Milton Keynes Council and Milton Keynes Development Partnership Employment Land Review and Economic Growth Study Phase 1 Technical Analysis: Final Report
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Report 3 Brindleyplace Birmingham B1 2JB T: +44 (0)121 609 8265 F: +44 (0)121 609 8314 Milton Keynes Council and Milton Keynes Development Partnership Employment Land Review and Economic Growth Study Phase 1 Technical Analysis: Final Report November 2015 gva.co.uk Milton Keynes Council and Milton Keynes Development Partnership Contents Contents Executive Summary ............................................................................................................................................ 1 1. Introduction ............................................................................................................................................ 3 2. Socio-Economic Baseline ..................................................................................................................... 5 3. Neighbours Policy Aspirations ............................................................................................................ 32 4. Property Market Analysis ..................................................................................................................... 41 5. The Functional Economic Area ......................................................................................................... 66 6. Employment Land Supply ................................................................................................................... 71 7. Stakeholder Engagement .................................................................................................................. 81 8. Forecast Demand Scenarios .............................................................................................................. 88 9. Emerging Quantitative Conclusions ................................................................................................ 104 Appendices Appendix A Employment Sites Assessment Matrix Appendix B Employment Sites Assessment Matrix Sites Ranked Best to Worst Appendix C Employment Sites Assessment Proformas Appendix D Geographical Locations of Employment Land Appendix E Base Forecast Changes in Employment by Sector Appendix F Abbreviations and Glossary of terms used Appendix G References Prepared By: Simon Phillips Status: Final Draft Date: July 2015 ------Portrait Report.Docx For and on behalf of GVA Grimley Ltd November 2015 gva.co.uk Milton Keynes Council and Milton Keynes Development Partnership Final Report Executive Summary 1. This Phase 1 Technical Analysis Interim Report has drawn together the key findings from the baseline stage of work for the Milton Keynes Economic Growth and Employment Land Study. 2. The key conclusions from the work to date are provided below. Socio-economic Baseline 3. Milton Keynes (MK) is the fastest growing city in the UK with a notably young population, and there is a high economic activity rate and skills levels. However, unemployment rates have increased during the last decade as a result of the economic recession. 4. There is a cluster of sector strength in Financial Services, IT Consulting, Security Related Services, Transport and related supply chain activities and Food and Beverage manufacturing. 5. MK has a containment rate of approximately 60% of jobs for its employed population. The rest of its workforce travels to the neighbouring boroughs of Central Bedfordshire, Bedford, Aylesbury Vale and Central London. Neighbours Policy Aspirations 6. Milton Keynes works closely with its neighbouring Local Authorities under the ‘Duty to Co- operate’ banner. 7. The key issues of relevance to Milton Keynes neighbours are the balance between employment/housing land, commuting patterns, economic growth sectors, cross boundary infrastructure provision and demand forecasting. Property Market Analysis 8. The Milton Keynes commercial property market is dominated by leasehold floorspace. Much of this stock is no longer ‘fit for purpose’ nor does it meet the needs of the modern occupiers. 9. There is significantly less freehold accommodation currently on the market but where opportunities exist there are more industrial than office properties available freehold. 10. Consequently, in recent years there have been a smaller number of freehold transactions across both property market sectors. The average unit size sold in freehold transactions is greater than in leasehold deals suggesting that there remains owner occupier demand for larger size freehold accommodation. November 2015 gva.co.uk 1 Milton Keynes Council and Milton Keynes Development Partnership Final Report Employment Land Supply 11. Employment land is land used for offices, factories and warehouses and is categorised as classes B1, B2 and B8 in the planning use classes order. There is a large supply of employment land in Milton Keynes which consists of existing employment sites, proposed sites, and potential sites, all of which have been subject to an assessment of both market features and physical features. 12. The existing employment sites contain a broad mix of B class employment use with the majority of sites providing a mix of office, industrial and warehouse/distribution uses. 13. As there appears to be limited expansion space in existing employment sites, it will be necessary for the proposed and potential sites to be brought forward in order to provide the supply to meet market demand. Stakeholder Workshops 14. GVA has held two workshops with key stakeholders during this baseline stage with the first focussing on the economic baseline evidence base, and the second focussing on the employment land supply and property market. 15. GVA has also engaged with local agents active in the property market, a range of public and private sector stakeholders and have given all Local Authorities that neighbour Milton Keynes the opportunity to engage with the process. Forecast Demand Scenarios 16. Given the relationship between the Milton Keynes economy and its neighbours it is important that the evidence base for Plan:MK provides a robust understanding of economic potential that is consistent with the neighbouring areas. 17. In this regard GVA has prepared two ‘base’ positions utilising both the East of England Forecasting Model EEFM and Experian forecasts. Both suggest that the majority of floorspace will be required within the warehouse and distribution sector. Phase 2 Delivery Strategy 18. The outcomes of this Phase 1 technical analysis provide a robust evidence base to inform the Phase 2 Delivery Strategy which will provide advice on the Employment Land Strategy for Milton Keynes. November 2015 gva.co.uk 2 Milton Keynes Council and Milton Keynes Development Partnership Final Report 1. Introduction 1.1 Milton Keynes Council (MKC), together with the Milton Keynes Development Partnership (MKDP) appointed GVA to undertake an Economic Growth and Employment Land Study (EGELS) for the Borough of Milton Keynes, one of the fastest growing and most dynamic local authority areas in the UK. The study will form a key part of the Council’s evidence base for its new Local Plan, Plan:MK. 1.2 Plan:MK will replace the current MKC Core Strategy adopted in July 2013, which seeks to provide for a minimum of 28,000 dwellings and around 42,000 jobs over the period 2010-2026. It will also replace the saved policies in the Milton Keynes Local Plan adopted in December 2005. The new comprehensive Local Plan will cover the period up to 2031. 1.3 The current Milton Keynes Employment Land Study (prepared by GVA in 2007) is now out of date, as its production predates the economic recession. It now has no regard to the current situation Milton Keynes finds itself in or current economic opportunities and threats. It also does not address the revised national policy position as set out in the National Planning Policy Framework (NPPF) which was published on the 27th March 2012 and sets out the National Government’s planning policies for England and how these are expected to be applied. Further, it does not address the National Planning Practice Guidance (NPPG) which was published on the 6th March 2014 and adds detail and clarity to the NPPF. Ultimately, therefore, the current Employment Land Study is not fit to support the development of Plan:MK. 1.4 This new EGELS has two primary purposes. Firstly, it will establish the likely level of jobs growth resulting from the economic growth of Milton Keynes up to 2031. Secondly, it will assess the implications for Milton Keynes Council in planning to accommodate the anticipated level of economic growth. 1.5 More specifically, in order to achieve this purpose, the EGELS will: Take stock of the existing situation; Create a picture of future requirements; Review the supply of employment land; Compare the supply and demand; and Identify key development options and recommendations. 1.6 Ultimately the new EGELS will identify a justified and reasoned strategy for Plan:MK to follow. November 2015 gva.co.uk 3 Milton Keynes Council and Milton Keynes Development Partnership Final Report 1.7 Both the NPPF and NPPG contain guidance on the preparation of economic land availability assessments. They indicate that the main purpose of these studies is to assess the existing and future supply of land available for economic development and its suitability to meet identified needs. Specifically, the NPPG requires that these studies should identify sites and broad locations with potential for development; assess their development potential; and assess their suitability for development and the likelihood of development coming forward. Taken together, this Phase 1 report and the Phase 2 report