacturing receiving an LQ score of 1.73 (Heart of Essex Economic Futures, 2012).
4.17 Much of this manufacturing is considered advanced. The Bradwell Socio-Economic Baseline study (2012), suggests that around 30% of manufacturing can be considered advanced or high-tech (with a greater percentage being mid-tech). The Essex Sector Proposition study (2012) suggests that there are 52 advanced manufacturing companies in Maldon District. The Local Futures Place Profile; Maldon report (2010) notes that Maldon has a high-concentration of knowledge businesses. It says;
4.18 “Employment in knowledge-driven production is well above the national median, with the district ranking in the top 20% of districts. It has 6.66% of employment in this sector. This compares with 3.54% in Essex and 3.21% nationally”
4.19 Figure 5 illustrates the breakdown of manufacturing employment in Maldon District. Employment is spread across a range of industrial sectors; however, there are identifiable clusters in metal products and computer & electronic products. Metal products represents a wide range of businesses from those offering CNC precision engineering to the manufacture of agricultural, energy and marine components. There are a number of high-tech computer and electronic manufacturers in the District. Many are linked to the marine/shipping sectors, whilst others provide prototyping for large international clients. Non-metal products provide employment for approximately 300 people. Non-ferrous production often refers to plastics, and many businesses in the District offer plastic injection moulding services, while others produce products for the medical industry.
Fig 5: Manufacturing Employment Sub-Sectors Manufacturing Sub-Sector Employment Food, Drink & Tobacco 300 Wood & Paper 200 Printing and Recorded Media 300 Fuel Refining 200
Non-Metallic Products 300
Metal Products (Thousands) 900
Computer & Electronic Products 400
Machinery & Equipment 200
Transport Equipment 100
Other Manufacturing 400 Experian Megafile (2012)
4.20 In addition to conventional engineering and manufacturing sectors, the nuclear industry has historically played a significant role in the local economy. Bradwell Nuclear Power Station supported a large number of skilled and semi-skilled employees since construction work began at the site in the 1950’s. Whilst in operation, the plant supported around 800 permanent jobs at any one time, but since the plant ceased
3 A location quotient measures the relative importance of a sector to employment relative to the national average. An LQ score of 1 indicates that the sector in question accounts for an equal share of total employment as the UK average. A score higher than 1 indicates that the sector is more significant than the national average. 13
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operation and entered into its decommissioning phase in 2002 this number has fallen. The Bradwell Socio- Economic Study (Regeneris, 2012) indicates that (as of late 2012) there are around 240 permanent Magnox staff, 170 agency staff and 410 temporary contractors are employed on site. When the site enters its care and maintenance phase by 2016, employment at the power station will cease. This reflects a significant loss of skilled, well paid employment to the District that will be difficult to replace.
4.21 Retail and wholesale makes a substantial contribution to employment and output in Maldon District, and approximately 8% of businesses in the District can be categorised as retail.
4.22 Maldon Town Centre, the Causeway, Wycke Hill and Heybridge (Bentalls) are the major retail areas in, and around, Maldon Town, and represent the most significant shopping areas in District. Outside of Maldon Town, Burnham-on-Crouch is the main secondary retail location and predominantly serves a local market (The Maldon District Retail Impact Assessment; the Causeway (GVA Grimley, 2010).
4.23 The retail make-up of Maldon District is weighted toward independent shops which are slightly more prevalent than the national average (MDC, 2012). Conversely, national chains are slightly less prevalent when compared to the UK average.
4.24 As a small and rural district, Maldon’s retail offer faces competition from regional shopping centres located nearby. Competition for comparison goods (non-food) comes primarily from;
• Chelmsford Town Centre • Chelmer Village Retail Park • B&Q, Homelands Retail Park, Chelmsford • Colchester Town Centre • Lakeside Retail Park • Basildon Town Centre
4.25 In the long-term there is potential to expand the ‘bulk goods’ (retail warehouse) offer in the District, which may reduce leakage as local residents travel further afield to shop. The Maldon District Retail Impact Assessment; The Causeway (GVA Grimley, 2010) examined two scenarios to assess the impact of two bulk scheme developments on the Causeway Industrial Area. Scenario one considered a purely bulk good scheme, whilst scenario two examines a hybrid scheme.
4.26 The report argues that the development of a ‘pure’ bulk scheme (of 13,700 gross sqm) would have a marginal impact on Maldon Town Centre, reducing turnover in the town centre by 5.9%. In contrast a hybrid scheme, containing 8,700 sqm gross bulky goods and 5,000 sqm gross non-bulky goods, would have a significant detrimental impact. Maldon Town Centre would likely experience a loss of some 11.6% of turnover, whilst Burnham-on-Crouch would lose 4.9% of turnover. This increased effect is caused by the greater mix of retail uses in the hybrid development, which would have a corresponding impact on a larger number of existing shops. It should be noted that the retail sector is undergoing significant structural evolution and the potential to attract larger retail developments may be tempered by on-going changes in the retail sector (such as internet retailing). Conversely, such a development may be encouraged by the projected growth in the local population and a potential return (in the medium-long term) to the trend pre- 2008 trend of increasing levels of consumer expenditure4. Some of these issues are explored in paragraphs 4.29-4.31.
4 See Experian Retail Planner Briefing Note 10.1 (2012) for details of retail expenditure projections 14
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4.27 Figure 6 provides a breakdown of retail uses in Maldon District. It reveals that the primary retail use is for retail services (40.4%), followed by comparison goods (26.3%) and convenience goods (7.3%). Retail vacancy rates (6.6%) are well below the national average (14%).
Fig 6. Retail Uses in Maldon District Typology % of total Retail category Coding No. Units 2012 % of total 2011 Convenience A1 CTN & Convenience Store 1 18 3.1% 2.9% Groceries & Frozen Food 2 3 0.5% 0.8% Baker 3 9 1.6% 1.7% Butcher 4 5 0.9% 0.6% Greengrocers 5 1 0.2% 0.4% Fishmongers 6 1 0.2% 0.2% Off licence 7 5 0.9% 0.2% Total Convenience 42 7.3% 6.8% Comparison A1 Footwear & repair 8 2 0.3% 0.4% Clothing 9 17 2.9% 3.6% Furniture, carpets & textiles 10 8 1.4% 1.7% Books, art/crafts, stationers/copy, photo 11 7 1.2% 1.3% Electrical, home entertainments, phones, video 12 8 1.4% 1.5% DIY, hardware & household goods 13 18 3.1% 4.4% Gifts, china, glass, leather goods 14 17 2.9% 3.3% Cars, motorcycles & accessories 15 8 1.4% 0.4% Chemists, toiletries & opticians 16 12 2.1% 2.1% Variety, department & catalogue 17 2 0.3% 0.4% Florists & garden 18 5 0.9% 1.0% Sports, toys, cycles & hobbies 19 12 2.1% 1.7% Jewellers, clocks & repairs 20 5 0.9% 0.8% Charity shops 21 10 1.7% 1.5% Other comparison 22 21 3.6% 3.6% Total Comparison 152 26.3% 27.6% Service Restaurants & café (A3), sandwich bar (A1) 23 55 9.5% 9.6% Drinking establishment (A4) 24 24 4.1% 3.3% Hot food takeaway (A5) 25 25 4.3% 5.2% Internet café (A1) 26 0 0.0% 0.0% Hairdressing, beauty & health (A1) 27 54 9.3% 9.0% Bookmaker (A2) 28 2 0.3% 0.4% Launderette (S/G)/ dry cleaners (A1) 29 5 0.9% 0.8% Travel agent (A1) 30 4 0.7% 0.8% Banks, financial (A2) and professional services (A1/A2) 31 39 6.7% 7.9% Money transfer 32 0 0.0% 0.0% Estate agent (A2) 33 16 2.8% 2.9% Employment agencies (A2) 34 4 0.7% 0.2% Post Office (A1) 35 6 1.0% 0.4% Total Service 234 40.4% 40.8% Vacant Uses 36 38 6.6% 8.2% Other Uses 37 109 18.8% 16.1% Mixed Uses 38 4 0.7% 0.4% Total 579 100% 100% Retail Monitoring Survey Maldon District Council (2012) 15
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4.29 Taking a broader view of the resilience, depth and vibrancy of the retail offer, it is evident that Maldon District compares favourably to the national picture and has a below average number of vacant shops (6%) compared to 14% nationally. The status of Maldon Town as a significant local retail and amenity centre has helped to protect the local retail sector from major decline, as has the relatively limited development of out of town shopping centres. Other smaller retail centres have fared less favourably. Burnham-on-Crouch has over the last 15 years lost its status as a significant retail town. Nevertheless, new independent retail businesses continue to develop in the town, and these have tended to be more successful where they are boutiques, or other similar niche shops, aligned with the higher-wealth tourist market segments and the ‘affluent commuter’ segment of the resident population.
4.30 While relatively resilient, the District is not immune to long-term trends leading to the decline in shop numbers on UK high streets (see Figure 7). The rise of internet retailing is a major factor causing a structural contraction in the size of the traditional high-street retail offer (Figure 8). Despite this pessimistic outlook, there are opportunities for small retail businesses to develop a strong online retail presence, complementing their conventional high street presence. Several retailers in the District have already taken this approach and whilst an online presence does not guarantee success, tech-savvy proprietors, who are able to utilise social media and run efficient online purchasing operations, will almost certainly outcompete those retailers that fail to evolve in an ‘always on-line’ business environment. Similarly, diversification from conventional retail into upmarket leisure and boutique store segments, supported by closer integration with the tourism offer and better links between visitor locations, may also help to sustain and improve the vibrancy of the town centre offers. Taken together, the convergence of these trends is likely to result in an increase in the prevalence of retail services and convenience goods, while the high street retailing of comparison goods declines.
4.31 Though there are viable opportunities for innovation on the high street, it is unlikely that the high street retail sector will be a major driver of economic and employment growth in future. This statement is supported by the economic scenarios in the Heart of Essex Economic Futures (NLP, 2012), which suggest that overall employment in retail will remain largely static or experience limited growth. This said, the development or expansion of edge of centre retail parks could increase overall retail employment. However, great care must be taken to ensure that new retail developments are of a ‘bulk’ nature, and do not offer so great a mix of services that they dramatically reduce footfall in the town centres (GVA Grimley, 2010).
Fig 7: Long-Term Store Numbers on UK High Streets
Successful Town Centres; Developing Effective Strategies, (ATCM, 2013) 16
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Fig 8: On-Line Retail as a Percentage of Total Retail (Projection for 2016)
The Connected World: The $4.2 trillion opportunity the internet economy in the G20 (BCG, 2012)
4.30 Food services, accommodation and leisure businesses make an important contribution to the local economy. Together, businesses in these sectors employ over 2,400 people and contribute approximately £60m GVA to the District.
4.31 Projected population growth in the wider region is likely to increase the pool of people who may visit the District. This is likely to expand the day visitor market, increase the potential of the local food and restaurant offer, and increase interest in the leisure sector. This was noted in the Maldon Hotel and Pub Accommodation Futures Study (Hotel Solutions, 2010).
4.32 With respect to accommodation, the outlook is less certain. The loss of Bradwell Nuclear Power Station and the associated contractor workforce will likely to result in a contraction of the accommodation market in the Dengie Peninsula. The Bradwell Socio-Economic Impact Assessment Report (Regeneris, 2012) suggests that affordable, down-market, accommodation providers will be particularly badly affected.
4.43 Though the affordable accommodation sector may face contraction, there is some evidence suggesting there is scope for growth in upmarket guesthouses, gastro-pub hotels and country hotel accommodation. There is also potential to increase accommodation at existing golf resorts. However there is currently not enough demand to sustain a major new golf resort development, though this may change in the long-term (Hotel Solutions, 2010)
4.44 Whilst there are growth opportunities in the leisure and day visitor markets, and in small scale, high-quality accommodation, it should be noted that Maldon District is not generally recognised as a significant tourist destination. The District has too small a population to attract a major branded hotel and branded hotels chains have expressed an interest in investing in the District. The only exception to this was Travelodge, which operates a different business model that enables it to operate in less populous places. However, in 2012 Travelodge announced they were undergoing a major restructuring programme and intended to sell 50 unviable hotels. Because of this, it would appear less likely that they will invest in Maldon. Despite the
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findings of this study, it should be noted that planning applications for large hotels have been submitted to the Council, though there remain doubts as to market viability (Hotel Solutions, 2010).
4.45 With respects to country house hotels, few existing businesses have expressed serious interest in developing as conventional hotels. Instead, they preferred to focus on the lucrative wedding market. Whilst this market is relatively resilient, it has the side effects of limiting investment into ‘hotel standard’ catering and at peak times of the tourist year, tourists who want to visit the istrict aren’t able to because hotels are fully booked for weddings. This is significant because a tourist who is here to see the wider attractions of the area will spend money at a diverse range of locations. People who are visiting for a wedding are often contained within the hotel, spend less in the surrounding area and generate more limited externalities (Hotel Solutions, 2010).
4.46 With respects to golf resorts the District has two large sites (Three Rivers Golf and Country Club and Crowne Plaza Colchester Five Lakes). The local corporate market is a major source of mid-week income at these businesses, while weekend markets for golf-breaks/spa-breaks are a stronger market in the summer months. Weddings and conferencing are a significant market, though growth in this segment has slowed since 2008.
4.47 It should be noted that the diverse food services and retail offer forms just as important an attraction as the accommodation, and cultural offer (e.g. museums). If the visitor economy is to develop as a significant part of the local economy, the experiential/lifestyle offer should be developed and branded more consistently. For example, the Maldon District Tourism Strategy Research study (EET, 2009) suggests that the lack of integration of Maldon Crystal Salt Company into the tourism offer is a major missed opportunity. Maldon salt is a vehicle for the international recognition of the District and contributes to the fabric of the local brand. Yet the visitor offer does little to capitalise on the District’s most famous product.
4.48 Agriculture and rural businesses play an important role in the District’s economy. The agriculture, forestry and fishing sector comprises 7% of the total business population, and supports 3.5% of total employment. The dry climate and deep soils, present in the South East of the UK, means that arable farming is by the most common form of farming in the District. The most important crops grown in the District are wheat, oilseed rape, barley, peas, beans and potatoes.
4.49 The report Maldon District Rural Gap Analysis (Writtle College, 2010) identifies the agricultural pattern in the District as being varied, but with horticulture and fruit growing predominating in the northern part of the District. The prevalence of grazing livestock in the District is low, but livestock production across Essex accounts for the second highest use of farm holdings at 15.9%, followed closely by horticulture at 14%. Dairy farming is the lowest use of farm holdings across Essex (Defra, 2008). In the Maldon District there are several successful meat, fruit and vegetable, and oyster producers and several established or emerging vineyards.
4.50 The District is home to a small number of large agri-businesses. Dengie Crops are the UK’s leading manufacturer of fibre‐based horse feeds and the largest producer of alfalfa in the UK. This company operates in the areas of grain trading, grain storage and buying products such as diesel and fertiliser for its members. Springstep Dairy is East Anglia’s largest working goat dairy and produces cheese, yogurts, milk, cream and ice‐cream.
4.51 Maldon District is a viable area for growing the energy crop; Miscanthus. However there are local limitations, such as high capital costs involved in the production of these crops. For example Miscanthus is planted by rhizome division, however this makes establishment expensive. The crop is also harvested in early spring when the ground is wet, which is makes harvesting difficult especially in clay‐rich soils such as those found in the Dengie.
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4.52 A constraint on the development of the energy crop sector is the lack of a local straw burning power station. The nearest and largest straw burning power station is located in Ely in Cambridgeshire. The construction of a plant may present a significant economic opportunity and drive the development of a local supply chain. However, consultations with major landowners and developers have suggested that the construction of a straw burning plant in the District would not be economically viable in the District without significant subsidy.
4.53 More generally, the District is viewed (in economic terms) as a good location for renewable energy generation. Whilst local opinion of renewable power generation is often sceptical, the flat, rural geography of the District has attracted interest from wind turbine and photo-voltaic developments. There are also opportunities to expand the development of small, low-intensity bio-mass/anaerobic units that service local farms. Diversification into renewable energy presents an opportunity for many landowners, but a balance must be struck between strictly commercial interests and the wider community, if economic development in the District is to be sustainable.
4.54 When considering the agricultural sector, it is important to remember that the industry is exposed to a global market in food commodities and. Similarly, many rural businesses are directly at risk from weather‐ related factors on land and production as well as disease outbreak; these are all aspects that affect the resilience of the rural economy. Beyond this the agricultural sector in the District has difficulty in accessing funds, this is especially true of tenant farmers, who lack the collateral to invest in diversification, and the income to repay debt, invest in pension schemes and cope with local problems such as flooding and disease outbreak.
4.55 However, the biggest influence on the viability and success of agricultural businesses are likely to be world prices and the Common Agricultural Policy. Price fluctuation in the value of wheat and oilseed rape represents the greatest threat to agricultural businesses in the District. There is little certainty and manoeuvrability to react to price drops or price increases for that matter. Since 2005 when support for farmers in the subsidising of production was redistributed to provide area support (decoupling), prices received by farmers have been influenced by world markets; this leaves UK markets vulnerable to the vagaries of global demand and supply (Writtle College, 2010).
4.56 Whilst agribusinesses face significant challenges, most forecasts commissioned to support the development of the Economic Prosperity Strategy, predict a modest rise in employment in agriculture related activities. This is likely to be driven by global pressure to increase the food supply and diversification into a broader range of non-traditional agricultural activities (such as localised bio-mass energy production, leisure/tourism related activities and upmarket food production). New employment opportunities in rural businesses are likely to require a mixture of vocational and business management skills; (e.g.) high-tech farm machinery operation, land management/planning, hedge laying, historic building restoration, blacksmithing and coppicing.
4.57 In addition to growth in agricultural sectors, agri-businesses may be in a position to diversify by changing the use of redundant or under-utilised farm buildings. Small business parks on farm sites can provide office or workshop space for SME and generate employment opportunities in rural settings. It should be noted however, that rural business parks are more viable in those areas that are relatively accessible. In truly isolated areas, conversion of disused buildings to housing or self-catering visitor accommodation may be a more appropriate use.
4.58 Professional and other business services contribute 4,200 jobs to the economy of the Maldon District and the impact of small professional services firms is significant. Professional services include lawyers, ICT specialists, and consultants in various fields. The report Britain’s Quiet Success Story; Business Services in the Knowledge Economy (Work Foundation, 2011), notes how this part of the economy has thrived over the past three decades and now plays a major role in the economy, particularly in the South of England. 19
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4.59 The proximity of the Maldon District to London and other large settlements, and its location within the wider South East (where UK professional services companies are concentrated) has left it well placed to develop a relatively large professional services sector. Alongside the healthcare, education and public administration sectors, professional services make a significant contribution to the local knowledge economy. The Local Futures Place Profile; Maldon report (Local Futures, 2010) suggests that 19% of employment in Maldon District is in knowledge-driven services. This compares with 18.67% in Essex and 21.37% nationally. This places Maldon within the top 40% of Districts nationally, which is a significant achievement considering the District’s rurality and its small business base. The presence of a strong professional services sector is a significant enabler of economic growth, and the following analogy helps explain this: Whereas ports and roads (etc.) provide the infrastructure to move people and goods around the country, professional services (for example, accountancy or consultancy services) provide the infrastructure required for the functioning of for the knowledge economy (Work Foundation, 2011).
4.60 ‘Other business services’, refers to a myriad of intermediate service sector businesses that support the wider economy. These include; recruitment agencies, leasing companies, marketing and advertising companies, and information support services (such as internet hosting and data processing providers). Like professional service companies, intermediate service providers make a significant contribution to the local economy, creating 1,200 jobs and lubricate the wider economy.
4.61 Construction contributes 2,700 jobs to the District’s economy and creates over £131m (GVA), or 14.6% of total output. Around 800 jobs relate to the construction of buildings (builders, carpenters, roofers etc.) and these mostly service the local and sub-regional economy. Around 200 jobs are classed as civil engineering. Local civil engineering companies operate in the rail industry, onshore and offshore energy sectors, and a range of other industrial segments.
4.62 1,700 people work in specialised construction categories. This number is particularly high for a small, rural district and relates to the decommissioning work currently underway at Bradwell Nuclear Power Station. However, when high-intensity decommissioning work at the power station ceases during 2015, it is likely that specialist construction sectors will decline in significance (Regeneris, 2012).
4.63 Whilst the completion of work at the power station will reduce the number of construction jobs in the District, changes to national planning regulations are likely to drive increased housing building across the region. This will create opportunities for many people working in the construction sector.
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4.64 Entrepreneurialism; New Business Growth and Survival
4.65 The Maldon District has an entrepreneurial culture and is ranked 4/12 across Essex districts in terms of the number of residents (per 1000 population) choosing to start a business. Figure 9 reveals that, in 2011, 7.2 new businesses were registered per 1000 residents, while 9.6 businesses closed.
Fig 9. Rates of Business Registrations and Closures, Per 1000 Resident Population (2011)
12.00
11.00
10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
Rate - Registration Rate per 1000 working age population Rate - Closure Rate per 1000 working age population
ONS Business Demography (2012)
4.66 Figure 10 provides further information with respect to business births and survival rates over 5 years, and compares the performance of local authorities in the Heart of Essex Sub-Region. It suggests that the survival rate of new businesses in the Maldon District does not differ significantly from either the Essex county average or Heart of Essex sub-regional average. As might be expected the rates of survival for the most recent data (20095) suggests the impact of the recession has increased new business deaths across all areas. New enterprise survival rates broadly conform to Essex and England averages. The possible exception being that new businesses in the Maldon District are slightly less likely to survive into their 5th year of operation. This is perhaps a statistical anomaly, a point supported by the fact the 4th year survival rates are above the Essex and England averages.
4.67 Whilst Maldon District compares favourably to the Essex or England averages, opportunities for growth could be found by reducing the gap between rates of business registration and closure. The district of West Oxfordshire has the highest new business survival rate in the UK, with 63.5% of businesses surviving into
5 Please note, ONS Business Demography data is not available past 2009
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their 5th year of operation. The Oxfordshire Economic Assessment (2010) attributed this success to very strong support mechanisms for new businesses and a very well developed business network, with close links to universities.
4.68 Improved support for new businesses could increase new business survival rates in the Maldon District. This could be achieved by developing closer links with local universities (e.g. to access knowledge transfer programmes) and by providing business-to-business (B2B) training for people running new businesses, which aims to help them develop robust business plans and adopt good business practice.
Fig 10. Business Survival Rates 2005 - 2009 1 year per 2 year per 3 year per 4 year per 5 year per Births cent cent cent cent cent Maldon 385 95.80% 82.20% 62.90% 51.40% 41.80% Chelmsford 795 96.60% 80.70% 65.70% 55.70% 46.30% Brentwood 370 97.60% 84.40% 68.80% 58.90% 48.90% Essex 6,565 96.20% 81.60% 65.60% 54.80% 45.90% 2005 England 241,410 95.90% 79.90% 64.60% 53.70% 44.10% Maldon 295 97.30% 84.70% 68.80% 56.30% Chelmsford 720 97.10% 81.90% 65.70% 52.50% Brentwood 370 97.00% 85.10% 68.60% 56.90% Essex 6,320 95.90% 80.80% 65.50% 53.30% 2006 England 225,120 96.50% 80.70% 66.20% 53.00% Maldon 380 95.00% 80.30% 65.80% Chelmsford 750 95.50% 82.70% 65.20% Brentwood 415 95.50% 80.50% 65.80% Essex 6,880 95.10% 80.60% 63.10% 2007 England 246,700 95.40% 81.30% 62.90% Maldon 325 94.80% 77.30% Chelmsford 820 93.50% 78.30% Brentwood 450 89.50% 71.90% Essex 6,715 92.40% 74.20% 2008 England 236,345 92.10% 73.90% Maldon 275 92.10% Chelmsford 720 93.20% Brentwood 370 90.20%
Essex 5,900 93.00% 2009 England 209,035 90.90% ONS Business Demography 2010
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4.69 Skills in the Maldon District
4.70 The chart below provides an illustration of how qualified the workforce is in comparison with the East of England average and the UK average. The chart indicates that Maldon District is slightly below the East of England and UK average, in terms of the percentage of people qualified to NVQ level 4 (high level skills). Likewise the percentage of people who hold no formal qualification is slightly above the East of England and UK averages.
Fig 11. Workforce Qualifications (2012) Maldon District Maldon District East Great Britain (numbers) (%) (%) (%)
NVQ4 and above 10,700 27.5 29.2 32.9 NVQ3 and above 20,600 52.9 49.9 52.7 NVQ2 and above 26,300 67.5 68.5 69.7 NVQ1 and above 32,400 83.2 83.8 82.7 Other qualifications 6# # 6.6 6.7 No qualifications 4,500 11.5 9.6 10.6
4.71 Whilst the percentage of people who hold higher level qualifications is lower in the Maldon District than the UK and East of England average, there have been significant improvements. Figure 12 indicates that in 2004 only 16% of the local workforce was qualified to NVQ level 4. However, by December 2011, 27.5% of the local workforce held higher level qualifications.
Fig 12. Higher Level Workforce Skills (2004-2011)
35
30
25
20 L4 NVQ to
Maldon District 15 (%) East (%)
Percentage of WorkinGAge Population Qualified Great Britain (%) 10 2004 2005 2006 2007 2008 2009 2010 2011
Source: NOMIS 2012
6 # At a District Council local authority level, certain statistics are considered unreliable by the ONS and are not displayed. 23
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4.72 Specific Skills Shortages: The Bradwell Socio-Economic Impact Assessment (Regneris 2012) identified local skills shortages in the following areas:
• Agriculture with both technical and manual skills • Hotel catering and Accommodation (particularly chefs and supervisory) • Manufacturing: o Engineers, ranging from electronic to steelwork draftsman o Factory and warehouse staff o Specialist technicians • Business skills (particularly at a supervisory/junior management level)
4.73 The findings of the Regeneris report are supported by analysis conducted through another study, Demand Analysis for a Skills Centre within Maldon, Incorporating a Labour Market Analysis for Tendring District (2012). This report found that many local employers identified a lack of NVQ level 3 qualified engineering/production technicians. However, both reports suggest that the availability of degree qualified engineers was already adequate.
4.74 The Essex Business Survey (Essex County Council, 2010) reaches similar conclusions, noting that 59% of survey responders had experienced difficulties in recruiting skilled staff. Figure 13 below provides further analysis of recruitment issues Maldon district businesses have found.
Fig 13. Types of skill shortages or jobs that Maldon District businesses have had difficulty recruiting. Professional and Technical 57% Administrative and 13% secretarial Skilled Trades 41% Marketing 11%
Sales and customer service 39% Personal services/carers 2%
Managers and Senior staff 33% Other 0%
Unskilled 32% None 5%
Process, plant and 17% Essex Business Survey (2010) machine operatives
4.75 The Knowledge Economy and Workforce Skills: Though workforce skills have improved significantly, the District’s scores remain marginally below the national and East of England averages. Despite this, Maldon District has a strong ‘knowledge economy’ and as such enjoys an above average concentration of higher skilled jobs which are classified as ‘knowledge intensive occupations’.
4.76 In comparing the national distribution, and local concentration, of knowledge intensive businesses, the report Local Futures Place Profile; Maldon (Local Futures, 2010), ranked the Maldon District as 96th out of 408 districts across the UK, for its concentration of knowledge intensive businesses.
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4.77 The significance of the knowledge economy in the District is largely the result of an above average concentration of advanced manufacturing, engineering and high-tech companies, which require access to a highly skilled workforce. The District ranks within the top 20% nationally for the presence of knowledge- driven production7 and the study, Essex Sector Propositions, Advanced Manufacturing (Essex County Council, 2012) identifies 52 advanced manufacturing companies which are known to operate in the district.
4.78 Professional services also account for a significant part of the knowledge economy. Supporting approximately 1,500 local jobs this highly productive sector adds £52 Million GVA to the local economy (Experian, 2012).
4.79 Economic Geography; the Maldon District in Context
4.80 Maldon is a large, sparsely populated and rural district in which the availability of transport infrastructure varies significantly. This has important effects on income levels, deprivation, house prices, commuting patterns, employment opportunities and access to services. Indeed, disparities in the provision road and rail infrastructure create such significant and multifaceted effects, that it is reasonable to talk of the existence of three functional sub-economies in the Maldon District8. These are:
1. The Core; primarily encompassing Maldon Town, Heybridge and to a lesser extent Burnham-on-Crouch are the most accessible and developed urban areas, contain the majority of businesses and amenities. 2. The Commuter Economy; in the West and South West of the District, where proximity to rail and the trunk road network effectively extends the travel to work area. Resident incomes are higher in commuter areas. 3. The Rural Economy; the rural hinterland of the District, which is less well served by road and rail infrastructure. The economy is oriented toward serving local markets, though a number of larger long- established businesses are situated it rural areas.
4.81 Figure 14 demonstrates that the east of the District is relatively well connected to the major trunk road network and the A12 corridor, while other parts of the District are relatively inaccessible by road. Also of note is the Southminster branch railway line in the south of the District. This connection has the effect of linking the settlements along the south coast of the District (as well as Southminster) to the London rail terminals (via Wickford).
Fig 14. Major Transport Infrastructure in the Maldon District and Surrounding Area
Maldon District Council (2012)
7 This uses the following 2003 Standard Industrial Classification (SIC) codes: Aerospace (35.3), Electric machinery and optical equipment (30, 32, 33), Printing, publishing, recorded media (22.11-22.22), Chemicals (24), Energy (11, 23, 40, 41). 8 This analysis draws and expands on the sub-district assessment provide in the ELR (2009), paragraphs 3.1 -3.11. 25
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4.82 The distribution of transport infrastructure concentrates economic activity around Maldon town and Burnham on Crouch, and connects parts of the District to the London commuter region. The settlements of North Fambridge, Althorne, Latchingdon, Burnham on Crouch and Southminster, contain (or are in proximity to) stations along the railway line. This makes out-commuting viable for residents. Commuting along the north and west of the District is also significant, as residents commute by road into Chelmsford, Colchester and Braintree or south into Brentwood and Basildon. Many residents living in the west/north will commute by car to railway stations along the East Coast Mainline and travel into London. Fig 15 provides a visual representation of commuting patterns.
Fig 15. Maldon District Commuting Patterns
Commuter Patterns based on 2001 Census (ONS)
4.83 Economic growth is likely to be stronger in large urban areas, such as Chelmsford, Colchester and London, than it is in Maldon District. In turn, this is likely to exacerbate existing patterns of out-commuting (NLP, 2012). Fig 16 provides a projection of future commuting patterns. It suggests that by 2030 out-commuting is expected to rise by 30%, compared to 2010 levels. It should be noted that forecasts are not facts waiting to happen, and sustained intervention to promote economic growth within the Maldon District could influence future commuting patterns. However, it’s unlikely that intervention will be of a scale that fundamentally alters the prevailing trend.
Fig 16. Commuting Forecasts 2010-2030 2010 2015 2020 2025 2030 Change Per cent Change Net Daily Out - - Commuting 8,400 9,000 9,700 10,300 10,900 2,500 30% East of England Forecasting Model (2011)
4.84 Out-commuting has significant effects on the economy of the District. Figure 17 below indicates that average incomes for residents with jobs within the District are £503/week and average incomes for those who out commute are £655/week, giving a differential of £152/week. 26
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Fig 17. Gross weekly pay 2012 (£) Non commuters and Commuters Compared Maldon District East UK
Residents with full-time jobs 503.1 495.2 507.6 within the District
Residents with full-time jobs 655.5 NA NA outside the District Nomis (2012)
4.85 The effect of the income disparity between out-commuters and residents working locally is evident in figure 18. This map reveals that residents with the ‘best’ employment, defined in terms of pay and skill level, are concentrated in the south and west of the District (in areas highlighted in blue and grey). The grey LSOA in the east of the peninsula, which includes Bradwell and Tillingham, is the exception because of the high value employment provided at the Bradwell Power Station. However, by 2016 this employment will be lost.
Fig 18. Employment Score by Lower Super Output Area (LSOA)
Indices of Local Deprivation (2010)
4.86 The effect of the income disparity between commuters and those who work within the District is also significant in terms of house prices. The average price of a detached house in the District is £320,329 (April- June 2012). Yet, in and around North Fambridge and Althorne (two settlements with train stations along the Southminster Branch Line in postcode CM3), the average detached house sold at £355,990 (April-June 2012).
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4.87 Figure 19 reveals house price ‘hot spots’ across the District. The map reveals that pressures on house prices are highest in the south and west of the District. As previously described, these areas are within commuter range of London, Chelmsford and other major employment areas in the South East of England.
Fig 19. House Price Heat Map Please disregard the solid orange areas. These were overlaid for a different and redundant purpose
Land Registry (2010)
4.88 The effect of income and house price disparities is evident the distribution of deprivation within the Maldon District. Figure 20 illustrates that deprivation is more severe in the south east of the District and in and around Maldon town. Other parts of the District, that have most access to transport, are the least deprived.
Fig 20. Index of Multiple Deprivation (Overall Score) by Lower Super Output Area (LSOA)
Multiple Indices of Local Deprivation (2010)
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4.89 Strategic Transport Infrastructure
4.90 The 2006-2011 Essex Local Transport Plan (ELTP) identified two key transport limitations in the Maldon District; 1) Access to public transport is limited particularly in the Thurstable Hundred (to the North of Maldon) and in the Dengie Peninsula. 2) There is congestion on the A414 and B1018, and a need to link the Maldon District more effectively to the A12 corridor to increase access to employment and increase the economic attractiveness of the District. Such an upgrade could be achieved through improvements to the B1018 / B1019 route to the A12. Such a scheme was estimated to cost £9.3m.
4.91 The 2006-2011 ELTP has been replaced by the 2011-2026 Essex Local Transport Plan. The sub-regional implementation plans (in which the Maldon District would be treated as being part of the Heart of Essex region) have yet to be agreed. As such, it is not clear if there is any provision will be made to finance upgrades to the B1018 / B1019 route. However, in view of recommendations in other key policy documents9 it is likely that Essex County Council finance (and other funding streams) will be concentrated on strategic infrastructure improvements that are significant on a county wide or regional scale. Figure 21 provides an illustration of prioritised transport projects. Given these priorities it is highly unlikely that the £9.3m will be found to support the improvements to the aforementioned routes.
4.92 In view of the limited prospects of securing major improvements to the transport network, the Economic Prosperity Strategy will need to support alternative interventions. These should focus on improving access to the public transport network, through the promotion of car sharing and demand responsive transport (DRT) programmes. Where possible, finance for public transport interventions should be sought through developer contributions, S106 and CIL.
Fig 21. Prioritised Transport Investment Projects in Essex
Essex Growth Strategy (2012)
9 Notably the Essex Integrated County Strategy and the Essex Growth Strategy 29
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4.93 Land and Property Supply
4.94 The Institute of Economic Development identifies the availability and quality of development land, new premises and existing vacant property, as a major determining factor in economic growth. The Maldon District Employment Land Review (ELR) (Roger Tym, 2009) suggests that location has a very significant bearing on the likelihood of development and investment on a particular site. The report suggests that some sites in the District have the potential to serve local markets (but may be slow to develop), whilst sites situated around Maldon, along major distributer roads or in closer proximity to the A12, were best positioned to attract investment.
4.95 In terms of the supply of existing commercial and industrial premises, a range of studies point to the age of existing industrial stock and the limited supply of modern, high quality premises as a barrier to economic growth in the District. The Heart of Essex Economic Futures Study (NLP, 2012) notes that there is a need to renew and replace the District’s older manufacturing stock, and that suitable employment land must be found to support the aspirations to support high-value businesses. “The lack of good quality space for offices and industrial units” is identified in the ELR (2009) as a barrier to growth and the report proposes a phased programme of relocation and renewal, which aims to increase the amount of high-quality commercial stock available to the District. Furthermore, the Essex Business Survey (2010) notes that 20% of Maldon District businesses were affected by constraints with premises and location.
4.96 Consultation with businesses, local developers and land owners have revealed that a number of local companies have plans to expand in the sort-medium term, and require new or enlarged premises. Many of these companies have been based in the local area for some considerable time and wish to remain near their existing workforce. There is therefore a significant localised demand for modern commercial and industrial space.
4.97 In terms of attracting businesses from outside the District, the supply of land and premises in the Maldon District allows it to play a complementary role to large urban or highly industrialised areas found elsewhere in Essex. When consulted and asked why they moved to the District, a common response from business owners was that they relocated to the District because they perceive land and rents to be relatively cheaper, than neighbouring Chelmsford or industrial areas in the south of Essex. Other businesses noted that the quality of the environment and lack of pollution made the area attractive to high-tech companies that require a clean environment (ELR, 2009). Outside of Maldon Town and its surrounding area, the clustering of maritime engineering businesses (in Burnham-on-Crouch and Tollesbury) makes those areas relatively attractive for other small marine enterprises. The age and corresponding affordability of industrial units in these areas, supports small businesses, but acts as a barrier to companies remaining in the District as they develop and they require more modern facilities. The recent relocation of an American owned medical equipment manufacturer to Maldon town (which moved into one of the few large, modern industrial units in the area), suggests that where high-quality premises exist the most accessible parts of the District are able to attract investment.
4.98 The ELR notes that, annually, total annual industrial take-up between 2004-2007 (i.e. years when the UK economy was relatively buoyant) was 86,000 sq.ft in the Maldon District. The majority of this take-up was for premises in the 5,300 sq.ft or less range. Annually, there was also some movement in the 10,000 to 20,000 sq.ft range. This kind of demand reflects the small-business economy prevalent in the Maldon District (and indeed much of the East of England).
4.99 Office take-up is rather less significant than industrial take-up. The ELR notes that annual take-up for office space between 2004 and 2007 was, approximately, 21,000 sq.ft / annum. The vast majority of this demand 30
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was for small premises of 2,500 sq.ft, or less. Businesses with requirements for larger office space are thought to see Chelmsford or Colchester as preferable to a rural location like Maldon (ELR 2009).
4.100 The Local Development Plan Preferred Options Consultation designates strategic growth areas. These are the pink areas shown in figure 22 below. Within these areas it is expected that a proportion of employment land will be brought forward. Located near the A12, and along the main trunk routes in the District, the growth areas surrounding Maldon Town represent the most viable areas for employment sites to develop (Bradwell Socio-Economic Impact Assessment Reports Parts A). The Economic Prosperity Strategy should seek to secure business investment into these areas; either through relocating local businesses to improved sites, through attracting companies to the District or by providing space for SMEs to enable the development of new businesses.
4.101 Burnham-on-Crouch is further from the A12 and is less accessible by car. However, it is connected to London via Southminster Branch Railway Line. This makes the area attractive to commuters. There are some sizeable and well developed industrial estates in the town, and there is developer some interest in extending them. The market for premises is driven by a range of small businesses serving the local area (such as builders and car repair garages), marine engineering/service businesses and a small number of manufacturing companies.
4.102 A detailed evaluation of employment land requirements is set out in section 6.
Fig 22. Strategic Growth Areas
Maldon District Council Local Development Plan, Preferred Options (2012)
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4.103 Age Profile and Future Change
4.104 The demography the local population has a considerable influence on the local economy. Regions with a ready supply of younger workers are likely to experience higher levels of growth. In contrast areas with a higher proportion of older residents are likely to have a smaller working-age population. In turn, this will influence the local labour market and firms may find it harder to recruit staff at a competitive salary.
4.105 Figure 23 below portrays the age profile of residents living in the District in 2012. It indicates that 21% of residents are under 16 years, 22% of residents are aged 30-44, whilst 23% are aged 45-59. Overall 64% of residents are of working age (16-65).
Fig 23. Maldon District Resident Age Profile (2012) People aged 90 and People aged 85-89 over 1% 1% People aged 0-4 6% People aged 75-84 People aged 5-7 5% 4% People aged 65-74 People aged 8-9 8% 3%
People aged 60-64 People aged 10-14 5% 7%
People aged 15 1% People aged 16-17 2% People aged 18-19 2% People aged 20-24 5%
People aged 25-29 People aged 45-59 5% 23%
People aged 30-44 22% ONS; Population Projection
4.106 Like the rest of the UK, the Maldon District is predicted to experience a change in its demographic composition. The trend toward increased life expectancy is projected to continue, while birth rates will remain stable. As such older people will represent an increasing proportion of the population. Figure 24 (below) contains projections of changes to the age profile, over the period 2011-2021. It foresees a 55.6% increase in the number of residents aged 70 or over and a corresponding 15.4% decrease in the number of residents aged 15-24.
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Fig 24. Maldon District Age Profile: Projection 2011-2021 (thousands to one decimal place)
Change Age 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 %
15-19 3.7 3.7 3.7 3.7 3.7 3.6 3.5 3.5 3.4 3.4 3.5 -5.40%
20-24 3 3 2.9 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.7 -10.00%
25-29 2.7 2.7 2.8 2.9 3 3 3 3 3 2.9 2.9 7.40%
30-39 6.3 6.3 6.2 6.1 6.3 6.3 6.3 6.5 6.7 6.8 6.9 9.50%
40-49 10.1 10.1 10 9.7 9.5 9.2 8.8 8.6 8.3 8.1 7.9 -21.80%
50-59 8.9 8.9 9.2 9.4 9.7 9.8 10.1 10.3 10.4 10.5 10.6 19.10%
60-69 9.3 9.4 9.4 9.3 9.2 9.2 8.9 8.7 8.8 8.8 9 -3.20%
70+ 5.4 5.7 6 6.1 6.4 6.6 6.8 7.1 7.5 8 8.4 55.60% ONS (Mid-Year Forecasts)10
4.107 The aging population profile is likely to put additional pressure on care services and, as noted, may also result in a decline in the available working-age population. A reduced supply of labour may have negative economic consequences if not managed effectively, but may be less problematic if productivity levels can be enhanced. Some new business and employment opportunities will develop as a result of demographic change. An aging population will drive demand in healthcare/health-tech sectors and innovative companies will seek to develop new technologies and approaches, to manage aging more efficiently.
Fig 25. Comparing Maldon District’s Changing Age Profile to Essex
Median Age Category, 2012; 41.6 to 46.4 years Median Age Category, 2029; 46.5 to 51.2 years The Aging of the United Kingdom (ONS, 2013)
4.108 Placing the District in context, Figure 25 (above) maps projected demographic changes between 2012 and 2029. The charts reveal that much of Essex will experience an aging population. Maldon District will be significantly affected and the ‘median age’ (the age at which 50% of the population is younger and 50% older) is predicted to rise from 41.6-46.4 years of age to 46.5-51.2 years.
10 This chart is to illustrate trends towards an aging population – It should, be noted that demographic forecasts offer a range of different projections, and as more evidence becomes available from the 2011 Census (information which is released in phases) it will be possible to update the information presented in this section. 33
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5. Comparing the District
5.1 Comparing the Sub-Regional Partners; Heart of Essex
5.2 Comparing the District to its sub-regional partners helps to contextualise the local economy within a wider economic area. Maldon District’s partners in the Heart of Essex; Chelmsford and Brentwood differ significantly to Maldon in both scale and economic function. Brentwood is, in economic terms, effectively a suburb of London and will be further integrated into the London economy with the construction of Cross rail. Chelmsford is a fast growing city and is identified as a key growth area for the region. Figure 26 illustrates how the Maldon District compares local authorities in the Heart of Essex partnership local authorities to each other, and East of England averages.
Fig 26. Heart of Essex Authorities Compared
Heart of Essex Economic Futures (2012)
5.3 Figure 26 reveals that the Maldon District is below both the Heat of Essex and East of England averages when comparing the percentage of the population who hold higher level skills. Higher levels skills are defined as NVQ level 4 or above, which means degree level or higher. The chart also reveals relatively high average weekly earnings in the Maldon District. Whilst slightly lower than the Heart of Essex average, local income levels are above the East of England average. Following a similar pattern, house prices are on average lower than those in Chelmsford and Brentwood, though they are higher than the East of England average.
5.4. Figure 27 (below) provides a comparison of economic output in Brentwood, Maldon District and Chelmsford, between 1997 and 2011. Particularly striking is the difference in scale between Chelmsford, which in 2011 produced 3.5bn GVA, when compared to Brentwood and Maldon District, which produced £1.5bn and £0.9bn, respectively. This difference is perhaps not surprising given the relative population size of Chelmsford. However, higher levels of growth (between 1997 and 2004) are indicative of the rapid growth of
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the service sector in Chelmsford and a trend by which economic growth is concentrated in major regional centres and cites11.
5.5 In terms of overall economic scale, Brentwood is relatively comparable to Maldon District. However, as an economic suburb of London its patterns of growth are rather different. Brentwood did not experience a significant slowdown in output until 2007 (whereas this began in 2004 in Maldon District and Chelmsford). The difference is attributed to the relative distribution of manufacturing, which was more highly concentrated in Maldon District and Chelmsford, and as a sector contracted severely from around 2004. Conversely, financial services and other business service sectors (which grew significantly until 2008) are more prominent in Brentwood.
5.6 As Figure 27 suggests, Maldon District has the smallest economy in the Heart of Essex partnership. This is perhaps not surprising given that Maldon, by population, is the smallest district in Essex and has only the 309th largest population of district councils in England (ONS, 2011). £900,000,000 GVA was created in Maldon District in 2011-2012. This means that total output is around 10% less than in 2004. As noted, this fall reflects a sharp decline in manufacturing, which had a disproportionate impact on Maldon District, and general slowdown in house building (Regeneris, 2012).
Fig 27. Heart of Essex Local Authorities; 1997 - 2011 Output (GVA) Heart of Essex Local Auhorities Output 4000.0 GVA (£million) 3500.0
3000.0
2500.0
2000.0
1500.0
1000.0
500.0 Brentwood Total GVA (£mn) Chelmsford Total GVA (£mn) Maldon Total GVA (£mn) 0.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Heart of Essex Economic Futures (2012)
5.7 Comparing Maldon District Nationally; Economic Resilience and Growth Potential
5.8 Comparing Maldon District against other areas permits an assessment of the District’s relative competitiveness as a location for growth. The Maldon District Local Place Profile (2012) provides us with a basis to make this comparison in some key areas as it ranks the District against all other English local authorities across several key enablers of economic growth.
11 The trend is referred to as agglomeration, which suggests that large urban areas benefit from a deep the labour market (i.e. a concentration of labour), concentration of suppliers and competitors, and large ‘home market’ which accelerates innovation. 35
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5.9 The Institute of Economic Development (IED) conducted a wide ranging study in 2010. This study suggested that those places most successful in achieving economic development were those that;
“Continually upgrade their business environment, skill base, and physical, social and cultural infrastructures, so as to attract and retain high-growth, innovative and profitable firms, and an educated, creative and entrepreneurial workforce, thereby enabling them to achieve a high rate of productivity, high employment rate, high wages, high GDP and low levels of income inequality and social exclusion”
5.10 The study goes on to identify 7 key factors behind the promotion of economic growth. These are:
• Skilled Workforce • Connectivity • Innovations in Firms and Organisations • Economic Diversity of the Industrial Base • Strategic Capacity to Mobilise and Implement Long Term Development Strategies • Quality of Life • Availability and Cost of Business Premises
5.11 To provide an appraisal of Maldon District’s competitiveness, a matrix has been developed to evaluate the local economy against the IED’s 7 enablers of growth, using data from the Maldon District Local Place Profile study (Local Futures, 2012). This assessment is set out in Figure 28.
Fig 28. How Does Maldon District Score Against the IED’s 7 Enablers of Growth?
Enabler Assessment Reason
Weak (but • In 2008 Maldon District was ranked 395 out of 407 districts skills and qualifications, indicating a resident improving) workforce that performs in the bottom 20% of districts by national standards (Maldon District Place Profile, 2010)
Skilled • Some forecasts predict that the size of the available workforce (i.e. total working age population) may Workforce fall by 400 people by 2031 (Heart of Essex Economic Futures, 2012)
Medium • Overall, Maldon District is ranked 244 out of 408 districts for its overall connectivity score. This indicates (Poor in an area that performs in the middle 20% of districts nationally on levels of connectivity to intercity rail,
rural east of motorways and airports (Maldon District Place Profile, 2010) the district) • The middle ranking score reflects the fact that parts of the Maldon district have good access to the A12, A13 and M25, and is within easy reach of two airports and the Greater Anglia mainline. Yet, whilst there is a railway line in the south of the District (though not to the main settlement) parts of the District are Connectivity extremely rural and inaccessible (Indices of Local Deprivation, 2010).
Medium - • Knowledge intensive sectors in Maldon accounted for 25.66% of total employment in 2008. By Strong comparison, the Essex figure was 22.21%, the East of England figure was 23.48% and the national figure was 24.58% (Maldon District Place Profile, 2010)
• Employment in knowledge-driven production is well above the national median, with the District ranking in the top 20% of districts. It has 6.66% of employment in this sector. This compares with 3.54% in Essex and 3.21% nationally.
• Employment in knowledge-driven services is above the national median, with the District ranking in the top 40% of districts. It has 19.00% of employment in this sector. This compares with 18.67% in Essex and 21.37% nationally (Ibid, 2010) Innovation in Firms • Between 2006 and 2008, employment in knowledge-driven sectors in Maldon increased by 11.77%. This places Maldon in the top 20% of districts nationally. By comparison the sector changed nationally by 1.72% (Ibid, 2010)
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Medium • Maldon district is ranked 96 out of 408 districts on overall industrial structure, indicating a knowledge economy that performs in the top 40% of districts nationally (Ibid, 2010) • Maldon district has low rates of new VAT registrations. This is indicative of high levels of self- employment, a sizeable non-VAT registered economy and suggests that relatively few start-ups grow into businesses large enough to be required to register for VAT (Ibid, 2010) • Between 1998 and 2008 (i.e. a period of growth), the total VAT registered business stock in Maldon increased by 14.01%. This change places the area in the bottom 40% of districts nationally for that period. Over the same time period, the number of businesses in Essex grew by 22.93% (Ibid, 2010) Diversity of Business Base
• Weak - Maldon district is not viewed as a growth area by Essex County Council or the South East LEP. This limits the potential for significant investment in infrastructure (Essex Growth Strategy, 2012; South East LEP Business Plan, 2012) • Limited public sector finances constrain Maldon District Council’s capacity to directly drive investment in
Capacity to Capacity economic growth. Term Strategies Implement Long Implement
Strong- • Maldon is ranked 111 out of 407 districts on prosperity score, indicating average incomes amongst the Medium resident population in the top 40% of districts nationally (Maldon District Place Profile, 2010)
• Maldon is ranked 255 out of 354 districts on the deprivation score putting it in the 40% least deprived districts nationally (Ibid, 2010)
• Health and life expectancy are average, crime is low.
• Maldon is ranked 100 out of 354 districts for its overall natural environment score, putting it in the top Quality of Life 40% of districts nationally (Ibid, 2010) • Housing unaffordability is severe, especially in rural LSOAs.
Medium- • The Employment Land Review (2009) notes that landowners in the District restrict the development of Weak employment land as they ‘hold out’ for housing. • The effect of landowner aspiration results in overpricing of land/premises over and above the market value of employment land.
• There is a limited stock of purpose built ‘grade A’ office space.
• The quality of employment (class B) land/premises is generally low.
Business Premises • Land and premises are less expensive than elsewhere in Essex (i.e. Chelmsford, Brentwood, Braintree) Availability and Cost of Local Futures, Place Profile Maldon District (2010), Heart of Essex Economic Futures (2012) Essex Growth Strategy (2012), South East LEP Business Plan (2012), Employment Land Review (2009) and Maldon District Council Analysis.
5.12 Summary of Figure 28: In assessing Maldon District it is apparent that the District has strengths in quality of life and levels of innovation in its firms. Strengths in innovation can be attributed mainly to the concentration of high-tech manufacturing and engineering. This represents an area in which the District has an advantage on which it should seek to capitalise. Access to a skilled workforce and the availability of high quality business premises are major obstacles to business growth. Failure to secure long-term improvements in these areas will diminish the attractiveness of the District as an investment location. The limited capacity of the area to deliver long-term interventions, is concerning. Reductions in budgets mean the District Council is unlikely to have the resources to implement major infrastructure projects, and the prioritisation of major urban areas (such as Chelmsford) for investment by Essex County Council and the SELEP, may mean that road infrastructure improvements are delayed.
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6 Forecasting Future Growth: Setting an Employment Target and Projecting Employment Land Requirements
6.1 When developing interventions to promote economic growth, forecasting is a powerful tool for assessing how and where resources can be best applied to achieve maximum outcomes. Forecasts are also useful for understanding the impacts of policies (something we can control) and external forces, such as the global economy (which is beyond our control).
6.2 In this report, employment forecasting is used to support the setting of an employment target, which can help to shape the interventions pursued in the economic strategy. This target is informed by a range of scenarios which cast different projections of employment growth. The target also reflects the aspirations of the District Council to support a particular level of growth in the local area. In this respect an employment target should demonstrate some correlation to the level of growth set out in the Local Development Plan. However, it should be noted that the strength of the correlation between housing growth and employment growth is necessarily influenced by the National Planning Policy Framework (NPPF), patterns of commuting, the free movement of labour and the fact that functional economies are rarely reflected in administrative boundaries12. Taking this into account allows us to recognise that the economy of the Maldon District is heavily integrated into larger centres of economic activity, notably Chelmsford. Employment growth in urban areas such as Chelmsford is likely to exceed growth in rural areas such as Maldon District (Experian, 2012).
6.3 Setting an employment target which is aspirational, but also informed by a range of independent forecasts, can help provide information that can then be used to estimate requirements for employment land.
6.4 The methodology for translating employment targets into land requirements is set out below in Figure 29. This particular methodology is borrowed from the Bournemouth, Dorset and Poole Workplace Strategy and Delivery Plan (2008), produced by GVA Grimley13 and a subsequent 2012 update, produced on behalf of all local authorities in Dorset14. The chosen methodology reflects a standardised approach used by GVA Grimley, well-known and respected commercial property specialists who provide economic consultancy services to organisations across the UK. This particular mythology was used because the Dorset studies provided a clear and transparent explanation of each step involved.
12 Insight East produced a report which assesses contested conceptions functional economic areas, such travel to work areas, local labour markets and city-regions. This is available via the following link: http://www.researchonline.org.uk/sds/search/download.do;jsessionid=ECFB1721EB28F6A6B351240B70022FAD?ref=B17805 13 This report is available via the following link: http://www.dorsetforyou.com/media.jsp?mediaid=141119&filetype=pdf 14 This report is available here: http://www.dorsetforyou.com/media.jsp?mediaid=172746&filetype=pdf 38
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Fig 29. Methodology; Employment Demand and Land Requirements
A: Projections for employment growth 2012-2029 give employment demand and support an approximated employment target ↓ B: Employment demand is converted to Land Use Class (LUC) (Office, Other Business Space, Warehousing) ↓ C: Employment demand by LUC is converted to floorspace requirement Using worker densities by LUC (FTE per sqm) using 2010 employment density guide ↓ D: Floorspace requirement is converted to a baseline land requirement (ha) using plot ratios by LUC ↓ Allowances are then added: E: Windfall losses Employment land likely to be lost to non-B use is projected based on the mean over the last six years + F: Churn To estimate the churn demand for each area, the annual average net take-up of employment land for the period 2004 to 2007* has been multiplied by two15. This is based on the assumption that it takes about two years to achieve planning consent, prepare the site and construct the development. + G: Flexibility A margin is allowed for competition in market at 10% of baseline requirement. Baseline land requirement plus allowances = H: Final land requirement
Adapted16 from: Bournemouth, Dorset and Poole Workplace Strategy and Delivery Plan (GVA Grimley 2008, 2012) and Heart of Essex Economic Futures (2012) * 2007 is the latest year for which this data is available
6.5 A) Projecting Employment Growth and Setting an Employment Target
6.6 To provide a sound basis upon which to develop an employment target, Maldon District Council has procured four employment projections. Two of these scenarios were developed on behalf of Nathaniel Lichfield and Partners (NLP) using data derived from the Experian Megafile. These were, Dwelling Constrained and Sector Derived New Nuclear. Maldon District Council commissioned an additional scenario directly from Experian; Sector Derived No New Nuclear. A final scenario EEFM baseline was taken from the East of England Forecasting Model, which is publicly available. The total employment projections of the four scenarios are illustrated in Figure 30.
15 Note in a recession the churn period may rise as sites with planning permission take longer to be built out (ELR, 2009). The economy is expected to begin growing more rapidly over the next few years and on that basis assuming a two year churn may be appropriate, given the scope of this Strategy. However, if the economy continues to demonstrate slow growth this assumption may need to be revised. 16 This table provides a summary of the methodology used taken in the Dorset studies and adopted in this report. 39
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6.7 As noted, three of the employment growth scenarios are drawn from forecasts provided by Experian. These three scenarios all assume a constrained supply of labour. The assumption of a restricted labour supply was derived from another related assumption; that the level of future house building in the District would not meet projected need, based on the projected growth in household numbers (which in turn influences the local labour market). The reason for making this assumption was that the Council was (at the time) proposing to set a housing target of 200 dwellings per annum, which may not have met the identified need. While the three scenarios share an assumption about the constrained supply of labour, a range of different economic assumptions feed into each scenario (this is explained shortly). The fourth scenario is the product of a different forecasting model17; the East of England Forecasting Model (EEFM) Baseline. This scenario assumes unconstrained housing growth and a moderate level of economic growth.
6.8 All the scenarios set out in Figure 30 come with a clear health warning; forecast outcomes are not inevitable, nor do they represent the only possible outcomes for Maldon District. Forecasts provide a projected outcome under a given set of circumstances and assumptions. These assumptions can change or be changed, however the value of forecasting as an economic development or planning tool lies in providing a rigorous framework through which land use decisions can be assessed and resources targeted.
Fig 30. Employment Forecasts 2012-2031; Variant Scenarios
29.0
28.0
27.0
26.0
25.0
24.0
23.0 Employees (Thousands) Employees
22.0 Dwelling Constrained Sector Derived (Nuclear) 21.0 Sector Derived (No Nuclear) EEFM (Adjusted) 20.0
Heart of Essex Economic Futures (2012), East of England Forecasting Model (2012)
Comparing Employment Scenarios
6.9 Scenario 1 ‘Dwelling Constrained’: Built upon modelled data, the pessimistic outlook of the Dwelling Constrained Scenario is derived from assumptions regarding (a) the effects of constraining the labour supply and (b) a forecast of slow-growth in economic activity. The scenario follows the assumptions of Experian’s baseline projection of economic growth (as of June 2012), which expects low rates of economic growth to continue. Overall this scenario predicts a loss of 400 net jobs by 2031.
17 Note; the EEFM model assumes that in 2012 there are approximately 1000 more jobs in Maldon District than do the Experian scenarios. As such, this projection has been adapted by the author to make it consistent with the Experian projections. 40
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6.10 The loss in employment, forecast in scenario 1, is driven predominantly by a decline in the number of manufacturing jobs. This is indicated in Figure 31, which foresees a radical decline in employment in metal based manufacturing (a significant sector in Maldon District) and a decline in most other manufacturing sectors.
6.11 The negative outcomes of this scenario may be challenged by Government policies which support advanced manufacturing businesses. These polices are articulated in UK Industrial Strategy; Sector Analysis (BIS, 2011). The on-shoring of manufacturing (driven by China’s diminishing competitive advantage in labour costs and the risks inherent in long-distance supply chains18) may also reduce the decline in employment in manufacturing sectors.
6.12 A further caveat is that this scenario takes no account of local knowledge regarding the strengths and aspirations of specific businesses in the Maldon District. It also assumes that local interventions designed to boost economic growth are limited and insufficient to have a meaningful impact on economic activity.
Fig 31. Employment Forecasts for Manufacturing; Dwelling Constrained Scenario 1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3 Employment (Thousands) Employment
0.2
0.1
0.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Food, Drink & Tobacco (Thousands) Textiles & Clothing (Thousands) Wood & Paper (Thousands) Printing and Recorded Media (Thousands) Fuel Refining (Thousands) Chemicals (Thousands) Pharmaceuticals (Thousands) Non-Metallic Products (Thousands) Metal Products (Thousands) Computer & Electronic Products (Thousands) Machinery & Equipment (Thousands) Transport Equipment (Thousands)
Experian Projections and Heart of Essex Economic Futures (NLP, 2012)
6.13 Scenario 2 ‘Sector Derived No New Nuclear’: As with scenario 1, this projection starts with assumption of a constrained labour supply. However, the Sector Derived No New Nuclear scenario takes into account qualitative information about specific local businesses. This qualitative information was based on the professional judgements of the Economic
18 http://www.cityam.com/article/supply-shocks-prompt-shoring 41
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Development Team19 and was incorporated into the assumptions of the scenario by Experian. The effective of this was to uplift growth projections for certain sectors, compared to that set out in Scenario 1.
6.14 The qualitative knowledge suggests that Maldon District has clusters of businesses operating in computer and electronics, plastics and other non-metallic manufacturing, as well as strengths in agriculture and a growing demand for health/care.
6.15 The inclusion of this qualitative knowledge results in an uplift in projected employment in the aforementioned sectors and across the wider local economy, as a result of multiplier effects. As can be seen in Figure 30, this scenario assumes a net additional job increase of 1,200 by 2029.
6.16 Scenario 3 ‘Sector Derived New Nuclear’: As with scenarios 1 and 2, scenario 3 assumes a constrained supply of labour and an uplift in certain advanced manufacturing sectors. However, unlike the scenario 1 or 2, the New Nuclear forecast assumes the construction of a new nuclear power station at Bradwell. This scenario was developed as Bradwell had been selected as a preferred site for a new generation nuclear power station, though new information from the Nuclear Decommissioning Authority (NDA) suggests that a new build at Bradwell is unlikely. The impact of new employment derived from the building and operation of a new nuclear power station is illustrated in figure 32. This projects an addition 1,100 jobs in civil engineering during construction and an addition 450 jobs in fuel refining20. The total net additional jobs gained by 2029 in this scenario are 2,600. This is a result of direct employment relating to the construction or operation of the new nuclear plant, and a multiplier effect in the wider economy.
Fig 32. Impact of New Nuclear Build on Maldon District
Heart of Essex Economic Futures (NLP, 2012)
6.17 Scenario 4 EEFM Baseline: Unlike scenario’s 1-3, this scenario is derived from a different forecasting model (East of England Forecasting Model). The projection has been adjusted to allow a comparison with the Experian forecasts (as shown in figure 30).
6.18 The adjustment made was to lower the estimated of the number of jobs in the District (in 2012) to more closely reflect the Experian estimate. It should be noted that both the Experian and EEFM models make
19 The qualitative assumptions were based on interviews the Economic Development Team had conducted with businesses, the results of a local business questionnaire and the outcomes of business workshops that supported the development of the EPS. 20 The ‘fuel refining’ sector is the category used to represent the staff that would be employed as the station went into operation. 42
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‘modelled assumptions’ about levels of employment, as a completely accurate figure cannot be established21.
6.19 The forecast produced by the EEFM model is far more positive than those used derived from the Experian scenarios. Virtually all sectors are expected to show at least some degree of employment growth. Indeed, as figure 30 illustrates the adjusted forecast suggests the District’s economy could create 3,300 net additional jobs, compared to the 2012 level. This is significantly above the level of growth forecast in scenarios 1-3 and reflects the fact that scenario 4 assumes unconstrained housing growth.
6.20 Assessing the Forecasts
6.21 As noted, Economic growth forecasts are not facts waiting to happen. They are possible futures that reflect the models and assumptions upon which they are based. They should be seen as providing a guide to policy, which should be considered alongside a range of issues, such as local knowledge and aspirations.
6.22 Taking stock of the forecasts and considering them in light of the consultation exercises that have supported the development of the Economic Prosperity Strategy, allows us to develop a target level of employment growth which the District Council would like to see achieved. This appraisal is contained in figure 33.
Fig 33. Scenario Analysis Scenario Net Additional Jobs Comments 1 – Dwelling -400 (by 2031) This scenario reflects a ‘do nothing’ approach to promoting Constrained economic growth and doesn’t reflect local knowledge of local businesses. As the Council will take proactive steps to promote growth and aspires to see new jobs created, this scenario is not considered a suitable basis for setting an employment growth target.
2 – Sector 1,200 (by 2029) The scenario provides a more accurate reflection of identified Derived strengths within the local economy, and recognises that the Council (no-nuclear) will take steps to promote the local economy.
3 – Sector 2,600 (by 2029) Scenario 3 assumes the construction of a new nuclear power station Derived within the District. While there is broad support for a new power (new- station, because of delays at new nuclear sites as in Somerset and nuclear) Suffolk it’s unlikely that it would be delivered by 2029.
4 – EEFM 3,300 (by 2029) This scenario is the product of a different forecasting model which Baseline is commonly used through the former East of England Region and (adjusted) supported the (now abolished) Regional Spatial Strategy (RSS). The level of projected employment growth in this scenario is very positive and setting a jobs target of 3,300 (based on this projection) would be very aspirational. Indeed, it perhaps reflects a level of growth that could only be achieved through a scale of investment which, in view of available evidence, is unlikely to be deliverable (see paragraphs 2.13 and 4.79 to 4.92).
21 For example, in many businesses employees will be located across different branches or sites. Therefore, forecasts must make assumptions about the percentage of employees working locally. As the assumptions in each model will be different, it is entirely possible that two different models will identify different employment levels.
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6.23 Setting an Employment Growth Target
6.24 Taking into account a range of growth forecasts, past trends and the aspirations of the Council, it is possible to seek to define an approximate jobs growth target.
6.25 Discounting scenarios 1 and 3 (for reasons described in Figure 33), means that a proposed jobs target should range between that set out by the Sector Derived (No New Nuclear) scenario and the EEFM Baseline scenario.
6.26 However, in addition to looking at projections for future growth, past trends should also be considered when setting a jobs target. Past employment trends (when considered alongside other available evidence) can assist in framing the level of potential employment growth in the future. Looking at the past 15 years (1997- 2012), it’s apparent that in 2012 there were approximately 2,100 more jobs in the Maldon District, than in 1997 (a growth of 9.6%). However, the rate of job growth has fluctuated significantly throughout that period. During the period of fast growth (1997-2004) local employment in the District rose by 3,200 net additional jobs. Yet, following the slowdown which began in late 2003 and the recession which began in 2008, the total number of jobs in the District began to fall from a high in 2003. As a result, between 2003 and 2012 the total number of jobs reduced by 1,200 to its current level of 23,900. The fluctuations in employment growth are revealed in Figure 34 below.
Fig 34. Maldon District Total Employment 1997-2012
Maldon District Total Employment (Thousands) 26.0 25.0 24.0 23.0 22.0 21.0 20.0 1997199819992000200120022003200420052006200720082009201020112012
Experian Megafile (Experian, 2012)
6.27 Taking into account the forecasts, and considering past rates of job growth, a proposed target of 2,000 net additional jobs, generated over the 2012-2029 period (leading to a total of 25,900 jobs), represents a mid-range target of 8.3% growth over the period. This growth will be supported by the activities in the Maldon District Economic Prosperity Strategy, the Essex Economic Growth Strategy and the South East Local Enterprise Partnership (SELEP).
6.28 Examining the Housing : Jobs Ratio
6.29 The ratio between employment growth and housing growth, acts as an index which helps us to understand the extent to which economic development is sustainable and how dependent the local area is on out- commuting. Comparing this ratio with that of other local authority areas also acts a baseline which helps us to understand how ambitious the proposed Maldon District employment target is. This can then be contextualised against other information, which may explain why the local target differs from other sub- regional authorities.
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6.30 In Maldon District, a net additional jobs growth of 2,000 reflects a ‘new house’ to ‘new jobs’ ratio of 1.5, assuming 3000 homes will be built between 2013-202922. When compared to other local authority areas, this is a conservative ratio, which is less ambitious than Colchester Borough Council (1.21), Tendring (1.1), and much less ambitious than Babergh (0.62). This is based on a comparative analysis provided by the Haven Gateway Partnership (figure 35).
6.31 However, though the ratio proposed for Maldon District is conservative (when compared to other authorities), it should be noted that an over ambitious ratio is open to challenge. This is especially the case within the context of the new national planning framework. For example, the deliverability of Babergh District Council’s jobs target (and related employment land requirement) has been challenged at public examination. Moreover, the planning system, in adapting to the influence of the National Planning Policy Framework (NPPF)23, now stresses the importance of house building in such a way that is disassociated (to a greater extent) from the creation of new employment. In view of these circumstances a conservative housing : jobs ratio is not unreasonable. Indeed, whilst in the past a housing : jobs ratio may have helped to shape an employment growth target, within the new planning system, it can really only be seen as an indicator for monitoring wider trends (such as the prevalence of out-commuting).
Fig 35. Census, LDF and Economic Strategy Numbers
District Population From Equivalent 15 Year Equivalent 15 Year New Houses to 2011 Census Housing Target* Jobs Target New Jobs Target Ratio
Suffolk Coastal 124298 6697 5000 1.34
Colchester 173074 12900 10650 1.21
Tendring 138048 6000 6000 1.00
Babergh 87740 4500 7275 0.62
Ipswich 133384 7323 13235 0.55
Braintree 147084 4027 8400 0.48
Data supplied by Haven Gateway Partnership, 2013
6.32 It should also be noted, that the housing growth target of 3000 reflects the preferred option set out in the Maldon District Local Development Plan Preferred Options Consultation (2012). It is possible that this figure will change, as Maldon District Council must plan for a level of housing growth which enables it to meet its objectively assessed need (subject to constraints), as defined in the NPPF.
6.33 Creating Sector Projections Based on the Employment Target
6.34 In order to understand the amount/type of employment land which will be required to support the net additional employment target (2,000), it is necessary to project employment change in particular sectors (which can in turn be related to land use class).
6.35 Figure 36 illustrates projected changes in employment by sector, and the total change in employment by 2029. The adjusted projections in this table are based on the same assumptions as those in scenario 2; Sector Derived No New Nuclear. This scenario was used because (as discussed in paragraph 6.13) it
22 The housing growth target reflects the preferred option set out in the Maldon District Local Development Plan Preferred Options Consultation (2012). 23 Specific paragraphs in NPPF are of particular relevance to the projection of employment and forecasting of employment land requirements. These are; paragraph 17, bullet point 3 and paragraphs 18-22, 28, 160 and 173 45
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incorporates both local qualitative knowledge and the trends forecast by Experian/NLP. The key difference, between scenario two and the adjusted projection in Figure 36, is that trends rates of growth/decline per sector have been extended in order that the growth target is (approximately) met. As a result the percentage of total employment that each sector contributes is the same in the figure 36 as in the Sector Derived No New Nuclear scenario (scenario 2). The only difference is the level of total employment in 2029.
Fig 36. Conversion of Sectors to Land use Classes Use Industry Employment Percentage of Employment Percentage of Class 2012 Total 2029 Total Employment Employment 2012 2029
Agriculture, Forestry & Fishing 826 3.50% 1108 3.90% Food, Drink & Tobacco 264 1.10% 155 0.60% Textiles & Clothing 40 0.20% 0 0.00%
Wood & Paper 192 0.80% 129 0.50% Printing and Recorded Media 263 1.10% 284 1.10% Fuel Refining 224 0.90% 51 0.20% Chemicals 20 0.10% 25 0.10% Non-Metallic Products 264 1.10% 491 1.90% Metal Products 881 3.70% 517 2.00% Computer & Electronic Products 375 1.60% 413 1.60%
Other Business Space (OBS) Machinery & Equipment 202 0.80% 129 0.50% Transport Equipment 91 0.40% 77.5 0.30% Other Manufacturing 406 1.70% 180 0.70% Utilities 183 0.80% 155 0.60% Construction of Buildings 818 3.40% 1008 3.90% Civil Engineering 242 1.00% 284 1.10% Specialised Construction Activities 1687 7.10% 1654 6.40% B8 Wholesale 1095 4.60% 1111 4.30% Retail 2540 10.70% 2610 10.10% Land Transport, Storage & Post 883 3.70% 956 3.70% Air & Water Transport 35 0.10% 25 0.10% Accommodation & Food Services 1603 6.70% 1809 7.00% Recreation 834 3.50% 930 3.60% B1a Media Activities 391 1.60% 542 2.10% Telecoms 24 0.10% 25 0.10% Computing & Information Services 441 1.80% 517 2.00% Finance 266 1.10% 284 1.10% Insurance & Pensions 24 0.10% 25 0.10% Real Estate 188 0.80% 180 0.70% Professional Services 1482 6.20% 1861 7.20% Administrative & Supportive Services 1421 6.00% 1602 6.20% Other Private Services 1159 4.90% 1189 4.60% Public Administration & Defence 380 1.60% 361 1.40% Education 1661 7.00% 2068 8.00%
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Health 1396 5.90% 1861 7.20% Residential Care & Social Work 1032 4.30% 1266 4.90% Total (Thousands) 23,851 100.00% 25,882 100.00%
Sector proportions derived from Heart of Essex Economic Futures (NLP, 2012) and Experian projections (Experian, 2012)
6.36 B) Converting Employment Demand to Land Use Class
6.37 Having established an employment growth target and sector growth projections it is now possible to covert employment demand into land use requirements. The sectors were converted into land use class using a matrix which was designed to convert SIC divisions into land use. Experian sectors are a variation of SIC codes (2011) and as such they are similar enough that the Matrix in figure 37 can be applied for our purposes. The results of the conversion to land use class can be seen in figure 36, where the LUCs have been colour coded.
Fig 37. Matrix; Experian Sectors to Land Use Class
Bournemouth, Dorset and Poole Workplace Study Employment Land Projections (GVA 2008, 2012)
6.38 Drawing Conclusions on Sector Growth
6.39 When considering sector forecasts it’s important to remember that forecasts are not facts waiting to happen, they are potential outcomes based on the assumptions that are fed into them. They incorporate past trends and knowledge of emerging patterns of development. However, they cannot take into account the development of (for example) new technologies, unexpected changes in the global economy or evolving patterns of consumption.
6.40 Accepting the caveats set out in the previous paragraph, sector projections are helpful in setting priorities and strategic objectives. In terms of employment growth, sectors which have potential for employment growth include;
• High-tech manufacturing, engineering and design; • Professional Services; • ICT; • Administrative & Business Services; • Education and training services; 47
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• Recreation, food services and short-stay accommodation services; • Residential Care & Health Care; • Agriculture related activities 6.41 It should be noted that the correlation between employment growth and output growth (Gross Value Added) varies between sectors. For example, employment in many manufacturing businesses may become less intensive; however automation or improvements to business improvements may increase overall output. For example, Youngman Group Ltd has a large factory in the District, and has reduced headcount through automation, but has increased turnover and profitability24.
6.42 In considering priorities for the Economic Prosperity Strategy, creating employment and increasing output must both be acknowledged as central to building a robust, sustainable economy. Focusing on low-skill sectors such as those (for example) related to the visitor economy, will generate less wealth but more jobs. However, these jobs will tend to be part-time, seasonal and low paid. Focusing on high-value sectors, such as professional services, civil engineering, ICT and high-tech manufacturing will tend to deliver fewer, but more higher-skilled (and paid) jobs. Businesses operating higher up the value chain are often more highly integrated into the global economy (for example, manufactured good account for 80% of global trade). Exposure to international markets drives innovation and competitiveness25. Companies that are competitive create more wealth, enabling greater re-investment in capital, research and labour.
6.43 C) Employment Demand Converted to Floor Space Requirement
6.44 Using figures 36 and 37 (above) it is possible to convert employment projections for ‘B’ class employment land uses into land use requirements. This takes place over two stages.
6.45 The first stage is to convert job numbers into a raw floor space requirement, using an employment density guide. Figure 38 (below) illustrates three different employment density typologies. Employment density ratios provide a general approximation of the space required for employment in B class uses. For our purposes, the ratio provided in the official Employment Densities Guide 2010 (which is widely used) will be used here to translate the OBS/B class sector employment figures set out in figure 35, into raw floor space requirements.
Fig 38. Employment Densities
Land Use GVA Grimley 2008 Study Employment Employment Densities Guide 2010 Densities Guide 2001 M/sq per FTE M/sq per FTE M/sq per FTE Office 18 12 19 Other Business Space (OBS) 32 36 34 Warehousing 55 70 50 Sources: Bournemouth Dorset Poole Workspace Strategy and Delivery Plan (GVA Grimley, 2008), Employment Densities Guide (HCA, 2010) and Employment Densities Guide (HCA, 2001)
6.46 The chosen employment density ratio has been applied to estimates of employment in those business sectors requiring class B land (as set out in figure 36). The results of this analysis are illustrated in figure 39 (below) which indicates that to meet our employment target the total ‘raw’ requirement for floor space in 2029 is 325,966 sqm.
24 http://www.bara.org.uk/em/pdf/QM11/QM11-Youngman-Group.pdf 25 For further information on the role of internationalisation as a driver of innovation and productivity in local economies, see the report Kent International Business Study (Kent County Council and BIC, 2010). 48
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Fig 39. Converting Land Use Class Employment Projections into Floor Space Requirements
Land Use 2012 2029 sqm per Floor Space 2012 Floor Space Class Employment Employment Employee (sqm) 2029 (sqm) Estimate by Estimate by Class Class OBS 4916 4105 36 176,976 147,780 B8 1095 1111 70 76,650 77,770 B1a 3725 4184 12 44,700 50,208 Totals 9736 9400 NA 298,326 325,966
Employment Densities Guide (HCA, 2010)
6.47 D) Converting Floor Space Requirements into Baseline Land Requirements
Translating raw floor space requirements into ‘raw’ site area requirements is achieved through use of a plot ratio. The plot ratios used are drawn from the Employment Densities Guide 2010. Figure 40 reveals that 707,670 SqM or 70.8 hectares will be required by 2029.
Fig 40. Converting Floor Space Requirements into Baseline Site Area Requirements
Land Use Floor Space Floor Space Plot Site Area Site Area Site Area Class 2012 (sqm) 2029 (sqm) Ratio 2012 (sqm) 2029 (sqm) 2029 (hectare) OBS 176,976 147,780 .40 442,440 369,450 37 B8 76,650 77,770 .50 153,300 155,540 15.5 B1a 44,700 50,208 .30 149,000 167,360 16.7 Totals 298,326 325,966 NA 744,740 692,350 69.2
E) Accounting for Windfall Losses
6.48 In addition to establishing a raw site area requirement, an allowance is made for the likelihood of a proportion of designated employment land being used for purposes other than class B employment, e.g. for health care, education, leisure use etc, or for residential use. This is portrayed in figure 41.
Fig 41. Historic Employment Land Windfall Losses In Maldon (2004-2012)
Employment Average/ Multiplied by 16
Land Lost year (2013-2029) Please note figures for 2008 – 2004-2005 1.04 ha 1.39 Ha 22.24 Ha 2012 measure the loss of whole 2005-2006 0.57 ha employment allocations, rather than employment land. 2006-2007 1.83 ha 2007-2008 4.61 ha 2008-2009 0 2009-2010 0 2010-2011 0 2011-2012 3.12
Annual Monitoring Reports (MDC, 2012) 49
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6.49 F) Accounting for Churn
6.50 Having factored in the impact of windfall losses, it is now possible to estimate the churn demand for each area. This is achieved by taking the annual average net take-up of employment land for the period 2004 to 2007 and multiplying by two. This is based on the assumption that it takes about two years to achieve planning consent, prepare the site and complete the development (see figure 29 for details).
6.51 The ELR (2009) suggests that per-annum take-up of employment land for industrial use (other business space and B8) is around 8,000 sqm (approx. 86,000 sq.ft). Assuming a plot ratio of 40%, this equates to a net site area requirement of 2ha/annum.
6.52 For office space (B1a) take up is lower, ranging around 1,500 sqm to 2,000 sqm per annum. Taking the average figure for take-up as 1,750 sqm and assuming a plot ratio of 30%, this equates to a net site area requirement of 5,833 sqm or around 0.5 ha/annum. This is set out below in figure 42.
Fig 42. Average Annual Take-Up and Adjustment for Additional Land Requirement Average Annual Take- Plot Ratio Land required Land required Up (baseline) (X2) OBS/B8 8,000 sqm .40% 2ha/annum 4ha B1a 1,750 sqm .30% 0.5ha/annum 1ha 5 ha (total churn)
6.53 G) Allowing a Margin for Flexibility
6.54 Adding together the baseline site area requirements + adjustment for historic windfall loss + the adjustment for average annual take-up provides a baseline figure for the total amount of employment land required by 2029. To this figure is added an additional 10% to take into account the need to promote competition and choice, in the supply development land. This reveals the net total land employment land required by 2029.
Fig 43. Total Employment Land Requirement Baseline Total Land Requirement 96.4 Net Total Land Requirement (Baseline + 10% 106.04 for flexibility)
6.55 H) Final Land Requirement
6.56 The net total employment land requirement for 2029 can be compared to the current supply of developed/partially developed employment land, and the allocations brought forward in the Maldon District Local Development Plan (2012). This requirement is set out in figure 44.
Fig 44. Additional Employment Land Requirement Current 95 Ha (Approx.26) employment land (2012/13) 2029 requirement 106.04 ha Difference 11.04 ha
26 The Employment Land Review (2009) suggests there is approximately 100 Ha of developed/partly developed employment land in Maldon District. However, the loss of sites to alternative uses in the past 4 years means that the figure is likely to be closer to 95ha. 50
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6.57 Analysis of Employment land Requirements
6.58 The methodology set out in figure 29 has been used to provide a quantitative employment land requirement. This quantitative requirement will help to inform the employment land requirement in the LDP. However, as is noted throughout this document, the quality of employment land is a significant problem in the Maldon District. The poor quality of many of existing employment sites has resulted in under occupation and low jobs densities (as noted in the ELR), which reflects an inefficient use of land. As such, re- development and renewal (supported by a mixed-use element where appropriate) and rebuilding of premises by existing firms, may engender more efficient land use. Because of this the requirement for ‘additional’ employment land could be partly provided through the renewal and redevelopment of existing employment sites. The caveat to this is that sites in need of major remediation may by less cost effective and potentially less viable. It is perhaps in these circumstances where an element of mixed-use redevelopment could provide the catalyst to wider regeneration. However, such an approach would depend upon the particular circumstances of the site in question.
6.59 The redevelopment of existing dilapidated employment sites will increase the volume of high quality commercial stock in the District (which will help to meet the requirement for employment space). However, in addition, small green field allocations within the strategic growth areas (defined in the Maldon District Local Development Plan) and the expansion of existing, viable employment sites (in good locations) should be encouraged to provide an attractive offer for inward investment and business growth.
6.60 It should be noted that the Maldon District Council Local Development Plan proposes to release 14.3 ha of allocated employment land, for redevelopment for other uses. The sites released were identified in the ELR (2009) as being least viable and most unlikely to develop (as defined by location, accessibility of site, quality of buildings, and local market demand). Typically, these are isolated sites in very rural locations. Whilst several minor sites have been released from their formal designation as employment land, the employment policies within the LDP (i.e. Policies E) will ensure that applications for a change of use on existing sites being retained in the LDP, and newly allocated employment sites, will be permitted only under certain conditions. Furthermore, in instances where a change of use is viewed favourably, it’s likely that a commercially-led mixed use development would be seen as preferable to a solely residential development, as this will generate greater economic benefits.
6.61 To replace those sites which are lost, and to achieve a qualitative shift in the nature of employment sites available in Maldon District, new employment allocations / expansion of existing sites should be concentrated in the most accessible areas around Maldon town, and along the A414, B1018 and B1019, or on other sites in relative proximity to the A12. There is also scope to expand the existing and well occupied, employment site at Burnham on Crouch (Burnham Business Park). It is expected that such an expansion at Burnham-on-Crouch would primarily serve local market demand and should concentrate on provision of flexible small business space for SMEs, noting that the good access to the railway network could make it attractive for small offices, as well as conventional units designed to support a B2/B8 use (ELR, 2009)27. The Council would expect new employment developments to be well laid out and support an efficient use of land. Moreover, in compliance with the National Planning Policy Framework (NPPF), the LDP will support a flexible supply of employment land and make expansion of existing employment sites easier. The need to support a flexible approach is further justified by the on-going uncertainty surrounding economic growth.
27 Further information about the accessibility of different parts of the District can be found in paragraphs 4.80-4.88 of this report 51
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6.62 In terms of meeting business needs, additional/redeveloped employment land should seek to facilitate the development of office space for SMEs28. A small provision of land for B8 uses may be required, though demand for this is likely to derive from the rebuilding/expansion of premises by existing local companies, rather than through the attraction of (for example) large distribution centres to the District (ELR, 2009). The forecast decline in low-tech manufacturing employment suggests that the loss of some employment land allocated for OBS (particularly B2 general manufacturing) should be expected. However, there is a recognised need to improve the availability of high-quality industrial and high-tech units. This is recognised in the ELR (2009) and the Heart of Essex Economic Futures Study (2012)29. Projected output growth in advanced manufacturing sectors (e.g. electronics, computing and general non-ferrous production) and professional/business services is likely to drive this demand. This situation suggests that where older employment sites are lost to other uses, there should be a broadly corresponding increase in the supply of modern business space in the most accessible parts of the District (i.e. those which have good access to the A12, the main distributor road network and those sites with good access to A414, B1019 and B1018). This will be achieved partly through the allocation of new employment sites in the strategic growth areas identified in the LDP and through the expansion of existing sites.
6.63 Whilst the loss of employment in lower-tech production will reduce long-term demand for lower quality industrial stock, and potentially exacerbate under-occupation, it should be recognised that the relationship between staff numbers and floor space requirements changes over time. This is because business requirements evolve as a result of technological change and new working patterns. For example, process improvement and automation in manufacturing may result in worker : floor space ratios being revised for B2/B8 uses. Equally, the emergence of flexible working practices may intensify levels of employment in office developments. Monitoring on-going trends in the property market will allow the Council to identify changing requirements, and subject to review, it may be that the land requirements set out in this document should be revised to ensure a flexible supply of employment land which meets business requirements. In this respect care should be taken in assessing the requirements in the localities and sub-areas identified previously (see paragraphs 4.80-4.102).
28 The ELR (2009) notes that large office requirements will likely be met by Chelmsford and Colchester 29 The ELR (2009) notes that only 8 of 33 sites evaluated were rated ‘good’, with 18 being rated as ‘fair’ and 7 ‘poor’. 52
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7. Conclusions
7.1 Maldon District has a diverse economy with businesses operating in a range of sectors. Most businesses are small, though there are a limited number of larger businesses. These larger firms include supermarkets and a number of long established engineering and manufacturing companies and agri-businesses. The concentration of advanced manufacturing and engineering businesses is disproportionate to size of the local economy. Similarly, the significant presence of knowledge-intensive professional and business services is another local strength.
7.2 Infrastructure, particularly the road network, is relatively good in the west of the District, while the south of the District is effectively connected to London via a branch-line. Other parts of the District are less accessible, with parts of the Dengie Peninsula being very remote.
7.3 Disparities in the provision of transport infrastructure and accessibility in the District has significant implications: The west of the District is relatively well connected to the A12, while the South of the District is connected to London (via Wickford) by the Southminster Branch Line, meaning the area is favoured by commuters. Other areas of the District are very rural in character, and limitations to the road network restrain significant economic growth. While it’s plausible that there will be some improvements to local road infrastructure (linked to new housing developments) the Essex Local Transport Strategy (2011) suggests it’s unlikely that major improvements to transport infrastructure will occur within the scope of the Economic Prosperity Strategy (i.e. 2013-2029).
7.4 Housing affordability is a significant issue in parts of the District, particularly in those areas from which people commute. Already high levels of out-commuting are projected to continue to grow, this has the potential exacerbate high price inflation which may have two significant effects 1) Local residents cannot afford to remain in the District 2) local businesses do not have access to a local workforce.
7.5 Whilst manufacturing remains a major employment sector in the District, most forecasts assume that lower- tech manufacturing activities will decline, whilst employment in high-tech production will rise (though not at a rate which completely offsets reduced employment in low-tech sectors). While overall employment in manufacturing will fall, manufacturing output is likely to rise as a result of productivity gains (i.e. automation).
7.6 Professional and business services create a significant volume of employment and contribute greatly to output (GVA). The UK retains a competitive advantage in professional services and most forecasts suggest that in the medium to long term, knowledge intensive services and intermediate business services will provide a driver for economic growth. If Maldon District can expand the range and quality of commercial premises and high-speed broadband infrastructure, its location near Chelmsford, Colchester and London leave it well placed to capture the benefits of future growth in this sector.
7.7 The local visitor economy encompasses; accommodation providers, food and leisure services and an element of retail. Whilst visitor spending contributes around 6% of total GVA, its contribution to employment is more significant; the visitor economy linked to over 10% of total employment. This sector is likely to continue to develop, but as Appendix 1 indicates salaries associated with visitor-economy sectors are typically low. Over dependence on these sectors may compound issues such as deprivation and housing affordability, and reduce the standard of living for local residents.
7.8 Retailing provides significant employment in the Maldon District and maintaining a vibrant town centre is recognised as vital to image of the local economy. This will prove increasingly challenging over the coming
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decades as the trend towards online retailing will continue to develop. Figure 7 illustrates that the UK is leading the development of the online retail market and in this context local, independent shops must look to have a strong online, retail presence and be capable of; selling goods online, marketing effectively through internet channels and social networks, and responding very flexibly to changing patterns of demand.
7.9 Agricultural activities sustain around 800 jobs (3.5% of total employment) and most forecasts suggest that employment in agricultural activities will increase. Research suggests that there are opportunities for growth in this sector. These relate to renewable energy production, particularly bio-mass and crop based fuels, but also wind and photo-voltaic energy. Diversifying disused/under-utilised agricultural businesses will provide opportunities for small business development
7.10 The construction industry is a significant employer. However, the end of employment resulting from the decommissioning of Bradwell Nuclear Power Station will affect a reduction of employees in ‘specialised construction activities’. Conversely, increased levels of house building which may result from the adoption of Maldon District Local Development Plan and government incentives designed to increase housing demand. Low carbon/energy efficiency programmes (such as the Green Deal) and the BREEAM building standard requirements will also create employment through retrofitting and new builds.
7.11 Bradwell has been cited in national policy statements as a possible site for a new nuclear power station. However, the report Nuclear Industrial Strategy -The UK’s Nuclear Future (BIS, 2012) notes that the UK industry has developed plans to deliver around 16 GW of new nuclear by 2030. That translates into at least 12 new nuclear reactors at five sites currently earmarked for development: Hinkley Point, Sizewell, Wylfa, Oldbury and Moorside. Since Bradwell has not been identified, the development of a new power station at Bradwell is unlikely to occur within the duration of this strategy.
7.12 Strategic Recommendations:
7.13 The Strategy should prioritise a ‘high-road’ approach to economic development, which concentrates on growing, developing and retaining businesses which operate further up the value chain and which exert greater positive effects on the local and regional economy. Higher value-added businesses typically employ a highly skilled workforce and achieve high levels of productivity. A high-road approach aligns with the Government’s agenda, SELEP policy and the Essex Growth Strategy. Funding streams (both national and EU) will increasingly focus on high value-added sectors. To support a focus on growing high value-added businesses, the Economic Prosperity Strategy should adopt a sector led approach and concentrate resources to develop the key sectors set out in paragraph 6.40.
7.14 Located in the south east of England, the most accessible parts of the District are well positioned to attract investment, particularly from small-medium sized businesses looking to escape higher rents/rates found elsewhere in Essex. However, large inward investment opportunities will always be infrequent in rural locations and areas not located near the strategic road network. As such, greater emphasis should be placed on growing local businesses that are more likely to remain entrenched in the local area and less likely to divest.
7.15 Stronger business support mechanisms should be put in place to support SME development. Maldon District is alone in Essex in lacking an effective, Council supported business start-up and mentoring service. This is likely to place the District at a competitive disadvantage compared to its neighbours. If financially viable, the Council should seek to support the development of an enterprise hub, which links new business training to small business starter units.
7.16 Maldon District Council should seek to increase the supply of high quality commercial and industrial stock. Providing relatively small allocations of new employment land around Maldon Town could support this aspiration. Existing, modern B2 units at Wycke Hill offer a strategic location with good access to the A414, 54
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and have high levels of occupancy. This suggests that small (500 to 5000 sq/ft) units, in the most accessible areas of the District, will attract high levels of take up. There is also scope to expand an employment site in Burnham on Crouch. Larger commercial units may be required where existing businesses wish to expand and the LDP should adopt an approach flexible enough to accommodate this less infrequent demand. Subject to market demand, other employment sites in the District should be permitted to expand where the development is broadly sustainability.
7.17 Existing industrial sites should be regenerated, with a view to delivering modern B2 units/offices. Demand for such regeneration is likely to be driven through re-building of factory/warehouse sites by landowners and existing occupiers. Redevelopment should aspire to retain existing businesses on site or support local relocation.
7.18 Increasing training provision in the District is essential to driving competiveness through improved workforce skills. Different approaches could be taken to increasing provision: A vocational skills centre could be established in the District however there exist concerns over long-term viability. Technical skills centres, attached to a businesses or confederation of businesses could provide another solution and will support the matching of skills to business needs. Provision of vocational training at schools could be improved and existing collaboration between Orimiston Rivers Academy and the Plume High School allows students to study vocational subjects at either school.
7.19 Working in partnership is integral to the delivery of the economic development. By population, Maldon District is amongst the smallest lower tier local authority areas in the UK, and as such will continue to face financial restraints. Working with other local authorities and external organisations will enable the Council to support more ambitious projects, secure external funding and mitigate risk more effectively. Government policy favours business-led partnerships, and empowering local business organisations will encourage greater engagement from the business community, in the strategic management of the local economy.
7.20 Enhancing the District’s brand and repositioning it to emphasise Maldon’s reputation for industry and enterprise will sell the District not just as a visitor destination, but an investment destination and a great place to do business. The quality of the environment and quality of life are key messages, and these should be closely associated with proximity to London.
7.21 Supporting the provision of high-speed broadband infrastructure will help maintain and improve the commercial offer in the District. Extending high-speed broadband to commercial areas will ensure that the property base is attractive to companies. Increasing residential access to high-speed broadband, and improving provision in rural areas, will support home working and enable economic growth in parts of the District not well serviced by road infrastructure.
7.22 Maldon District Council should place economic development at the heart of all its activities. All departments within the authority should recognise that in a time of economic crisis, (where feasible) all Council supported projects should seek to exploit opportunities to support local businesses, create local jobs, develop workforce skills and bring unused property into a commercial use. The Council is a significant local buyer of good and services, and (though diminishing) its purchasing power could have a significant positive impact on the local area.
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8. Appendix 1: Salaries in Different Sectors Median UK Annual Incomes By Occupation, 2011 (£) Waiters and waitresses Bar staff Kitchen and catering assistants Retail cashiers and check-out operators Sales and retail assistants Hairdressers and related services Elementary sales occupations Shelf fillers Care workers and home carers Customer service occupations Sales supervisors Elementary process plant occupations Senior care workers Science, engineering and production technicians Building and civil engineering technicians Quality assurance technicians Planning, process and production technicians Customer service managers and supervisors Electrical and electronics technicians Web design and development professionals Engineering technicians Psychologists Electronics engineers Medical radiographers Business, media and public service professionals Chartered and certified accountants Production and process engineers Civil engineers Design and development engineers Programmers and software development professionals Pharmacists IT business analysts, architects and systems designers Mechanical engineers Production managers in manufacturing Electrical engineers Legal professionals
5,000 15,000 25,000 35,000
Source; Median UK Annual Income (ONS, 2012)
8.1 The chart above highlights median annual salaries for different occupational types. Those bars coloured in green represent occupations that can be found in the visitor-retail economy, orange illustrates the care sector, red shows manufacturing/engineering, and blue indicates a range of other skilled occupations. The UK median income for all sectors is £21,093.
8.2 The retail-visitor economy is characterised by low pay and part time working, this results in very low median incomes. The median income of bar staff is £6,067, while shelf fillers median income is £12,146. The care sector follows a similar pattern, though experienced carers/supervisors can expect to earn more. Elementary plant technicians had a median income of £16,685 in 2011, however other manufacturing occupations (which might be deemed knowledge intensive) have a median income of £25,000 or higher. Indeed mechanical and electrical engineer’s median income is well in excess of £35,000. Other non-production 56
EB068b based occupations have median incomes well above the UK median. Web-designers, business, media and public service professionals have median income levels of between £25,000 to £35,000 and IT business analysts, architects and system designers can expect to earn over £37,000.
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