Northumberland Employment Land Review Northumberland County Council January 2011 NORTHUMBERLAND COUNTY COUNCIL NORTHUMBERLAND EMPLOYMENT LAND REVIEW FINAL REPORT 26 January 2011 Nathaniel Lichfield & Partners Ltd 3rd Floor Offices also in One St James's Square Cardiff Manchester M2 6DN London Newcastle nlpplanning.com 1427375v31427375_3.DOC Executive Summary This Employment Land Review (ELR) has been commissioned by Northumberland County Council (NCC) to provide robust evidence to demonstrate the need for, and deliverability of, employment allocations across the County. The ELR will inform the County’s Local Development Framework (LDF) - specifically the Northumberland Core Strategy and the Delivery DPD: Delivering Sustainable Communities and Proposals Map – and future reviews of Northumberland’s Economic Strategy. The principal aims of this ELR are: • To undertake a comprehensive qualitative and quantitative assessment of all existing employment sites in Northumberland. • To quantify the current employment land portfolio into a specifically designed database to record and monitor the survey outcomes, and other site characteristics. • To obtain an understanding of the future growth aspirations/plans and criteria/specifications of required sites of existing employers in Northumberland. • To understand key current and future sectors in the local economy and provide an insight into potential industry clusters and niche industries. • To understand important market segments, undertake a flow analysis to reveal past trends and inform future supply and demand. • To recommend potential new employment land revealed by a ‘call for sites’. • To confirm which sites to retain and which to release, identifying any gaps in the land portfolio. If new sites are suitable to alleviate these gaps they should be recommended as an appropriate employment site. Ultimately, a portfolio of sites should be recommended to take forward in the Northumberland LDF. Economic Context In very broad terms, the County is made up of three broad socio-economic areas, termed ‘Key Service Areas’ by NCC. The smallest spatially (but most densely populated), Service Area is in the South East of the County, which forms part of the Tyne and Wear City Region. This area has traditionally comprised the industrial hub of Northumberland and has a substantial coal mining and seafaring legacy. Despite facing many challenging socio-economic issues resulting in part from its industrial heritage, these areas still form the dominant commercial areas in the County due to their proximity to the commercial hub of Tyneside with its various facilities including Newcastle International Airport. In contrast, the North Service Area stretches from Morpeth all the way up through Alnwick, Wooler to Berwick-upon-Tweed in the far north of the County. This area is defined by its rurality and the attractive and historic market towns. In contrast to South East Northumberland, this area has very dispersed population patterns and localised levels of market demand. Although in general the area is affluent, there are pockets of rural deprivation whilst market demand is constrained by the area’s remoteness and poorer quality strategic road links. 1427375v31427375_3.DOC The West Service Area , which comprises much of the former Castle Morpeth and particularly the Tynedale Districts, exhibits many similarities with the North Service Area, in particular the quality and desirability of its market towns such as Ponteland, Hexham, Corbridge, Haltwhistle and Prudhoe; the splendour of the countryside, heritage, and tourism and leisure, particularly focussed upon the World Heritage site of Hadrian’s Wall, are also key strengths. In terms of the commercial and industrial market, the area is predominantly focussed around the Tyne Valley area, with settlements beyond this being less accessible, peripheral markets characterised by indigenous demand, catering to the rural economy. As with the North, many locations are physically remote and face key challenges in retaining younger residents and remaining sustainable, viable communities. The Current Stock of Employment Space Northumberland has a relatively large stock of employment space overall in comparison with the neighbouring authorities. It has the third highest amount of floorspace; exceeding that of Newcastle – the regional capital. However, an examination of floorspace relative to population shows that the County has a modest supply in per capita terms. This is particularly true with respect to office floorspace – Northumberland has less floorspace per capita than any of the surrounding districts. In gross terms, Northumberland is estimated to have 46.65ha of potential new employment land that would be taken up if all extant planning permissions relating to employment land were implemented. Based upon recent levels of take-up, this would equate to approximately 4.5 years of supply. Adjusting this figure to allow for any losses of B class land due to extant permissions would result in a net development pipeline of just 1ha. Vacancy rates across Northumberland are estimated at 8.8%, which is broadly in line with a level of 8-10% typically observed in a healthy commercial property market. This does, however, mask some significant variations by sub-area with above average vacancies in the South East and particular low levels recorded in the North and West. An average of 10.43ha of gross new B class land has been developed annually in Northumberland in recent years, with much of this activity focused in Blyth Valley and Tynedale. However, significant losses of employment land over the same period mean that, in net terms, the County has actually experienced a decline in the stock of employment land available. The majority of demand for employment space in Northumberland has traditionally been for industrial (manufacturing and distribution) uses . The main industrial demand has been for premises in the South East of the County, particularly the former districts of Blyth Valley and Wansbeck. This has resulted in a range of new industrial developments taking place in the last 5 years, notably at North Nelson and Nelson Park West Industrial Estates at Cramlington providing new accommodation from 500 sq ft up to 30,000 sq ft on a speculative basis. There does, however, appear to be demand for further industrial accommodation in Prudhoe, Hexham and Morpeth where availability levels are currently very low. 1427375v31427375_3.DOC Elsewhere in the County, markets appear to be very localised. There are new units currently vacant in Alnwick and Berwick. There are also vacancies in some of the more rural areas e.g. Wooler and Belford but demand is not steady. Northumberland is not generally regarded as a significant centre for office development . As a consequence, the majority of demand is from local occupiers. The last decade has seen several new, good quality, office developments in the County. Take up success has been mixed. Northumberland Business Park has been the most successful in terms of amount of space disposed of. This is probably due to its location and catchment area and the range of accommodation developed. In common with most areas there is little appetite currently for speculative development of any kind and this is likely to continue until the property market and general economy improve. Once this happens however there appear to be areas where demand should stimulate development of new floorspace but only when this becomes economically viable. Review of Current Employment Space and Allocations The study assessed 125 existing and committed employment sites in the three Service Areas within Northumberland, which together account for slightly over 350ha of nominally available land and a further 325ha of potential expansion land. In general, the quality and spatial distribution of the sites was found to be highly variable, although it is estimated that around 160ha of land rated as being high quality, and 75ha lower quality: • The North Key Service Area had 48 sites, comprising some 108ha of available employment land, with a reasonable spread of good quality sites across the area in towns such as Alnwick and Berwick, and clear deliverability issues for sites in and around Morpeth in particular; • The South East Key Service Area, based largely around the former areas of Wansbeck and Blyth Valley, has a considerable legacy of industrial land and Port-related uses, hence this area has the bulk of the County’s forward supply – some 227ha, including the County’s only Strategic Site at West Hartford. In general, the sites scored highly in this area, particularly in and around Cramlington, due to sites’ policy compliance, accessibility and reasonable levels of demand, although the increased costs involved in bringing forward many of these sites is likely to impact significantly upon the deliverability of the portfolio; • The West Service Area had just 37 sites totalling just over 18ha, reflecting the considerable under supply of land in most of the larger towns in this area, notably Hexham, Ponteland and Prudhoe. Much of the land that is notionally available in this area is heavily constrained, with the owners often pursuing alternative, higher value uses for the site. Economic Drivers and Non B Class Sectors It appears that Northumberland’s future growth is likely to be characterised by a shift away from public sector activities into the private service sector, with employment in manufacturing remaining relatively constant (albeit characterised by movement into