Social Research Number: 63/2017 Publication date: 26/10/2017 Strategic Employment Sites Infrastructure Fund (SESIF) Evaluation Final Report © Crown Copyright Digital ISBN 978-1-78859-765-4 Strategic Employment Sites Infrastructure Fund (SESIF) Evaluation Regeneris Consulting Views expressed in this report are those of the researcher and not necessarily those of the Welsh Government For further information please contact: Joanne Coates Social Research and Information Division Welsh Government Cathays Park Cardiff CF10 3NQ Tel: 0300 025 5540 Email: [email protected] Table of contents List of Tables and Figures Glossary of Acronyms Executive Summary 1 Introduction………………………………………………………………...….. 20 2 Understanding the SESIF Project …………….…..…………………………26 3 National Socio-Economic & Property Market Context ……….….….……45 4 Rhyd y Blew – Site Evaluation …………………….……….………………67 5 Amazon Way Stage 2 – Site Evaluation ……….…………..……………...105 6 Parc Bryn Cegin – Site Evaluation ……………………………………….139 7 The Delivery and Management of SESIF ………..….…….…………….165 8 SESIF – Impact Assessment ………….……..……………………………179 9 Conclusions ……….……………..………………………………………….191 10 Recommendations ……….……...…………………………………………220 Appendix A - Acer Ecology Report 1 List of Tables and Figures Tables Table 2.1: Summary of the National Policy Context – Relevance and Fit 38 Table 2.2: SESIF Costs Funding Package – Original Offer and Re-profiled 40 Table 2.3: SESIF Funding Package per Site – Original and Re-profiled Funding 41 Table 2.4: SESIF Output & Lifetime Result Targets 43 Table 3.1: Summary of Labour Market Indicators for Wales and the UK, 47 December 2014 Table 3.2: Summary of Median Weekly Earnings of Full-Time Workers in Wales 54 and the UK, 2014 Table 3.3: Supply and Demand of Industrial Property in Wales, 2012-14 (sq ft) 61 Table 3.4: Take-up and Available Supply of Industrial Floorspace by Sizeband in 65 Wales Table 4.1: Rhyd y Blew Original and Re-Profiled Costs and ERDF Contribution 70 Table 4.2: Rhyd y Blew Target Output & Results 70 Table 4.3: Summary of the Regional/Local Policy Context – Relevance and Fit 81 Table 4.4: Economic Profile of Blaenau Gwent (and surrounding districts) 82 Table 4.5: Summary of Available Land and Property Supply in Blaenau Gwent 90 and Neighbouring Districts Table 4.6: Rhyd y Blew Performance Against Target Expenditure 93 Table 5.1: Amazon Way Stage 2 Original and Re-Profiled Costs and ERDF 108 Contribution Table 5.2: Amazon Way Stage 2 Target Output & Results 109 Table 5.3: Summary of the Regional/Local Policy Context – Relevance and Fit 115 Table 5.4: Economic Profile of Neath Port Talbot and Swansea 116 Table 5.5: Summary of Property Market Availability for Amazon Way Stage 2 Site 123 Table 5.6: Amazon Way Stage 2 Performance Against Target Expenditure, June 125 2015 Table 6.1: Parc Bryn Cegin Original and Re-Profiled Costs and ERDF 140 Contribution Table 6.2: Parc Bryn Cegin Target Output & Results 140 Table 6.3: Summary of the Regional/Local Policy Context – Relevance and Fit 148 Table 6.4: Economic Profile of Gwynedd and Anglesey 150 Table 6.5: Summary of Property Market Availability for Parc Bryn Cegin Site 156 Table 6.6: Project Spend to June 2015 161 Table 7.1: SESIF Project Performance Against Target Expenditure 173 Table 7.2: Summary of Output & Results Targets 178 Table 8.1: Alternative Survey Fieldwork Approaches 180 2 Table 8.2: Calculation of Potential Gross FTE Jobs Impact at Parc Bryn Cegin 188 Table 8.3: Gross to Net Impact Adjustments for Parc Bryn Cegin 190 Figures Figure 2.1: The Logic Chain for the SESIF Project at Inception 28 Figure 3.1: Comparison of Economic Activity Rates, Employment Rates, 48 Unemployment Rates and Economic Inactivity Rates for Wales and the UK, 2004- 14 Figure 3.2: Employment Change by Broad Industrial Group, 2009-2013 49 Figure 3.3: Total Claimant Count in Wales and the UK, 2000-2015 50 Figure 3.4: Growth in Total GVA and GVA per head in Wales, 2007-13 51 Figure 3.5: GVA per head in Wales and the UK, 2007-2013 52 Figure 3.6: Highest Level of Qualification of Residents in Wales and the United 53 Kingdom Figure 3.7: Number of businesses in Wales, 2010-2014 55 Figure 3.8: Number of businesses in the UK, 2010-2014 55 Figure 3.9: Business Births and Deaths per 10,000 of population, 2007-2013 56 Figure 3.10: Age of Industrial Accommodation in Wales, 2004 62 Figure 3.11: Industrial Floorspace Availability in Wales by grade, Q2 2011-Q4 63 2012 Figure 3.12: Wales industrial/logistics availability, 2001-14 64 Figure 3.13: Number of Inward Investment Projects in Wales, 2012-15 65 Figure 4.1: Location Context for Rhyd y Blew and Other Ebbw Vale Enterprise 72 Zone Sites Figure 4.2: Rhyd y Blew Site Masterplan Development Options 74 Figure 4.3: The Rhyd y Blew Site – Infrastructure & Environmental/Ecological 92 Works, May 2015 Figure 5.1: Amazon Ways Stage 2 Site Location 105 Figure 5.2: Amazon Way Stage 2, May 2015 126 Figure 5.3: Coed Darcy Masterplan and Relationship with Amazon Way Stage 2 129 Figure 5.4: Land Ownerships in the Fabian Way/Amazon Way Area 130 Figure 6.1: Parc Bryn Cegin Project Site 139 Figure 6.2: Parc Bryn Cegin Masterplan 142 Figure 6.3: Developable Land at Key North Wales Employment Sites 158 Figure 6.4: The Parc Bryn Cegin Site, May 2015 161 Figure 7.1: Timeline of SESIF Project Development to WEFO Approval 165 Figure 7.2: SESIF Management and Delivery Structure 170 3 Glossary of Acronyms APS Annual Population Survey BG Blaenau Gwent BP British Petroleum Building Research Establishment Environmental Assessment BREEAM Methodology CCT Cross cutting themes' CPO Compulsory Purchase Order DCA Dependency and Catchment Areas DE&T Department of Economy & Transport ECA Enhanced Capital Allowance ERDF European Regional Development Fund ERP Economic Renewal: A New Direction ESA Employment and Support Allowance ESF European Social Fund EU European Union FTE Full Time Equivalent GVA Gross Value Added HCA Homes and Communities Agency ICT Information Communication Technologies JESSICA Joint European Support for Sustainable Investment in City Areas JLDP Joint Local Development Plan JSA Jobseeker's Allowance LDP Local Development Plan NPTCBC Neath Port Talbot County Borough Council ONS Office for National Statistics PDO Project Development Officer PIF Project Idea Form PIV Project Inspection and Verification RME Research, Monitoring, Evaluation RSPB Royal Society for the Protection of Birds RYB Rhyd y Blew SESIF Strategic Employment Sites Infrastructure Fund SINC Site of Nature Conservation Interest SME Small and Medium Enterprises UDP Unitary Development Plan UKCES The UK Commission for Employment and Skills UKTI UK Trade and Investment WDA Welsh Development Agency WEFO Welsh European Funding Office WG Welsh Government 4 Executive Summary 1. Regeneris Consulting was commissioned by the Welsh Government in April 2015 to undertake an evaluation of the Strategic Employment Sites Infrastructure Fund (SESIF) project. Regeneris’s team was supported by Old Bell 3, Robert Chapman and Acer Ecology. 2. SESIF was a £7.2m capital investment project supported via £2.6m of funding from the 2007-13 Wales ERDF Convergence Programme, along with £3.5m of Welsh Government and £1.1m of private sector match funding. The project established an infrastructure fund to facilitate the development of strategic employment sites within the ERDF Convergence Area (West Wales and the Valleys) through investment in advanced infrastructure works. 3. The market failure rationale for ERDF investment was that insufficient employment sites were coming forward for development by the private sector in the Convergence Area, given the large upfront costs involved in their site servicing, infrastructure and preparation. The costs of developing commercial property in some parts of the Convergence Area are often much greater than the value of the completed development. 4. The Welsh Government saw an opportunity to use ERDF resources, alongside match funding, to play a key role in supporting the provision of the necessary physical infrastructure required at strategic employment sites. By undertaking these works and removing prohibitive site constraints, the Welsh Government could contribute towards ensuring that the Convergence Area had an adequate supply of high quality strategic employment sites to meet the needs of both local businesses and inward investors. The fund would therefore play a key role in helping to improve the economic trajectory and competitiveness of the Convergence Area economy, as well as the wider Welsh economy. 5 5. Given the scale of available resources, SESIF project investment was focused upon three sites in the Convergence Area. These were at: Rhyd y Blew in Ebbw Vale (South East Wales Spatial Plan area) Amazon Way Stage 2 in Neath Port Talbot/Swansea City Region (Swansea Bay Spatial Plan area) Parc Bryn Cegin in Bangor (North West and North East Spatial Plan area). 6. The SESIF project was formally completed at the end of June 2015 in line with ERDF Programme guidelines. Given the scale of the ERDF investment, there is a mandatory requirement placed on the Welsh Government and the Welsh European Funding Office (WEFO) to commission an independent evaluation to assess project outcomes and the mechanisms of delivery. 7. The aims and objectives of the final project evaluation were: To conduct a comprehensive evaluation of project outcomes against the key performance indicators as outlined in the project business plan To assess the effectiveness and efficiency of project delivery in achieving the project aims and objectives outlined in the business plan To understand the added value of the project for its potential beneficiaries with regard to the packages of support offered To identify and determine the nature of any unintended outcomes not covered by the WEFO key performance indicators To assess the project’s delivery and achievement against the cross cutting themes’ (CCT) aims, objectives and CCT-related indicators outlined in their business plan.