Enterprise Zone “gazelle” companies (some in Devon) have unintended consequences

“Britain’s fastest-growing businesses could be contributing to job losses, according to research that claims the government’s policy of backing entrepreneurial companies “may be fundamentally at odds” with tackling regional inequalities.

A study of the performance of more than six million companies over a period of 17 years found that high-growth businesses had a “spillover” effect that could damage local employers.

Fast-growing companies, sometimes dubbed “gazelles”, have been identified in recent years as a way of boosting job creation and improving the nation’s productivity. Despite accounting for less than 5 per cent of businesses, these companies create about half of all new jobs and typically show higher levels of productivity.

However, the study, conducted by the Enterprise Research Centre, found that companies with the fastest employment growth — 20 per cent growth every 12 months for three consecutive years — tended to grow by “hoovering up” jobs from slower- growing businesses in the same region, in what the researchers called a “crowding-out competition effect”.

A 1 per cent rise in the incidence of high-growth businesses in a region was found to actually slightly cut employment, by 0.35 per cent on average — equivalent to a net loss of about 122,000 jobs UK-wide over the period studied, 1997-2013. The worst affected regions included the Scottish Highlands, Cheshire, the North East, Lincolnshire and Devon. In contrast, many urban areas in the South East and Midlands saw a net jobs gain.

Negative effects were most pronounced in the manufacturing sector and rural parts of the UK, where competition for skilled workers was most intense, the researchers said.

The fastest growing companies often attract the most skilled workers in a region where such staff are scarce, leaving slower-growing rivals struggling to attract employees and having to pay more to keep existing team members. As a result they hire fewer people and could be forced into job cuts.

Mike Harding, director of Inspira Digital, said that his ecommerce agency based in Barnstaple, Devon, competes with a London-based agency with a satellite office in north Devon. “If you have someone offering London wages here, that is a black hole that sucks up the local talent,” he said.

The issue can be exacerbated by large companies being offered tax breaks to open an office in Devon in the name of local development, Mr Harding said.

Professor Jun Du of Aston University, one of the authors of the research, said that “while encouraging clusters of fast-growth firms can bring productivity benefits to whole supply chains, some regions and industries with acute skills shortages could see unintended consequences”.

Source: The Times (pay wall)

EDDC councillor desperately tries to justify expansion of Greendale and Hill Barton – going against Village Built Up Area requirements

Owl says: what a lot of help Greendale and Hill Barton are getting from (some) EDDC councillors! Hurriedly arranged meetings, a desperate race to find loopholes to allow expansion and now this. Is it a personal comment? Well, an awful lot of “we” in there!!! And quoting 2012 consultant’s views in 2018 – astonishing! AND playing down their own industrial sites (too big for small businesses) – REALLY!

“Mike Allen comment to Inspector on Hill Barton and Greendale issues

(The Lead Councillor for Business and Employment in East Devon District Council (EDDC) and past Chair of the Local Plan Forum which developed the current EDDC Local Plan)

EDDC welcomes proposals for business investment and the creation of units for small and medium sized enterprises across the East Devon area subject to NPPF and Local Plan criteria.

We appreciate that cumulative development along the A3052 road corridor has the potential to negatively impact upon existing communities and infrastructure and the operations of existing businesses. The lack of objection from Highways England on a recent nearby planning application is significant Hill Barton (HB) and Greendale Business Park (GBP) are situated near recently approved (on appeal) Yeo Business Park. This determination is of direct material significance in considering further proposed development.

I will examine four main areas of consideration for Economic development in respect of this SPD for Business Parks:

1) It could be reasonably assumed that the Planning Inspector’s view that employment space proposals of a ‘relatively small-scale development that would provide jobs for local people’ would be applicable to the current plans for Business Parks in the area. It is similarly likely that this location would also be deemed a suitable location for small scale business units at appeal.

2) Greendale and Hill Barton Business Parks are larger scale and vitally important to the economic expansion of East Devon outside of the Science Park and Skypark areas.

3) The lack of residential neighbours means no loss of amenity.

4) There is clear demand for the facilities at Hill Barton and Greendale, without which business expansion would not be accommodated elsewhere. The medium quality, flexibility and appeal of the industrial storage space and units for larger growing businesses in the district is essential.

To be clear, we have no economic basis on which to challenge further development within the perimeters set in the Villages DPD.

5) EDDC’s Economic Development team have reviewed the Draft Villages Plan as well as the Sustainability Appraisal. Having also reviewed Strategy 27 and Policy E7 of the adopted Local Plan, in addition to material evidence in respect of employment land delivery below, I recommend that the Greendale (GD) and Hill Barton (HB) employment sites be removed from this Villages Development Plan.
Approval of this draft Villages DPD with GD and HB included will exacerbate the undersupply of employment premises we are already experiencing through non-delivery of our employment allocations in the adopted Local Plan.

The Council’s strategic drive is to prioritise the development of employment land in the west of the district. Any applicants are advised to examine the potential suitability of our Enterprise Zone sites (Inc. the Exeter Airport Business Park Expansion site; Cranbrook Town Centre; Skypark & Science Park), all of which benefit from infrastructure investment in excess of £25 million and include enhanced transport corridor infrastructure, rail stations and employment site infrastructure as well as being immediately adjacent to Exeter Airport and A30 and M5 junctions.

However, we are aware of some businesses feeding back a view that sites, such those examined above are aimed predominantly at the medium to large scale employers with scientific and professional or transport accommodation requirements in excess of 5,000 sq. ft. This can fail to meet the needs of many new and growing local medium sized manufacturing / B2 class businesses many of which would not be welcome in proximity to residential areas or on Science Parks.

In 2012 East Devon District Council Commissioned Professor Nigel Jump of Strategic Economics Ltd to carry out an independent assessment of the economic impact of the two strategic employment sites in East Devon. His conclusions were clear in that investment in these locations has unlocked valuable employment and economic growth in the district.

Moreover, these sites have the potential to make further economic net benefits (job creation, added GVA and inward investment) throughout challenging economic periods
to come. The report concludes that when social and environmental factors are considered, there remains a net positive impact of extended capacity at these sites which are yet to run their full course.

In light of this EDDC commissioned evidence, inclusion of Greendale and Hill Barton within the Villages DPD is unwarranted, contrary to the specialist advice we have commissioned and would cause demonstrable harm to the district.

These findings are echoed in 3 subsequent studies of demand for industrial and commercial space in East Devon which formed the overall economic element of the EDDC Local Plan which placed great weight on the sustainable balance of social, economic and environmental issues as the “Golden thread” which ran through the Local Plan and the NPPF

The proposals for the development of medium sized businesses of B2/B8 category fit well with a large number of B use premises enquires received by Economic Development in the last 2 years,

The filling out and redevelopment of Greendale and Hill Barton will complement the demand for larger B use provision and remain a welcome addition to the diverse mix of commercial accommodation required to facilitate indigenous business growth as well as the district’s ability to meet the needs of potential inward investors seeking to become established or grow their operations in East Devon.

Having recently reviewed B use premises demand across the district, the following updates can be cited: –

In Exmouth, B use accommodation at Liverton Business Park is in high demand. We have seen speculative build in this location with all but their final unit now let. They are unable to accommodate further demand

Across Clinton Devon Estate’s whole East Devon portfolio of commercial property; they have no other vacant B use premises available, representing a significant shortage of supply.

The Exeter and Heart of Devon Commercial Premises Register has received 43 separate enquiries for B1 Office accommodation in the District in the last 3 months

Greendale have received more than 80 B use premises enquiries in the last 12 months totalling more than 850,000 sq. ft.

Also, west of the Enterprise Zone, land is being brought forward for speculative development of small, flexible B use units.

Recently, as part of their Business Plan for the use of the Owen Building, Rolle Exmouth Ltd provided details of 59 separate businesses, social enterprises, individuals, groups/classes, education & training providers who have declared an interest in finding small SME commercial premises in Exmouth
Lastly, to curtail the provision of good jobs at Hill Barton and Greendale would be to consciously, selectively and actively undermine our stated (and adopted) Local Plan ambition of delivering one job per new dwelling. This target has not yet been realised, resulting in an unsustainable imbalance between the provision of new homes and new, quality jobs in East Devon.

We cannot continue to overlook this imbalance as our young teens and twenties leave to pursue careers elsewhere and the economically inactive grow as a proportion of our aging population.

We continue to receive inward investment enquires of differing scales and different employment use classes, including from the Dept. for International Trade (DIT, formerly UKTI).

These request a diverse mix of investment formats and much needed employment opportunities from outside the district. However, it is often difficult to identify suitable available employment premises.

Maintaining a diverse mix of development land and premises is key to securing these investments and associated local economic benefit.

The increased density of employment possible on Greendale and Hill Barton sites for B1/B2/B8 use is a clear benefit to our established local supply chains and producers/providers served by these developments.

Finally – I am concerned about an issue of prejudice: I believe that it would be prejudicial to the economic development of East Devon to consider the imposition of Strategy 7 (Greenfield) on Hill Barton on Greendale since the sites are clearly well used industrial sites which are in the right location for the type of businesses they serve.

The two sites have been afforded a specific exception in Policy E7 – ‘Extensions to
Existing Employment Sites’ of our adopted Local Plan (See Pg. 196 “This policy will not apply at Hill Barton and Greendale business Parks”). While for landscape and other reasons we might wish to limit the further expansion of the sites, I believe it would be prejudicial to single out these two sites rather than the 50 other smaller industrial sites for special treatment.

The criteria already laid down within the Local Plan are fully sufficient to control and promote the appropriate development on these sites.

Recommendation

I recommend that the Greendale (GBP) and Hill Barton (HB) employment sites be removed from this Villages Development Plan. I recommend that any application of strategy 7 within the perimeters already agreed should not occur but that other Planning Policies on Industrial Land development should be applied on the basis of equity and equality with other industrial sites in East Devon.

Approval of this draft Villages DPD with GD and HB included and subject to strategy 7 will exacerbate the undersupply of employment premises we are already experiencing through non-delivery of our employment allocations in the adopted Local Plan.”

How do you spot a development site? Look for a road tunnel!

This article contains a useful overview of the Clyst Honiton bypass tunnel, whose lights are being replaced by LEDs.

But the accompanying aerial view of it is the more interesting photo:

http://www.devonlive.com/news/devon-news/clyst-honiton-bypass-tunnel-near-463174

It is a “Growth Point” development site

http://www.exetersciencepark.co.uk/news-events/25-news/77-clyst-honiton-bypass

and, obviously, a new road could not interfere with that given its access to vastly more development land a la Lidl and Skypark!

With the airport and other developments in “Greater Exeter”, will Cranbrook become one of the most polluted places in Devon?

More MASSIVE speculative industrial development at Clyst Honiton with benefits to LEP

Owl says: watch the claims of “new” jobs – most companies are relocating from premises just outside the “Growth Point” to take advantage of subsidies such as business rate holidays and are NOT creating “new”jobs at all.

“It appears major development at Clyst Honiton on the edge of Exeter will not cease any time soon, with outline plans in for an 110,000sqm industrial park next to the Lidl depot. The massive development would create between 1,530 and 1,817 new jobs and contribute an extra £90 to £105m to the regional economy. [Owl says: pinch of salt needed here – Skypark made similar claims but has attracted few NEW jobs – mostly only locally relocated ones, see above].

It’s second phase of development at land at Hayes Farm on behalf of Church Commissioners For England. The huge chunk of land is earmarked for more storage and distribution warehouses, offices and business space as part of the Exeter and East Devon Growth Point.

It would also need associated parking, servicing, yard areas, landscaping and engineering works including demolition of existing building within the site. The development also sits near the Skypark, a similar development of a similar size [Owl:which is currently still mostly empty after several years of marketing and an abortive attempt to relocate the EDDC HQ from Sidmouth].

At the moment the future occupiers are unknown, but it’s possible a major company could take the entire site. Options for the land include space for 540 car parking spaces on a two unit scheme, and 530 for a multi-unit scheme. [Translation: speculative building].

Alongside news of the latest planning application, buildings at the nearby Skypark development are already taking shape. Built over 20 years, the 110-acre Skypark site will provide 1.4 million sq ft of warehouse, industrial and office space and deliver up to 6,500 new jobs.

When it completes this autumn, this new office building will create 17,142 sq ft of employment space.

The new offices will join the Ambulance Special Operations Centre (ASOC West) and DPD UK’s new 60,000 sq ft distribution centre on site [relocated from nearby Sowton]. They will benefit from the £3.5 million worth of investment in road and services infrastructure at Skypark and the five-acre public realm area, complete with trim trail exercise stations.

Ian Guy, Senior Development Manager for St. Modwen and Devon County Council’s development partner for the £210m Skypark development, said: “These speculative [Owl’s BOLD] offices are going up alongside the new headquarters for Devon and Cornwall Housing [relocating from central Exeter], which is also under construction on site. They represent the first major office development in Exeter for many years and are a strong sign of the improving occupier market in the local area.”

http://www.devonlive.com/massive-homes-plan-next-to-lidl-depot-near-exeter/story-30206010-detail/story.html

How can you say the market is improving when buildings are speculative, they have no confirmed interest and those which ARE occupied are taken by locally relocated businesses taking advantage of incentives such as no business rates for 5 years to move. And, of course, the Local Enterprise Partnership benefits!

“The current iteration of Enterprise Zones was established by the Government in 2012, as part of their long-term economic plan. They are geographically defined areas, which aim to support growth by encouraging businesses to locate within them, providing a number of incentives including:

Up to 100% business rate discount worth up to £275,000 over 5 years
Simplified local authority planning
Roll out of super-fast Broadband where necessary
For zones in Assisted Areas, 100% enhanced capital allowances (tax relief) to businesses making large investments in plant and machinery.

Any business rates growth generated by the Enterprise Zone (over the next 25 years) is retained by the Local Enterprise Partnership (LEP) to reinvest in local economic growth.”

http://democracy.devon.gov.uk/documents/s2142/CS1622%20Enterprise%20Zones.pdf

Skypark: 30,000 sq ft let – only 1,300,000 sq ft or so left to go!

“Exeter-based housing association DCH is set to relocate its city centre headquarters to a new office building at Skypark.

It will be the first office occupier on the new business park near Exeter Airport when staff move into a new 30,000 sq ft office space at the 1.4 million sq ft scheme.

The new offices will join the Ambulance Special Operations Centre (ASOC West) and DPD UK’s new 60,000 sq ft distribution centre on the site.”
http://www.exeterexpressandecho.co.uk/housing-association-dch-to-move-exeter-headquarters-to-skypark/story-29906748-detail/story.html

30,000 sq ft out of 1.4 million sq ft available!

The (quite small) ambulance centre opened in 2014 and the 60,000 sq ft DPS distribution centre opened in 2015. With DCH in (probably) 2017 this will be 3 tenants in 4 years.

No wonder EDDC mooted having their HQ there – and plans are now being changed to accommodate things such as a nursery and hotel … remember, Diviani promised us all 6,500 new jobs from this development.

And how will people from areas outlying Exeter area find their way to Skypark? At the moment one bus will take most people (tenants, potential tenants and employees) into the central offices in Exeter – getting to Skypark will entail another journey out, with consequent expense.

But selling off the offices in Exeter (for student housing? which already surrounds the bus station) will be very lucrative.

Whatever happened to … Skypark?

Readers will recall when EDDC got so panicky about vast swathes of undeveloped land at Skypark, on the edge of Cranbrook, that it created the seemingly batty idea to relocate its headquarters ther – 10-25 miles away from its voters and practically in the lap of Exeter City Council.

That was fairly quickly knocked on the head (but not without tens of thousands of our pounds being wasted – Owl wonders how much the mostly- vacant site is still costing us).

So far, there seem to be only two businesses at EDDC’s flagship Skypark – DHL couriers and an ambulance call centre.

In July of this year, St Modwyn put in a planning application for reserved matters on the site, including construction of an office block.

The planning application is:

16/1462/MRES
The erection of an office block, landscaping, car parking and associated access and infrastructure (Reserved Matters application in pursuance of outline planning permission ref: 06/3300/MOUT)

Skypark Clyst Honiton Exeter EX5 2D

Planning application describes:

… creche, 150 bed hotel, cafes, leisure and conference facilities, relocated football ground, clubhouse and facilities, strategic open space (including flood attenuation) …

It was originally submitted in July 2016, and further information was submitted 21 September 2016.

Does anyone recall a hotel, conference centre and football pitch in the original plans? Whose pitch is being relocated?

Here is a paper trail:
https://planning.eastdevon.gov.uk/online-applications/simpleSearchResults.do?action=firstPage

Surely such a big change, especially after ten years (2006 – 06/3300/MOUT) should merit a new planning application?

Skypark – how’s it getting on?

Not too well if you read this story, where a large company preferred to go to the Hill Barton Business Park, further away from the M5 and a few miles extra driving on the A3052 road towards Sidmouth:

http://www.exeterexpressandecho.co.uk/forklift-truck-firm-still-opens-new-uk-headquarters-near-exeter/story-29536875-detail/story.html

What is it about EDDC-owned Skypark that made Hill Barton more attractive, Owl wonders? Especially as developer St Modwen has gone to (expensive?) lengths to pretty it up, sacrificing 5 acres of rental opportunity land to do so:

http://www.stmodwen.co.uk/media-centre/news/view/loca-councillor-marks-opening-of-new-public-realm-area