Economic Needs Assessment Newcastle-under-Lyme & Stoke-on-Trent June 2020 Contents Executive Summary i 1. Introduction 1 2. National Policy and Guidance 3 3. Economic and Spatial Context 6 4. Local Economic Health-check 18 5. Overview of Employment Space 39 6. Commercial Property Market Review 60 7. Review of Employment Sites 81 8. Demand Assessment 93 9. Demand / Supply Balance 122 10. Strategic Sites Assessment 141 11. Summary and Conclusions 152 Appendix 1: Site Assessment Criteria Appendix 2: Site Assessment Proformas Appendix 3: Sector to Use Class Matrix Our reference NEWP3004 This report was commissioned in February 2020, and largely drafted over the period to June in line with the original programme for the Joint Local Plan. Discrete elements of the analysis, purely relating to supply, were completed beyond this point due to the limitations of lockdown. Executive Summary This Economic Needs Assessment has been produced by Turley – alongside a separate but linked Housing Needs Assessment (HNA) – on behalf of Newcastle-under-Lyme Borough Council and Stoke-on-Trent City Council (‘the Councils’). It is intended to update their employment land evidence, last reviewed in 20151, and comply with national planning policy that has since been revised2. It provides evidence to inform the preparation of a Joint Local Plan, while establishing links with ambitious economic strategies that already exist to address local and wider priorities in this area. It should be noted at the outset that while this report takes a long-term view guided by trends historically observed over a reasonable period of time, it has unfortunately been produced at a time of exceptional economic volatility. Reporting has coincided with the coronavirus pandemic (Covid-19) which prompted an unprecedented shutdown of economic activity, with inevitable uncertainty about the timescales for the expected recovery and only limited evidence available on its local or even national impact. This clearly increases the level of uncertainty when considering – as required by national planning policy – the prospect of future economic growth in the study area over the long- term. With this report intended to inform the production of a new Local Plan, the Councils are advised to closely monitor wider and local economic trends during its preparation, particularly as the economy recovers from the pandemic, and review the continued applicability of any conclusions drawn at this uncertain time. Similarly, this economic context has limited the potential for and representativeness of engagement with the business community in particular as part of the study. Future updates will need to incorporate engagement with businesses as the evidence is used to underpin emerging planning policy. Understanding existing trends The analysis in this report reveals the progress that the study area – capturing the entirety of both Stoke-on-Trent and Newcastle-under-Lyme – has made in the years since the last Employment Land Review (ELR) was prepared in 2015. In summary: Job growth has been sustained in recent years, most notably – though not exclusively – in Stoke-on-Trent where the rate of job creation has accelerated far beyond the forecast favoured in the last ELR. This has spanned a range of sectors, including health, logistics, IT and construction, but public services, wholesale and retail continue to account for the largest shares of all jobs in the study area. Professional services remain relatively underrepresented, but it is notable that professional occupations are increasingly prevalent amongst the 1 NLP (2015) Newcastle-under-Lyme and Stoke-on-Trent Joint Employment Land Review 2 MHCLG (2019) National Planning Policy Framework i workforce which may have contributed towards a recent rise in average earnings that nonetheless remain relatively low; The resident labour force has responded positively to this improving economic context, with the rate of unemployment in each authority having substantially fallen to – or near – record lows as of 2019. A growing proportion of residents are working in higher paying roles, with their average earnings rising as a result, and an increasing number are highly qualified with fewer possessing no qualifications. Certain areas remain highly deprived in a national context, however; New offices, warehouses and industrial premises have been delivered in recent years, but existing space has also been lost. The study area continues to be defined by its offer of industrial space, much of which is dated – and often lost – but with recent provision appearing to have enabled a slight improvement in quality. There is proportionately less office space in the study area than seen nationally or in some neighbouring areas, largely concentrated in Hanley and the town centre of Newcastle-under-Lyme as well as in business parks, and while such space continues to be provided – including through a small number of large schemes – it is also being simultaneously lost at a similar rate. The delivery of new warehousing space is in contrast outpacing the rate of loss and therefore markedly growing the stock of such premises, which are largely concentrated on a number of sites along the A500 in Stoke-on-Trent and are locally unique in being relatively high quality; and Market activity has generally slowed in recent years, having peaked around the point at which the 2015 ELR was published. In the case of industrial and warehousing premises, which cannot be separated in this particular analysis, this slowdown appears driven by a lack of availability rather than reducing demand, with the most accessible parts of the study area – along the A500, A50 and M6 – still viewed as premier locations for distribution in particular. There are, though, exceptions to the general trend, with Stoke-on- Trent continuing to see a relatively large number of increasingly sizeable office transactions before a flurry of smaller premises were leased last year. Availability rates for offices across the study area have fallen from recessionary highs to align closely with the regional and national average, but the prevalence of second hand stock and the finite capacity of this locally oriented market mean that this has not perceptibly inflated average rents. Rents for warehouses have, in contrast, surged in Stoke-on-Trent especially, potentially due to the provision of quality new space and the extremely low availability rate. The availability rate has also fallen across industrial premises, in a fundamental change from the trend observed in the last ELR, which has led to a rise in average rents that still remain low due to the “sub-prime” nature of the market. ii Assessing the current supply of employment land In the current context described above, Aspinall Verdi have sought to reassess the current supply of employment land last reviewed in the 2015 ELR, based on the Councils’ criteria and their occasionally revised classification of sites. This current supply has been found to offer circa 293.4ha of developable land in total, with the majority (228.7ha) located in Stoke-on-Trent and the residual 64.8ha in Newcastle-under-Lyme. Existing allocations are an important but increasingly small component of the latter but there are no such sites remaining in Stoke-on-Trent, and this means that the vast majority of the existing supply across the study area is vacant land either within or adjacent to existing employment sites. This is augmented by circa 66.6ha of land with extant planning permission. This current supply has been evaluated by Aspinall Verdi, based on criteria set by the Councils, with sites indicatively ranked – at a necessarily high level – against 12 factors linked to their market appeal, physical characteristics and sustainability. This indicates that good or very good sites account only for around a third (97ha) of the current supply across the study area, with most sites instead considered to be relatively average. A similar process has been followed by Aspinall Verdi in assessing further sites identified by the Councils, or submitted through the call for sites process, as offering the potential for future employment uses. It is for the Councils to consider, through the plan-making process, whether these sites are appropriate for such development noting that a large proportion are in the Green Belt, but it can nonetheless be observed that they collectively offer a further 366.7ha of potential employment land. This is, though, largely attributable to eight sites in Newcastle-under-Lyme, which are of a “strategic” scale and are separately considered further in that context. Estimating future demand and the balance with supply This report has attempted to quantify the future demand for employment land and floorspace over the emerging plan period, using the approaches suggested in Planning Practice Guidance (PPG) and drawing upon the latest available evidence. It is important to recognise that each approach has strengths and limitations, and none should be viewed as definitive with a degree of interpretation necessary. The PPG encourages the use of employment forecasts, and three have been obtained from the leading providers – Experian, Cambridge Econometrics and Oxford Economics – to inform this study. They offer divergent views on the potential for job growth in the study area, as was the case when the last ELR was prepared, with Experian forecasting 794 additional jobs annually – driven by health and logistics especially – but Oxford Economics implying that 167 jobs will be lost each year,