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Economic Evaluation
of a proposal by Applegreen plc
for a Motorway Service Area on the A1(M) at Kirby Hill
and its contribution to the Harrogate District Economic Growth Strategy 2017-2035
by Kirby Hill RAMS [Residents Against Motorway Services]
February 2018
PLANNING APPLICATION REFERENCE: 18/00123/EIAMAJ
TABLE OF CONTENTS
Section Page
1. EXECUTIVE SUMMARY ...... 3
2. INTRODUCTION ...... 5
3. ECONOMIC BENEFITS OF THE PROPOSED MSA ...... 6
4. ECONOMIC HARM FROM THE PROPOSED MSA ...... 12
5. EVALUATION VS THE ECONOMIC GROWTH STRATEGY ...... 17
6. CONCLUSION ...... 19
LIST OF TABLES/FIGURES
Table/Figure Page
Table 3.1: Current partners engaged by Applegreen on the ...... 8 ‘Vale of York’ MSA project
Table 4.1: Current Applegreen UK job vacancies and wages ...... 14
Figure 4.1: How would the proposed MSA contribute to ...... 16 ‘brand Yorkshire’?
ABOUT THE AUTHOR: Gareth Owens, MSc. (Oxon), MBCS, CITP
Gareth has lived in Kirby Hill for 17 years. He is the Chairman of Kirby Hill RAMS and former Vice-Chair of Kirby Hill & District Parish Council. He holds a Master’s degree in Business Management from the University of Oxford, Saïd Business School. During his time in Harrogate District, Gareth has established two new businesses and served in senior management roles at two of Harrogate’s largest financial services companies – Engage Mutual Assurance and VocaLink Ltd. He was a member of the Institute of Directors and as a consultant and senior Executive he has many years’ experience in the economic evaluation of £multi-million development programs.
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1 EXECUTIVE SUMMARY
1.1 This paper evaluates the economic benefits of a proposed Motorway Service Area on the A1(M) at
Kirby Hill against the Harrogate District Economic Growth Strategy (2017-2035). It draws on data
provided by Irish developer Applegreen in planning application 18/00123/EIAMAJ and on the skills,
expertise and knowledge of the local economy of independent residents’ group Kirby Hill RAMS
(Residents Against Motorway Services).
1.2 The main economic benefits of the scheme claimed by Applegreen are the creation of 300 jobs, an
inward investment of £40M and a boost to the local economy of £6.2M p.a. We examined these
claims and found that they are not evidenced in Applegreen’s planning application. Data available
from comparative MSA projects indicates that Applegreen’s figures are far too high. Applegreen
has arrived at these high numbers by making invalid assumptions and by not correctly following the
methodology they say that they adopted for the calculations. Therefore the Council should have no
confidence that the claimed economic benefits would be delivered.
1.3 The best available data from comparative MSAs indicates that the number of jobs created is likely
to be around 150-200 and that Applegreen’s investment is likely to be in the region of £25-£30M.
Most of the jobs would be low-paid, retail roles at National Living Wage rates. Most of the supposed
‘inward investment’ would actually be received by Applegreen’s Design and Construction partners.
We have shown that none of the eleven partner organisations currently engaged by Applegreen on
this project is based in the area that Applegreen says would benefit economically. It is therefore
highly likely that most of the supposed ‘inward investment’ would be spent outside Harrogate
District and that the benefits to the local economy would be negligible.
1.4 Applegreen’s claim of a £6.2M p.a. benefit to the local economy is based on a flawed methodology,
invalid assumptions and basic arithmetical errors. The suggestion that local businesses would
benefit from the proposed MSA is directly contradicted by the details of Applegreen’s planning
application. A more realistic appraisal of economic benefits is that, before any economic harm is
taken into account, the proposed MSA might contribute up to £2M p.a. to the District’s economy.
1.5 Applegreen have incorrectly implemented the methodology they adopted for evaluating economic
benefits. By not utilising a ‘Reference Case’, they have neglected to take into account any economic
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growth that would happen anyway in the area, without the proposed MSA. Applegreen has
seriously underestimated ‘displacement’ effects on existing local businesses and has not taken
account of other economic harm that would result from the proposed MSA. Using a more realistic
assumption for displacement, together with Applegreen’s own figures, our estimate is that the
proposed MSA would cause £3.5M p.a. of economic harm in Harrogate District, significantly
outweighing the economic benefits.
1.6 We have also shown that there would be unquantifiable harm caused to ‘brand Yorkshire’ by the
presence of an Irish retailer’s 43-acre MSA development at a sensitive location, where many visitors
receive their first impression of the glorious North Yorkshire countryside.
1.7 Applegreen’s proposal is in direct conflict with the Harrogate District Economic Growth Strategy
(2017-2035) and would in fact undermine it. The Strategy specifically targets growth in high-value
sectors and in high-wage jobs. Applegreen operates in the Retail sector, which is notorious for its
low margins, low value-added and low wages. Our analysis of current Applegreen job vacancies
and the wages on offer across the UK showed that the proposed development and its associated
jobs would actually ----reduce the average wage across the District below its current levels.
1.8 Council leaders should not be fooled by Applegreen’s headline numbers. An analysis of the detail
reveals that this proposal would not deliver the claimed economic benefits and would in fact harm
economic interests in the District, including the Economic Growth Strategy.
1.9 There is no economic case for granting planning permission for this proposed development.
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2 INTRODUCTION
2.1 Reference is made to the Harrogate Economic Growth Strategy (2017-2035) and to the economic
policy aspects of planning application 18/00123/EIAMAJ by Applegreen plc, for a proposed
Motorway Service Area (MSA) on the A1(M) at Kirby Hill.
2.2 This report has been prepared by Kirby Hill RAMS [Residents Against Motorway Services]. Kirby
Hill RAMS is an independent residents’ group that objects to the proposed MSA. The Chairman of
Kirby Hill RAMS, Gareth Owens, is a senior executive with a Master’s degree in Business
Management from the University of Oxford, Saïd Business School and 25 years’ experience of
evaluating and leading £multi-million programs for multinational corporations.
2.3 Applegreen plc claims certain economic benefits for Harrogate District if the proposed MSA were
to be granted planning permission. Kirby Hill RAMS has evaluated these claims against the
Harrogate Economic Growth Strategy (2017-2035), in order to assess how any economic benefits
and economic harm caused by the proposed MSA would contribute to the Strategy overall. We
present here our findings, in order that the Council may consider all of the available evidence and
properly evaluate the contribution of the proposed MSA to the Economic Growth Strategy.
2.4 We set out in the sections below our analysis and conclusion, with references to Applegreen’s
planning application documents and to the Economic Growth Strategy in parenthesis, for example:
Harrogate Borough Council Economic Growth Strategy: [EGS, p10-11]
Applegreen Planning Application: [APGN,
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3 ECONOMIC BENEFITS OF THE PROPOSED MSA
3.1 Applegreen claim three main economic benefits associated with the proposed MSA [APGN:
Environmental Statement, Chapter 12]. We will assess each of these in turn.
New Jobs
3.2 Applegreen claims that the proposed MSA would create 300 new jobs [APGN: Planning Statement,
para 5.3.2]. This figure is not evidenced at all. Kirby Hill RAMS asked Applegreen to evidence the
claimed number of jobs that would be created. We received the reply that: “The employment figures
are based on Applegreen’s operational experience.” Not satisfied with this, we further inquired
whether Applegreen could tell us which of their existing MSAs the operational experience derives
from, so that we might validate the number of jobs created by contacting the Economic
Development Unit at the local Council. Applegreen replied: “To re-iterate, the formulation of
projected employment numbers is based on Applegreen’s operational experience which includes a
history of over 25 years in business and over 200 other Applegreen outlets across the UK, Ireland
and more recently the USA.”
3.3 Applegreen does indeed have 243 retail outlets in its portfolio across the UK, Ireland and the USA.
The company employs a total of 2,908 staff [APGN: Annual Report & Accounts, FY 2016]. So the
average number of staff per outlet is just under 12 (2908 divided by 243). We accept that a major
development such as an MSA is likely to employ more staff than a petrol station, however the
claimed number of jobs for the proposed Kirby Hill MSA represents more than 10% of Applegreen’s
entire workforce, which seems unrealistic. Applegreen operates a number of MSAs in Ireland and
none of them employs anything like 300 staff.
3.4 Kirby Hill RAMS made our own inquiries into Applegreen’s ‘operational experience’ of UK MSAs.
In April 2015, Applegreen opened the new Templepatrick MSA on the M2 in Northern Ireland. It
includes a full convenience store, car and HGV fueling pumps and extensive parking across the
site, with a food offering that includes Greggs, a Burger King restaurant and drive thru, Subway,
Chopstix and Lavazza Café, as well as Applegreen’s own brand, The Bakewell. The site has an
outdoor children’s play area and is open on a 24/7 basis. In terms of employment, Applegreen
says that the Templepatrick MSA created 75 new full-time jobs – just a quarter of the number they
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claim would be created at Kirby Hill. In fact, Templepatrick is one of four new MSAs Applegreen is
working on in Northern Ireland, which they say would create 250 jobs in total. [The Belfast
Telegraph: Motorway Service Areas to Create 250 New Jobs, 17 June 2014]
3.5 From our assessment of Applegreen’s operational experience, the claimed figure of 300 new jobs
for the proposed MSA appears to be far too high. It is not supported by any evidence. We decided
to check Applegreen’s job creation figure by comparing it with another similar facility in Harrogate
District – the new Wetherby MSA, operated by Applegreen’s competitor, Moto. Wetherby Services
employs a total of 215 staff, working three shifts, 24x7. Moto operates the busy Wetherby MSA
with 85 less staff than Applegreen say they would need at Kirby Hill. Furthermore, Moto’s Wetherby
Services include a 126-bedroom hotel, whereas Applegreen’s Kirby Hill proposal includes no
overnight accommodation. Even if we make allowance for a difference in productivity between the
leading UK MSA Operator and their less experienced Irish competitor, Applegreen’s proposed MSA
should still require less staff than the 215 employed by Moto’s operation at Wetherby, not more.
3.6 The only evidence we can find to support Applegreen’s claim that 300 jobs would be created comes
not from Applegreen’s operational experience, but from the claims made by the developer of the
recently-opened Gloucester Services. Crucially, however, the Gloucester site involves duplicate
MSAs on both sides of the M5 motorway, employing 150 people on each side. Applegreen’s
proposal at Kirby Hill is for a single-sided MSA. It appears that Applegreen erroneously adopted
the 300 jobs figure from Gloucester Services without taking account of this major difference.
3.7 In summary, Applegreen has not evidenced its claim that 300 new jobs would be created. All of
the available evidence points to a much lower figure of perhaps 150-200 jobs that would be created
by the proposed MSA. The quality of these jobs and likely wage levels are covered in Section 4.
Inward Investment
3.8 Applegreen claims that the proposed MSA represents an inward investment of circa £40M into the
local economy [APGN: Planning Statement, para 5.4.6]. This claim is not evidenced and does not
stand up to scrutiny. The typical cost of building a new MSA in the UK is £25M [Financial Mail on
Sunday: Why Motorway Services are at a Crossroads, 15 June 2015]. The most relevant
comparator site, Moto’s Wetherby MSA, cost around £25M to build in 2008. While costs may have
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increased since then, the Wetherby MSA is also much larger than Applegreen’s proposal – with
space for almost twice as many cars - and it includes a 126-bedroom hotel, which the Kirby Hill
proposal does not. It is reasonable therefore to estimate that the proposed Kirby Hill MSA could
be built for a similar figure at today’s prices. Applegreen claim that their design for the Kirby Hill
proposal is based on the new Gloucester Services on the M5, built at a cost of £30M in 2015 [Web:
motorwayservicesonline.co.uk: Gloucester]. The evidence of the two most relevant comparator
sites therefore indicates that Applegreen is probably inflating the size of the proposed inward
investment by at least £10M. The data points to an estimate of £30M.
3.9 It is questionable how much of this £30M would actually be an inward investment in Harrogate
District. As an MSA operator, Applegreen has established relationships with partners for the design
and construction of its sites. These companies would benefit the most. Table 2.1 below lists the
names and locations of Applegreen’s business partners currently engaged on this project. None
is based in Harrogate District, nor indeed in the Study Area chosen to assess the socio-economic
benefits of the proposed MSA. While Applegreen talks about this project as an inward investment
benefiting local businesses, in practice they utilize a network of existing, national, partners.
Company Role Location
Axis PED Master Planning Wilmslow, Cheshire
AFL Architects Design & Architecture Manchester
AECOM Traffic and Transportation London
Fira Landscape Design Birmingham
Weetwood Flood Risk and Water Quality Leeds
Eastwood & Partners Drainage Design Sheffield
Soil Environment Services Agricultural Land Use Consultants Newcastle
AOC Cultural Heritage Consultants Beverley
Smith Grant Air Quality Consultants Wrexham
NVC Noise Consultants Alfreton, Derbyshire
Argus Ecology Ecology & Nature Conservation Chester-le-Street, Co. Durham
Table 3.1 Current partners engaged by Applegreen on the ‘Vale of York’ MSA project
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3.10 Applegreen state, with a number of caveats, that ---some construction work might be undertaken by local contractors [APGN: Environmental Statement, para 12.4.6]. However, more likely is that this
project will follow the familiar pattern of existing national contractors with access to cheap, transient,
unskilled, Irish labour being engaged on UK motorway-related infrastructure projects. We note that
Applegreen is planning two large Site Compounds, one either side of the A1(M), to accommodate
the construction workforce and equipment [APGN: Environmental Statement, para 4.13.3 - 4.13.4].
3.11 In summary, Applegreen has not evidenced its claim that the proposed MSA would result in £40M
of inward investment. All of the available evidence suggests that Applegreen’s investment would
be at least £10M lower than claimed and that the bulk of that investment would be spent with design
and construction partners outside of Harrogate District. The supposed ‘inward investment’ would
therefore have a negligible impact on the local economy.
Benefits to the local economy
3.12 Applegreen claims other economic benefits for the proposed MSA totaling £6.2M p.a. in GVA.
However, we found that Applegreen’s study methodology is flawed and that the results obtained
are inconsistent and in some cases contradictory. Kirby Hill RAMS does not have confidence that
the proposed MSA will deliver the claimed benefits, for the following reasons:
3.13 The Study Area adopted by Applegreen for assessing socio-economic benefits is huge, comprising
the whole of both Harrogate and Hambleton Districts – a total area exceeding 1,000 square miles.
Paradoxically, the city of York is closer to the proposed MSA site than many points in Hambleton
and Harrogate District, yet it is not included in the Study Area. This creates the impression that the
Study Area has been deliberately chosen in order to deliver the desired result.
3.14 Applegreen’s methodology is, they say, based on information set out in The Additionality Guide
[APGN: Environmental Statement, para 12.2.7]. However, they have not followed the methodology,
set out in The Additionality Guide, which is to establish a Reference Case showing how the local
economy would grow in the absence of the proposed intervention, then show the Additionality that
would result if the intervention went ahead. It appears that Applegreen not used this key aspect of
the methodology recommended in The Additionality Guide, because developing a Reference Case
would involve considering other scenarios for growth of the local economy over the lifetime of the
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proposed MSA - scenarios which may deliver the same, or even greater, economic benefits. For
example, some Reference Case scenarios might be:
The economic renaissance of the market town of Boroughbridge continues, aided by passing
trade from motorists on the A1(M) using its Local Services.
Moto’s Wetherby MSA (in Harrogate District) is expanded and the new Leeming Bar MSA (in
Hambleton District) is built, generating the same or greater economic benefits.
Other growth opportunities, better aligned to the Economic Growth Strategy, create better
employment opportunities for staff who would otherwise work at the proposed MSA. For
example, growth might occur at Harrogate District’s leading Logistics business, Reed Boardall
at Roecliffe, which has the same catchment area for staff, but offers higher-value employment
in a higher GVA sector, one which is targeted by the Economic Growth Strategy.
3.15 Instead of using a Reference Case as they should have done, Applegreen has compared the
claimed economic benefits of the MSA to a baseline, assuming that the local economy will not grow
at all if the proposed MSA does not go ahead. This is not a valid approach and leads to the benefits
of the proposed MSA being overstated.
3.16 Applegreen’s calculations are also based on the assumption that the claimed economic benefits
will be shared equally between Harrogate and Hambleton Districts [APGN: Environmental
Statement, page 12-16, footnote 19]. This means that only 50% of whatever economic benefits are
delivered would contribute to the Harrogate District Economic Growth Strategy. Furthermore, the
£6.2M figure, of which Harrogate District would receive only 50%, is based on Applegreen’s
assumption that 300 new jobs would be created, which we have shown to be false.
3.17 Applegreen make two separate and very different claims for the number of jobs that would be
supported by the proposed MSA due to Additionality. Firstly they say: ‘approximately 63 new or
existing FTE jobs would be supported via the indirect or induced effects of the Proposed
Development‘ [APGN: Environmental Statement, para 12.4.18]. Later on the same page they say
‘When additionality is taken into account, the Proposed Development is likely to support
approximately 261 jobs within the Study Area.’ [APGN: Environmental Statement, para 12.4.22].
Both figures are derived from Applegreen’s claim that 300 jobs would be created by the proposed
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MSA and both calculations use the additionality multiplier of 1.21 to arrive at a figure, giving two
markedly different results. If Applegreen displays this degree of variation in its own estimates of
economic benefit, how can the Council have any confidence that said benefits might be delivered?
3.18 The GVA per job figure used by Applegreen is an average figure for the whole Study Area of
£23,751.50. However, since the proposed development is in the Retail sector, it would be more
appropriate to use the GVA per job figure for the Retail sector, which of course is lower.
3.19 Applegreen also make basic arithmetical errors in their calculations. In Table 12.11 of the
Environmental Statement, where they show the Additionality calculations, the GVA of 300 new jobs
is calculated as £7.125M, whereas just below it the GVA of just 240 new jobs is calculated as a
higher figure, £7.7M. [APGN: Environmental Statement, para 12.4.20]. Applegreen’s experts
cannot do basic arithmetic. Their calculations contain errors and the results cannot be trusted.
3.20 If we use a figure of 200 new jobs in Applegreen’s calculations, together with their assumption that
economic benefits would be split 50/50 between Harrogate and Hambleton Districts, this yields the
result that Additionality effects of the proposed MSA would contribute at best £2M p.a. in GVA to
the Economic Growth Strategy. However, even this figure assumes that only 10% of staff are
displaced from other local businesses. We show in Section 4 that this would in fact be much higher.
3.21 Applegreen claim that other benefits to the local economy may arise ‘via the supply chain of goods
and services that support the direct activities’ [APGN: Environmental Statement. para 12.2.4].
However, the Transport Assessment that forms part of Applegreen’s planning application sets out
an entirely different business model, as follows:
“It is anticipated that most of the deliveries will be made via the motorway access as these vehicles
may already be using the SRN to make other deliveries across the region or to other MSAs,
although a small number may use the proposed rear access junction. The number of delivery and
servicing vehicles reflects the fact that Applegreen owns and operates all the franchises at their
MSAs. Therefore the vast majority of the various components of the MSA are jointly serviced,
resulting in efficiencies that cannot be provided by other operators.”
[APGN: Transport Assessment, para 8.7.2 – 8.7.3]
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3.22 This reinforces the point that local businesses can expect little benefit from the proposed MSA.
3.23 In summary, the claim of £6.2M of economic benefits to the District is inaccurate and misleading.
The Council should expect, at best, economic benefits of £2M p.a. from the proposed development,
before any harm to the local economy is taken into account.
4 ECONOMIC HARM FROM THE PROPOSED MSA
4.1 Kirby Hill RAMS have identified and assessed the following types of economic harm arising from
the proposed MSA, which must be set against the economic benefits described above.
Harm from displacement of staff
4.2 Applegreen estimates that only 10% of new jobs at the proposed MSA will be filled by displacement
of staff from other roles. [APGN: Environmental Statement, para 12.4.17]. This means that 90% of
jobs would have to be filled by those who are currently unemployed. Quite apart from the obvious
management challenges of running a business where 90% of the staff were previously
unemployed, this unrealistic assumption on Applegreen’s part betrays a lack of local knowledge. It
is obvious to people who know the local economy that many of the MSA staff recruited would be
the result of displacement from other Retail businesses in the local area. Staff will not travel a long
way to work shifts in low-paid retail roles at an MSA. Many staff would therefore be drawn from
other local businesses, in particular:
Shops in the market town of Boroughbridge, 1 mile south-east of the site.
Shops in the city of Ripon, 6 miles west of the site.
The existing MSA at Wetherby, 12 miles south of the site.
4.3 Furthermore, if Applegreen’s assumption of only 10% of roles being filled by displacement were
correct, then 270 jobs would need to be filled by those currently unemployed. Applegreen
acknowledge that the local area is one of low unemployment. The 2011 census gives a total of 98
unemployed people in the whole of the Boroughbridge and Newby Wards combined. There simply
are not enough unemployed people in the locality to fill 270 new jobs. Applegreen says that a
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surprisingly high number of the new jobs – 86 in fact – are ‘professional and managerial’ roles. It is
very unlikely that many of these roles would be filled by the unemployed.
4.4 A more reasonable assumption is that 50% of the new jobs created would be filled by displacement
and 50% by those currently unemployed. Applegreen has underestimated staff displacement in
order to overstate the employment benefits and GVA of the proposed MSA. Displacement of staff
simply moves GVA from one place to another – it does not create new GVA. If 50% of MSA staff
were recruited from existing local businesses, then, using Applegreen’s own figure of £23,751.50
per job, the total harm to GVA from existing local businesses would be £3,535,725 p.a.
4.5 At over £3.5M p.a., the economic harm from displacement of existing staff exceeds the estimated
total of £2M p.a. GVA that Harrogate District would gain from the proposed MSA.
Harm to existing Farm businesses
4.6 The proposed MSA site occupies high-quality farmland belonging to two local farms. In total, 43
acres of Grade 1/2 BMV agricultural land would be permanently removed from agricultural use.
This would adversely affect the viability of two farm businesses. While this harm alone is unlikely
to result in job losses or the closure of either farm, the proposed MSA development should not be
considered in isolation. The Council’s planners know that, in addition to Applegreen’s proposed
MSA, the landowner has applied for planning permission for a major housing development on a
nearby site and has further plans for major development of the large-scale, open, agricultural
landscape north of Kirby Hill. The cumulative impact of the proposed MSA, together with one or
more of these proposals, could lead to job losses and the enforced closure of a local farm.
Harm to the Harrogate District Economic Growth Strategy
4.7 A low-wage, low-GVA Retail development at Kirby Hill would undermine the Harrogate District
Economic Growth Strategy and make it harder to achieve. For example, one aim of the Strategy is
to boost average workplace wages to at least the regional average.
The ONS Annual Survey of Earnings, 2015 gives an average wage figure for Harrogate District of £445
per week, which for a 37.5 hour week equates to £11.87 per hour. Kirby Hill RAMS evaluated all current
Applegreen job vacancies in the UK and the hourly rates on offer, as shown in Table 4.1 overleaf.
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Applegreen role Hourly rate Location
Greggs Supervisor £8.00 - £8.50 Crawley, Sussex
Costa Coffee Supervisor £7.50 - £7.80 Chatteris
Services Station Site Manager £7.50 Darrington (Team Leader Apprenticeship)
Services Station Site Manager £4.05 - £7.50 Biggleswade (Team Leader Apprenticeship)
Petrol Station Manager £10.42 - £11.46 Liverpool
Subway Manager £8.85 - £9.90 Bedworth
Subway Manager £9.38 - £11.46 Huntingdon
Subway Sandwich Artist £7.55 Church Stretton
Assistant Manager £8.00 Mold
Costa Coffee Barista £7.50 Church Stretton
Subway Manager £9.38 St. Asaph
Table 4.1: Current Applegreen UK job vacancies and wages
4.8 Every Applegreen job currently advertised, including the most highly-paid Petrol Station Manager
role, attracts a wage less than the Harrogate District average of £11.87 per hour. Consequently,
the creation of 300 jobs at current Applegreen rates will have the effect of reducing average wages
in Harrogate District, undermining the Economic Growth Strategy.
Harm to local Retail businesses
4.9 Local businesses - in particular Morrison’s supermarket and petrol station beside the A1(M) at
Boroughbridge, the shops and restaurants in the market town itself and the Blue Bell Inn pub &
restaurant at Kirby Hill - all benefit from passing trade on the A1(M) directed towards them by the
‘Local Services’ sign at Junction 48. Inevitably, the proposed MSA would attract trade as well as
staff away from these local businesses. We have shown in Section 2 how Applegreen’s claim that
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they would establish a local supply chain is the exact opposite of the business model they describe
in their planning application. Local businesses would be net losers from the proposed MSA.
Adverse impact on ‘brand Yorkshire’
4.10 Perhaps the most surprising claim that Applegreen make for the proposed MSA is that it would help
enhance ‘brand Yorkshire’. This appears to be based on the notion that the MSA, when built, could
include a few leaflets about local tourist attractions for the benefit of motorists using the facilities.
[APGN: Planning Statement, page 80]. It conveniently ignores the harm that the proposed
development would cause to that brand, which we will outline as follows:
a) The beautiful approach to the city of Ripon from the east, through open countryside which starts
at Kirby Hill and continues up the hill past historic Skelton windmill, would be dominated by the
proposed MSA with its 43 acres of hard-standing, petrol forecourts, shops, hundreds of
vehicles, neon signage and night-time lighting. Figure 4.1 overleaf illustrates how the MSA
would be the first thing visitors would see as they joined the B6265 Ripon Road. It would not
convey the character of the area as we would wish it to be portrayed to visitors.
b) The B6265 is also the main route to one of the finest historic houses in England and a major
tourist attraction – Newby Hall & Gardens. Richard Compton, the owner of Newby Hall, has
written to the Council objecting to Applegreen’s proposed MSA, on the grounds that it would
harm his brand and visitor experience.
c) Motorists travelling north on the A1(M) get their first real visual experience of the North
Yorkshire countryside as they reach Kirby Hill. Brands are very visual and so Figure 4.1
illustrates the difference that the proposed MSA would make. Currently, visitors are greeted
by the glorious North Yorkshire countryside unfolding before them as they reach Kirby Hill, with
the Vale of York opening up long-range views across open countryside to the North Yorkshire
Moors to the east, while historic Skelton windmill atop the hill on the B6265 Ripon Road marks
the gateway to the Yorkshire Dales to the west. Applegreen rather cynically acknowledges this
point by naming the proposed MSA the ‘Vale of York’ Services. The Vale of York is a national
treasure that deserves to be protected. If developed, the proposed MSA would become the
landmark experience of visitors as they reached Kirby Hill. It would not create a good first
impression and ‘brand Yorkshire’ would suffer significant, irreversible harm.
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come to Yorkshire yor sh re.Com
We come toYorksh. e yo~ sh cam
Figure 4.1: How would the proposed MSA contribute to ‘brand Yorkshire’?
Page 16 of 19
5 EVALUATION VS THE ECONOMIC GROWTH STRATEGY
5.1 In this section we evaluate Applegreen’s proposed MSA against the Economic Growth Strategy
(2017-2035), to determine whether it is a good fit and what its overall economic impact will be.
5.2 The Economic Growth Strategy states: “Our Aim: The Economic Growth Strategy is about the
Council adopting a co-ordinated, corporate approach to prioritise and support ‘good growth’ in the
District, to achieve a sustainable and resilient economy by 2035 (featuring new higher value jobs,
an increase in Gross value added (GVA) and a boost in average workplace wages to at least the
regional average).” [EGS: page 7]
5.3 This statement and the supporting information in the Economic Growth Strategy led us to base our
economic evaluation on answering the following five questions in relation to the proposed MSA:
Question 1: Is the proposed MSA “Good Growth”?
5.4 The Economic Growth Strategy sets out a clear vison of ‘good growth’, with the emphasis being to
‘grow and attract high-value business sectors: Creative & Digital, Financial & Professional Services;
Scientific Research & Development, Logistics’. [EGS, page 11].
5.5 Applegreen plc is an Irish petrol forecourt retailer. The company is listed on the London and Irish
stock exchanges as a General Retailer. In terms of its fit to the Economic Growth Strategy, the
business is therefore a poor choice on two counts:
a) The aim of Local and Central Government Economic Growth Strategy is to deliver growth in
the UK economy, --not the Irish economy. All of Applegreen’s revenues and profits are repatriated to its parent company in Ireland, which is itself 52% owned, presumably for tax
reasons, by a Maltese holding company, B&J Holdings Ltd. The Maltese holding company is
100%-owned by two Irish businessmen: Applegreen’s Dublin-based CEO and COO.
b) Applegreen accepts that the proposed MSA is not in one of the economic sectors identified as
being of particular importance in the District [APGN: Planning Statement, page 72]. Retail is
not one of the four high-value sectors that the Economic Growth Strategy says the Council is
aiming to grow [EGS, page 11]. The UK Retail sector is notoriously low-value and exhibits poor
productivity compared with other sectors. Despite employing 9.8% of the UK workforce, the
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Retail sector contributes only 5.2% of total GVA. By comparison, the Financial Services sector
employs 3.4% of the UK workforce and contributes 9.4% of total GVA [UK Government, BIS,
Economics Paper No. 18, Industrial Strategy: UK Sector Analysis]. This data indicates why the
Economic Growth Strategy does not focus on Retail as a means of growing the local economy.
5.6 In summary, an Irish Retail business is a very poor fit to the Economic Growth Strategy and on the
face of it, will not deliver ‘good growth’. However, our analysis continues to a more detailed level,
in order to evaluate Applegreen’s specific proposals and claims of economic benefit against the
definition of ‘good growth’ that the Council has adopted in the Economic Growth Strategy.
Question 2: Would the proposed MSA contribute to a sustainable and resilient economy?
5.7 No. Retail is not one of the sectors the Economic Growth Strategy is targeting to create a
sustainable and resilient economy. The proposed MSA would not contribute to this aim because:
a) The economic characteristics of the Retail sector are low-value, low wages and high-volatility.
b) The MSA sector itself is based on fuel oil sales and is therefore subject to uncontrollable
fluctuations in the global oil price.
c) Given the rapid evolution of the automotive industry towards electric, driverless vehicles, the
MSA sector faces a significant risk from the planned replacement of petrol/diesel with electric
vehicles over the next 20 years. It is likely that, during the lifetime of the proposed MSA, the
motorway network will become littered with derelict MSAs for which there is no need. MSAs
are not sustainable in either the economic or the environmental sense of the word.
Question 3: Would the proposed MSA create new higher-value jobs?
5.8 No. We have shown that the proposed MSA would create approximately 200 low-value Retail jobs,
in contradiction to the aims of the strategy.
Question 4: Would the proposed MSA increase Gross Value Added (GVA)?
5.9 No. While we accept that the proposed MSA would add an estimated £2M p.a. of GVA to the
Harrogate District economy, we have shown in Section 4 that this would come at a --cost of £3.5M
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p.a. in GVA due to displaced staff from existing local businesses, as well as an unquantifiable level
of economic harm to those businesses through loss of trade.
Question 5: Would the proposed MSA help boost average workplace earnings to at least the regional average?
5.10 No. We have shown in Section 4 that the proposed MSA would actually reduce average wages
across the District, making it harder for the Strategy to achieve this goal.
6 CONCLUSIONS
6.1 The conclusion of our detailed economic evaluation of Applegreen’s proposed MSA is that the
claimed economic benefits are grossly inflated and would not be delivered. While the proposed
MSA would create circa 200 jobs and may contribute up to £2M p.a. in GVA to the Harrogate District
economy, these would be low-paid Retail jobs and there are not enough unemployed people in the
local area to fill them. The economic harm caused by displacement of staff from existing local
businesses is estimated to be £3.5M p.a., outweighing the economic benefits.
6.2 Evaluation of the proposal against the Harrogate District Economic Growth Strategy (2017-2035)
shows that as a low-wage, low-value, Retail development, the proposed MSA is a poor fit and would
in fact work against achievement of the Strategy, by reducing average wages in the District below
their current levels.
6.3 There is no economic case for granting planning permission for this proposed development.
Kirby Hill RAMS
February 2018
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