Accelerated development: do Simplified Planning Zones work?

The Hillington Park SPZ has accelerated a number of developments, including a “motorbike village”.

by Donna Gardiner

A simplified planning zone (SPZ) is a designated area where the need to apply for planning permission for certain types of development is removed so long as the development complies with a range of pre-specified conditions.

Although the SPZ concept has been around since the 1970s, the idea has never really taken off, and there are very few SPZs in the UK.

However, in the last 12 months there have been some signs of renewed interest in the concept.  As part of the current review of the planning system, the Scottish Government has shown considerable enthusiasm for the potential of SPZs to address the housing crisis and support economic development.

In their most recent position statement, they state:

Zoning has potential to unlock significant areas for housing development, including by supporting alternative delivery models such as custom and self-build. This could also support wider objectives including business development and town centre renewal

Indeed, the Scottish Government recently committed £120,000 to help four local authorities develop pilot SPZs for housing development in Aberdeenshire, Argyll & Bute, Dumfries and Galloway, and North Ayrshire.

There are also plans underway for the creation of two new SPZs in Scotland.  In Aberdeenshire, councillors have agreed that planning officers should begin the statutory process for the creation of an SPZ for industrial and commercial activity in the south of Peterhead. The SPZ aims to strengthen the town’s position as a key strategic investment location, and complement work to regenerate the town centre.

At the other end of the country, in the Scottish Borders, a consultation has recently closed on the creation of an SPZ in Tweedbank – the new Central Borders Business Park.  The scheme aims to capitalise on the opportunities brought about by the Borders Railway, and is likely to receive additional funding as part of the recently agreed Edinburgh and South East Scotland City Region Deal.

While there is enthusiasm for the Tweedbank SPZ, East Berwickshire councillor Jim Fullerton notes: “The question of the viability of this project has to be recorded. Enthusiasm is one thing, but evidence of it being viable is the key.”

Viability

So what is the evidence on the viability of SPZ’s?  In theory, SPZs can offer a number of benefits for both the developer and the planning authority, including:

  • removal of the ‘planning hurdle’ and associated fees
  • faster decision making and accelerated development
  • greater certainty for developers and stakeholders
  • simplified planning control
  • reduces the need for repetitive planning applications
  • saves time and costs both for organisations and the local planning authority
  • offers more flexibility than a masterplan
  • attracts investment
  • can help to promote the reuse of existing space

However, while there are equivalent mechanisms in other countries, there are currently only two other operational SPZs in Scotland – Hillington Industrial Estate and Renfrew High Street.  They are widely considered a success, with Scottish Planner concluding that:

Both projects are a good example of how planning professionals, working with commercial stakeholders, can cooperate successfully in finding new ways to encourage sustainable economic growth.

Case study: Glasgow City Council and Hillington

In 2014, the first SPZ in Scotland in 20 years – the Hillington Park SPZ – was established by a partnership between Glasgow City Council and Renfrewshire Council.

The award-winning SPZ allows the landowner to increase space at the site by around 85,000 square metres, as long as proposals conform to the conditions set out in the SPZ scheme.

The SPZ is valid for 10 years.  So far, it has triggered around 20,000 square metres of development and attracted around £20 million pounds of investment.  Not only has it helped to promote the reuse of existing space, such as the obsolete Rolls Royce plant, it claims to have given the area a commercial advantage in attracting inward investment.

Jamie Cumming, the director of Hillington Park, said: “Our SPZ status means that new developments like the ‘motorbike village’ with Ducati Glasgow, Triumph Glasgow and West Coast Harley-Davidson as well as Lookers plc’s new Volvo and Jaguar showrooms and our own Evolution Court manufacturing and logistics development can be accelerated with an anticipated build time of just 10 months.”

Case study: Renfrew Town Centre

Building on the success of the SPZ at Hillington, in 2015 Renfrewshire council created the Renfrew Town Centre SPZ Scotland’s first SPZ focusing on town centres.  Renfrew is a “small, but vibrant” town centre. The SPZ aims to support existing businesses, encourage new businesses, and increase the number of people living within the town centre by supporting the re-use of vacant property on upper floors.

The scheme has been hailed as an excellent example of the Town Centre First principle.

According to Scottish Planner: “The scheme has been well received and offers simplicity to businesses who can invest in the town centre knowing that they can change the use of premises and upgrade the shop front without having to apply for planning permission”.

Challenges

However, SPZs are not without their challenges.  These include the initial costs of establishing the SPZ, which can vary significantly depending on the size and complexity of the scheme.  There is also the need to ensure that the SPZ is ‘future-proofed’ – so that it is still relevant throughout the duration of its life (usually 10 years).  It is also important that those establishing an SPZ address the perception held by many that the relaxed planning rules associated with SPZs will result in poor design or compromise environmental impact.

Future directions

In addition to the pilot SPZs, the Scottish Government has commissioned Ryden (in association with Brodies) to undertake research to assess the potential for a more flexible and more widely applicable land use zoning mechanism than SPZs provide at present.  The research will inform the Government’s final proposals.

The research team at Idox will be following the revival of SPZs in Scotland with interest.

Supporting markets to survive and thrive

For around a thousand years, the London Borough Market has existed in one form or another.  It has survived fire, flood, plague and war – and on the 3rd of June this year, a terrorist attack.  The market has since reopened, with traders determined to continue their work and serve the local community.

Although many markets are a historic part of their host towns and cities, they are far from being relics.  Indeed, in recent years markets have experienced something of a revival.  In London alone, since 2010, the number of street markets has grown from 162 to over 250.

There are clear reasons for this – markets offer consumers and traders a number of benefits, and they make significant contributions to the economic, social and political health of towns and cities.

Economic impact of markets

Indeed, in 2015, the Institute of Place Management (IPM) conducted a comprehensive review of the impact of markets and found that markets not only have a significant turnover, they also impact indirectly on the wider economy – meaning that the £3.5 billion turnover directly attributable to retail markets is actually worth around £10.5 billion to the UK economy.

The Portas review in 2011 hailed markets as a potential saviour of the high street.  Indeed, the IPM review supports this, reporting that markets can help to increase town centre footfall by up to 25%.  This has significant economic potential.  In London, market visitors spend around £752 million per annum in nearby shop-based retailers.

Markets were also found to:

  • act as a significant employer, both nationally and at the local level
  • support intergenerational economic mobility (through family-owned businesses)
  • support the development of entrepreneurial skills in young people through ‘youth markets’
  • act as business incubators and support business formation due to their low barriers to entry, for example, enabling migrants to set up their own businesses
  • enable small businesses to reach larger businesses whom they can supply, and support other local businesses, such as farmers.
  • encourage high street diversity and create a distinct ‘identity’ for high streets
  • promote high street resilience, as they are flexible and able to respond quickly to changing demands.
  • help to utilise vacant and underused spaces within high streets
  • attract tourists, who are drawn to them because they are “unique, quirky, unusual”

Wider benefits

Markets also have a number of social purposes.  They are important places of social interaction, which facilitate community cohesion and social inclusion.  Markets can also help to improve public health and quality of life through the provision of fresh, quality produce at lower price points, which may be particularly beneficial for low-income families.

From an environmental perspective, there are also a number of benefits arising from the sale and purchase of locally produced products, including reducing pollution associated with high ‘food miles’ and reducing the need for consumers to travel to out-of-town sites, such as large retail parks, in order to make their purchases.

Challenges

Although there is overwhelming evidence that almost every street, food and farmer’s market is an invaluable asset to its local community, markets still face a number of very real threats.  These include:

  • the rise of out-of-town shopping centres, the dominance of big supermarkets, and the popularity of online shopping
  • planning and regulatory regimes that do not allow for, or restrict, the expansion or establishment of markets
  • a lack of support for markets or poor management by local authorities
  • high land values making it difficult for markets to be established

As many markets are a lifeline for areas experiencing deprivation, it is important that they receive the support that they require to survive and flourish.

Promoting and supporting markets

So, what can be done to support markets?  Earlier this year, the Mayor of London, Sadiq Khan, announced plans to establish the London Markets Board – a team of experts tasked with delivering a London markets strategy, and work to preserve and promote London’s increasing number of markets.

On a wider scale, NABMA (National Association of British Market Authorities) and the National Market Traders Federation recently published a ‘five-year manifesto’, which made a number of recommendations for ways to support markets.

A key recommendation is that local authorities work to raise the profile of markets.  There are many market-focused national initiatives such as Love Your Local Market, the National Youth Market, and the Great British Market Awards, which local authorities can become involved in.

The Love Your Local Market campaign, for example, is an annual event, established in 2012, which brings together markets across the UK.  It aims to build affection and support for markets in local communities, and offers free or subsidised pitches to start-ups to test trading conditions.  In 2013, it increased footfall in participating town centres by 10%.

Other recommendations to support markets include:

  • greater recognition of the role of markets in local economies, jobs and growth, as well as in civic local society
  • ensuring that retail markets have a voice in policy making that affects them, including planning and town centre management
  • further lifting the current burden of business rates for SMEs
  • supporting greater awareness of the sector’s employment opportunities including apprenticeships, platforms for self-employment and training hubs
  • developing and supporting sector-led initiatives that aim to support entrepreneurship and increase the amount of businesses on markets, and support them digitally
  • encouraging schools and further education establishments to work with market operators to enable people entering the labour market to embrace markets as a possible career

There are some promising signs.  Around £90 million has been invested into improving markets since 2014, and an increasing number of local authorities are making them central to town centre plans and regeneration activity.

By promoting and supporting markets in this way, the economic, social and environmental benefits can be maximised. As the 2015 review of markets underlines: “markets are an important asset to a location, and their future cannot be left to chance.”

Destination stations: the role of railways in regeneration

King’s Cross Station, London © User:Colin / Wikimedia Commons, via Wikimedia Commons

From Roman roads, to Victorian ‘cathedrals of steam’, transport has played a pivotal role in the development of societies and economies throughout history.

Today, rising energy prices, road congestion, and climate change, as well as reduced household sizes and an increased demand for urban living have put the potential benefits of urban transport hubs back in the spotlight.

Transit-orientated development

Transit-orientated development (TOD) is one response. An American-concept, it involves the creation of high-density mixed-use developments around a transit station or stop, such as a railway station, usually within a half-mile radius (a 10-minute walk approximately).  It may include office space, retail, leisure facilities and housing, as well as public areas and green space, and a variety of public transport options.

The aim is to create attractive, diverse, walkable places.  TOD can also help to significantly reduce traffic congestion and air pollution.

Stations as ‘destinations’

In Europe, TOD has yet to ‘catch on’. However, it shares many similar principles with the increasingly popular concept of developing railway stations as destinations in their own right – for shopping, working and socialising.  Railways often form an important part of a town or city centre, and the combination of transport node and central location has the potential to attract people in great numbers.

The redevelopment of London King’s Cross station and the surrounding industrial wasteland made it one of the first ‘destination stations’ in the UK.  Around the station, new homes, shops, offices, galleries, bars, restaurants, a hotel, schools and a university were created, along with 20 new streets, 10 new public parks and squares, and 26 acres of open space.  In fact, the redevelopment was on such a scale that the area now has its own postcode – N1C.

Some other key examples of newly developed ‘destination stations’ in the UK include Manchester Victoria Station and Birmingham New Street Station. Network Rail last year stated that they intend to create many more such ‘destination stations’.

Economic and social benefits

As well as environmental benefits such as reduced air pollution and traffic congestion, mixed-use developments in and around railway stations can help meet housing demand, and spur the economic and social regeneration of their surrounding communities.  Particular benefits can include:

  • Improved passenger experience/satisfaction
  • Attracting more businesses into an area
  • Improving the supply of labour for businesses
  • New job creation
  • Increased demand for food, retail and leisure facilities from greater numbers of commuters, residents and workers
  • Helping high streets to compete with online retailers and out of town developments
  • Contributing to public health goals through increased walkability of areas
  • Making good use of previously inaccessible/waste land

Government support

There is strong government support for delivering improvements around railway stations.

The recent Housing white paper recognises the regenerative potential of railway stations, viewing them as key anchors for the next generation of urban housing developments.

Two new sources of funding for railway station developments have also recently been announced: the second round of the New Stations Fund – a £20 million pot to build new stations or reopen previously closed stations; and the Station Regeneration programme – which aims to develop railway stations and surrounding land, while delivering up to 10,000 new homes.

Alongside this, there are also plans to release large amounts of unused railway land for housing – enough to build 12,000 houses across 200 sites.

Large and small

In addition to developments focused around one particular station or city, there are also a number of major railway-based infrastructure projects currently taking place.  Among these are the Edinburgh-Glasgow Improvement Programme (including recently approved plans to redevelop Glasgow Queen Street station), Great Western Electrification, Crossrail and HS2.  All of these have the potential to catalyse regeneration in their surrounding areas.

At the opposite end of the spectrum, there are also a number of successful smaller scale regeneration projects involving railways.

Addressing the challenges

The development of railway sites can pose a number of challenges, including contaminated land, fragmented land ownership and reconciling short-term economic development goals with the longer time scales necessary in larger infrastructure projects.

However, according to James Harris, a policy officer at the Royal Town Planning Institute, planners are ‘uniquely’ placed to work with landowners, infrastructure providers, developers and the local community to help deliver a strategic vision for these locations.

Planners should also be flexible and creative in their approach towards station redevelopments, focusing on outcomes rather than processes, says David Crook, assistant director of station regeneration at the Department for Business, Energy and Industrial Strategy’s Cities and Local Growth Unit.  In doing so, he says, planners can help make a station regeneration project ‘more than the sum of its parts’.


Follow us on Twitter to see what developments in public and social policy are interesting our research team. If you enjoyed this article, you may also be interested in our blog post ‘Reimagining travel: how can data technologies create better journeys?

“Business is an act of citizenship”: using BIDs to promote inclusive economic growth in communities

The key to inclusive place based economic growth?

The principle of Business Improvement Districts (BIDs) is pretty straightforward, and the legislation in Scotland is flexible enough to ensure that pretty much anyone can create and act on a BID-based idea. There are currently over 30 live BID projects in Scotland, with BIDs Scotland stating in their latest annual report that they believe this number could almost double to 65 by the end of 2017 if upcoming and scheduled BIDs are also taken into account. The report found that, despite continuing tough economic conditions, there appears to be little evidence of a decline in interest in the BID model. If anything, more people are turning to BIDs as a way of improving local high streets using limited local funds, private investment from local businesses, and other local assets.

BIDs themselves can be seen as a cross section – a mix of the entire economic ecosystem of a place. They can encompass economic, business, local, political and social elements and bring them together in a strategic way to build revenue to support the different aspects of the BID area, including aesthetics, security and commerce. They are locally developed, locally managed, locally financed and locally delivered, giving a sense of authenticity which is becoming increasingly popular among consumers. This popularity is evidenced by the successful renewal of all of the BIDs in Scotland who have gone to reballot to date, with many actually increasing their majority in favour of the BID model.

Collaboration and embedding BIDS within their local communities

As BIDs have been developed, and new models, partnerships and ways of co- operating have been established, BID coordinators and councils in particular are thinking about how to ensure the legacy of the BID within their locality and, more importantly, how to ensure that the economic benefits of the BID are felt across the BID area, not just within the businesses.

This area-wide benefit can be created by for example, re-investing money in security, street lighting, Christmas lights, and flower baskets to improve the feel and aesthetics of a place – actions which are commonplace in BID areas. However, there are some who feel that BIDs could and should go even further in increasing their social value within a community, while not losing sight of the interests of levy payers. This balance, which requires recognition of the wider roles and responsibilities of BIDs, is something which will have to be carefully managed by BID managers in order to ensure that BIDs do not try to do too much, but at the same time act in a way which makes them a key part of their local community and economy. It is an interesting and, at times, difficult place for progressive BIDs to be.

In many areas, BIDs have provided an opportunity for increased community development, and it has been suggested that there could be a formal role for BIDs to play in the wider community development partnerships within localities. BIDs are now being developed to sit alongside existing community anchor bodies, helping to create strong local partnerships and independent communities.

Through collaboration and co-ordination, BIDs are working alongside other services and organisations to help develop sustained community empowerment, helping communities to lobby, providing work experience placements to local young people and acting positively in the form of events to promote increased community cohesion and empowerment, as well as continuing with “normal practice”- increasing footfall in their local area to benefit businesses.

Not all about the money

While generating additional income for the local economy is one of the biggest drivers of support for BIDs in communities, in some instances one of the biggest assets they bring to a community (especially once they are firmly established) is their leverage and collective bargaining power. They have the power to campaign and support other groups in the community on issues that are important to them, as well as offering greater bargaining power with local authorities or other businesses.

As well as commitment to the levy payers’ interest and to improving the local area for people living nearby, another of the potential roles of BIDs is not to act as direct income generators, but as catalysts or facilitators, to encourage new investment and wider growth beyond the BID area – to engage strategically with other partners to encourage investment.

 

Where next for BIDs

As we have already seen, the flexibility of the BID model in Scotland (there are some legislative differences in England) is such that groups may only be limited by their own ambition. Currently Scotland has what is thought to be the world first food and drinks BID and the first tourism BID this side of the Atlantic. Another innovation is the Borders Railway BID, which seeks to maximise the collective benefit to businesses that are located along the railway route.

It has been suggested that the BID model could be used in a more flexible way to generate income for other public service projects, including the suggestion of a BID for health and a BID for schools. Although the intricacies of how these would work in practice are still being considered, there is much that can be taken from how the existing models use community empowerment, and engagement between the public, third and private sectors to create sustainable and inclusive local economic growth in an area.

As well as their commercial enterprising side, BIDs are also realising their potential as agents of community development and improvement beyond that of economic input. The future currently looks bright for BIDs, which will hopefully mean that it also looks brighter for our local communities.


Business Improvement Districts Scotland is the national organisation for BIDs in Scotland, providing support, advice and encouragement to business groups, communities and local authorities considering and developing a business improvement district.

BIDs Scotland held its Annual Gathering on 28th March 2017 at Perth Concert Hall  with the theme of People – Place – Business: Business Improvement Districts – the key to economic growth.

Follow us on Twitter to see what developments in public and social policy are interesting our research team. If you enjoyed this article, you may also be interested in our other article on BIDs.

Information Service members can also access a research briefing on BIDs here (login required).

The economy and Brexit – what’s next?

money-economics-growth

By Heather Cameron

‘Uncertainty and volatility’ – these were two key terms highlighted at a recent event focusing on the impact of Brexit on the economy, hosted by STEP Stirling.

Following the historic decision of the UK to leave the European Union and all the press that has ensued, it was interesting to hear from experts in the field on what they believe the true impact will be.

Speaker: David Bell, Professor of Economics, University of Stirling

Professor David Bell from Stirling University delivered the first presentation, providing an overview of the key economic implications of Brexit.

David suggested that the negative impacts from a leave vote have not materialised as predicted, noting that “the economics of Brexit has moved at a slower pace than the politics.” Many predicted that there would be an immediate impact on the economy and on consumer confidence, but this hasn’t happened. Retail sales have shown no signs of collapse, with recent research actually showing growth.

Nevertheless, David noted that things were different for businesses, which are experiencing a lot of uncertainty. He indicated that this business uncertainty has dragged UK business output and optimism to a three year low.

What is clear, is that there has been a significant depreciation in Sterling which is unlikely to be reversed in the short to medium term. David considered the implications of this, including that we are poorer, more time will be spent working to benefit smaller businesses, there is lower borrowing costs and it is bad news for pensions.

David also highlighted the issues around the UK’s deficit in goods and surplus in services and trade agreements, which are particularly complicated. To conclude, David acknowledged that negotiations will be difficult and that we will be in the same position for some time to come – with a lot of uncertainty.

Speaker: Craig Wilson, Senior Director Treasury Solutions North England & Scotland at Clydesdale Bank

Following David, was Craig Wilson from the Clydesdale Bank. He considered the impact of Brexit from a financial markets perspective.

To begin, Craig highlighted that what was surprising about the Brexit vote was that ‘the bookies were wrong’, with odds as much as 2/9 suggesting an 82% probability of a remain victory. He noted that the immediate reaction, as similarly highlighted by David, was a drop in Sterling. He said:

“We had a reaction to a recession without the recession taking place.”

Craig also highlighted what has happened since the vote in terms of GBP/Euro stats, interest rate cuts and the price of Brent oil. Interestingly, Brexit hasn’t been shown to have affected commodities as oil prices only dropped slightly and have now increased again.

In agreement with David, Craig argued that there will be a negative impact on the economy in the short to medium term. Economists have cut UK GDP growth going forward to just 1%. Craig suggested that house prices will be important because if they hold up, consumer confidence is likely to remain.

The future, however, was also emphasised as uncertain by Craig. He highlighted that there are lots of variables, both within the UK and abroad, including:

  • UK data
  • Public perception and consumer sentiment
  • Recession?
  • Bank of England monetary policy – will there be more cuts?
  • Negotiations – timing of these, will they be positive or negative?
  • House of Commons/Lords may ignore the vote
  • The US presidential elections
  • US interest rate increases?
  • The Italian debt crisis
  • Emerging markets

In conclusion, Craig suggested the one thing to take away is that so many factors will make the markets volatile.


If you enjoyed reading this, you may also be interested in our other recent blogs on the impact of Brexit:

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Single sector Business Improvement Districts: the future of BIDS in Scotland?

As a model to promote economic development, Business Improvement Districts (BIDs) have been a success in Scotland. Under the watchful eye and guidance of the umbrella body BIDS Scotland, the framework has grown and in many ways looks very different from the 5 initial ‘pathfinder BIDs in 2006 (the first being Bathgate BID). However, the underlying principles, values and aims remain constant.

Single sector BIDs

The traditional model sees businesses within a local area enter into a financial partnership, with each member paying a levy towards improving and promoting economic development within a community, in partnership with local authorities and other bodies. By working together businesses can reduce costs, share risks and create new platforms for growth, while for local authorities the benefits include the potential to drive growth and investment in the local area and to obtain help in raising additional funds to do this.

However, the flexibility of the model and the way it fits it with both local and national agendas has been a big part of its success, and groups are now trying to apply the framework to new contexts in alternative and innovative ways. One of these new style frameworks is the idea of single sector BIDs. Their role was part of the discussion at the BIDS Scotland 10 year anniversary conference held in Perth last month.

Image via Rebecca Jackson

Image via Rebecca Jackson

Single sector BIDs, as supporters have pointed out, come with their own unique sets of challenges and benefits compared to the traditional BID model, but they are no less effective. They allow groups of businesses with common interests and common agendas to come together, cooperate, organise and collectively promote their goods and services with a view to develop not only their own businesses but those of others in their area and the local community as a whole.

A BID for food and drink

Within East Lothian plans are currently under way, and awaiting ballot, to officially form what is thought to be the world’s first ‘food and drinks BID’. They have adapted the BID model to cover a wider geographic area than the original BIDs model intended, as it was initially focussed around town and city centres and encompassed a number of different types of business.

Instead the single sector BID model encompasses businesses which sit within the food and drink industry, with a view to promoting East Lothian food and drink, support local business and create a unified voice and brand to market themselves and East Lothian as a quality provider of exquisite produce. They have had strong support from their local authority as well as from national bodies like Scotland Food and Drink. Together, local producers and sellers have been working with these statutory bodies to form their BID partnership. In May 2015 the partnership was awarded a seedcorn grant to develop their Food and Drink BID in East Lothian.

Because the businesses within the proposed BID are varied in terms of size and scope, it was decided to create levy bands relating to the number of employees, rather than rateable value, as had previously been the traditional model. The BID group also introduced a voluntary levy scheme for businesses such as farmers, who wanted to be included in the BID group as producers but were not eligible to under the current BID legislation.

The issue with legislation regarding urban and rural BIDs and the increased difficulty rural businesses have in joining BIDS, (both because of their geographic isolation and their size and categorisation within current legislation) is something which the BID group in East Lothian have stated they are trying to address and mitigate as best they can.

Rural_Urban Landscape_iStock_000004526499Medium

Many observers are watching keenly to see if the single sector BID model could be applied across a wider geographical area, or across additional sectors. Suggestions have already been put forward for a canals BID within Scotland, a universities BID, as well as potentially creating food and drink BIDS in other areas such as Ayrshire and Perthshire. These could potentially form a network of BIDS across the food and drink sector, enabling individual businesses to create a stronger lobbying voice.

The future of BIDs in Scotland?

It is now the case that BIDs in Scotland are not restricted to town and city centres and can be developed in areas such as the tourism and visitor sector, commercial or industrial districts areas, rural areas, agriculture or, as this blog has highlighted, single sector business groups. The flexibility of the model and the increased levels of partnership working act as ways to spread accountability, create legitimacy through collective action and generate additional funding for a local area.

Together these elements make BIDs an interesting proposition for many businesses in Scotland and it is this flexibility, legitimacy and promotion of partnership which has driven the BID model into new and innovative areas, transforming the nature of the relationship between local businesses and statutory bodies within communities and transforming the nature of economic development and community resilience agendas.


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Innovation districts – the way forward for sustainable growth?

London iStock_000005757832Medium_interim2

By Heather Cameron

“Innovation is the lifeblood of any society or any economy” Julian Beer, Birmingham City University

Innovation districts, first coined by Bruce Katz and colleagues at the Brookings Institute in the US, are a recent trend in urban planning that is on the rise across the globe.

They represent a move away from the traditional corporate campuses, socially isolated in out-of-town sites, consisting of clusters of innovative research facilities in working areas that are also liveable, accessible by foot or by bike, and have good transport links.

The move towards these innovation hubs reflects the growing importance of the geography of innovation to urban areas.

Driving economic growth and regeneration

According to the judges and partners of the inaugural Lambert Smith Hampton Enterprise Award, consisting of leading figures from the property industry, innovation districts can drive economic growth and ensure the Northern Powerhouse and UK-wide devolution are successful.

The Sheffield City Region’s Advanced Manufacturing Innovation District (AMID) Partnership was selected as the winner of the £15,000 Award, the proposals of which were highlighted as an example of how developing industry clusters can deliver economic growth, employment and community regeneration. They also called for the AMID Partnership to be considered as a model for regional development.

The AMID Partnership consists of The University of Sheffield, Sheffield Hallam University, Harworth Estates, Sheffield Business Park, Sheffield City Council and Rotherham Metropolitan Borough Council.

This integrated approach utilises newly devolved powers and funding for the greatest economic and social impact.

The role of The University of Sheffield and its Advanced Manufacturing Research Centre (AMRC) in driving productivity improvements and innovation has been recognised in three independent reports.

One of the reports, Making it: the advanced manufacturing economy in Sheffield and Rotherham, notes that “R&D and industry-led innovation in Sheffield-Rotherham has been driven by the AMRC and led by the University of Sheffield, a UK leader in advanced manufacturing and research.”

Another notable innovation district in the UK is Corridor Manchester. Developed over the past 10 years, it is a partnership between the city council, local universities and regional hospitals that supports nearly 12% of the city’s workforce and generates £3bn GVA per annum. The recently opened £61m National Graphene Institute, which is to explore new commercial uses for graphene technology, has been described as “the perfect example of innovation-district potential.”

Growth in collaboration

Such university-industry partnerships are becoming increasingly common as a way for higher education institutions (HEIs) to enhance their research, create new research and development opportunities and increase revenues.

Robert Tijssen, chair of science and innovation studies at Leiden University in the Netherlands, has stated that “university-industry connectivity is now the third mission of a university, next to teaching and training and research.

The most recent Higher education – business and community interaction survey shows a continuing increase in the exchange of knowledge between UK HEIs and the public, private and third sectors.  Between 2012-13 and 2013-2014 these interactions increased in volume by 10.1%, the value of which was £300 million – increasing from £3.6 billion to £3.9 billion.

At a time of reduced government funding, it should be no surprise that such collaboration is continuing to increase.

A recent Universities UK report highlighting the extensive economic value of universities states that they have an important part in supporting businesses to drive product, process and service innovation.  And in terms of policy implications, it argues that:

any policy aiming to promote the long-term economic success of the UK needs to have universities at its heart, recognising the breadth, complexity and significance of their contribution and the need for stable, continued support to enable further impact.”

Barriers to innovation

Despite the wide recognition of the value of such partnerships, it has been argued that the UK’s fiscal policy of austerity acts as a barrier to industry innovation.

According to Simon Marginson, professor of international higher education at the UCL Institute for Education:

As long as the rewards for investment in financial assets are higher than the rewards for investment in knowledge-intensive industry innovation, the latter will be neglected… This is a serious problem in the UK economy, where finance generating finance often seems to be the main game.

Way forward

Nevertheless, it would seem likely that the rise in innovation districts will continue due to the organic nature of their growth, as highlighted by Katz and colleagues. Economic and demographic forces will continue to change the way people live and work.

Brookings has called for local decision-makers, global companies and financial institutions, and government to ‘unleash’, ‘embrace’, ‘support and accelerate’ innovation districts. The result: “a step toward building a stronger, more sustainable and more inclusive economy.”


If you liked this blog post, you might also want to read our previous post on science and innovation

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Costs and benefits of the National Living Wage

English money

By Heather Cameron

Britain’s bosses have been urged by the government to prepare early for the introduction of the National Living Wage (NLW) in April next year.

Firms are advised to follow four simple steps:

  • know the correct rate of pay – £7.20 per hour for staff aged 25 and over
  • find out which staff are eligible for the new rate
  • update the company payroll in time for 1 April 2016
  • communicate the changes to staff as soon as possible

Support

This push coincides with a new poll revealing that 93% of bosses support the Living Wage initiative, with a majority believing it will boost productivity and retain staff.

This is supported by new research by the University of Strathclyde and the Living Wage Foundation (LWF), which uses real-life case studies and evidence from employees working for accredited Living Wage employers. It suggests that paying staff a living wage leads to many business benefits – such as staff retention, more efficient business processes, improved absenteeism and better staff performance.

Potential benefits

Many of the findings highlighted relate to research on the London Living Wage (LLW). Among these include:

  • 50.3% of employees receiving the LLW registered above average scores for psychological wellbeing, a sign of good morale, compared to just 33.9% of non-LLW employees studied
  • an average 25% reduction in staff turnover was reported for organisations moving to the LLW
  • and 70% of employers studied reported reputational benefits through increased consumer awareness of their commitment to being an ethical employer

Estimates show that 4.5 million employees will see a rise in their wages as a result of the introduction of the NLW in 2016, with a further 2.6 million gaining from spillovers. By 2020, 6 million employees are predicted to have received a pay increase.

Up to one in four workers are expected to experience a significant positive impact from the NLW. If the result is indeed a happier workforce, perhaps the knock-on effect for businesses will be improved productivity.

There will however be variation across different parts of the UK and across different households, depending on how the NLW interacts with the tax and benefit system (it should be noted that many estimates were made prior to the u-turn on welfare reform). And let’s not forget that the NLW is not for all as under-25s will not be eligible.

Costs to employers

The impact on employees and therefore employment generally, will also depend on the actions firms take to prepare for the NLW in order to mitigate costs.

Indeed, the research from Strathclyde and LWF recognises that implementing the NLW will inevitably involve initial costs to businesses and could represent an issue for some companies more than others.

According to the Federation for Small Businesses, a negative impact on business is expected by 38% of small employers, with many expected to slow their hiring and raise prices.

It has been estimated that the NLW may lead to an increase in the unemployment rate by 0.2% points in 2020; resulting in around 60,000 more people unemployed and total hours worked per week across the economy around 4 million lower.

Businesses may also look to employ those under the age of 25 who won’t be eligible for the NLW. This could particularly impact on those sectors with a high proportion of lower paid employees, such as social care – a sector that is already under financial pressure.

The roll out of the Living Wage has certainly raised concern over potential costs for councils, which are having to deal with increasing budget cuts. The Local Government Association (LGA) has estimated that the NLW could cost local authorities £1bn a year by 2020/21.

So while increasing wages for low paid workers may seem like a no-brainer in the bid to help reduce in-work poverty, the full impact on employees, employers and therefore the economy, remains uncertain. Only time will tell what the true impact of the NLW will be.


Further reading: if you liked this blog post, you might also want to read our previous blog on the Living Wage

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Fossil fuel divestment:an idea whose time has come?

Introduction

Within just a few years, fossil fuel divestment has overtaken previous campaigns targeting apartheid in South Africa and tobacco advertising to become the fastest growing divestment movement in history.

In September, a report from Arabella Advisors found that 436 institutions and 2,040 individuals across 43 countries and representing $2.6 trillion in assets had committed to divest from fossil fuel companies.

What is Fossil Fuel Divestment?

Organisations, communities and individuals commit to fossil fuel divestment (FFD) by making a public pledge to stop buying stocks, bonds and investment funds from energy companies whose primary business relies upon coal, gas or oil. They also promise to invest in climate solutions, such as clean energy and sustainable agriculture.

Who’s involved in FFD?

The roots of the FFD movement may be found in the college campuses of the United States, where student campaigning has resulted in around 40 educational institutions (including the universities of California, Georgetown and Stanford) making full or partial divestments from fossil fuels.

The movement has spread rapidly beyond the education sector, taking in religious groups, municipalities, NGOs and healthcare organisations. While most divesting institutions are US-based, FFD has also become a worldwide movement, with the cities of Oslo in Norway and Uppsala in Sweden, and the Australian Capital Territory Government making their own commitments. Pledges to divest from fossil fuels have also been made by some surprising sources, including the Australian city of Newcastle (home to the largest coal port in the world) and the Rockefeller Brothers Fund (heirs to the Rockefeller oil fortune).

In the UK, the FFD movement has also seen exponential growth. Last year, the University of Glasgow became the first academic institution in Europe to divest from the fossil fuel industry. Since then, other higher education institutions, including the universities of Oxford and Surrey and the School of Oriental and African Studies (SOAS) have made pledges to reduce their fossil fuel investments.

Four UK local authorities – Oxford, Bristol, Kirklees and Cambridge – have committed to FFD, while councils in York, Bradford, Reading and Hackney are reviewing their fossil fuel investments.

Other high-profile organisations committing to FFD include the British Medical Association and the Environment Agency’s pension fund.

The factors driving FFD

Moral and economic arguments have converged to propel fossil fuel divestment. FFD advocates say it’s morally wrong to profit from climate change, a view powerfully expressed by Nobel laureate Archbishop Desmond Tutu:

“Just as we argued in the 1980s that those who conducted business with apartheid South Africa were aiding and abetting an immoral system, we can say that nobody should profit from the rising temperatures, seas, and human suffering caused by the burning of fossil fuels.”

There is also a growing recognition in the business world of the financial risks associated with investment in fossil fuels. As the Arabella Advisors report observed:

“Reports by Citigroup analysts, HSBC, Mercer, the International Energy Agency, Bank of England, Carbon Tracker Initiative, and others have offered evidence of a significant, quantifiable risk to portfolios exposed to fossil fuel assets in a carbon constrained world. The leaders of several of the largest institutions to divest in the past year have cited climate risk to investment portfolios as a key factor in their decisions.”

At the same time, falling costs have made renewable energy more attractive both to consumers and investors, although investment in clean energy is far from the estimated $1 trillion annually needed to limit global warming to 2˚C.

Resistance and resurgence

FFD is not without its critics, and some organisations have resisted pressure to change.  Last month the Massachusetts Institute of Technology (MIT) rejected calls to divest its endowment from the fossil fuel industry. Instead, MIT argued that engaging with the fossil fuels industry was a more effective way to address climate change. Similarly, Harvard University has declined to stop buying fossil fuel company stocks, claiming its research and teaching contributes to a better understanding of global warming.

But FFD campaigners are not backing down. In May the University of Edinburgh ruled out a wholesale sell-off of its £27m investments in oil, gas and coal companies. However, after a 10-day occupation by students the university clarified its position, and announced it would fully divest from three of the world’s biggest fossil fuel producers within six months.

There is also growing pressure on local authority pension funds to reduce their fossil fuel investments. In September, it was reported that UK local government pension funds hold over £14 billion in coal, oil and gas companies.

The focus now shifts to the UN Climate Change Conference, starting today in Paris. Divestment campaigners are making it clear that they expect governments attending the Paris summit to follow the lead of the FFD movement by committing to phase out support for the consumption and production of fossil fuels.


 

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Further reading

A beginner’s guide to fossil fuel divestment

The case for fossil-fuel divestment

Parking charges and the death of the high street

By Heather Cameron

“High streets are not just about shops; we have to consider what local people want” (Mary Portas)

Councils called for a scrap in parking charges recently following reports of booming trade in Cardigan, Mid-Wales, after pay-and-display machines were broken by vandals. Shopkeepers reported huge increases in turnover, with some up as much as 50%.

Three years on from her independent review of high streets, Mary Portas has said that the main source of dissatisfaction with our high streets is – you’ve guessed it – parking charges. Portas highlights research by Deloitte that shows 34% of us are unhappy with the cost of parking to access high streets otherwise regarded as convenient. The research suggested that consumers want to see more of:

  • Free parking (60%)
  • Choice of stores (59%)
  • Independent stores (57%)
  • Specialists e.g butchers (50%)
  • Parking spaces (48%)

Portas also notes that the more progressive local authorities are providing free parking at certain times or are freezing parking charges.

This begs the question – should parking charges be removed or changed to aid our declining high streets?

Decline of the high street?

It’s no secret that since the growth in large out-of-town shopping centres, local high street stores have struggled to compete. Business owners in Cardigan suggested that the temporary removal of parking restrictions “levelled the playing field” when it comes to competing with these shopping centres where parking is often free.

Despite efforts to regenerate high streets and make them more appealing to consumers, the latest BDO high street sales tracker  recorded a further month of decline in August, with sales falling by 4.3% compared to the same month last year – the worst performance since November 2008.

Much of this can be attributed to an increase in spending on leisure activities, including holidays abroad. The strong pound hasn’t helped the high streets as consumers are spending more on items abroad while tourists are more reluctant to spend.

As it is often cheaper to shop online and pay for delivery charges than it is to pay for parking for a couple of hours, it is little wonder people are less likely to shop on the high street. The threat of parking tickets is also a deterrent for many.

Earlier this year, high streets minister, Marcus Jones, claimed “unfair parking fines push up the cost of living and undermine high streets”.

So what is being done to address this issue?

New parking initiatives

Many of the Portas pilots trialled parking initiatives to bring more people to the high street. The ‘free after three’ initiative is one that has been introduced in a number of places since and has shown to have made a difference. Visitor numbers increased in Salisbury following a six month experimental period of the initiative. Nearly double the number of cars used the car park per week, making the town noticeably busier.

Just last month, Chippenham launched its own ‘free after three’ pilot initiative on Thursdays to support local businesses. It’s hoped that this will help shops and offices as well as improve the evening economy.

Rotherham Borough Council, for the fifth consecutive financial year in 2014/15, planned for no increases in the cost of parking. Portas suggests that it is no coincidence that 55% of shoppers in the town centre came by car, compared to 29% in 2009.

A way forward

Despite the evidence in support of free parking in town centres, it is also something that could easily be met with opposition. With calls to reduce car use and tackle emissions from vehicles, particularly in larger towns and cities, a balance needs to be struck.

And free parking alone is unlikely to save the high street. As Portas argues, a combination of actions are required. She suggests that while moves have been made in the right direction, more commitment and action is needed from government, specifically on:

  • Access and parking
  • Reforming business rates
  • Landlord registers
  • Long term support for Town Teams and simplification of the process of forming BIDs.

Clearly, parking is an important part of the picture in our smaller towns and cities, particularly in an age where convenience is key. If our high streets are to be viable, it’s something that councils need to think about carefully as part of a strategic approach to local economic development, rather than only as a way to manage traffic and generate revenue for traffic improvements.


 

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