• Abstract and Figures
• Public Full-text

' "l I NO ] I MOTORWAY l SERVICES ] I HERE! ] Kirby Hill & District ] -'"' ' ,cJ 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. Page 2 of 19 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 Page 3 of 19 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. Page 4 of 19 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, <Document Name>, para 3.2-3.4] Page 5 of 19 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.

Load more

  19

Copy Link