The Thames Valley for Our Communities
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Ernst & Young LLP accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material. ey.com/uk Contents Foreword I am pleased to share this study into This, coupled with increasing Foreword the strengths and economic growth competition, rising housing costs and 03 prospects across the Thames Valley. growing transport congestion, means the Thames Valley is facing considerable At EY, we are clear about the An introduction to the Thames Valley threats to its future success. 04 important role the UK regions have in transforming the country’s economy In this context there is a clear need 06 The Thames Valley economic dashboard and strengthening its position on a for the region to maintain its focus on global stage. The Thames Valley is economic growth and on the prosperity a case in point. Our recent Regional of its businesses and communities. 08 The way forward: a joined-up approach Economic Forecast found, for example, This report has been created as a that the Thames Valley continues to framework to aid that focus and outpace London and the wider South promote greater discussion. In it, we 10 Executive summary East and is forecast to continue to do so discuss the opportunities, challenges over the next three years. Drilling down, and constraints for the region, centred Infrastructure Reading is expected to be the UK’s around five dimensions: people and 14 fastest-growing town or city over the skills; infrastructure; enterprise Richard Baker next three years, alongside Manchester, and investment; quality of living; 16 Enterprise and investment Managing Partner with growth of 2.4% Gross Value Added and governance. Thames Valley and South (GVA) per year until 20201. The region is in a very strong and, Quality of living As a thriving region, the Thames Valley indeed, enviable position but future 18 is clearly in a strong position, bolstered success hinges on the ability to by its proximity to London and by the respond to today’s challenges as well as 20 Governance success of its burgeoning sectors like anticipate tomorrow’s. technology, life sciences and advanced Given the fragmented nature of the engineering. Moreover, the region has a region, we believe that material Contact us unique chance to help the UK reshape its 21 change is far more likely if the business global trading position by capitalising on community expresses itself in a joined- the extraordinary opportunities afforded up and cohesive way. by digital and scientific transformation. In developing the framework set out in However, there are reasons for caution. this report, we gathered an extensive Our forecast also found that growth is range of views from business, academia, slowing more generally across the UK. local authorities and others across the This comes on the back of a decade of Thames Valley. We look forward to productivity stagnation. What is more, helping facilitate further discussions to recent years have seen the country, help build a cohesive agenda for long- and indeed the world, experience term and sustainable growth. unprecedented levels of disruption across the political, social and economic spectrum. 1 EY Regional Economic Forecast Issue 3, Winter 2017-18 The Thames Valley | A framework for growth 3 An introduction to the Thames Valley As a loosely defined informal This is a region with an eclectic mix of towns and villages; ranging from picturesque rural hamlets to region of south-eastern England industrial towns like Reading and Slough, and from the ‘dreaming spires’ of Oxford to historic Windsor and its Bucks centred around the River castle, not forgetting the region’s new towns such as Thames west of London, the Bracknell and Basingstoke. This variety means that, in contrast to many other parts Thames Valley’s boundaries Oxfordshire Middlesex of the UK, the Thames Valley has no single metropolitan can be hard to pin down. For centre. Reading, for example, is the region’s biggest town with around 162,000 residents. But it represents most purposes the region just 8% of the Thames Valley’s two million-plus Berkshire consists of the three counties of total population. Surrey Berkshire, Buckinghamshire and The region benefits from a vibrant and prosperous economy with strengths in several high-growth, high Hampshire Oxfordshire — with parts of North value-add sectors such as life sciences, advanced Hampshire, Surrey and Middlesex engineering and information technology. The Thames Valley’s proximity to London, the often included. economic and cultural capital of the UK, is a defining characteristic, offering employment and leisure appeal to residents. Heathrow, one of the world’s busiest airports, located at the region’s eastern apex is also hugely important, and has proved to be a major draw for the businesses that have chosen to locate here. 4 The Thames Valley | A framework for growth The Thames Valley | A framework for growth 5 The Thames Valley at a glance A thriving region, clearly in a strong position … ... with towns bolstering ... playing an important the strong performance role in transforming the of the Thames Valley ... country’s economy With a 3.4% Reading Thames Valley growing unemployment 2.1m population vs. UK average people at 4.4% of 4.4% Fastest-growing town in the UK, Source: ONS, Population Estimates for UK, England and Aggregate growth Source: ONS, Regional labour market statistics, 2016 with average GVA growth of Wales, Scotland and Northern Ireland: mid-2012 to mid-2016 between 2012-16 £71b of GVA, 3.8% 2014-17 4.1% of UK GVA … growing faster than any Employment growth £36,300 GVA per other region outside of 2.2% GVA outpacing UK by 0.3% head vs. UK average of growth between £26,339 2014 and 2017 London and set to continue Source: ONS, 2016 Source: EY UK Regional Economic Forecast, Issue 3: Winter 2017-18 outperforming all UK regions through to 2020 … Set to grow 2.3% through to 2020 — outpacing London (2.2%) Reading £21.6b combined and UK average (1.8%) turnover of Thames Valley 250 top private companies Source: EY UK Regional Economic Forecast, Issue 3: Winter 2017-18 £13.6b digital tech turnover Source: The Business Magazine TV250 2017 ... with strengths in key sectors of technology, Source: Tech Nation 2017 business services and scientific research ... Largest sectors generating foreign direct investments into the South East (2016) 58,109 digital jobs Telecommunications Scientific Source: Tech Nation 2017 Software Pharmaceuticals and post research 16% 8% 7% 5% 605 start-up births Business Other transport (London 7,682) services Air transport services Other Source: ONS, Business Structure Database, average number of start-up births 2011-15 11% 7% 6% 40% Source: EY UK Attractiveness Survey 2017 6 The Thames Valley | A framework for growth The Thames Valley | A framework for growth 7 The Thames Valley at a glance (continued) A globally connected region ... A place to live well and live long Home to Heathrow, the UK’s largest airport With 474,033 flights per year to 204 destinations handling 78m passengers per year Heathrow Airport Ltd heathrow.com/company/company-news-and-information/ company-information/facts-and-figures Mean average earnings — both for Indeed, residents can expect to outlive residents (£35,811) and for people those in many other parts of the UK by as who commute in to work in the region much as a year (average life expectancy (£35,134) — are considerably higher in the region is 82.4 years vs. a UK Crossrail to provide even faster travel to and from London from 2019 plus construction of the Western than for the UK as a whole (£28,296). average of 81.3 years). Rail link between Reading and Heathrow. Source: ONS, Annual Survey of Hours and Earnings, 2016 Source: ONS, 2014 Road plans include Smart M3 and M4. An IP-rich, high value-add region ... with a history in achieving academic excellence and Sector-based clustering of 8,000 strong life sciences workforce and over 135 life entrepreneurs and fast-growth sciences companies in the region.