Shropshire Economic Development Needs Assessment Interim Report

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Shropshire Economic Development Needs Assessment Interim Report Shropshire Economic Development Needs Assessment Interim Report Shropshire Council December 2020 © 2020 Nathaniel Lichfield & Partners Ltd, trading as Lichfields. All Rights Reserved. Registered in England, no. 2778116. 14 Regent’s Wharf, All Saints Street, London N1 9RL Formatted for double sided printing. Plans based upon Ordnance Survey mapping with the permission of Her Majesty’s Stationery Office. © Crown Copyright reserved. Licence number AL50684A 61535/01/SHo/CR 19104509v4 Shropshire Economic Development Needs Assessment : Interim Report Contents 1.0 Introduction 1 Introduction 1 Methodology 2 Report Structure 4 2.0 Economic Strategy and Policy Aspirations 5 Introduction 5 National 5 Regional 11 Local 13 3.0 Shropshire Socio-Economic Context 24 Introduction 24 Location 24 Population 25 Deprivation 29 Economic Resilience 30 Economic Conditions and Trends 33 Economic Competitiveness 43 4.0 Functional Economic Market Area 46 Introduction 46 Outline Description / Outline Methodology / Working Definition 46 Defining the Functional Economic Market Area 47 Conclusion: Shropshire’s Functional Economic Market Area 55 5.0 Overview of Employment Space 57 Introduction 57 Gross Completions 67 Losses 68 Development Pipeline 69 6.0 Stakeholder Consultation and Business Survey 73 Introduction 73 Key Stakeholders 73 Shropshire Economic Development Needs Assessment : Interim Report Shropshire Business Survey 74 7.0 Property Market Signals and Intelligence 79 Introduction 79 National and Regional Property Market Overview 79 Shropshire Property Market Overview 81 Summary and Conclusions 93 8.0 Future Employment Land Requirements 95 Introduction 95 Methodology 95 Growth Scenarios 96 Safety Margin 109 Planning Requirements 110 Summary of Requirements 113 9.0 Demand / Supply Balance 115 Introduction 115 The Need for Employment Land in Shropshire 115 Existing Supply 118 Quantitative Summary 120 Qualitative Factors 120 Other Employment Land Policy Issues 122 10.0 Conclusions and Recommendations 128 Shropshire Economic Development Needs Assessment : Interim Report 1.0 Introduction Introduction 1.1 Lichfields has been commissioned by Shropshire Council [the Council] to prepare an Economic Development Needs Assessment [EDNA] that will provide the economic evidence to help underpin the Council’s emerging Local Plan. This Interim Report will fully align with the ongoing Local Plan work being undertaken by the Council as well as updated guidance in the National Planning Policy Framework 2019 [the Framework] and Planning Practice Guidance [PPG] on planning for employment land needs. 1.2 A key focus for this ELR is the need to ensure that sufficient suitable employment sites are provided to achieve the Council’s ambitions for long-term economic growth. The study provides Shropshire Council with an assessment of the current position and recent trends within the County’s economy, and the potential scale and type of future economic growth and business needs. This is based on considering a range of scenarios for how Shropshire’s economy could change in the future, over the plan period 2016 – 2038. 1.3 Following from this analysis, the land and floorspace implications are specifically considered for the group of employment land sectors outlined below: • Offices, research & development (within the new E Use Class); • Light Industry (within the new E Use Class); • B2 General Industrial (factories and workshops); and, • B8 Storage or Distribution (warehousing and distribution) 1.4 Demand for employment land and floorspace is considered in this report, and references to “employment space” are intended to mean both land and floorspace. 1.5 It should be noted that there are a variety of factors and drivers to consider when objectively assessing business needs for a local area. This study utilises a combination of both quantitative and qualitative analysis to explore these issues within the context of Shropshire County and addresses these to draw overarching conclusions and implications. An important consideration for any work of this type is that it is inevitably a point-in-time assessment. This study has incorporated the latest data and other evidence available at the time of preparation. The accuracy and sources of data derived from third party sources has not been checked or verified by Lichfields. 1.6 In light of the Covid-19 pandemic and the uncertainties surrounding the consequences of Brexit, Lichfields has factored in our understanding of the local impacts of the pandemic within the County to date based on the latest available data. This includes an analysis of the latest econometric forecasts for how the County’s economy may change and the effect on different sectors over the short and medium-term, testing the impact on key industrial sectors. 1.7 Shropshire Council will be consulting on its draft Submission Local Plan commencing in December 2020. This EDNA report informs the policy choices in the emerging Local Plan on employment land matters. It is important however, that the conclusions of this report take fully into account any views that might emerge from the Local Plan consultation process. For this reason, the EDNA should be seen as an ‘interim report’ which will be finalised following the end of the Local Plan consultation process early in 2021. Pg 1 Shropshire Economic Development Needs Assessment : Interim Report Methodology 1.8 The Government has updated its Planning Practice Guidance on how the need for housing and economic development should be assessed. The original 2014 iteration replaced the previous Office of the Deputy Prime Minister [ODPM] Employment Land Reviews: Guidance Note from 2004 (although this arguably remains a source of good practice). The 2019 version of the PPG1 has reintroduced its methodology for assessing economic development needs. It states that plan makers should liaise closely with the business community to understand their current and potential future requirements2. 1.9 Plan-makers should also assess: 1 the best fit functional economic market area [FEMA]; 2 the existing stock of land within the area - this will indicate a baseline for land in employment uses; 3 the recent pattern of employment land supply and loss – for example based on extant planning permissions and planning applications (or loss to permitted development); 4 market demand – sourced from market intelligence from local data and discussions with developers and property agents, recent surveys of business needs or engagement with business and economic forums including locational and premises requirements of particular types of business; 5 wider market signals – relating to economic growth, diversification and innovation; and, 6 any evidence of market failure – such as physical or ownership constraints that prevent the employment site being used effectively. 1.10 In terms of using market signals to help forecast future needs, the PPG3 advises that a range of data which is current and robust should be used, such as: 1 sectoral and employment forecasts and projections (labour demand); 2 demographically-derived assessments of future employment needs (labour supply techniques); 3 analysis based on the past take-up of employment land and property and/or future property market requirements; and, 4 consultation with relevant organisations, studies of business trends, and monitoring of business, economic and employment statistics. 1.11 In terms of how market demand can be analysed, the PPG4 advises that plan makers should note that: “The available stock of land can be compared with the particular requirements of the area so that ‘gaps’ in local employment land provision can be identified. It is important to consider recent employment land take up and projections (based on past trends) and forecasts (based on future scenarios) and identify occurrences where sites have been developed for specialist economic uses. This will help to provide an understanding of the underlying requirements for office, general business and warehousing sites, and (when compared with the overall stock of employment sites) can form the context for appraising individual sites. 1 Practice Guidance Reference 2a-025-20190220 2 Practice Guidance Reference 2a-026-20190220 3 Practice Guidance Reference 2a-026-20190220 4 Practice Guidance Reference 2a-029-20190220 Pg 2 Shropshire Economic Development Needs Assessment : Interim Report Analysing supply and demand will allow policy makers to identify whether there is a mismatch between quantitative and qualitative supply of and demand for employment sites. This will enable an understanding of which market segments are over-supplied to be derived and those which are undersupplied. Authorities will need to take account of business cycles and make use of forecasts and surveys to assess employment land requirements.” 1.12 In order to derive employment land requirements, the PPG5 states that when translating employment and output forecasts into land requirements there are four key relationships which need to be quantified: 1 Standard Industrial Classification sectors to use classes; 2 Standard Industrial Classification sectors to type of property; 3 Employment to floorspace (employment density); and, 4 Floorspace to site area (plot ratio based on industry proxies). 1.13 Two new sections have been added to the economic needs section of the PPG in 2019. The first of these relates to how authorities can assess need and allocate space for logistics6. The PPG states that where a need for such facilities may exist, strategic policy-making authorities
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