Employment Land Study Rugby Borough Council Final Report May 2015 Prepared by GL Hearn Limited 280 High Holborn London WC1V 7EE T +44 (0)20 7851 4900 glhearn.com Rugby Borough Council Employment Land Study Final Report, May 2015 GL Hearn Page 2 of 131 \\rugbyfs\LOCPLAN\ECONOMY AND EMPLOYMENT\Employment Sites - MATT\Rugby Employment Land Study 2014-15\FINAL REPORT - MAY 2015\ELR Final Report 22-05- 15.docx Rugby Borough Council Employment Land Study Final Report, May 2015 Contents Section Page 1 EXECUTIVE SUMMARY 7 2 INTRODUCTION 11 3 CONTEXT TO THE STUDY 17 4 ECONOMIC & LABOUR MARKET DYNAMICS 27 5 COMMERCIAL PROPERTY MARKET 51 6 DEMAND FORECASTS 65 7 LAND SUPPLY 80 8 SUPPLY-DEMAND BALANCE 125 9 CONCLUSIONS 127 List of Figures FIGURE 1: ANNUAL GROWTH IN GVA AT CURRENT BASIC PRICES 28 FIGURE 2: TREND IN PRODUCTIVITY (GVA PER HEAD) 29 FIGURE 3: TRENDS IN EMPLOYMENT, RUGBY BOROUGH 30 FIGURE 4: COMPOSITION OF EMPLOYMENT IN RUGBY BOROUGH BY BROAD SECTOR, 1983-2013 33 FIGURE 5: TREND IN EMPLOYMENT GROWTH, RUGBY BOROUGH 2003-13 34 FIGURE 6: GROWTH IN ACTIVE ENTERPRISES, 2004-13 38 FIGURE 7: BUSINESS BIRTHS AND DEATHS, RUGBY BOROUGH 2004-13 38 FIGURE 8: SELF-EMPLOYMENT, 2006/7 – 2013/14 39 FIGURE 9: POPULATION GROWTH INDEX, 1998-2013 40 FIGURE 10: GROWTH IN WORKING-AGE POPULATION (16-59/64) IN RUGBY BOROUGH, 1998-2013 40 FIGURE 11: AGE STRUCTURE OF RUGBY BOROUGH’S POPULATION, 2013 41 FIGURE 12: CHANGES IN POPULATION BY AGE BAND IN RUGBY BOROUGH, 1998- 2013 42 GL Hearn Page 3 of 131 \\rugbyfs\LOCPLAN\ECONOMY AND EMPLOYMENT\Employment Sites - MATT\Rugby Employment Land Study 2014-15\FINAL REPORT - MAY 2015\ELR Final Report 22-05- 15.docx Rugby Borough Council Employment Land Study Final Report, May 2015 FIGURE 13: JOBS DENSITY, 2012 43 FIGURE 14: COMMUTING PATTERNS, 2011 43 FIGURE 15: WORKPLACE-BASED WEEKLY EARNINGS OF FULL-TIME WORKERS 44 FIGURE 16: COMPARISON OF RESIDENTS- AND WORKPLACE-BASED EARNINGS, FULL-TIME WORKERS, 2013 45 FIGURE 17: TRENDS IN ECONOMIC ACTIVITY, 2006-14 45 FIGURE 18: EMPLOYMENT RATE, 2006/7 – 2013/14 46 FIGURE 19: UNEMPLOYMENT, 2006/7 – 2013/14 47 FIGURE 20: PROFILE OF OCCUPATIONS OF WORKING-AGE RESIDENTS, RUGBY BOROUGH 2011 48 FIGURE 21: SKILLS PROFILE OF RESIDENTS, 2011 48 FIGURE 22: PROFILE OF OFFICE DEALS IN RUGBY BOROUGH BY SIZE, 2005-14 55 FIGURE 23: OFFICE FLOORSPACE TAKE-UP IN RUGBY BOROUGH BY SIZE BAND, 2005-14 56 FIGURE 24: OFFICE FLOORSPACE AVAILABILITY, RUGBY BOROUGH DECEMBER 2014 57 FIGURE 25: OFFICE FLOORSPACE AVAILABILITY IN RUGBY BOROUGH BY QUALITY, DECEMBER 2014 57 FIGURE 26: INDUSTRIAL DEALS, RUGBY BOROUGH 60 FIGURE 27: INDUSTRIAL TAKE-UP, RUGBY BOROUGH 2005-14 61 FIGURE 28: INDUSTRIAL TAKE-UP BY TYPE OF SITE, RUGBY BOROUGH 2005-14 62 FIGURE 29: AVAILABLE FLOORSPACE IN RUGBY BOROUGH, DECEMBER 2014 62 FIGURE 30: INDUSTRIAL FLOORSPACE AVAILABILITY BY QUALITY, RUGBY BOROUGH DECEMBER 2014 63 FIGURE 31: FORECAST TOTAL EMPLOYMENT TO 2036 66 FIGURE 32: BENCHMARKING CE FORECASTS 67 FIGURE 33: FORECAST NET FTE JOBS GROWTH IN RUGBY BOROUGH (2011 – 2031) 69 FIGURE 34: FORECASTS OF NET CHANGES IN EMPLOYMENT FLOORSPACE BY USE CLASS IN RUGBY BOROUGH, 2011-31 71 FIGURE 35: COMPARISON OF CE 2013 AND 2014 FORECASTS FOR RUGBY BOROUGH, TOTAL EMPLOYMENT 72 GL Hearn Page 4 of 131 \\rugbyfs\LOCPLAN\ECONOMY AND EMPLOYMENT\Employment Sites - MATT\Rugby Employment Land Study 2014-15\FINAL REPORT - MAY 2015\ELR Final Report 22-05- 15.docx Rugby Borough Council Employment Land Study Final Report, May 2015 FIGURE 36: MODELLED GROWTH IN RESIDENT LABOUR FORCE IN RUGBY BOROUGH, 2011-31 – BASED ON 660 DPA 74 FIGURE 37: MODELLED GROWTH IN RESIDENT LABOUR FORCE IN RUGBY BOROUGH, 2011-31 – BASED ON 540 DPA 75 FIGURE 38: MODELLED GROWTH IN RESIDENT LABOUR FORCE IN RUGBY BOROUGH, 2011-31 – BASED ON 453 DPA 75 List of Tables TABLE 1: COMMUTING FLOWS – RESIDENTS ANALYSIS 15 TABLE 2: COMMUTING FLOWS – WORKPLACE ANALYSIS 15 TABLE 3: EMPLOYMENT LAND SUPPLY IDENTIFIED IN CORE STRATEGY 24 TABLE 4: ED2 AND ED4 SITES 24 TABLE 5: POLICY ED5 SITES – STRATEGICALLY SIGNIFICANT EMPLOYMENT SITES 25 TABLE 6: COMPOSITION OF EMPLOYMENT BY SECTION, 2013 30 TABLE 7: EMPLOYMENT BY SECTION, LOCATION QUOTIENT, 2013 31 TABLE 8: SECTORS WITH MORE THAN 1,000 EMPLOYEES IN RUGBY BOROUGH, 2013 32 TABLE 9: TRENDS IN MANUFACTURING EMPLOYMENT, RUGBY BOROUGH 1983-2013 35 TABLE 10: TRENDS IN PROFESSIONAL SERVICES & PUBLIC ADMINISTRATION, RUGBY BOROUGH 1983-2013 36 TABLE 11: NUMBER AND CONCENTRATION OF BUSINESSES BY SECTOR, 2013 37 TABLE 12: CE FORECASTS – ANNUAL GROWTH RATES 67 TABLE 13: PERCENTAGE OF FTE JOBS PER SECTOR, RUGBY BOROUGH 68 TABLE 14: FORECAST FTE JOB GROWTH BY B-CLASS SECTOR, 2011-31 70 TABLE 15: FORECAST NET LAND REQUIREMENTS TO SUPPORT NET FORECAST EMPLOYMENT GROWTH 71 TABLE 16: EMPLOYMENT LAND COMPLETIONS, 2009-2014 77 TABLE 17: LIST OF EMPLOYMENT AND POTENTIAL EMPLOYMENT SITES REVIEWED 81 TABLE 18: CURRENT DELIVERABLE LAND SUPPLY, 2015 125 TABLE 19: RECOMMENDED APPROACH TO EMPLOYMENT SITES 128 GL Hearn Page 5 of 131 \\rugbyfs\LOCPLAN\ECONOMY AND EMPLOYMENT\Employment Sites - MATT\Rugby Employment Land Study 2014-15\FINAL REPORT - MAY 2015\ELR Final Report 22-05- 15.docx Rugby Borough Council Employment Land Study Final Report, May 2015 Quality Standards Control The signatories below verify that this document has been prepared in accordance with our quality control requirements. These procedures do not affect the content and views expressed by the originator. This document must only be treated as a draft unless it is has been signed by the Originators and approved by a Business or Associate Director. DATE ORIGINATORS APPROVED May 2015 Aled Barcroft, Planner Nick Ireland Nick Ireland, Planning Director Planning Director Limitations This document has been prepared for the stated objective and should not be used for any other purpose without the prior written authority of GL Hearn; we accept no responsibility or liability for the consequences of this document being used for a purpose other than for which it was commissioned. GL Hearn Page 6 of 131 \\rugbyfs\LOCPLAN\ECONOMY AND EMPLOYMENT\Employment Sites - MATT\Rugby Employment Land Study 2014-15\FINAL REPORT - MAY 2015\ELR Final Report 22-05- 15.docx Rugby Borough Council Employment Land Study Final Report, May 2015 1 EXECUTIVE SUMMARY 1.1 Rugby Borough Council has commissioned GL Hearn to undertake an employment land review to assess the need for and supply of employment land in Rugby Borough up to 2031 in order to inform the emerging new Borough Local Plan. 1.2 The purposes of this study are to: Review the characteristics and performance of Rugby Borough’s economy; Assess commercial market trends and dynamics in the office and industrial sectors; Assess the supply of land capable of accommodating new B-class employment development; Consider the implications of employment land provision in adjoining areas on Rugby Borough; Forecast future needs for employment land provision within the Borough; Bring the analysis together to set out the need for additional employment land provision. 1.3 Rugby Borough has a population of 101,400 residents as of mid-2013. Population growth in the Borough has been relatively strong over recent years with an 18% growth over the last 15 year period. This compares favourably with the 9% growth rate seen across the Coventry and Warwickshire Local Enterprise Partnership (LEP) area, and the 10% rate seen nationally over this period. Rugby had seen particularly strong growth over the period from 2000 to 2010 with the Borough’s population growing by an additional 7,000 people over this period. This rate of growth has however tailed off somewhat over the last few years in line with lower levels of housing delivery. 1.4 Rugby Borough’s economy has performed strongly in the recent past and has fared the recession well. Economic participation is high in the Borough with 82% of the population economically active – higher than rates seen across the LEP, West Midlands Region, and nationally. Since the recession there has been a marked fall in unemployment levels with unemployment now below 4% - lower than these wider geographical areas. 1.5 The skills profile of Rugby Borough is relatively strong with a higher proportion of the population with level 2 (GCSE) and level 4+ (degree) skills above LEP, regional, and national averages. Conversely fewer of Rugby’s residents possess no qualifications than averages. This is reflected in earnings levels in Rugby which are, on average, above those in wider geographies pointing to above average productivity. Average workplace based earnings are 7% above the national average and 17% above the West Midlands regional average. 1.6 Analysis of the current employment composition of Rugby Borough shows that the largest industrial sectors in the Borough are wholesale and retail trade (15% of Borough jobs), construction (11%), manufacturing (10.5%), and education (9.5%). When compared to the employment composition of the Coventry and Warwickshire LEP and the West Midlands Region, there are a number sectors which have a particular concentration in Rugby Borough. The construction industry is particularly GL Hearn Page 7 of 131 \\rugbyfs\LOCPLAN\ECONOMY AND EMPLOYMENT\Employment Sites - MATT\Rugby Employment Land Study 2014-15\FINAL REPORT - MAY 2015\ELR Final Report 22-05- 15.docx Rugby Borough Council Employment Land Study Final Report, May 2015 strong with twice the representation in Rugby than seen across the region, due in part to Cemex having their headquarters in Rugby. The transport and storage sector is also particularly strong in the borough, reflecting the Boroughs excellent access to the regional and national strategic road and motorway network. There is also a particular strength in the professional, scientific, and technical service sectors in the Borough.