Eric Pickles

Coventry Gateway decision blocks path for West Midlands jobs

By: David Bailey @dgbailey
Published: Tuesday, February 24, 2015 - 11:19 GMT Jump to Comments

Eric Pickles, the Communities and local Government Secretary has turned down the proposed ‘Coventry Gateway’ scheme. But UK manufacturing needs the space to grow. It is time to look at the Green Belt again for the space we need to create new jobs?

The Coventry Gateway development – which could have created thousands of jobs - had been approved by both Coventry City Council and Warwick District Council, and was backed by the Coventry and Warwickshire Local Enterprise Partnership.

Pickles had “called in” the planning application for the Gateway project in July 2013. It had been approved by Coventry City Council and Warwick District Council planning committees but had received more than 1,000 objections. That led to a public inquiry last year into what some saw as one of the most important job creation schemes in the region in recent years.

The £450m proposed development would have been built on Green Belt land. It would have included a technology hub on land north of Coventry Airport as well as a major manufacturing and logistics hub to the south. Major road improvements to ease congestion and improve access around Jaguar Land Rover’s Whitley operation would also have been undertaken.

A country park would have been created as part of the development, with the planting of 30,000 trees and 5km of hedgerows in addition to the establishment of 9.5km of new cycle and footpaths.

The firm backing the scheme, the Coventry & Warwickshire Development Partnership (CWDP), expressed its disappointment at the decision. Peter Burns, president of the Coventry and Warwickshire Chamber of Commerce, called the decision a “huge blow.” Others described it as a “kick in the teeth” for the LEP and local councils.

David Keir, chairman of joint venture partner Roxhill noted that “Coventry and Warwickshire is rapidly running out of sites to attract investment… the area is very short of locations that will not only attract inward investment but also allow companies to expand and remain in the area”. He has a point.

Building on green belt land is a controversial issue, and Pickles no doubt weighed up the value of jobs created against the loss of green belt. That’s of course the right thing to do, but I wonder if he fully appreciates the acute shortage of space available to manufacturers in the region.

As I’ve noted here before, decades of offshoring is now being replaced with a growing trend for reshoring manufacturing activities. The UK, for example, has of late become a great place to make cars, with over £7 billion invested in the automotive sector in the last three years with plants working 24 hours a day, seven days a week.

It is now recognised as being genuinely world class, with a highly skilled workforce, low costs, high productivity and a pronounced shift to making upmarket vehicles. The success of the sector has presented companies in the automotive supply chain with opportunities to reshore their activities.

However, companies are faced with challenges including high energy costs, access to finance, and the shortage of suitable property in the right locations.

As a Birmingham Real Estate Network event noted late last year, firms reshoring face a fight for an ever-decreasing pool of available industrial and logistics accommodation.

Alex Carr, Industrial and Logistics Agency Director at Lambert Smith Hampton, argued at the event that there is a massive shortage of supply of industrial and logistics property across Birmingham and the West Midlands.

“The existing supply has been completely exhausted and we are going to face a lot of problems next year. Occupiers have this year taken the opportunity to grab the last few available properties and now there is very little left on the market,” he said.

“It’s a good time to be a landlord, with rents rising to above £6.00 per square foot, but land supply is a major issue and the plans for HS2 have caused us real problems… The region is losing out to the East Midlands which has a good supply of potential sites.”

Carr summarised the West Midlands market:

+ Occupiers have to consider design and build solutions but if site is not “oven ready” it has an impact in terms of choice, cost and timing. A realistic occupancy date is between 18-24 months into the future.

+ Should the likes of automotive component suppliers find a suitable location they will be vying against the burgeoning e-commerce sector for both existing buildings and design and build solutions.

+ There is undeveloped land available throughout the region that would be suitable for development but it lacks planning consent, the allocation of which can be a protracted process.

Looking across the pond, US experience shows us is that reshoring is indeed a real opportunity, but isn’t a foregone conclusion.  And like the US case, while a range of economic fundamentals have shifted, the actual logistics of bringing production back to the Midlands can be hard going.

As I’ve noted before, whether reshoring benefits our region depends on the local availability of skills, innovation capacity, the supply chain base, support services, the availability of land, and institutional ‘thickness’.  Like the US, reshoring in the UK will play out on a region-by-region basis.

So far we have seen a great effort locally by Local Enterprise Partnerships (LEPs), suppliers, unions, assemblers and support agencies such as the Manufacturing Advisory Service (MAS) to work together to support the local mini-renaissance of manufacturing, especially in auto. The cooperation between some of the local LEPs over inward investment, for example, has been great to see.

That needs to go further – for example in terms of more cooperation between local authorities so that we can make the most of devolution opportunities thrown up in the wake of the Scottish referendum. That’s needed so that we can have the policy levers available to continue supporting the mini-renaissance of manufacturing locally. But at a more basic level it also means making sure we have the space for manufacturers to reshore activities and jobs to.  

Turning down the Coventry Gateway scheme may well have saved part of the Coventry Green Belt, but its likely effect will be to push manufacturing jobs to other regions given the acute shortage of suitable manufacturing land here in the West Midlands.

Professor David Bailey works at the Aston Business School.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

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