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Regeneration Plan 2Nd Draft

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Regeneration Plan 2Nd Draft Commissioned by IIEX Regeneration Plan for Derry~Londonderry Volume One: Foundation Document Baseline Analysis and SWG Summary Reports 1.1 Ba fff June 2010 1.2 2 Contents Page Part 1: Baseline Analysis 003 Part 2: Modelling Results 141 Part 3: Citi-Scope Residents Survey 146 Part 4: SWG Foundation Documents 166 Part 5: SWG Actions: Long-list to short-list 211 Part 6: A proposal for the growth of the higher education 226 provision in Derry~Londonderry to 2020, within the framework of the Mark II Regeneration Plan. Part 1: Baseline 3 Section Page Building a Baseline 4 The Economic Context 12 Derry~Londonderry Today and Tomorrow 21 Looking Within – A City of Disparity 88 An Urban Comparison 108 The Challenge 118 Summary – Business as Usual is not Acceptable 124 Annex A: North West Baseline Forecast Summary 126 Annex B: Urban Local Authorities Used For 130 Benchmarking Annex C: Oxford Economics‟ Suite of Forecast 131 Models Linked to Citi-Scope Model Annex D: Citi-Scope Ward Module Methodology 135 Annex E: Citi-Scope Ward Baseline Forecast 140 Profiles Part 1 – Baseline 4 Building a Baseline Introduction Ilex Urban Regeneration Company Limited (Ilex) commissioned Oxford Economics in April 2009 to develop an econometric model of the North West Region (known as the Citi-Scope model) in order to support the development of the strategic masterplan. More specifically, the key objectives of Oxford Economics‟ wider contribution to the masterplan are to: . Produce a „live‟ socio-economic statistical baseline profile of the region (the district council areas of Derry~Londonderry, Strabane and Limavady and parts of Donegal); and . Construct a „city region‟ econometric model capable of forecasting and evaluating the performance of key policy decisions. This report presents the socio-economic baseline profile of the region. It also provides a discussion of the current and future macroeconomic context and a detailed profile of the Derry~Londonderry and North West economy. In addition it provides a discussion of how the Citi-Scope Model can measure and forecast inequality and identifies the scale of the challenge facing the Derry~Londonderry economy. In many ways, the report overlaps with existing work completed by Indecon, PwC and Oxford Economics (see a list of these reports further below). However it fills a number of gaps by providing an update on the recession and its impact; covering wider North West analysis including the incorporation of Donegal performance and forecasts; and undertaking for the first time ward-level analysis and forecasts. Therefore it should be used as a report to discuss the baseline „policy neutral‟ outcome for the North West Region and the scale of the challenge, and to agree the platform upon which the Regeneration Strategy will be built. Part 1: Baseline 5 Background Ilex Urban Regeneration Company Limited was set up in July 2003 by the Office of the First Minister and Deputy First Minister (OFMDFM) and the Department for Social Development (DSD). Its role is to plan, develop and sustain the economic, physical and social regeneration of the Derry~Londonderry City Council Area. Ilex‟s mission is: “To create and promote a deliverable vision for the regeneration of Derry~Londonderry, to secure the community‟s commitment to that vision, and to pursue single-mindedly its implementation” Historically Derry~Londonderry and the wider North West Region have lagged behind more prosperous areas in NI east of the River Bann. This includes the Belfast Metropolitan Area, the widely acknowledged regional driver of the NI economy. As discussed later in this report, the achievement of economic convergence poses a significant challenge. However it is a challenge that has received considerable political support: “Our aim is to deliver in Derry~Londonderry the best regeneration any city in these islands has ever seen” Margaret Ritchie, Minister for Department for Social Development, December 2007 To date, there have been a number of strategic interventions by Ilex in the priority areas of education, transport and infrastructure, retail, tourism, arts and culture, spatial planning and branding. In addition, Masterplans for Fort George and Ebrington have been launched and work commenced, while future projects have been planned and started. Furthermore, there have been a number of studies on the local economy that include: . “Urban Regeneration Baseline Study of Derry~Londonderry City Council Area”: This report completed by Indecon International was a baseline study of the area to help inform the development of the Ilex Regeneration Plan. “Labour Market Study”: This report, produced jointly by Oxford Economics and PricewaterhouseCoopers (PwC), provided a labour market analysis with ten-year forecasts, a review of relevant policies, and recommendations for the future. “Addressing the Gap in Educational Attainment and Qualification in Derry”: Produced by PwC and Oxford Economics, this research assessed alternate futures for the Derry~Londonderry Part 1: Baseline 6 economy from changes to educational outcomes (at KS2 and GCSE level), higher education expansion and a reduction in economic inactivity. “Comparative analysis of Derry~Londonderry‟s economic performance”: This report by Oxford Economics provided a comparison of Derry‟s recent economic performance against a number of comparator urban areas in NI, GB and ROI. Against this backdrop, Ilex felt a need to understand and consider how the city and North West economy might look in the future, what the challenges facing the city and region were, and subsequently the approach needed to achieve the aim of: „To reach, within a reasonable timescale, a situation where we have an economically sustainable city making a net economic contribution to the local economy (NI) and to the Island – a city paying its way in the world‟ Citi-Scope Model The Citi-Scope model being developed by Oxford Economics for use by Ilex is a tool to assist decision makers in making choices. It is being designed to support the development of the Regeneration Mark II plan and provide ongoing support to Ilex and its partners going forward. The model will be handed over to Ilex upon completion. The model will help to provide empirical evidence to not only quantify the impact of the regeneration plan, but other specific developments which may be under consideration, now or in future. Coverage The Citi-Scope Model is a user-friendly, comprehensive econometric model for the North West (Derry~Londonderry, Limavady, Strabane, Donegal); and Derry~Londonderry wards. It incorporates data, analysis and forecasts, under a baseline and alternate future scenarios, for: . Demographics (population, housing stock, migration etc); . Workplace economy (employee jobs by sector, self-employment and sectoral GVA); . Labour market (resident employment, unemployment and inactivity); . Skill supply and demand; Part 1: Baseline 7 . Employment land demand; . Commuting and traffic flows; . Environmental accounts; . Tourism demand; . Fiscal accounts (spending, revenue and overall balance); and . Selected economic appraisal output results (consistent with HM Treasury and DFP Green Book). It also has an in-built „warning flagging‟ system to highlight where demand or supply bottlenecks are likely to hinder realisation of a particular scenario outcome. Given the modular design of the Citi-Scope Model, other modules, data and capacity / functionality can be added at later a date. The model itself provides the holistic evidence base (from people to projects) to ground the Regeneration Strategy. It will, for the first time, offer ward level accounting and forecasts of all citizens and workers, alongside fiscal balance analysis, traffic flows and environmental accounts. As a result, the Citi-Scope model should, in theory if used appropriately, prevent a „wish list‟ regeneration plan and avoid the inconsistencies so common in the myriad of projects / initiatives that are often treated in isolation. Box 1.1: Modelling limitations It is worth however highlighting the limitations of modelling in this context. Not every intervention can be modelled as a scenario (e.g. governance, community cohesion) and a successful regeneration strategy will achieve more than just economic growth (e.g. improvement in quality of life). In addition econometric models are only as good as the data available and the assumptions employed. The quality of data at district council level in NI is very poor indeed (and worse at ward level). Furthermore, keeping the model up to date is vital and can undermine its usefulness if it is not carried out. Models can also be complex to run, understand and interpret (but ensuring it is well documented and designed can mitigate against this risk). Finally, acceptance of results is imperative for the work to have merit. Part 1: Baseline 8 The model is not designed to replace existing methodologies but rather to bring best practice in assessing the economic and social benefit of projects under one simplified roof and add value to the debate by thinking about the collective impacts of a range of developments running concurrently or in sequence. It will complement existing methods within government and produce results (i.e. the economic appraisal output results) to input into the processes which central government carry out when assessing project evaluations and impact assessments. The design of the model will be such that the outputs would be set out in a way as to be both robust enough to be acceptable for scrutiny and transparent enough to be understood and, where appropriate, be challenged and re-visited. To this end, the model is being built using clearly defined data and is underpinned by robust and transparent assumptions which are fully documented. It will carry out the standard impact tests that would be carried out for a given project (for example looking at direct, indirect and induced impacts and gross versus net impacts, net present value analysis and assessing fiscal implications etc) and present these results in an easy to understand format. However beyond that, it will look at the wider implications of a project that is not typically fully explored in an impact assessment.
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