Greyfriars Bus Station - WhatDoTheyKnow

Produced by Northampton Borough Council In response to a request under the Freedom of Information Act 2000

FOI Disclosure NBC1868-212

Greyfriars Bus Station

NBC draft report GHK final report

Prepared on the 6th March 2012

Greyfriars House Bus Station, Car Park and Offices (DRAFT) Evaluation of Life Cycle Costing S.Docker 28.5.09 Purpose This information is to form part of the Economic Impact Assessment of the Greyfriars Complex undertaken by GHK. The information provided comprises of refurbishment costs, maintenance and operational costs and additional cost information for exceptional ‘one off’ necessary repairs. 1.0 Refurbishment Cost per m2 Element Gross floor

Area m2 BCIS Index 244 – 1Q2009 Refurbishment Cost per m2

BCIS Index 244 – 1Q2009 New Build Cost per m2

Greyfriars House Offices

14443m2 £1471 £1716

Greyfriars Car- Park

8536m2 £160 £486


10250m2 £785 £2347

Information obtained from the Building Cost Indices Service. Storey height of the building is factored into cost per m2. Mean cost used for purpose of this exercise. The figures do not include professional fees or contingency. Comments: The Bus Station, Offices and Car Park have purposefully been left off Northampton Borough Councils cyclical maintenance programme due to the impending development of Greyfriars. The most recent schedule of condition is the Northampton Borough Council and Montague Evans Condition Survey, carried out in1993. To let office space in these challenging economic times a BREEAM standard of ‘Excellent’ or ‘Outstanding’ will be required by the lessor. However, this has not been factored into the above refurbishment data. The cost information is suitable for the purpose of this report only.

FOI Disclosure NBC1868-212 6th March 2012

2.0 Operational Cost per m2 Element Gross Floor Area m2 Total Operation Cost

Per Annum Operation Cost per m2


14443m2 £1,522,188 £105.40

Greyfriars Car Park

8536m2 £236,461 £27.70


10250m2 £682,589 £66.59

Comments: The above information was obtained from the Northampton Borough Council GVA Asset Management Data Base. There is no other comparable data available. This does not include any Planned, Cyclical or Re-active maintenance. Included in the costs are:

1. Estates management administration 2. Security 3. Cleaning and janitorial duties 4. Gas, electricity and services 5. General waste requirements 6. Insurance

Empty building rates are included in the Total Operation and Maintenance Cost per Annum, these being:

1. Greyfriars House Offices - £433,724.00 per annum 2. Greyfriars Car Park - £169,785.00 per annum 3. Greyfriars Bus Station - £ 83,324.00 per annum

3.0 Additional Cost Information – Exceptional necessary maintenance works to

ensure weatherproofing and compliance with Health and Safety Executive requirements.


Element Description of Work Cost of Works Greyfriars Bus Station

Health and Safety Work required by Health and Safety Executive

£100,000


Removal of Planters and asphalt remedy to stop water leaking into car park

£500,000


Spalling concrete to underpass Full investigation required by Structural Engineer


Damp penetration through floor of underpass

Full investigation required by Structural Engineer

Source of information – GVA Asset Management property database. Option 1- Do nothing option, inclusive of Refurbishment of Bus Station due to previous lack of maintenance and impending redevelopment, necessary weatherproofing of the whole complex, structural investigations and the Health and Safety Executive requirements. Refurbishment of Bus Station £ 8,046,250.00 Health and Safety Requirements £ 100,000.00 Structural (1) – Spalling to underpass £ 25,000.00 (Provisional) Structural (2) – Damp Penetration £ 25,000.00 (Provisional) Water Penetration from Office Planters £ 500,000.00 ------------------- Refurbishment Cost £ 8,696,250.00 (Excluding professional fees) Annual Operational Cost of Bus Station £ 682,589.00 Operational Cost for 20years £ 13,651,780.00(0% inflation) Total Option 1 Cost £22,348,030.00 Option 2 – Do Something option, inclusive of refurbishing the Offices and Car-park above the Bus Station, as well as works to Bus Sation listed in option 1 Refurbishment of Office Block £21,245,653.00 Refurbishment of Car Park £ 1,365,760.00 Refurbishment of Bus Station £ 8,046,250.00 Health and Safety Requirements £ 100,000.00 -------------------


Refurbishment Cost £30,757,663.00 (Excluding professional fees) Annual Operation Cost of Car Park £ 263,461.00 Operational Cost for 20years £ 4,729,220.00 (0% inflation) Annual Operation Cost of Office Block £ 1,512,188.00 Operational Cost for 20years £30,243,760.00 (0% inflation) Total Option 2 Cost £65,730,643.00


Northampton Town Centre

Expansion – Economic Impact

Assessment

Final Report

9th October 2009


Northampton Town Centre Expansion – Economic Impact Assessment

[J30256553]

Northampton Town Centre Expansion – Economic Impact

Assessment

Northampton Borough Council

Final Report

submitted by GHK Consulting

in association with

Roger Tym & Partners

Date: 9th October 2009

526 Fulham Road, London SW6 5NR

Tel: 020 7471 8000; Fax: 020 7736 0784

www.ghkint.com



[J30256553]

Document Control

Document Title Northampton Town Centre – EIA

Job No. J30256553

Prepared by James Medhurst

Checked by Andy White

Date 9th October 2009



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CONTENTS

EXECUTIVE SUMMARY ......................................................................................................................... I

1 INTRODUCTION ............................................................................................................................... 1

2 POLICY CONTEXT ........................................................................................................................... 3

3 SUMMARY OF FUTURE DEMOGRAPHIC AND ECONOMIC TRENDS ........................................ 6

4 OPTION 1: DO NOTHING ................................................................................................................ 8

5 OPTION 2: GREYFRIARS HOUSE OFFICE REFURBISHMENT ................................................. 12

6 OPTION 3: EXPANSION OF THE TOWN CENTRE ...................................................................... 16

7 STRATEGIC ADDED VALUE ........................................................................................................ 25

8 CONCLUSIONS .............................................................................................................................. 34

ANNEX 1: REFERENCES .................................................................................................................... 37

ANNEX 2: DESCRIPTION OF TOWN CENTRE SCHEMES ............................................................... 39

ANNEX 3: DEMOGRAPHIC AND ECONOMIC TRENDS ................................................................... 43

ANNEX 4: VISITOR IMPACT ASSESSMENT ..................................................................................... 51

ANNEX 5: COMPARATOR AND COMPETITOR PROFILES ............................................................. 54



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EXECUTIVE SUMMARY

STUDY CONTEXT

There are ambitious plans for the development of Northampton Town. The town desperately needs investment. Although stated as an important centre of the Milton Keynes and South Midlands (MKSM) Growth Area, and the future recipient of a considerable number of houses, the economy of the town is not performing as well as expected. More particularly the centre of the town is near universally derided as rather shabby and characterised by a poor retail and leisure offer. The town requires economic regeneration.

This state of affairs is liable to get worse if the developments proposed for retail centres surrounding and in competition with Northampton are implemented. The evidence is clear; if action is not taken Northampton could slide into a continuous decline. Most certainly aspirations for the town to be a major regional centre with a prosperous economy and vibrant communities living lives that they value could be severely compromised.

The modernisation and expansion of the Grosvenor shopping centre in the centre of Northampton could change the future history of Northampton. This development is a major investment, generating a significant increase in retail spend in the town, and potentially associated with very important catalytic effects.

This report presents the findings of a detailed investigation into the potential impacts of the development. Important economic impacts and policy are described, and cost benefit ratios of the development (and variants thereof) are presented. These findings will allow decision makers in both the public and the private sectors to make an informed and definite judgement about the value of the proposed development.

MAIN FINDINGS

The preferred option is the town expansion option by a significant margin...

The economic impact assessment has been undertaken to identify the costs and benefits of the proposed town expansion option compared to alternative options. This assessment has clearly identified the town expansion option as the preferred option. Not only is it the cheapest option, but it has by far the highest benefits to cost ratio:

Do Nothing Option: Net benefit of £48m

Greyfriars House Office Refurbishment: Net benefit of £786m

Town Centre Expansion: Net benefit of £3,612m,

o providing £230 of benefit per £1 public sector cost

The economic benefits of the town centre expansion are substantial...

Compared to the do nothing option the redevelopment would:

increase GVA by over £60m in 2031 in Northampton Borough (£55m in the county) due to higher levels of retail and tourism related activity

have a wider economic impact on GVA by accelerating development worth £1,620m

over the appraisal period to 2049

generate over 6,000 jobs in Northampton Borough in 2031 from the additional retail and tourism activity and the wider economic impacts – a cost per job of £1,500

leverage £350m of private sector investment in the Grosvenor Centre.

Despite the economic benefits there is a requirement for public funding...

The rationale for public intervention stems from the inability of markets to take account of the positive spillover effects associated with the town expansion option. The achievement of



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public policy goals laid down in the Regional Plan (and related housing growth) and in sub-regional plans for the economic development of MKSM and Northampton has been shown to be at risk without the town expansion option. This is supported not just by the assessment of quantifiable costs and benefits but in the wider judgements of stakeholders, and by reference to the experience of other comparable towns.



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1 INTRODUCTION

1.1 Purpose of the Report

This report provides an economic impact assessment of the costs and benefits of relocating the Greyfriars Bus Station and redeveloping the site as part of a larger scheme to modernise and expand the Grosvenor Shopping Centre and with it lead to the expansion of the town centre. The assessment considers the effects on achieving strategic policy objectives. The report is intended to inform the subsequent grant application process.

The report responds to the commission tendered by Northampton Borough Council (NBC) in partnership with East Midlands Development Agency (emda), West Northamptonshire Development Corporation (WNDC), Northamptonshire County Council (NCC) and Legal & General (L&G), and has been undertaken by GHK Consulting in association with Roger Tym & Partners (RTP).

1.2 Objectives of the Economic Impact Assessment

The relocation of the Greyfriars Bus Station and associated redevelopment of the site and adjoining development is widely seen by the commissioning bodies as an important pre-requisite to the long-term economic expansion of Northampton town centre and the achievement of the regional, sub-regional and local development objectives.

1.2.1 Options for the Town Centre

The economic impact assessment (EIA) has sought to assess the costs and benefits of town centre expansion as one of a number of possible options facing the partners. In particular the EIA has sought to assess the economic impacts of town centre expansion in comparison with:

a baseline ‘do nothing’ option, including the retention of Greyfriars bus station, and

recognising that there are a number of short-term (10 year) and long-term (20 year) developments planned for the town; and

a ‘do something – office and car park refurbishment’ option designed to avoid the need for the relocation of the bus station and to bring back into use the commercial floorspace located immediately above the bus station, which has remained vacant for over 10 years, to complement the planned town centre developments.

This comparison allows an assessment of the net additional economic benefits that the Project would allow, taking into account what might otherwise have happened; and informs an assessment of the best return for public sector investment.

Table 1.1 summarises the main assumptions for each option.

Table 1.1: Summary of Options

Assumptions Option 1: Do Nothing

Option 2: Office Refurbishment

Option 3 : Town Centre Expansion

Population increases in line with Regional Plan

Keep the existing bus station

Demolition of existing bus station with temporary and new bus service facilities



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Highways improvements

Commercial developments in the pipeline

1.2.2 Measurement of Economic Impacts

The costs of the options have been estimated and provided by the partners. The EIA has therefore focused on establishing the potential long-term (20 year) economic benefits associated with the Project in comparison with the other options. The approach has assessed:

the direct impacts of the options on the scale and types of economic activity and the effects on local income and employment (including other development plans for the Central Area);

the leverage of private sector investment secured (if any) by the options, taking into account the influence on investor confidence; and

the wider economic impact as a result of changes (if any) in the town’s image and

position as an economic centre.

The costs and benefits have been estimated over a period to 2049 (40 years), to take account of the length of the period before the Project is open (in 2018), and the life of the assets once opened. The stream of costs and benefits over this period has been discounted to calculate the present value (2009 prices) of these costs and benefits, using the Treasury discount rate of 3.5%, allowing estimates of the net present value (benefits less costs) and comparison between options.

The costs and benefits have been estimated for Northampton (defined as the NBC Borough) and the sub-region, defined as the County of Northamptonshire. The sub-region comprises two housing market areas (HMAs) which are used to define policy objectives and demographic and economic trends. These are West Northamptonshire HMA comprising the three districts of Northampton, Daventry and South Northamptonshire; and North Northamptonshire HMA comprising the four districts of Corby, East Northamptonshire, Kettering and Wellingborough.

1.3 Structure of the Economic Impact Assessment

The EIA is presented in the following sections:

Section 2 – describes the policy context and the public sector rationale for investment in town centre expansion

Section 3 – summarises the long-term demographic and economic trends in the local economy and sub-region as the context in which to consider the options

Sections 4 to 6 – describe and assess the costs and benefits of the three options, including a review of the risks of each option and potential mitigation measures

Section 7 – illustrates the strategic added value of intervention as identified by public and private sector stakeholders

Section 8 – summarises the main conclusions.

Further details and analysis are presented in a series of Annexes to the Main Report.



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2 POLICY CONTEXT

2.1 Regional Economic Strategy

The East Midlands Regional Economic Strategy 2006-2010 identifies ‘key challenges’ for

the Northamptonshire sub-region. In particular it recognises the opportunities from the proximity to London and the South East and inclusion within the Milton Keynes South Midlands (MKSM) growth area (see below). This is seen as presenting the sub-area with a major economic opportunity, but also the challenge of delivering development on the planned scale, whilst ensuring that essential infrastructure, employment provision and services keep pace with the expected growth in demand.

Northampton is viewed in the RES as ‘an increasingly important urban settlement’ with

significant potential to bring ‘wider benefits to the surrounding hinterlands and neighbouring

areas’, and the rest of the region.

In particular the RES notes the need to:

Reinforce Northampton's economic significance over the medium to long term through housing growth and associated investments in Northampton;

Continue the regeneration of Corby to ensure it can benefit from the opportunities in other parts of the sub-area;

Support the continued activity of the Urban Development Corporation in West Northamptonshire and the Local Delivery Vehicle in North Northamptonshire.

2.2 Milton Keynes South Midlands Growth Area

The RES ‘policy on’ scenario is based in part on full implementation of the MKSM growth area plan, contributing to the East Midlands achieving UK levels of productivity during the lifetime of the RES, which suggests GVA growth of 2.8% per annum for the period 2004-14, 0.2 percentage points per annum above the baseline scenario.

Regional Planning Guidance for the South East (RPG9, 2001) identified the Milton Keynes and the South Midlands (MKSM) area as one of four major growth areas in the wider South East. The Sustainable Communities Plan takes this further and suggests that there is significant potential for growth in the MKSM area to 2031 of up to 300,000 jobs and 370,000 homes. It states that Milton Keynes and Northampton have achieved employment growth between 1991 and 2000 of more than three times the national average. It also identifies opportunities to maximise future growth by creating the right links and approach to cross-boundary collaboration, raising skills levels and through significant regeneration.

This resulted in the development of the MKSM Study (2002) and the subsequent MKSM Sub-Regional Strategy (2005), the objectives of which are:

to achieve a major increase in the number of new homes provided in the area, meeting needs for affordable housing and a range of types and sizes of housing;

to provide for a commensurate level of economic growth and developing skills in the workforce, particularly in the high value, knowledge-based sectors;

to locate development in the main urban areas to support urban renaissance, regeneration of deprived areas, recycling of land and sustainable patterns of travel;

to ensure that development contributes to an improved environment, by requiring high standards of design and sustainable construction, protecting and enhancing environmental assets (including landscape and biodiversity) and providing green space and related infrastructure (green infrastructure);



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to meet existing infrastructure needs and provide for requirements generated by new development, by investing in new and improved infrastructure, by planning to reduce the need to travel and by creating a shift to more sustainable modes of travel; and

to create sustainable communities by ensuring that economic, environmental, social and cultural infrastructure needs are met in step with growth.

The strategy states that different economic growth scenarios have been assessed and it has been concluded that the MKSM area could grow at the ‘high growth’ scenario,

generating between 230,000 and 300,000 jobs by 2031 compared to around 150,000 jobs if current planning policies continued. The ‘preferred option’ for achieving these objectives, is

to focus the majority of development at six locations within the sub-region, including Northampton, which it states “will continue to grow in stature as an important regional

centre with a key emphasis on renaissance of the town centre and major enhancement of

the public transport network”.

2.3 County and Town Centre Policy

The 2006 Sub-Regional Economic Strategy produced by Northamptonshire Enterprise Ltd (NEL) highlights the need for sub-regions to maximise their competitive capabilities. Northamptonshire is considered a key part of the East Midlands economy and the strategy outlines the following key objectives:

Achieve continual business growth, economic diversification and high levels of competitiveness

Create and sustain a dynamic and flexible labour market

Support and enhance community cohesion

Achieve additional economic advantage through effective relationships

Develop and promote a strong Northamptonshire Brand.

The Northampton Economic Regeneration Strategy 2008-2026 describes how the MKSM Sub-Regional Strategy, West Northamptonshire Joint Local Development Scheme, the Joint Core Strategy (JCS), Central Area Action Plan (CAAP) and NCC Transport Strategy for Growth will provide the strategic framework for the spatial development of Northampton. The Economic Regeneration Strategy identifies the key economic priorities and actions that are needed to move the town forward. The following points emphasis the need to improve the retail offer in the town centre:

Northampton, as Northamptonshire’s county town and a major market town, currently has a fairly average retail offer. The size and quality of stores is disappointing.

Northampton has a total of 518 town centre retailers covering 123,000 sqm of gross retail floorspace, while out of town retail warehousing is larger, with 131,000 sqm of gross retail floorspace1.

A recent survey conducted by CBRE, ‘Fashioning a Shopping Experience’, shows that the average shopper now has a preference for out of town locations due to the availability of free parking and larger shops. A further threat to Northampton town centre is the improvement of ‘competing centres’ in the area, that have the potential

to attract local shoppers to those centres. Current figures (2006) show that 18% of

residents in the south of the Borough shop in Milton Keynes rather than

Northampton.

When CBRE looked at ‘comparison goods’ it was noted that Northampton town centre would be able to achieve higher market share with a major new town centre development, taking into consideration the expanding population. If the extension of

1 CBRE (2006) Property Market Review



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the Grosvenor Centre provided an additional 50,000 sqm of gross floorspace then

this could equate to 2,500 new jobs. The report also identified the opportunity for another major supermarket within the town centre, which would be further strengthened with the provision of additional residential units.

The Northampton Economic Regeneration Strategy takes guidance both from local needs as well as the RES, the RSS and the Northamptonshire Sub-Regional Economic Strategy. It is also aligned with the Draft SNEAP – Strategic Northamptonshire Economic Action Plan. The Regeneration Strategy is primarily driven around ‘living in, working in, and developing

the town centre’.

According to the Strategy, the Central Government Growth Agenda gives Northampton ‘greater opportunity than most towns in the UK’. The number of houses in the town is set to

increase from 86,000 to 111,500 by 2021. This will result in greatly increased retail demand and provides the opportunity to significantly enhance the shopping offer in the town centre. There is currently land available in the town centre to achieve this, for example from surface car parks.

The Strategy highlights the following key points:

The design of the new retail offer needs to be outstanding to create a ‘wow factor’

that differentiates Northampton from other local offers, drawing people into the town centre through quality landmark developments.

The historic character of the town needs to be promoted and niche markets created.

The aim is to offer outstanding retail, leisure and investment opportunities, matched with new desirable houses, making the town prosperous, progressive and promoted.

The Strategy states that as the ‘largest town in England’, Northampton’s retail offer should

be much better and sets out several ‘key targets’, which include:

Expanding the town centre retail offer – increasing the town centre gross retail floorspace by two-thirds i.e. 80,000 sqm. If Northampton is to become a major competing retail centre, it needs to expand and develop the retail offer of the town centre to make it the number one choice for the surrounding catchment area.

Increasing jobs/skills and opportunity - the expansion of the retail area will bring significant employment opportunities which should be taken up by local people skilled and/or trained to realise the opportunities. Geographically these opportunities are next to areas of the town with high levels of deprivation providing good opportunity to skill or re-skill people to work in the expanding retail sector.

The West Northamptonshire Joint Core Strategy – Issues and Options Discussion Paper (2007) looks at new options for growth citing the North Eastern Extension option. This includes: growth in the northeast quarter of Northampton between A5199 Welford Road and the A45 Nene Valley Way; town centre intensification; provision of an intensified University Arc and a new parkway station to the south of Northampton. Key objectives for revitalising Northampton’s Central Area are outlined as:

Developing the area around and including the railway station as a transport hub, gateway to the town centre and focus for development;

Improving the range and quality of retail provision;

Making the central area the focus of a range of employment opportunities, particularly offices;

Linking the central area to the railway station and waterside areas;

Developing cultural and heritage tourism;

Increasing the range of centrally located overnight accommodation.



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3 SUMMARY OF FUTURE DEMOGRAPHIC AND ECONOMIC

TRENDS

As noted in the previous section, the East Midlands Regional Plan and the MKSM Sub-Regional Strategy recognise Northampton as an important regional centre with a key policy emphasis on the renaissance of the town centre and major enhancement of the public transport network.

Northampton is a town of 200,000 people, expected to grow significantly in the next 20 years as part of the Sustainable Communities Plan. Northamptonshire faces significant challenges as one of the largest of the Growth Areas designated by Government, and Northampton has a significant role to play locally and regionally in fulfilling its growth and economic potential as an expanded regional centre.

An overview of the projected trends in Northampton, West Northamptonshire and Northamptonshire from 2009 to 2031 (the period of the draft regional plan) is presented in Table 3.1.

Table 3.1: Projected Trends in Key Variables, 2009-2031, Northampton, West

Northamptonshire and Northamptonshire

Note: Projections apply projected growth rates to the latest actual data – in most cases actuals are lower than

projected and resultant end period estimates are therefore lower than original projections.

The GHK ‘Hybrid’ Scenario adjusts the SNEAP ‘Preferred’ Scenario to account for the recession by using the base

projection trends to 2010.

Sources and more detailed analysis are presented in Annex 3.



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Key points to note are:

Demographic

The projected growth in population and households is very significant – by 2031 there are expected to be an additional 40,000 households and 60,000 people living in the Northampton Borough; an increase of some 40% and 30% respectively. Similar rates of growth are also expected at the County level;

Slightly lower rates of growth in population and households are expected in the rest of West Northamptonshire, meaning that the growth in the housing market area is predominantly focused on Northampton;

Housing development reflects the provisions in the Regional Plan. The required level of development over the period is not currently being achieved, implying higher annual rates of development in the future than have been achieved to date. The ability to meet Regional Plan targets is likely to be a function of ensuring the expansion of Northampton supports the levels of demand envisaged. The risk from development options that do not deliver the town expansion is that they jeopardise planned growth.

Economic

The expected growth in population is matched by the projected rates of growth in employment, which means that job growth is expected to more than keep pace with growth in the working age population, implying reduced levels of unemployment, out-commuting and/or increased in-commuting;

The growth in the economy as measured by GVA2 means that the economy is expected to almost double in size by the end of the period, even without major public policy intervention. Planned policy interventions by the Development Corporation will lift the growth rate yet higher;

The growth is very substantially higher than in employment or in demographic trends. This suggests a very substantial increase in the productivity of the local economy, to be achieved by a move to higher value added activities;

The growth in the economy as measured by GVA between the base scenario and the hybrid scenario (the preferred scenario adjusted for the recession by using base projection trends to 2010) is substantial and is a measure of the expected influence of public policy interventions;

The growth in the County economy is greater than in Northampton, reflecting higher growth rates in North Northamptonshire than in West Northamptonshire.

Details of the sources and methods of calculation of these trends are presented in Annex 3, which provides a fuller description of the local economy.

2 GVA is Gross Value Added. This is a measure of the output of final goods and services by the local economy after accounting for the purchase of intermediate products. This measure approximates to the national measure of economic output of GDP (Gross Domestic Product). GVA can also be defined in income terms as the returns to factors – and can be considered to be represented, in summary, as the rents, profits and wages received from economic activity.



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4 OPTION 1: DO NOTHING

4.1 Description of the Option

This option represents the baseline or status quo for the comparison of costs and benefits. It seeks to present potential long-term trends in the absence of interventions to redevelop the Greyfriars bus station and Grosvenor Centre.

It assumes that the projected increases in population and households take place, as required by the Regional Plan to 20313. Sensitivity analysis has examined the effects of a smaller than planned increase in population on the results of the cost-benefit analysis, reflecting the effects of a lack of investment in the town on the attraction of new households. Note that if such an effect implied the housing targets would not be met, then since this is a central case of the LDF, it would mean that the development should be a strategic aim of the Core Strategy.

The option assumes that there is no redevelopment of the Grosvenor Centre and that the bus station continues in its current use, but with some modifications to accommodate expected growth in bus movements, requiring funds to refurbish, maintain, operate and reorganise the existing bus station. Because of the plans to redevelop the bus station, the Bus Station and the Offices and Car Park above, have purposefully been left off Northampton Borough Council’s cyclical maintenance programme, and this Option would therefore require a one-off major refurbishment to address the backlog of repairs.

A number of commercial developments are in the development pipeline over the next 10-20 years4 (Table 4.1). It is assumed that because of the lack of investment in the town centre coupled with the continuing uncertainty from the severe economic recession and the limited availability of public sector funds to support these schemes, that all these timescales are deferred by ten years, with the exception of St Johns, which would be expected to be complete in the next 5 years under all the options.

Table 4.1: Northampton Town Centre Development Pipeline

Scheme Type of Use Land OwnershipTimescale (years)

Floorspace (m2) GVA (£m)

Horse Market Offices F/H: NBC, L/H: Park Inn 20 22,370 47 Angel Street Offices F/H: NCC 10 26,650 54 St Johns Offfices F/H: NBC 5 14,700 31 Lower Mounts Offices F/H: NBC 15 13,200 29 Abington Street Retail F/H: Private, L/H: Multiple tenants 10 4,900 4 Bridge Street Offices Multiple ownership 15 11,425 25 St Peters Way Retail Multiple ownership 10 3,500 3 St Peters Square Retail/Offices Multiple ownership (incl. NBC) 10 17,960 28 Spring Boroughs Offices F/H: NBC, L/H: Various 10 6,000 11 Castle Station Offices F/H: Network Rail/NBC L/H: Various 10 42,895 88 Great Russell Street Offices Multiple ownership 15 3,660 8 Development Pipeline in the Town 167,260 326

Source: BDP: Northampton Central Area Design, Development and Movement Framework, 2006. GVA estimates

from GHK.

3 East Midlands Regional Spatial Strategy (RSS), Appendix 1 4 These developments are considered to be best defined in the report by BDP in 2006. These developments and related scale and phasing are summarised in Annex 2.



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4.2 Estimates of Costs

4.2.1 Costs of Bus Station Refurbishment

This option identifies the costs of continuing with the current bus station, as a benchmark against which to consider the impacts of the other options. It is expected that there will be a growth in bus services over the next 20 years, reflected in an approximate increase in hourly bus movements into the station of 50%. This growth is judged to be capable of being accommodated within the existing bus station without extension, although some reorganisation of bus bays would be required.

The estimate of refurbishment costs has been provided by NBC based on the NBC GVA Asset Management Database. A one-off cost of £8.05m has been estimated. This reflects the previous lack of maintenance, noted above. In addition, exceptional necessary maintenance works to ensure weatherproofing and compliance with Health and Safety Executive requirements would be needed (Table 4.2), totalling £650,000, This sums to a total one-off cost of £8.7m.

Due to existing budgetary constraints and the need to budget the expenditure, it is assumed that these costs are deferred for 3 years and incurred over a 3 year period (2013-2015).

Table 4.2: Refurbishment Cost of the Greyfriars Complex

Element Description of Work Cost of Works


Health and Safety Work required by Health and Safety Executive

£100,000


Removal of Planters and asphalt remedy to stop water leaking into car park

£500,000


Spalling concrete to underpass - Full investigation required by Structural Engineer

Say £25,000


Damp penetration through floor of underpass - Full investigation required by Structural Engineer

Say £25,000

Source: Northampton Borough Council

4.2.2 Operational Costs

The operational costs include: estates management administration, security, cleaning and janitorial duties, gas, electricity and services, general waste requirements, and insurance. The total annual operating cost of the bus station is £683,000.

4.2.3 Costs of Relative Decline

The costs of this option also include the possibility that in the absence of town centre investment, the town will decline relative to competitor locations. This risk is considered below. The actual benefits of town centre retail investment, relative to the do nothing option, are presented under Option 3 and include an allowance for a loss of retail market share in the do nothing option. To include it here as a cost would be to double count the impact.

4.3 Estimates of Benefits

As the do nothing option the levels of economic activity are assumed to continue as usual, with no additional benefit under this option. The option provides the baseline for comparisons with the other options. To the extent that there are risks of relative decline under this option, this has been identified in the benefits attributed to other options to avoid double counting.



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4.3.1 Rental Income from the Bus Station

The local authority as the owner of the bus station receives a rental income from the bus operating companies. The annual income is £0.12m.

4.3.2 Business Rates

The local authority receives business rates from the bus station, Greyfriars offices and car park and the existing Grosvenor Shopping Centre. In the latter case, the business rates payable relate to the retail floorspace subject to redevelopment under Option 3 to provide a comparison. The total income received has been estimated by the Borough Council to be £3.06m, based on the existing poundage of £0.485 per £ rateable value. A breakdown is provided in Table 4.3.

Table 4.3: Business Rates Payable Under Option 1

Item Rateable Value (£m)

Rates Payable (£m)

Existing Bus Station - Ground Floor £0.07 £0.03 Existing Bus Station - Kiosks, driver rest rooms, etc £0.10 £0.05 Existing Greyfriars Office £0.10 £0.05 Existing 300 Space Car Park £0.11 £0.05 Existing Grosvenor Centre Retail Units £5.93 £2.87 TOTAL Option 1 £6.30 £3.06


4.4 Overall Costs and Benefits

The option provides a baseline against which to compare the other options. The public sector costs of the option, relating to the refurbishment, maintenance and operation of the bus station, reflect continuation of the present situation in terms of bus services, taking into account the expected growth in bus services. This in turn assumes that the public benefits from the provision of the bus services, also continue. Since the public benefits are expected to occur in all three options, the issue is whether these services can be provided at lower cost in other options, or at similar costs but with additional public benefits. This assumes that the current levels of economic activity continue and do not decline.

As the basis of comparison with the other options the estimated present value of the public sector costs of the option, over the 40 year period, are £23m. The estimated present value of the current rental and rateable income associated with the Option is £71m with a net benefit of £48m (£71m less £23m).

4.5 Risk Assessment

The risks of this option lie in the possibility that in the absence of any significant new investment in the town centre, the economic function, especially retail, would decline relative to competing locations. For example, existing shoppers and visitors might be drawn to competing locations; existing businesses might choose to relocate from the town; new households might choose to shop elsewhere. The ability to meet the regional housing plan targets, which are already regarded as challenging, would also be threatened.

This risk would be revealed in a decline in economic activity relative to a projected continuation of current trends. This may mean that the public sector costs are underestimated, since intervention would be required elsewhere in order to maintain the current economic position of the town. This can be examined through a sensitivity analysis of changes in current trends in activity (and as projected).



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4.5.1 Costs of Relative Decline in Retail Market Share

One major impact is likely to be the decline in Northampton as a retail centre. Without major new retail development the current market share of the town will decline (even if there is an absolute increase in spending because of rising real incomes and population growth).

This impact has been assessed as part of the retail impact assessment. It has been estimated, that under the do nothing scenario, compared to what Northampton would expect to achieve under constant market shares, Northampton will suffer a loss of 5.7% in retail expenditure because of a decline in market share from 24.2% to 23.1% in 2019, which represents a diversion of £40 million per annum of comparison expenditure.

Post 2019, this negative impact would be expected to worsen since Northampton would be suffering from a dated shopping centre with investors looking to other centres and residents of the catchment area travelling to centres such as Milton Keynes to undertake their main non-food shopping.

Based on the published turnover to GVA ratios5 and multiplier this would represent a loss in the annual GVA of the town, in 2019, of a minimum of £9m.

4.5.2 Costs of Relative Decline in Population Growth

The Regional Plan and Sub-regional Plans are directed to accommodating substantial growth in population and households, largely due to the in-migration of people. Failure to invest in the town centre would reduce the appeal and attraction of the town, and deter would be in-migrant population movements. This in turn would have a negative economic impact on the town and sub-region that would require public sector intervention and costs to maintain plan targets.

As an illustration of the size of the risk, the Retail Impact Assessment (RIA, para 2.35) has estimated that for the loss of every 1,000 population below that projected in Northampton (approximated by Zones 1-4 in the RIA), there is a reduction in spending in Northampton of between £0.4m (2019) and £0.8m (2031). Taking £0.6m of comparison retail expenditure per year in the town over the period as the average, this equates, using standard turnover to GVA ratios and multipliers to around £0.17m of GVA.

4.5.3 Policy Impacts

The possibility that the lack of investment would undermine the regional standing of the town and hence the ability to secure the range of policy objectives and growth targets (including housing growth targets) is reflected in the continuing recognition of the investment need in policy documents (and summarised in Section 2).

4.5.4 Expected Values

The assessed risks associated with the costs and benefits can be used to adjust the estimated net benefits, by moderating the estimates of costs and benefits.

In the case of this option the expected values are well represented by the estimate of net benefits. The possible underestimate of costs associated with adjusting for growth in bus station use is likely to be marginal. The potentially severe disbenefits in terms of relative decline are covered in the benefits estimated for other options.

The expected net benefit of the option is £48m.

5 Annual Business Inquiry (ABI), 2008. GVA to turnover is 23% for retail sales; i.e for every extra £1 of sales, GVA increases by 23 pence. The difference is the use of the income from sales to purchase intermediate goods and services.



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5 OPTION 2: GREYFRIARS HOUSE OFFICE REFURBISHMENT


This option represents an attempt to bring back into use the three floors of office space above the bus station as a measure to boost town centre economic activity and accommodate expected growth in demand for office space. It assumes the same demographic trends and bus station use as in Option 1.

The gross office space of approximately 155,000 sq ft (14,400 sqm) represents around 3.3% of the total office floorspace in Northampton of 438,000 sqm (2008 VOA data)6. Applying an employment density ratio for general office space of 19 sqm of gross internal floorspace per employee7 suggests that the Greyfriars offices could potentially provide employment for around 750 employees.

Recent office developments in Northampton have been limited, with only a 7% increase in stock since 1999 according to the CBRE review. As with the retail sector, these developments have tended to be located away from the town centre and the Northampton office sector has become increasingly focused on ‘out of town’ locations. The ‘State of the

Cities’ database suggests that Northampton town centre has particularly low levels of office floorspace and office-based employees compared to other comparative centres. For example, there are reported to be 56% more office based employees in Peterborough town centre than Northampton, almost 2.5 times as many in Milton Keynes and almost five times as many in Norwich town centre.

Many employers have relocated away from the town centre including Barclaycard, Northamptonshire County Council, Shoosmiths solicitors, and numerous smaller operations. Planning consent has been granted for these ‘out of town’ developments, but the town centre is now suffering as a result. The town centre also suffers from the lack of good quality office space and parking provision, much of which has been converted to other uses. The CBRE study also reports that office vacancies in Northampton were 8% of office stock in 2007, significantly below the national average of 12 to 13%. Office space in the town centre typically comprises smaller, older units, which suggests there could be potential demand for the refurbished office space in the Greyfriars bus station.

However, this space is no longer considered to be ‘fit for purpose’ and has been vacant for

more than 15 years, despite being marketed by NBC over much of that time and requires extensive refurbishment to bring it back into a lettable condition.

5.2 Estimates of Costs

The public sector costs associated with this option will be:

The cost of refurbishing the offices above the bus station.

The ongoing costs of maintaining the bus station (as under the ‘do nothing’ option).

5.2.1 Costs of Office Refurbishment

The costs of office refurbishment have been provided by NBC. These have been calculated on the basis of the BCIS Index 244 – 1Q2009 refurbishment cost per m2 of £1,471. However, to let the office space a BREEAM standard of ‘Excellent’ or ‘Outstanding’ will be

required by the lessor. This has not been factored into the refurbishment cost data and the estimated refurbishment cost therefore represents an under-estimate.

6 The CBRE property market review provides a similar estimate of total office floorspace of 409,000 sqm 7 Arup Economics and Planning: Employment Densities produced for English Partnerships and RDAs, 2001



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The resultant one-off cost of office refurbishment is £21.2m plus the refurbishment of the car park of £1.3m, totalling £22.5m. This is assumed to be undertaken in three years, over a three year period (2013-2015).

The total refurbishment cost of the option, including the bus station, is £30.8m. This total figure excludes £0.5m of the bus station refurbishment costs from Option 1, which are also included under the £22.5m refurbishment costs for Option 2.

5.2.2 Operating Costs of Offices and Car Park

The annual recurring cost of operation and maintenance of the offices and car park are estimated to be £1.5m and £0.3m, respectively, totalling £1.8m per year. Under full repair and maintenance leases, it is assumed that, office maintenance costs are covered by tenants except for void periods (assumed to be 10%). Car park maintenance costs are assumed to be met by the public sector.

5.3 Estimates of Benefit

The estimate of benefits comprises the income received plus an estimate of the economic value associated with bringing forward other town centre schemes.

5.3.1 Rental Income for the Bus Station

The bus station receives a rental stream from the bus operating companies of £0.12m as in Option 1.

5.3.2 Rental Income from the Refurbished Office

NBC, as owner of the refurbished office will receive the rental income. This is assumed to commence in 2016 and continue for the rest of the period. The rental income per annum is estimated at £1.56m (Table 5.1) based on a rental of £145 per sqm (£13.50 per sq ft). This rental is substantially greater than that currently achieved in the town and is closer to that achieved in out of town developments. However, since the development might be expected to be the first of a number of developments designed to fit with a policy of ‘town centre first’, the rental achieved over the period of assessment would be expected to be considerably higher than that achieved at the present time.

Table 5.1: Estimated Annual Rental for the Refurbished Greyfriars House

Item UnitGross Floorspace sq m 14,443 Net Floorspace sq m 11,915 Net Floorspace (adj for voids) sq m 10,724

Rent £/sqm 145

Income £m 1.56 Notes: Net lettable floorspace based on 82.5% of gross floorspace.

Adjustment for voids assumes 90% of net lettable floorspace


The refurbished office development is estimated to have a rateable value of approximately £1.73m assuming a rent of £145 per sqm, providing rateable income of £0.84m. The total value of annual rateable income under this Option is £3.85m (Table 5.2).



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Rates Payable (£m)

Existing Bus Station - Ground Floor £0.07 £0.03 Existing Bus Station - Kiosks, driver rest rooms, etc £0.10 £0.05 Refurbished Greyfriars Office (based on £145 per sqm) £1.73 £0.84 Refurbished 300 Space Car Park £0.11 £0.05 Existing Grosvenor Centre Retail Units £5.93 £2.87 TOTAL Option 2 £7.93 £3.85


5.3.4 Commercial Developments in the Pipeline

The investment in the Greyfriars House office development may have the benefit of triggering some of the planned town centre schemes that might otherwise be lost or delayed compared to the previous ‘do nothing’ option.

Assuming that the timescale of schemes in Table 4.1 are delayed by 5 years under this option, rather than 10 years as with the previous option, has the effect of bringing forward the economic value of these schemes by 5 years. Excluding the retail schemes that carry the risk of displacement, the additional GVA associated with the office schemes in present value terms (i.e. the discounted sum of future annual levels of GVA), compared to ‘do

nothing’, is £739m (see Annex 2).


Based on the detailed estimates, the present value of costs and benefits over 40 years are calculated at:

Costs of £50m – which may be an underestimate if the office refurbishment is undertaken to BREEAM standards.

Benefits of £109m from rental and rateable income.

Net Direct Benefits of £58m (£109m less £50m).

The net direct benefits of this option are higher than under the do nothing option, £58m compared to £48m.

However, the benefits of this option compared to the do nothing option could include the benefits of accelerating the development of other town centre schemes. This has been estimated (Annex 2) to be in the order of £739m.

5.5 Risk Assessment

The main risk in this option is the ability to secure the high-end market rents and avoid higher public sector cost. Whilst the current site has remained unattractive this is due to the poor state of the building and quality of the floorspace and the availability of better quality space elsewhere in the town and in surrounding locations, as well as accessibility at the specific location. There is some scepticism among stakeholders that a rent of £145 sqm could be achieved even with refurbishment to a high quality, due in part to its specific location.

However, under the SNEAP projections the demand for additional office floorspace is expected to increase significantly and suggests that were the space available, the space would be taken by 2016. This view is partly supported by a report comparing office locations that identified Northampton as the best office location in the UK in 2008, reflecting



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the regional and sub-regional growth agenda and its ability to survive the credit crunch8, although the report refers to the whole of Northampton, not just the town centre.

Given the level of cost and marginal net benefit, it is likely that the option could only be justified in terms of the wider policy initiatives to support the growth objectives that give rise to demand; and any significant additional economic development attributable to the scheme. In practice it is likely that there are much cheaper but non-town centre options for public sector intervention to realise the required flow of office space.


The assessed risks above can be used to adjust the estimated net benefits, by moderating the estimates of costs and benefits.

In the case of costs there is a substantial risk of underestimating costs. There is say a modest chance (say 45%) that the estimate is accurate, a reasonable chance (say 45%) that is could be 10% higher and a small chance (say 10%) that it could be 30% higher.

In the case of the benefit estimates, there is reasonable chance (say 40%) that the estimate is 20% lower, a reasonable chance (say 50%) that the estimate is accurate and a small chance (say 10%) that the benefit estimate is 10% higher.

Table 5.2: Expected Net Benefit for the Refurbished Greyfriars House

Cost Estimate Probability

Expected Values

50 0.45 2356 0.45 2566 0.10 7

1 54

Benefit Estimate Probability

Expected Values

87 0.4 35109 0.5 54119 0.1 12

1 101

Expected Net Benefit 47 The expected net benefit is therefore £47m, compared to the estimated net present value of £58m. In addition there is the benefit of accelerating development of office schemes in the rest of the town which could add £739m of GVA, a total net benefit of £786m.

8 Lambert, Smith, Hampton: National Office Report, 2008



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6 OPTION 3: EXPANSION OF THE TOWN CENTRE


This option comprises the demolition of the current bus station and the redevelopment of the site, and including part of the existing Grosvenor Centre, as a major new comparison retail centre. It assumes bus station services are relocated to on-street ‘super stops’ with a

new depot for bus parking. Transitional arrangements for bus services during the redevelopment period would need to be provided, prior to the provision of new permanent bus service facilities.

6.2 The Proposed Expansion of the Grosvenor Centre

The Grosvenor Centre is one of three managed shopping centres in Northampton town centre, which also include Peacock Place and St Peters Way. The current Grosvenor Centre provides 27,000 sqm of gross retail floorspace, 9,352 sqm (35%) of which would be retained under the proposed expansion.

The plans for the development suggest that the retained units would be accompanied by a further 57,800 sqm of new gross retail floorspace, to provide a total of approximately 67,000 sqm after the development. This therefore represents around 40,000 sqm of gross additional floorspace over the current shopping centre. This equates to an increase of around 8.5% in the total gross retail floorspace in Northampton, including ‘out of town’

developments, and a 28% increase in non-food floorspace in the town centre (according to the latest estimates from the town centre ‘healthcheck’).

To put this into context, the additional 40,000 sqm of gross floorspace of the Grosvenor Centre expansion is:

Approximately two-thirds of the size of the Highcross Leicester expansion, which added 60,000 sqm,

Similar in size to the new Grand Arcade shopping centre in Cambridge (42,000 sqm),

Larger than the 36,900 sqm extension to Westfield Derby,

Larger than the extension to the Brunel Shopping Centre in Swindon (33,000 sqm), which is due to open in 2010, and

Nearly twice the size of the proposed extension to thecentre:MK in Milton Keynes (24,000 sqm).

The proposed scheme is expected to cost in the order of £350m to include demolition, new build and refurbishment of the existing Grosvenor Centre. Construction of the scheme is assumed to commence in 2014 and take four years, with an opening in 2018.

Based on these costs, our analysis suggests that the demolition of Greyfriars bus station and the town centre expansion will create net additional local construction jobs of 740 FTEs in Northampton and 1,300 FTEs in Northamptonshire over the four year construction period.

6.3 Northampton Town Centre Transport Investment Requirements

6.3.1 Bus Service Facilities

To bring forward the town expansion option requires the demolition of the current Greyfriars Bus Station which in turn requires the relocation of the bus stops to on-street locations, enabling potential improvements in bus services and facilities. NCC supports these improvements in principle, but it does not yet have certainty that the alternatives proposed provide adequate highway capacity in the Plough Hotel area or that the space needed and



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wider traffic and highway implications of a significant increase in on-street stops have been appreciated.

Further detailed design work will be required to ensure bus services at least maintain the present levels of service accessibility and interchange.

6.3.2 Bus and Highways Improvements

It is assumed that planned bus and highway improvements occur in all options. Policy is directed to promoting the increased use of public transport and to secure a transfer of car users to public transport, especially through the greater use of buses. The scope to increase road capacity is limited.

6.4 Retail Impact Assessment

The investment in the town centre expansion has been subject to a detailed impact assessment to establish the level of expenditure that it might generate and the consequent additional economic benefits that would accrue to the Borough and County after adjusting for displacement (the spending that would otherwise have been made in Northampton in the absence of the new Centre). The full assessment is provided separately.

The assessment has sought to establish the impact, of the investment in the new Centre, on comparison retail spending in Northampton allowing for the growth in population and real growth in per capita expenditure and the investment in competing retail centres around Northampton (especially in Bedford and Milton Keynes). The assessment identifies the impact relative to the ‘do nothing’ option that has no new major retail investment. It also considers the impact assuming that the town can maintain its current market share into the future.

6.5 Visitor Economy

The Northampton economy attracts a considerable number of day and overnight staying visitors. Based on available tourism data (see Annex 4) it is estimated that Northampton attracts nearly 6m visitors each year, spending £250m. The visitor numbers include Northampton residents. It can be expected that their expenditure would have occurred in the local economy in any event and needs to be subtracted to identify the economic benefit the town gets from visitors. It is estimated there are 3.7m non-resident visitors to Northampton Borough.

The analysis in Annex 4 identifies the current economic benefit from visitors and previous trends in visitor numbers and spend. This data is used to estimate future visitor numbers and expenditure with and without the town centre expansion. The do nothing option assumes visitor expenditure grows at the projected baseline rate of GVA growth in Northampton, from the SNEAP projections (baseline scenario). In the period to 2031 it is expected that there will also be some investment in the town centre as a result of implementing current plans, even if significantly delayed.

Estimates of growth in visitor expenditure with the town expansion option are based on applying the projected rate of growth of GVA in Northampton based on the SNEAP projections (preferred scenario). Estimates of future visitor expenditure from non-residents are converted to estimates of additional GVA and employment using current ratios.

6.6 Wider Economic Impacts

The potential impact of the town expansion option on the economy of Northampton and added value to policy goals has been described qualitatively in the scenarios in Section 7.

These wider impacts are hard to quantify, given the difficulties of attributing long-term changes to a single investment, albeit one of significant size. The approach has sought to use the economic projections for the baseline and preferred scenarios, used as the basis of the Draft SNEAP, examining the difference between the two projections as the basis for an assessment of the wider impacts.



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6.7 Estimated Costs

The costs of the option are largely met by the developer, including demolition costs. There are a number of items that require public sector intervention, comprising:

continued payment of operating costs for the current bus station (as in previous options) but only until redevelopment commences

capital payment to the bus company to facilitate relocation

capital costs of providing temporary bus service facilities

capital costs of new, permanent bus service facilities.

6.7.1 Existing Bus Station Operating Costs

For the 5 year period to 2014, the costs of operating and maintaining the existing bus station will need to be incurred. The annual cost is £0.68m.

6.7.2 Capital payments

Capital payment to the bus company is required of approximately £5-7.5m (although the sum has not yet been agreed), to facilitate the relocation of the bus depot from the current bus station. The company will use the payment to meet the costs of providing for a new bus depot facility.

The payment represents a payment in lieu of statutory compensation that the company would otherwise be entitled to receive under a CPO or threat of CPO, for the equivalent reinstatement, and which means the company will use the payment to effectively procure delivery of a new bus depot and overnight parking facility and to compensate for disturbance costs (dead mileage, etc.) in relocating.

6.7.3 Permanent and Temporary Bus Service Facilities

The specific design of the new bus service facilities, to replace the existing bus station, has yet to be developed and agreed; and is therefore not available as a basis for estimating costs. For the purposes of this assessment we have used estimates provided by the client group. These estimates are recognised to be in need of some review subject to discussions with the Highways Authority, and pending further detailed discussions and designs. It is recognised, for example, that the cost estimates do not provide for localised lay-over facilities that were previously provided by the bus station.

The estimates are therefore only taken as being indicative of the approximate order of costs. These indicate capital costs:

for temporary bus service facilities during the redevelopment period of £0.65m; and

for new permanent bus service facilities of £2.5m

It is assumed that the cost of temporary facilities will be in incurred in 2014 and the cost of the new permanent facilities will be incurred in 2018.

Some level of operating costs would be incurred. This has not yet been estimated but will be very substantially less than that currently incurred with the existing bus station.

6.8 Estimated Direct Benefits

The direct benefits of the option comprise the rental income from bus operating companies and the rateable income.

6.8.1 Rental Income

The estimated rental income from the bus operating companies is estimated in the absence of any more detailed information to be the same as in previous options, i.e. £0.12m. The relatively modest contribution of rental income to the overall benefit of the option means that conclusions are not sensitive to changes in the estimate.



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The estimated business rates payable have been calculated on the basis of the proposed redevelopment of retail floorspace plus an estimate of the potential rateable income from the change in bus service facilities. In the absence of any detailed information in relation to the bus service facilities, the estimate has assumed that it remains the same as under the do nothing option. The total value of business rates payable under the Option is £6.48m, which also includes rates from the refurbished retail units, the additional retail floorspace and the additional car parking spaces provided by the development (over and above the existing number of parking spaces).

The additional rateable income compared to the do nothing option is £3.4m.



Rates Payable (£m)

New Bus Service Facilities £0.07 £0.03 Redeveloped Grosvenor Centre - Retained/Refurbished Units £2.75 £1.33 Redeveloped Grosvenor Centre - Additional Floorspace £10.16 £4.93 Car Park Spaces (854+300) £0.40 £0.19 TOTAL Option 3 £13.37 £6.48


6.9 Estimated Indirect Benefits

The indirect benefits of the option comprise a series of facilitated economic benefits, i.e. occurring in part as a result of private sector investment which facilitates the flow of economic benefits, / social welfare benefit. These benefits comprise:

the additional retail spending in the town adjusting for displacement from existing shops, and the consequent increase in GVA

the additional visitor spend in the town attributable to the investment

the leverage of private sector investment

the wider economic impact, in particular the contribution to achieving the economic development aspirations identified in the various sub-regional and local strategies.

6.9.1 Retail Spending and Additional GVA

The Retail Impact Assessment (RIA) (separately reported) has assessed in detail the additional expenditure on comparison retail due to the town centre expansion. The main conclusion of the RIA is that by 2019 (the year after opening) the Town Centre will attract additional spending to the town of £86m, rising to £145m by 2031, compared to the ‘do

nothing’ option.

However, the additional spend to the Borough and the County needs to take account of the displacement of spending from other retail centres in these areas, reducing the level of additionality (Table 6.2). In the case of the Borough the additional spend is £73m (2019) and £123m (2031) after adjusting for displacement. In the case of the County the additional spend is £66m (2019) and £110m (2031). For the purposes of the cost-benefit analysis we have used the impact on the Borough.



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Table 6.2: Additional Comparison Retail Spending and Related GVA in Northampton

in 2019 and 2031 (£m)

Town Centre NBC NCC

Options 2019 2031 2019 2031 2019 2031

Do Nothing 123 594 218 991 337 1,519

Town Centre Expansion 209 739 290 1,113 402 1,630

Additional Spend from Town Centre Expansion

86 145 73 123 66 110

Gross Value Added 24 40 20 34 18 31

Employment (FTE) 825 950 713 800 638 700

Source Retail Impact Assessment, Tables 2.2 to 2.4. GVA and employment based on retail turnover: GVA and

employment ratios from Annual Business Inquiry (ABI) and a multiplier of 1.2. Note because of expected increases

in productivity on present levels the employment estimates allow for increases in productivity of 25% (to 2019) and

50% (to 2031)

The estimates of additional spending are converted into an estimate of the additional GVA associated with the retail spending using the retail spending GVA ratios form the Annual Business Inquiry and applying a multiplier of 1.2. We have assumed that, for the rest of the period to 2049, because of renewed investment in the competing centres, that the additionality of the investment remains constant at £34m.

The additional retail activity is also estimated to have a positive employment impact after allowing both for displacement effects and for productivity rises. In total an additional 800 jobs are expected to be generated in the Northampton Borough by 2031.

The evidence identified from previous retail impact assessments is that shopping trips generate spending in addition to that in the shop being visited. This suggests that for every £1 spent in the shop at least a further £0.3 is spent in the town (see para 3.31 of the RIA). Applying this ratio to the additional GVA identified (Table 6.1) would suggest an additional £10m of GVA from linked expenditure in the Northampton Borough in 2031 and an additional 240 jobs. The total additional impact in Northampton Borough is therefore an increase in GVA of £44m and 1,040 additional jobs. The respective figures for the county are £40m of GVA and 910 jobs.

6.9.2 Visitor Spending and Additional GVA

The main conclusion of the impact assessment on the visitor economy is that the town centre expansion will lead to an additional £20m of GVA in Northampton Borough and £15m in Northamptonshire, by 2031 (Table 6.3). For the purposes of the cost-benefit analysis we have used the impact on the Borough. We have assumed that, for the rest of the period to 2049, because of renewed investment in competing attractions, that the additional impact remains constant at £20m.

The additional tourism activity is estimated to have a positive employment impact after allowing both for displacement effects and for productivity rises. In total an additional 300 jobs are expected to be generated in the Northampton Borough by 2031.



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Table 6.3: Visitor Spending and Related GVA in Northampton in 2019 and 2031 (£m,

2007 prices)

Town Centre NBC NCC

Options 2018 2031 2018 2031 2018 2031

Do Nothing 360 513 273 390 194 277

Town Centre Expansion 378 565 287 429 204 305

Additional Spend from Town Centre Expansion

18 52 14 39 10 28

Gross Value Added 9 26 7 20 5 15

Employment (FTE) 210 390 158 300 120 220

Source Visitor Impact Assessment: Tables 1 and 2. GVA and employment based on tourism turnover: GVA and

employment ratios from Annual Business Inquiry (ABI) and a multiplier of 1.1. Note because of expected increases

in productivity on present levels the employment estimates allow for increases in productivity of 25% (to 2018) and

50% (to 2031)

6.9.3 Wider Economic Impacts

The wider economic impact can be judged against the difference in trends projected for the SNEAP under the baseline and preferred scenario. These trends applied to the latest data on local GVA suggest that in 2018 and 2031 the economy of West Northamptonshire will be £356m and £1,410m higher respectively under the preferred scenario compared to the baseline scenario (Table 6.4).

The experience of Reading and Derby (see Annex 5) is that major retail investment as part of a wider package of measures can have very significant economic impacts on the town over the longer term. The view of the stakeholders, and especially from the development industry, was that the town centre expansion would have a strong catalytic effect on the remainder of the development proposals in the rest of the town, accelerating development and attracting new investment.

Evidence strongly suggests that the absence of the town centre expansion and a related package of measures and schemes will severely disrupt the growth plans for Northampton and the wider area. At the same time, the review of competitor locations indicates that these towns are themselves investing heavily, and there is the strong risk that in the absence of the expansion, the town will lose its present relative economic position, even if there is an absolute increase in GVA.

Even if, say, 75% of growth plans are realised in the absence of the redevelopment, the 25% loss in GVA would be in the order of £350m in 2031, or a present value loss over the period to 2031 of £1.8 billion (Table 6.4). The scenarios presented in Section 7 and the case study evidence from other towns (Annex 5) suggests that a 25% loss is probably optimistic and that a more significant loss might be expected.



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Table 6.4: Additional GVA (£m, 2008 prices) in West Northamptonshire and Potential

Losses from the Failure to Redevelop the Town Centre West Northamptonshire HMA£m, (2008 prices)

Loss of GVA from reduced growth of:Year Addd GVA 15% 25% 35% 45%2009 - 0 0 0 02010 - 0 0 0 02011 36 5 9 13 162012 74 11 18 26 332013 114 17 29 40 512014 157 24 39 55 712015 203 30 51 71 912016 251 38 63 88 1132017 302 45 76 106 1362018 356 53 89 125 1602019 414 62 103 145 1862020 475 71 119 166 2142021 539 81 135 189 2422022 607 91 152 212 2732023 678 102 170 237 3052024 754 113 188 264 3392025 833 125 208 292 3752026 917 138 229 321 4132027 1,006 151 251 352 4532028 1,099 165 275 385 4952029 1,197 180 299 419 5392030 1,301 195 325 455 5852031 1,410 211 352 493 634Present Value 7,166 1,075 1,792 2,508 3,225

Source: SNEAP Growth Rates applied to Actuals in 2006. Present value based on a period 2009 to 2031 and a

discount rate of 3.5%

To put these potential losses in context, the direct impacts from additional shopper and visitor spend has been estimated above to be some £64m in 2031. The present value of accelerating the town centre office developments is worth some £1,618m GVA, assuming they would otherwise be delayed by 10 years.

For the purposes of the cost-benefit analysis we have taken, as a conservative estimate of the wider economic impact, the costs of delayed town centre office development of £1.6 billion (present value). It is likely that the economic costs from a failure to redevelop would be greater but it is difficult to justify a particular value above that associated with delays in specified schemes.

In addition to the additional GVA, the wider benefits also include additional jobs. The productivity of the local economy is expected to increase significantly under both economic scenarios. Using the projected rate of productivity in 2031 in West Northamptonshire of £73,000, an additional GVA of £350m would be generated, based on employing some 5,000 extra people.

6.9.4 Leverage of Private Sector Investment

The ability of the option to leverage private sector investment is reflected in the investment cost of the town centre expansion itself. This is a major development and will represent in the order of £350m of private sector investment.

The development is also likely to impact on other private sector investment through the acceleration of town centre schemes and, through support to maintain population and housing growth, underpinning elements of the growth plan. We consider this effect in the next section.



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The undiscounted public sector costs associated with the redevelopment excluding the existing bus station are £9.4m. It is worth noting that this cost is equivalent to three years of the additional rateable income attributable to the Option.

The estimated present value of the public sector costs of the option is £12m, including the operational costs of the existing bus station until redevelopment commences. This is a slight under-estimate due to the omission of operating costs of the new bus service facilities. In addition it should be noted that there is also some uncertainty over the capital costs for the bus service facilities, which requires further detailed work.

The estimated present value of the additional economic benefits of the intervention, excluding the wider impact, is £906m comprising the direct benefits (of £121m) and the additional GVA from additional retail and visitor spending (of £785m). Adding the present value estimate of £1,618m for the attributable, wider economic impact raises the present value of the total additional GVA benefits to £2,523m, in the 40 year period to 2049.

The net benefit (benefits less costs) is £2,512m of GVA.

6.11 Risk Assessment

6.11.1 Wider Economic Impact

The greatest uncertainty in the assessment of this option is the scale of the wider and long-term economic impact. Attempt has been made to frame the potential scale of impact with reference to long-term economic development scenarios and the experience in other comparable towns of major town centre retail investment.

It remains a matter of judgement as to the scale of additional economic impact attributable to the investment proposal. However, even based on conservative assumptions the wider impact is considerable.

6.11.2 Accessibility and Amenity

A second important uncertainty is the impact of the option on local transport policies and in particular on ensuring that at least current levels of accessibility and amenity are maintained. In terms of bus services NCC suggest that the experience from other towns is that moving to super stops can be associated with some decline in bus usage (c20%). In the case of Northampton over 20% of bus passengers are transferring from one bus to another, which will be more difficult with super stops. Facilities at a super stop are also likely to be less than in a central station and may also inhibit use.

It is recognised that more detailed design work is required in order to establish the best option for the provision of bus services as part of meeting long-term transport priorities in the town centre, as the basis of a more detailed cost estimate and accessibility impact. The plans by NCC for a detailed feasibility study9 would clearly address this uncertainty.


The uncertainty of the cost estimate relates mainly to the costs of the new permanent bus service facilities. Operating costs also have to be added. In addition, the capital payments to the bus company have still to be finalised.

The costs may therefore be higher than estimated. We have estimated the expected value by assuming a 30% chance that the cost estimate is accurate, a 50% chance that the cost estimate will be 30% higher and a 20% chance that the costs will be double. This indicates that the expected value of costs is £16m.

9 Unlocking Northampton’s Growth Potential: A Programme of Transport Priorities to release Northampton town centre employment sites: An application for funding from NEL, 2009



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Table 6.4: Expected Cost of Expanding the Town Centre

Cost Estimate Probability

Expected Values

12 0.30 315 0.50 823 0.20 5

1 16 The uncertainty on the benefits side is much greater, although the analysis has attempted to take a conservative view. The expected value is based on assuming a 25% chance that the estimate is correct, a 25% chance that the estimate could be 25% higher, a 25% chance that the estimate could be 50% higher and a 25% chance that the estimate could be double.

Table 6.5: Expected Net Benefit for Expanding the Town Centre

Benefit Estimate Probability

Expected Values

2523 0.25 6313154 0.25 7893785 0.25 9465047 0.25 1262

1.00 3627

Expected Net Benefit 3612 The expected value of the benefits is £3,627m and the expected value of the net benefit (benefit less cost) is £3,612m.



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7 STRATEGIC ADDED VALUE

7.1 Strategic Added Value – Alternative Scenarios

Assessing the Strategic Added Value (SAV) of policy intervention is designed to understand the contribution that the intervention can make beyond the specific impacts captured in a standard impact assessment. Improving the economy requires the action of many agencies and partners and can have wide-ranging benefits and impacts, many of which are not captured as direct outputs of the respective intervention. The concept of Strategic Added Value (SAV) was developed to take account of this by ensuring that the wider contribution of public interventions is also considered, in terms of their catalytic and influencing roles.

The assessment of SAV is based on stakeholder interviews and discussions, and a number of public and private sector organisations and individuals have been consulted as part of this study to take account of the different views and interests. Public sector consultees have included representatives of Northampton Borough Council, Northamptonshire County Council, Northamptonshire Enterprise Limited and West Northamptonshire Development Corporation. Private sector consultees included commercial property developers and agents and key employers in the town.

The assessment of SAV has considered the impact of the redevelopment on:

the strategic policy fit of the proposed redevelopment;

levels of business confidence and investment leverage;

the scaling of impact.

The consultations with public and private sector stakeholders have enabled us to develop three scenarios relating to the three options for the town centre providing a picture of how the town expansion option in particular might contribute added value to public policy. The scenarios also have the benefit of providing a richer context for the impact assessment.

7.2 Introducing the Scenarios

Three scenarios for Northampton, 2018-2031, are presented in this section of the report:

Scenario 1: DEAD-END

Scenario 2: STAGNATION

Scenario 3: SUSTAINABLE GROWTH

The first scenario can be regarded as the ‘doing nothing case’ and describes the likely outcome for Northampton assuming that:

the Bus Station, and the offices located above, are not refurbished

the modernisation and expansion of the Grosvenor Shopping Centre does not proceed

the retail and leisure developments planned for Northampton’s competitors do go

ahead.

The second scenario should be regarded as a variant of the first, and describes a situation characterised by refurbishment of the Bus Station and associated offices, as an alternative to the expansion of the town centre, and occurring in the face of retail and leisure developments planned and expected for Northampton’s competitors.

The third scenario charts the likely future for Northampton assuming that the Bus Station site is re-developed, the Grosvenor Shopping Centre development is built (and is opened around 2018), and retail and leisure developments for the town’s competitors do go ahead

according to plan.



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7.3 Scenarios and Economic Impact Assessment

Scenarios are neither projections nor forecasts; they are narratives (stories) of likely futures based on a reasoned interpretation of the drivers of change. They present a range of future states to which a city (or business) may have to respond. The scenarios presented in this report are based on:

The retail impact analysis of the expansion of the town centre.

The assessment of the impact of the development on GVA numbers and trends.

The analysis of ‘comparators’ (towns of a similar size to Northampton with a similar economic history and profile, and support the development of a major retail and leisure facility similar to the Grosvenor Shopping Centre).

The assessment of the ‘competitors’ (towns which have been identified through our retail impact assessment as the key competitors for Northampton).

Interviews with public sector officials and a selected number of businesses in Northampton.

The scenarios should be seen as adjunct to the quantitative analysis presented in the retail impact analysis and the assessment of the Northampton Town Centre Expansion (through the demolition of the existing bus station, modernisation and expansion of the Grosvenor Shopping Centre and new bus service facilities) on the GVA of the Borough. In many respects the scenarios summarise the information and present a coherent but brief narrative concerning the expected strategic added value and the economic impacts of the proposed modernised and expanded Grosvenor Shopping Centre.

Given that the future is always uncharted and uncertain territory, particularly the further in time one reaches, the scenarios presented in this section must be regarded as only indicative narratives. Furthermore, it is customary to devise and validate scenarios through a series of stakeholder engagements, a process that the time and budget constraints associated with this assignment did not allow.

Nevertheless the data and information used in the construction of the scenarios is fairly comprehensive and robust. There are clear ‘signposts’ in today’s economy indicating two

or three very possible outcomes for tomorrow. The scenarios are indicative but informative, and, in conjunction with the more quantitative analysis presented in the report, will allow the client to make informed judgements as to the importance, value and impact of the proposed development.

7.3.1 Scenario One: Dead-End.

“It [the existing Grosvenor Shopping Centre] is a bit ‘old-hat’. Most people

now seem to go shopping in Milton Keynes rather than Northampton

because of the significantly better offer”. Source: GHK Interview with local business, June 2009.

“The town centre is disappointing and underweight.........I only live 40

minutes form Northampton but I never go shopping there and I’m sure

that’s true of many people. It’s not even on the radar”. Source: GHK Interview with local developer June 2009.

“I live in Crick but would not consider shopping in Northampton. I do my

shopping in Leicester, Milton Keynes and Birmingham, which are infinitely

more appealing than Northampton, despite it being much closer to

home.......The expansion of the Grosvenor Centre is essential for the

expansion of the town centre retail offer and the economic survival of

Northampton”. Source: GHK Interview with local commercial property agent June 2009.



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“...the town centre has lacked investment for many years and has slipped

a long way behind its competitors. It has already fallen so far behind

Milton Keynes that it will not be able to catch up the lost ground, and

without a large-scale retail development it does not even have a fighting

chance of keeping up.” Source: GHK Interview with local commercial property agent June 2009.

“Few locals yesterday were surprised that the town had emerged as

Britain’s negative equity black spot..... “ (One local resident) confides:’ it’s

a dump, actually, the town’”. Source: Former boom town counts the cost as property dream turns sour. Financial Times, 25th June 2009.

In this scenario Northampton chooses neither to modernise and expand the Grosvenor Centre, nor to refurbish the Bus Station, while the town’s competitors do proceed to

implement the retail and leisure developments in the pipeline and planned. As such Northampton slips down the retail rankings. Competitors initially take retail trade from Northampton and subsequently take business investment as well. The scenario posits that the modernisation and expansion of the Grosvenor Shopping Centre would have acted as a catalyst, enhancing the economic impact of many of the other developments that were in the pipeline and planned for the town. The absence of the Grosvenor development had the opposite effect; decline ensued and gathered momentum over the years. A ‘tipping

point’ had been reached in Northampton in 2009-2010; choices were stark.

It’s 2021. The debate in the Council Chamber and the local paper is rather acrimonious and revolves around the decision made just over a decade ago not to proceed with the modernisation and expansion of the Grosvenor Shopping Centre. An emergency development scheme is mooted, but the developers recently approached expressed neither interest nor enthusiasm. The feeling was that there were better places to do business in the UK. Northampton town centre entered a spiral of decline.

The town centre of Northampton was most certainly not a vibrant and vital part of the local and sub-regional communities. Its poor shopping offer attracted only those with low purchasing power; which reinforced the low grade nature of the ‘offer’. Litter festooned the

plastic benches in the market square, and skateboarders took it in turns to annoy shoppers. Many avoided the town centre. Big spenders went elsewhere; to Milton Keynes, Birmingham, Leicester, out-of-town shopping experience-parks, and increasingly to Corby following the attractive redevelopment of its town centre between 2010 and 2014:



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Indeed, competition had been growing by the day – Corby, Bedford, Milton Keynes, Leicester and Peterborough and a clutch of adjacent towns (see Evidence Box 1) – all had town centre master plans which were more or less fully implemented. Northampton in 2021 remained mired in debate about its partially implemented town centre master-plan; a master-plan not seen as compromised because the Grosvenor Shopping Centre had not been modernised and expanded.

EVIDENCE BOX 1: Peterborough,

2009. Today’s Signposts for

Tomorrow’s Futures.

The £450 million North Westgate development will transform the heart of Peterborough. The scheme will include a brand new Marks & Spencer department store, a multi-screen cinema, 60 new shops, several restaurants and 100 new homes. Meanwhile, the Hammerson / Morley joint venture responsible for North Westgate is also planning a major upgrade of its adjacent Queensgate shopping centre.

Away from the city centre, a multi-million pound refurbishment of the out-of-town Bretton Centre has recently been completed, work is well under way on a £10 million refurbishment of the Orton Centre and public consultation has begun on a planned redevelopment of the Werrington Centre. Large new Matalan and B&Q stores have recently opened in the ‘retail

warehouse’ development alongside Bourges Boulevard and plans have been submitted for a £50 million extension of the Brotherhood Retail Park on Lincoln Road. City council figures show that more retail developments than ever before are taking place across the city, with over 9,000 square metres of new space in shops, cafes, pubs and restaurants recently opened. They are all adding to Peterborough’s established reputation as a major

regional shopping centre. Source: www.opportunitypeterborough.co.uk

But the Council was worried by a lot more than just the continuing decline of town centre shopping. The 2020 vision for the whole town (extended to 2030) clearly was not going to be achieved. Northampton had not become an attractive destination for businesses, and those that had been persuaded to locate in the town or its environs constantly complained about the lack of town centre facilities.

Regional and Central governments also looked upon the town with concern. Some 10 years ago, Northampton was identified as central to the development of the Milton Keynes and South Midlands Growth Area (MKSM). Northampton and its environs were to be the recipient of a significant increase in the Area’s housing stock. This policy was not a

success; houses were built but targets were not met, and the new housing was accommodated by many more unemployed, on benefit or considered workless than expected. Milton Keynes had secured its position as the ‘capital’ of the MKSM sub-region.

Northampton Borough Council had commissioned a study in 2009 to examine the development options for the Town Centre. The consultants had demonstrated that a number of towns, successful in 2009, had previously been struggling and had used the redevelopment of their town centre as a catalyst for growth and development. The Oracle Centre in Reading, for example, had lead to an upward movement in the curve of GVA increase from around 2.5% to 3.5% (see Annex 5). The evidence was available demonstrating the benefits to be generated from town centre driven growth and development. However, budgetary constraints in 2009, which deepened between 2010 and


http://www.queensgate-shopping.co.uk/

http://www.peterborough.gov.uk/page-5183

http://www.peterborough.gov.uk/page-11933

http://www.opportunitypeterborough.co.uk/Shopping.aspx

http://www.opportunitypeterborough.co.uk/


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2013, effectively led to the moth-balling of the Grosvenor Shopping Centre expansion in Northampton. Members of the Council in 2021 were arguing over false economies and then demanding a value be placed on the opportunity cost of inaction over the last 10 years.

Northampton had not generated or attracted the expected number or type of jobs, partly because the town centre was so unappealing and offered little that those who worked in modern businesses wanted to buy or, more importantly, experience. The town was not a destination; an ’experience’ that attracted customers. Talent that drives the modern

innovation economy was not attracted to Northampton in the numbers required to reach a ‘critical mass’ leading to a self sustaining development of the economy.

‘Leather Heaven’ had faded from the memories of all but the most ardent. The historic assets of the town were being neglected. Only the out-of town retail parks prospected. The 100,000 square foot of retail developed at Sixfields between 2011 and 2013 was holding its own in the late 2020s.

Northampton was fast becoming a sink town, characterised by underachievement on many accounts. To cap it all the Bus Station which over 10 years ago had been voted the second worst building in the UK had been elevated - to be the worst building in the UK! Winning that particular competition was not welcome news for the Councillors and Officers of the Borough Council. The town was perhaps a ‘dump’.

Looking further into the future, by 2031 Northampton had fallen into seemingly irreversible decline and had become eligible for Government and EC emergency regeneration assistance.

7.3.2 Scenario Two: Stagnation

This scenario is a variant of the first (and may be termed ‘Scenario 1b’). The scenario

posits that the Greyfriars Bus station is refurbished, particularly the offices above the main concourse. The timeline and most of the outcomes discussed under scenario 1 hold true for this scenario. The refurbishment of the Bus Station Offices is unlikely to have a major impact on the trajectory of the economy of Northampton.

This is because, firstly, the cost of refurbishment is expected to be high resulting in a relatively high square foot charge, and, secondly, the offices above the Bus Station have been empty for a number of years and many developers feel that refurbishment may not improve matters significantly (especially if charges are relatively high). There are, perhaps, better options as regards office accommodation; would a prestige firm paying prestige rates be happy to locate in a building voted the UK’s second worse?

What can be expected is that the decline of Northampton is slowed down. It’s 2021. The debate in the Council Chamber and the local paper revolves around the continuing uncertainty about the prospects for Northampton. Competitor locations have been implementing planned developments and the refurbishment of the Bus Station Offices has not delivered the boost to the economy that had been expected. Instead of a prestige company assuming occupation a large number of smaller firms negotiated razor-thin margin rents. A return to the Grosvenor Expansion was the number one agenda item for the Council.

7.3.3 Scenario Three: Sustainable Growth

This scenario posits that the modernisation and expansion of the Grosvenor Shopping Centre was a success in its own right and was extremely important for the success of many of the other developments that were in the pipeline and planned for the town. The gearing that was associated with the development of the Centre was found to be high. The Centre was a priority ‘high image-high impact’ development; it allowed other projects to be

successful, and lead to a ‘virtuous’ spiral of sustainable growth.



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“Walking along Abington Street 10 years in the future, it is noticeable

there are fewer empty shops, a new street surface, the awful plastic

benches have gone and the skateboarders who once made the street their

home have moved to a purpose-built facility on the edge of town. Walking

further down the street to the entrance of the new Grosvenor Centre,

which opened in 2018, a fresh new mall comes into view.

The ultra-modern centre is currently causing a crisis in nearby Milton

Keynes, where the town's residents are complaining nobody visits their

dated shopping centres any more. After strolling through the centre and

seeing environmentally-conscious shoppers getting onto buses at the

centre's new bus terminal along Lady's Lane, we pass into the Market

Square which, although it still retains its historic nature, now has a range

of independent shops around the outside and an entertainment space

which is regularly full with specialist markets and entertainers.

Walking on, past the Guildhall Road cultural quarter, we enter the posh

end of town. Gold Street's pound stores and kebab shops are long-gone,

replaced with an upmarket hotel and a range of specialist shops which

greet people as they enter the town from the railway station. At the

station, commuters pack into the massive glass building, fighting for

room among the shoppers and office workers at the new complex.

Beyond the station, new housing developments are seen stretching out

towards Sixfields. With new roads, shops and medical facilities, the

houses have created communities which fit into Northampton and,

despite being well served with local facilities, still encourage people to

shop and work in Northampton town centre. Source: What is in the future for Northampton? Northampton Chronicle and Echo 28th April 2008.

“The Grosvenor Centre development would significantly increase investor

confidence in the town. It would also play an important role in improving

the ‘social infrastructure’ of the town, which will in turn make it a more

attractive location for residents, employers and employees”. Source: GHK Interview with local business, June 2009.

The Grosvenor Centre expansion would provide the core shopping area in

the town, leaving smaller retail developments to develop a more ‘niche’

retail offer” Source: GHK Interview with local developer June 2009.

The industrial and office sectors in Northampton need a healthy, vibrant

town centre to thrive. The Grosvenor Centre redevelopment is a key part

in achieving this, and this should help the town centre to attract new

businesses, which are so essential for the future development of the

town. However, the Grosvenor Centre cannot achieve this by itself, and

needs to be part of a joined-up approach to developing and improving the

town centre.” Source: GHK Interview with local developer June 2009.



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“The Grosvenor Centre development would be fundamental in raising the

overall offer of the town centre, as part of the total package of proposed

developments. This would attract and encourage more employment in the

town centre, including higher quality office jobs that are currently lacking

in the town centre, encourage more visitors, particularly overnight

visitors, and have a massive impact on investor confidence and a big

influence on changing people’s perceptions of Northampton town centre.

This will encourage other developers to invest in the town centre.” Source: GHK Interview with local business June 2009.

“Without a large scale retail development, many of the other

developments might struggle to find investors and occupants, and the

added value for the town centre would not be maximised. The Grosvenor

Centre redevelopment will bring confidence and pride to the town centre

again, which will play a key part in attracting others to invest or locate in

the town, whilst also helping the town to retain talented young people”. Source: GHK Interview with local business June 2009.

It’s 2023. The ‘new’ Grosvenor Shopping Centre has been open for some 5 years. ‘From

Sour Town to Boom City’ ran the article in the Financial and Eco-Capital Times in June of that year. Some 14 years ago the then titled Financial Times had run an article examining the impact of the great 2008-2010 depression on Northampton Town. Their experience-maker reporter had returned to document the significant turnaround that had been engineered in Northampton, now a City.

The Town had blossomed. The ‘new’ Grosvenor Centre had not only increased the retail

spend in the town to over £80 million a year (in 2009 prices) immediately following its opening; it had also changed the perception of the town held by its residents and those on the outside. ‘Perception is everything’ as one developer had informed the Council. She

continued by outlining the investment projects in Northampton that her firm was interested in assuming. High on her agenda was the Market Square. ‘It's a great space for UK and

European exhibitions, festivals and speciality markets to take place’, she stated. ‘It is the

biggest in the country, a fantastic asset, and we’re going to turn it into one of the best

attractions in the UK’

Interestingly fears concerning retail trade diversion and ‘wars’ had not materialised. The

retail offer built in Northampton was found to be complementary to that of its largest so-called competitor, Milton Keynes. The heritage assets of the Town, the specialist shopping associated with themes such as ‘Leather Heaven’, and the variety of activities, leisure and

eating opportunities clearly created a recognisable distinctiveness to the Northampton ‘offer’.

Furthermore, following agreements made during the ‘single conversation’ with the Homes

and Communities Agency (HCA) in 2010, developments at potentially disruptive sites, such as Sixfields, were structured to be complementary to the Town Centre offer and supportive of the growth of the town’s knowledge economy. Sixfields today (2023) is a mixed housing-cum-knowledge park, with a specialist retail component.

Although the impact of the Grosvenor Centre development during its first years of operation did adversely affect some of the surrounding out of town retail parks, not only was the effect short-lived and dramatically corroded through a general increase in purchasing power, but the nature of offer of the out-of town parks changed and became complementary to that of the town centre.

Northampton, very sensibly, had packaged complementary projects together in a local investment plan in order to implement the 2026 Vision, and had ensured that the various stakeholders, from the local businesses to regional and central government agencies were aligned behind a coherent strategy and investment plan for the town.



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Most importantly projects had been prioritised and sequenced. The modernisation and expansion of the Grosvenor Shopping Centre had been seen a top-priority; one with a high gearing enhancing the success of many of the other projects that were planned, which in turn would enhance the success of the Grosvenor centre – leading to a spiral of sustainable growth.

The aims of the 2026 Northampton vision were increasingly seen as achievable, namely that by 2031 the City will:

Be a European city; - the European city of the East Midlands.

Be a regional cultural centre characterised by a distinctive leisure and retail offer.

Be a major driver of the MKSM region (reaching housing and related targets).

Be an Economy driven by knowledge and offering all levels of waged employment, particular employment associated with high value added activities, to all citizens.

Be a wonderful place to live and visit.

7.4 Strategic Added Value – A Summary

In summary the town expansion option provides

Strategic Fit – as the policy context for Northampton town centre demonstrated, the redevelopment of the Grosvenor Centre scheme is closely aligned with the key regional, sub-regional and local development strategies. All of these strategies project significant population and household growth for Northampton and highlight the importance of providing a sufficient number of new jobs and a retail offer commensurate with this larger population and of a quality that can help to attract residents and employers to the town. All consultees agreed that the redevelopment of the Grosvenor Centre was a vital part of the mix of town centre developments and the only feasible way of generating sufficient levels of new retail floorspace within the town centre. Furthermore, in order to achieve the considerable growth in population and housing projected for the town, Northampton has to provide a certain level of facilities, particularly in the town centre.

Business Confidence and Investment Leverage – The catalytic effect of the town expansion option is amply demonstrated in the scenarios, themselves reflecting evidence from other towns that have invested in major town centre redevelopment. The private sector stakeholders in particular emphasised the opportunities for investment alongside the redevelopment, and the importance of significantly improved town centre facilities in securing residential investment, appropriate mixes of skills and enabling the increase in productivity that the sub-region aspires. In short the Grosvenor Centre provides an opportunity to attract significant private sector investment for a relatively modest amount of public sector investment,

Scaling of Impact – The redevelopment and expansion of the Grosvenor Centre, enables a scale of development that is capable of attracting complementary investment in the town and sub-region. In its absence one would expect piecemeal and incremental development, incapable of providing the stimulus that the redevelopment would provide. One consultee suggested “the development of the

Grosvenor Centre on its own won’t achieve the vision for Northampton, but it is a vital

component of the package of interventions that will achieve the vision”. More

generally, consultees highlighted the importance of connectivity between the proposed projects, and having a joined-up approach to developing the town centre. Consultees collectively viewed the redevelopment of the Grosvenor Centre as vital for Northampton to avoid decline and to keep pace with competitors and Milton Keynes in particular, because of the potential for the scheme to:



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o Improve the scale and quality of the retail offer in Northampton, thereby attracting shoppers and visitors to the town centre and providing a boost to the visitor economy;

o Influence perceptions of the town centre as a place to live, work, shop and spend leisure time;

o Attract employers to occupy the proposed office developments in the town centre;

o Attract new residents to live and work in Northampton and thereby help meet the government defined growth targets for housing and employment.



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8 CONCLUSIONS

8.1 Identifying the Preferred Option

The economic impact assessment has been undertaken to identify the costs and benefits of the proposed town expansion option compared to alternative options.

The resultant assessment has identified the respective net benefits of each option expressed in present values, and adjusted for the assessed risks to identify the net benefits expressed as expected values. This provides the basis for identifying the preferred option, taking into account any impacts not included in the estimates.

The assessment has clearly identified the town expansion option as the preferred option (Table 8.1). Not only is it is the cheapest option, but it has by far the highest benefits to cost ratio.

Table 8.1: Comparison of the Expected Values of the Costs and Benefits of Defined

Options, 2009 - 2049

Option 1 Option 2 Option 3Expected Costs 23 54 16 Expected Benefits 71 840 3,627 Expected Net Benefits 48 786 3,612 Benefits to Costs 2 14 230

Note: Assumes a discount rate of 3.5%

8.2 Economic Benefits

The additional economic impact of the town expansion option compared to the do nothing option is to increase GVA by £64m in 2031 in Northampton Borough (£55m in the county) due to higher levels of retail and tourism related activity. The wider economic impact as indicated by the acceleration of development compared to do nothing is valued in present values as £1,618m over the appraisal period to 2049.

The additional retail and tourism activity would generate some 1,300 jobs in Northampton Borough in 2031, (1,100 in the county). A conservative assessment of the wider economic impacts would suggest that there would at least an additional 5,000 jobs in West Northamptonshire in 2031. Based on the additional funding costs of £9m, the town centre expansion option has a cost per job of £1,500.

The public sector funding of the town expansion option would leverage £350m of private sector investment in the Grosvenor Centre.

8.3 Policy Benefits

The rationale for public intervention stems from the inability of markets to take account of the positive spillover effects associated with the town expansion option. The achievement of public policy goals laid down in the Regional Plan (and related housing growth) and in sub-regional plans for the economic development of MKSM and Northampton has been shown to be at risk without the town expansion option. This is supported not just by the assessment of quantifiable costs and benefits but in the wider judgements of stakeholders, and by reference to the experience of other comparable towns.



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LIST OF CONSULTEES

Name Position Organisation

Mike Kitchen Principal Regeneration Officer NBC

Stuart Docker Senior Regeneration Officer NBC

Paul Lewin Planning, Policy and Conservation Manager

NBC

Helen Russell-Paddison Principal Transportation Officer NCC

Chris Wragg Transport Planning Manager NCC

John Ellerby Principal Bus and Rail Development Officer

NCC

Neil Holland Senior Bus and Rail Development Officer

NCC

David Wright Chief Executive NEL

James Cushing Business Infrastructure Manager NEL

Sajeeda Rose Head of Programme Management NEL

Sam Goodall Project Manager WNDC

Troy Hayes Senior Policy Planner WNJPU

Anthony Sowden Senior Regeneration Manager HCA

Neil Moore Team Leader Leicester City Council

Emma Thornton City Centre Manager Cambridge City Council

Richard Byard Economic Development Manager Reading UK CIC

David Marshall Development Director Derby Cityscape

Mark Wright Partner Trebor Developments

Chris Carlisle Managing Director Cedar House



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Chris Drummond Director Budworth Hardcastle

Colin Richardson Director The Richardson Group

Steve Hickson Facilities Manager Cosworth



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ANNEX 1: REFERENCES

Name of publication Author Date

Northamptonshire Strategic Employment Land Assessment – Initial Draft Report

Atkins 2009

West Northamptonshire Retail Study 2008-2026

CACI Ltd 2009

Planning Principles West Northamptonshire Development Corporation

2009

Unlocking Northampton’s Growth Potential NEL application 2009

A Local Development scheme for West Northamptonshire

West Northamptonshire Joint Planning Unit

2008

Retail Strategy for Northampton Town Centre

CACI Ltd 2008

Feasibility Study into the Demolition of Greyfriars Bus Station

White Young Green 2008

Northampton Economic Regeneration Strategy 2008-2026

Northampton Strategic Partnership

2008

Northampton Market Square Study Pleydell Smithyman Ltd 2008

Northampton – Bridge Street / St John’s /

Angel Street Masterplan Taylor Young and Partners 2008

Northampton Longer Term Growth Options Study

EDAW with Atkins and GVA Grimley

2007

Transport Strategy for Growth Northamptonshire County Council 2007

West Northamptonshire Joint Core Strategy – Issues and Options Discussion Paper

West Northamptonshire Joint Planning Team

2007

Draft Strategic Northamptonshire Economic Action Plan – Consultation Document

SQW Consulting 2007

Sub-Regional Economic Strategy Northamptonshire Enterprise Ltd 2006

The East Midlands in 2006 – Evidence Base for the East Midlands RES 2006-2010

EMDA 2006

Northampton Central Area: Design, Development and Movement Framework

Building Design Partnership 2006



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Property Market Review CBRE 2006

Fashioning a Shopping Experience CBRE 2006

MKSM Sub-Regional Strategy

Government Office for the south East, East Midlands and East of England

2005

Northampton Multi-Modal Study ARUP 2004



39 [J30256553]

ANNEX 2: DESCRIPTION OF TOWN CENTRE SCHEMES

In a review of town centre development opportunities, BDP identified a number of key development projects for the Central Area of Northampton. These projects are based around a number of key development drivers including:

Emphasising and taking advantage of the built heritage in Northampton.

Creating the best possible image for Northampton and differentiating it from other towns by delivering an exceptional public realm.

Making greater use of the waterside area.

Creating a series of exciting new destinations in the town centre to meet the demands of a growing population.

Encouraging creativity, enterprise and cultural activities by developing links with the university and college.

The 12 key projects are summarised in the table below, which provides the latest available details of the proposed developments including:

The additional floorspace that each development is expected to provide (specified in terms of retail, food and drink, office, residential and hotel use)

An estimate of the direct employment impacts that could result from the proposed floorspace, using employment densities prepared by Arup (Employment Densities: A Full Guide, 2001). The assumptions are based on gross internal floorspace per worker unless otherwise stated and include: 19 sqm per office worker; 20 sqm of net retail floorspace per town centre retail worker; 13 sqm per worker in food and drink establishments; 0.8 workers per room in a 4/5* hotel and 0.5 workers per room in a 3* hotel.

An estimate of the expected timescale for each of the proposed developments, provided by Northampton Borough Council, under normal market conditions.

The expansion of the Grosvenor Centre is by far the largest development in terms of retail and food and drink floorspace. The Grosvenor Centre development alone is expected to provide 65% of the additional non-food retail floorspace proposed for the town centre as well as 37% of the proposed food and drink floorspace. This is estimated to generate approximately 1,640 jobs, representing 16% of the 10,450 jobs estimated to be created by all of the schemes together.

The only proposed development expected to have a larger impact on employment in the town centre is the Castle Station development which is estimated to generate additional floorspace for around 2,350 workers, the vast majority of which (approximately 2,000) are expected to be office workers in a new 6-8 storey office block.

Only one of the 11 other proposed developments could be dependent upon the expansion of the Grosvenor Centre. The proposed ‘Abingdon Street’ scheme involves the

development of new retail units, providing 4,900 sqm of non-food comparison gross retail floorspace. This development is only likely to take place after the Grosvenor Centre development so that demand for retail units on Abingdon Street can be ascertained in light of the expansion to the neighbouring shopping centre. However, failure to invest in the town centre and especially in the Grosvenor Centre could undermine market confidence. Experience from Reading especially, is that the retail centre is the catalyst for other town centre development, without which development may be delayed or lost.



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Table A2.1: Northampton Central Area – Masterplan and Project Proposals



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In addition to the Grosvenor Centre, Castle Station and Abingdon Street developments, the other proposed developments include:

Horse Market – A mixed-use development expected to provide an additional 20,000 sqm of gross office space, as well as apartments and some small retail and food and drink outlets. The aim is to replace some of the office space that has been lost in the town centre and provide a boost to the lunchtime economy.

Angel Street / St John’s / Bridge Street – These three neighbouring sites are currently underused and/or occupied by low grade employment. The proposals include a number of mixed-use developments providing around 120 residential units, a 100 bed luxury hotel, 1,500 sqm of gross retail space, 4,000 sqm of gross space for food and drink outlets and almost 50,000 sqm of gross office space including a new innovation centre providing high quality office space for arts, media and IT businesses. The proposals aim to make St John’s the focus for the new cultural

quarter of the town centre, which is already the location of the Demgate Theatre. The Angel Street proposals also include the refurbishment of County Hall, the Museum and some existing retail space in addition to the new floorspace listed above.

Lower Mounts – A 13,200 sqm development of gross office space, which could be used as a business media centre, an extension to the Deco conference facilities or a new education facility linked to the Northampton University or College.

St Peters Way / St Peters Square – These two schemes are currently being developed further as part of the Waterside Masterplan but are likely to include mixed-use developments designed to make greater use of the waterside area. The plans detailed in the BDP report included more than 200 apartments, a 5,400 sqm food store (gross floorspace), a further 8,400 sqm of non-food gross retail floorspace, and a number of relatively small office blocks providing almost 8,000 sqm of additional gross office floorspace.

Spring Boroughs – A large residential development in this deprived part of the town centre, providing between 800 and 900 new town houses and apartments, 4,000 sqm of gross office space, 2,000 sqm of gross retail and food and drink floorspace, and 2,800 sqm of gross floorspace for community facilities.

Great Russell Street – Another residential development providing 150 live/work units.

The review has also identified approximately the expected development times under normal market conditions. Most developments are expected to come forward over the next 10 to 20 years. However, the failure to invest in the town centre may lead to the deferment or loss of some or all of these schemes.

There are very few early wins or even projects expected to complete within the next ten years. Only the St John’s development is likely to take place within the next few years,

followed by the first phase of the Castle Station redevelopment, expected to take place in around five years. Another six developments are expected to complete within around ten years, including the expansion of the Grosvenor Centre. This leaves four remaining developments likely to take around 15 to 20 years to be realised, including the Lower Mounts, Bridge Street, Great Russell Street and Horse Market developments.

For the purposes of the options analysis it has been assumed that under the do nothing option the projects are delayed by 10 years compared to that expected; and that under the office refurbishment option the projects are delayed by 5 years. Based on the timetables of development under each of the options, the present value of the GVA of the different schemes can be calculated. The difference in present values between the options indicates the cost or benefit of slowing or accelerating the timetable of development. Note that the estimates are based on the office schemes and exclude retail, to avoid any significant risks



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of displacement effects (i.e. that the GVA in the scheme is the result of reduced GVA in other schemes)

The results are summarised below and indicate that compared to the do nothing option, the office refurbishment option has a benefit of £739 million from accelerating development by 5 years; and that the town expansion option has a benefit of £1,618 million compared to the do nothing option and a benefit of £878 million compared to the office refurbishment option.

Table A2.2: Impact of Changes in the Timing of Office Development on GVA (£m)

Option 1 Option 2 Option 3Years10 18015 180 6120 180 61 4725 61 4730 47Present Values 1,859 2,598 3,477 Add GVA cf Option1 739 1,618 Add GVA cf Option 2 878

Note: Based on a Treasury discount rate of 3.5% over a period of 40 years



43 [J30256553]

ANNEX 3: DEMOGRAPHIC AND ECONOMIC TRENDS

DEMOGRAPHIC AND ECONOMIC INDICATORS

Population and Demographics

Northampton is located in the East Midlands region, the Milton Keynes – South Midlands (MKSM) Growth Area, and the West Northamptonshire Housing Market Area. It is one of the largest towns in the UK (without city status) and is also one of the fastest growing. Northampton was officially designated as a ‘New Town’ in 1968 and the population has

since increased rapidly from 124,000 to a current figure of more than 202,80010. Northampton has a young population with a relatively large proportion of people aged 0-44 and relatively few people aged 45 years and over, compared to regional and national averages.

There are currently 86,000 households in Northampton (CLG data for 2006), which has increased from 53,000 households in 1981 at an average of 1.6% per annum, which is significantly higher than regional (1.1% pa) and national (0.9% pa) averages.

Structure of the Local Economy

Northampton has historically been a major centre of shoemaking and other leather manufacturing industries, although only a few specialist shoemaking companies remain. More recently, the Northampton economy has developed a strong focus on retail and distribution, transport and communications, financial services, and professional and business services.

Table A3.1: Employment by Sector, 2007

Industry Northampton Northamptonshire East

Midlands Great

Britain

Agriculture, Forestry & Fishing 0.1% 0.2% 1.2% 0.9% Mining & Extractive 0.1% 0.1% 0.3% 0.2% Manufacturing 9.8% 15.4% 15.2% 10.6% Electricity, Gas & Water 0.3% 0.2% 0.6% 0.4% Construction 3.3% 4.5% 5.6% 4.9% Retail and Distribution 18.2% 19.0% 17.2% 16.6% Hotels and Restaurants 4.7% 5.1% 5.9% 6.7% Transport & Communications 7.5% 8.9% 5.6% 5.9% Financial Services 6.6% 3.4% 2.3% 4.0% Professional & Business Services 21.1% 17.9% 15.5% 17.7% Public Admin, Education & Health 24.8% 21.2% 26.2% 26.9% Other Services 3.5% 4.2% 4.4% 5.2% TOTAL 100.0% 100.0% 100.0% 100.0%

Source: NOMIS, Annual Business Inquiry, 2007

Northampton’s central location and good road and rail links make it an attractive location for

transport and distribution. A number of major distribution businesses are located in Northampton, including Power Logistics and the Tibbett & Britten Group, as well as the distribution operations of major companies including Morrisons, Panasonic, Wickes and Carlsberg-Tetley.

10 ONS 2007 mid-year population estimates



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Northampton also has significant and growing employment in financial and business services, increasing at almost 6% per annum between 1998 and 2007. Many large financial and professional services companies have located head offices, regional and administration centres in Northampton including Barclaycard, Nationwide Building Society and Shoosmiths Solicitors. Additionally, a large number of other national and regional head offices are also located at Northampton including Avon Cosmetics, National Grid, Travis Perkins and JohnsonDiversey.

There is relatively low employment in primary, extractive, energy, manufacturing, construction, hotels and restaurants, public administration, education and health, and other services sectors. Employment in the manufacturing sector in Northampton has been declining faster than the regional and national averages, and particularly in mechanical engineering and the manufacture of motor vehicles and chemical products. However, there is also relatively strong R&D and high technology engineering employment in Northampton including some large employers such as Cosworth Racing, Texas Instruments, and MAHLE Powertrain.

Labour Market

Northampton has experienced strong employment growth of 1.8% per annum between 1998 and 2007, significantly exceeding regional and national averages and the rate of population growth in Northampton over the same period.

The town has a relatively large working age population (65% of the total population) and high rates of economic activity (85% of the working age population), both of which are higher than the regional and national averages. A relatively large proportion of these people are employees, working full-time, while levels of self-employment and part-time employment are relatively low.

The total number of benefits claimants is also low compared to the regional and national averages, with particularly low numbers of incapacity benefit claimants, but remains higher than the county average. However, unemployment is relatively high (JSA claimants represent more than 5% of the working age population), and the current (April 2009) number of vacancies is relatively low (i.e. there are 7.3 JSA claimants per unfilled jobcentre vacancy in Northampton compared to just 2.6 for the East Midlands as a whole).

Table A3.2: Summary of Labour Market Statistics

Labour Market Indicator Northampton Northamptonshire East

Midlands

Great

Britain

2007 Working Age Population (% of total population) 64.7% 62.8% 62.1% 62.2%

Economically Active (% of working age population) 84.8% 84.3% 80.7% 78.8%

Employees (% of working age population) 73.9% 71.1% 67.3% 64.8%

Self-Employment (% of working age population) 7.3% 9.0% 8.4% 9.3%

Full-time employment 71.9% 71.9% 68.3% 69.0% Part-time employment 28.1% 28.1% 31.7% 31.0% Average Employment Growth per annum (1998-2007) 1.8% 1.8% 1.0% 1.0%

Total Benefit Claimants (% of working age population) 13.1% 11.1% 13.3% 14.2%

Unemployment: Claimant count (% of working age population) 5.1% 4.3% 4.1% 4.1%

Sources: ONS Mid-Year Population Estimates, 2007. ONS Annual Population Survey, Oct 2007-Sept 2008.

NOMIS, 2007. ONS Claimant Count, April 2009. DWP Benefit Claimants, August 2008.



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Skill levels in Northampton are quite polarised with a large proportion of the working age population having no qualifications, but also a relatively large proportion qualified to degree level or above, compared to regional and national averages. One in five people of working age in Northampton do not have any qualifications, while 27% of are qualified to degree level or above.

Table A3.3: Qualification Attainment Level, 2007

Northampton Northamptonshire East Midlands Great Britain

No Qualifications 19.8% 14.7% 13.5% 13.1% Lower Level Qualifications 46.7% 51.2% 52.7% 49.5% Higher Level Qualifications 27.0% 26.7% 25.5% 28.6% Other / Unknown Qualifications 6.6% 8.4% 8.4% 8.8%

Source: ONS Annual Population Survey, July 2007-June 2008

Incomes and Deprivation

Incomes in Northampton are in line with the regional average, which is only 91% of the national average of £26,000. Incomes are also growing more slowly than the regional and national averages. Mean annual gross earnings in Northampton are identical to the regional average of £23,750, although this is only 91% of the 2008 UK average of £26,000, according to the ONS Annual Survey of Hours and Earnings. Annual earnings in Northampton have increased by just 2.8% per annum in the five years to 2008, which is significantly lower than the regional (4.2% per annum) and national (4.1% per annum) averages.

Northampton has some affluent areas but also some pockets of deprivation. The 2007 Index of Multiple Deprivation (IMD) suggests that Northampton is the 129th most deprived local authority in England (out of 354). Furthermore, 24 of the 129 lower super output areas (LSOAs) in Northampton are amongst the 20% most deprived in England, including 6 of the 10% most deprived. The IMD 2007 data suggest 14% of the Northampton population are experiencing income deprivation and 5% experiencing employment deprivation. Northampton ranks particularly poorly in terms of crime and education, skills and training indicators (reinforcing the issues raised above relating to the large number of people with no qualifications).

Entrepreneurship

The Department for Business Enterprise and Regulatory Reform (BERR) data on VAT registrations and deregistrations provide estimates business start-ups and closures. The data suggest that Northampton has a relatively low number (stock) of VAT registered businesses per 10,000 of the adult population, compared to the county, regional and national averages. However, in 2007 Northampton had a higher rate of new businesses and a lower rate of deregistrations suggesting relatively high levels of successful entrepreneurship. BERR data on business survival rates also suggest that Northampton businesses have similar rates of survival compared to the regional and national averages.

Table A3.4: VAT Registered Businesses, 2007

Northampton Northamptonshire East

Midlands

Great

Britain

New VAT registrations per 10,000 adult population, 2007 4.3 4.7 3.7 4.2

VAT deregistrations per 10,000 adult population, 2007 2.8 3.1 2.7 3.0

Stock of VAT registered businesses per 10,000 adult population, 2007 36.4 44.5 38.8 41.1

Source: BERR, VAT Statistics, 2007



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The Visitor Economy

Northampton received approximately 5.9 million visitors in 2007 (Northampton STEAM report 2007), equating to more than 7.3 million visitor days in the town, with total expenditures of more than £252 million in current prices. Visitor expenditure therefore averages £34.51 per visitor per day. Day visitors represent 5.16 million (more than 70%) of the total visitor days and £143 million (57%) of the total visitor expenditures.

Table A3.5: Visitor Numbers and Expenditures, 2007

Visitor Numbers Visitor Days Visitor

Expenditures

Expenditure per

person per day

East Midlands 144m 175m £5,9bn £33.83 Northamptonshire 19.9m 24.0m £824m £34.25 West Northamptonshire 10.9m 13.9m £500m £35.96 Northampton 5.9m 7.3m £252m £34.51 Leicester (2006 data) 10.0m 12.6m £286m £22.68 Daventry 2.7m 3.1m £122m £39.22

Source(s): STEAM model results, Northamptonshire Observatory and www.goleicestershire.com

The data suggest that Northampton and West Northamptonshire attract relatively high daily visitor expenditures, compared to the county and regional averages. However, visitors to the neighbouring town of Daventry are estimated to spend more in the local economy, although Northampton and Daventry both achieve significantly higher visitor expenditures than Leicester.

The number of visitors and visitor days in Northampton has increased by almost 8% since 2004. However, visitor expenditure has increased more slowly at 6.5% (adjusted to take account of inflation) such that visitor expenditure per person per day has fallen from £34.98 in 2004 (2007 prices) to £34.51.

DEMOGRAPHIC AND ECONOMIC PROJECTIONS

Household Projections

The latest ‘policy-on’ housing projections are detailed in the Northamptonshire Strategic

Employment Land Assessment, (SELA) based on the latest allocations from the MKSM Sub-Regional Strategy, the East Midlands Regional Plan and the North Northamptonshire Core Spatial Strategy. These figures project that the number of households will increase over the period 2001 to 2031 by:

49,250 in Northampton (compared to the CLG trend-based projection of 39,000 additional households over the same period),

75,350 in West Northamptonshire (compared to the CLG projection of 86,000),

155,400 in Northamptonshire (compared to the CLG projection of 155,000).

These housing allocations are particularly focused on developing future housing provision in Northampton, representing almost one-third of the total allocation for the whole county between 2001 and 2031, and two thirds of the West Northamptonshire total. If these challenging targets are met, the number of households in Northampton will increase to more than 130,000 by 2031.

The latest housing figures for 2006 suggest that Northampton has added 5,000 new houses over the period 2001-2006, which is some 1,500 houses behind the original target of 6,500. However, West Northamptonshire and the county of Northamptonshire are both ahead of target by 1,150 and 1,025 houses respectively. This suggests that Northampton still needs



47 [J30256553]

to develop 44,250 new houses between 2006 and 2031, while the remaining allocations for West Northamptonshire and Northamptonshire are 63,350 and 132,400 respectively.

The data in the table below show the annual average housing allocations for each five year period to 2031, after redistributing the shortfall in Northampton from 2001-06 (and excess for West Northamptonshire and Northamptonshire) evenly across the remaining years to 2031.

Table A3.6: GHK ‘Policy-On’ Housing Projections 2006-2031

Average Annual Housing Increase 2006

Actual 2006-

11 2011-

16 2016-

21 2021-

26 2026-

31 2031

Projection Total

Increase 2006-31

Northampton 86,000 1,510 1,835 1,835 1,835 1,835 130,250 44,250 West Northamptonshire 154,000 2,274 2,599 2,599 2,599 2,599 217,350 63,350

Northamptonshire 282,000 4,884 5,399 5,399 5,399 5,399 414,400 132,400

Population Projections

The population of Northampton is projected to continue growing rapidly “delivered through a

combination of urban regeneration and intensification and the development of new

sustainable urban extensions, integrated with the development of enhanced public transport

and new public transport interchanges”11.

The latest ‘policy-on’ population projections, prepared by the relevant local authorities, are

presented in the 2008 MKSM Business Plan, and take account of the projected increase in households, as described above. The figures provide population projections for 2021, which GHK has extended to 2031 based on a basic assumption that the projected growth trend from 2001-21 continues to 2031. These ‘policy-on’ projections suggest that the

respective populations will increase over the period 2001 to 2031 by:

72,300 in Northampton to a 2031 total of 266,700 (compared to the ONS ‘trend-based’ projected increase of 58,700 and 2031 total population of 253,100),

135,750 in West Northamptonshire to a 2031 total of 481,650 (compared to the ONS projected increase of 150,000 and 2031 total of 495,900),

284,850 in Northamptonshire to a 2031 total of 915,750 (compared to the ONS projected increase of 268,900 and 2031 total of 899,800).

The ‘policy-on’ population projections obviously follow a similar trend to the housing

projections, with a greater focus on Northampton, compared to the ONS ‘trend-based’

population projections. The table below shows population projections at five year intervals from 2007 to 2031. These projections take into account the latest 2007 population position, and assume that the populations increase in line with the respective housing projections to 2031.

Table A3.7: GHK ‘Policy-On’ Population Projections 2007-2031

2007 Actual

2011 2016 2021 2026 2031 Total Increase 2007-31

Northampton 202,800 211,830 225,548 239,265 252,983 266,700 63,900 West Northamptonshire 372,200 388,822 412,029 435,236 458,443 481,650 109,450

Northamptonshire 678,200 715,093 765,258 815,422 865,586 915,750 237,550

11 Government Offices for the South East, East Midlands and East of England, Milton Keynes and South Midlands Sub-Regional Strategy, 2005



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GVA Projections

GVA data is not published at the district level as part of the Regional Accounts because of the difficulty in providing accurate estimates at such a local level. However, recent Experian data from December 2008 provides a 2007 estimate of GVA in Northampton of £4.6 billion. The Experian projections estimate GVA in Northampton to increase by an average of 2.5% per annum to 2016, which is the same rate as projected for West Northamptonshire, and slightly above the projected GVA growth rate for the county as a whole (2.4% per annum). Applying the same annual growth rate over an extended period suggests that GVA in Northampton could reach £7.6 billion by 2031, only marginally lower than the projection for Leicester.

However, the 2007 Draft Strategic Northamptonshire Economic Action Plan (SNEAP) provides GVA projections at county and HMA level to 2026, which are considered more reliable as a basis for projecting to 2031. The Draft SNEAP provides projections under two scenarios:

A ‘baseline plus population’ forecast – These are baseline projections prepared by Cambridge Econometrics, using their Local Economy Forecasting Model (LEFM), augmented only by expected population growth.

A preferred ‘policy-on’ economic scenario – This assumes trajectory-led jobs growth in North Northamptonshire and the LEFM baseline projected jobs growth in West Northamptonshire. The sectoral distribution of the jobs growth is then focused on a number of ‘priority’ sectors for Northamptonshire comprising: high performance

engineering; food and drink; print and publishing; construction; logistics; professional services; public services; environmental technologies; healthcare; leather; financial services; ICT; tourism; and creative industries.

The respective GVA growth projections for the SNEAP ‘baseline plus population’ scenario

and the SNEAP ‘preferred’ scenario are presented in the table below. The SNEAP

‘baseline’ scenario only provides GVA projections to 2021, so the 2010-21 growth rate has been assumed to continue to 2031. The SNEAP ‘preferred’ scenario provides projections

to 2026, and the 2021-26 growth rate has also been assumed to continue to 2031. The table also includes a GHK ‘hybrid’ scenario, which assumes the ‘baseline’ rate of GVA

growth to 2010 and the ‘preferred’ rate to 2031, in an effort to reduce the short term

projections of the ‘preferred’ scenario to account for the current economic downturn. Under

each scenario, Northampton is assumed to account for two-thirds of the West Northamptonshire total, as suggested by the latest Experian GVA data, and is therefore projected to grow at the same rates as West Northamptonshire.

Table A3.8: SNEAP and GHK GVA Growth Projections

SNEAP Baseline SNEAP Preferred GHK ‘Hybrid’ Scenario North-

ampton West

Northants Total

Northants North-ampton

West Northants

Total Northants

North-ampton

West Northants

Total Northants

2005-10 3.0% pa 3.0% pa 2.9% pa 3.4% pa 3.4% pa 3.5% pa 3.0% pa 3.0% pa 2.9% pa




Applying these growth rates to actual 2006 GVA data from the Regional Accounts, provides the projected GVA totals (at 2008 prices) included in the table below. Annual totals are presented at five year intervals from 2006 to 2031.



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Table A3.9: SNEAP and GHK GVA Projections (£ billion)


ampton West

Northants Total


West Northants

Total Northants

North-ampton

West Northants

Total Northants

2006 5.3 7.9 13.4 5.3 7.9 13.4 5.3 7.9 13.4 2011 6.2 9.2 15.5 6.3 9.4 16.1 6.2 9.2 15.6 2016 7.1 10.7 17.8 7.5 11.1 19.3 7.3 10.9 18.7 2021 8.3 12.4 20.6 8.8 13.2 23.2 8.6 12.9 22.5 2026 9.6 14.3 23.7 10.4 15.6 28.1 10.2 15.3 27.2 2031 11.1 16.6 27.3 12.3 18.4 34.0 12.1 18.0 33.0

The data suggest that GVA in Northampton is expected to more than double from £5.3 billion in 2006 to between £11.1 and 12.3 billion by 2031. In West Northamptonshire, GVA is projected to increase from £7.9 billion to between £16.6 and £18.4 billion by 2031, while total GVA for Northamptonshire county is projected to increase from £13.4 billion to between £27.3 and £34 billion by 2031.

Employment Projections

A large number of different datasets and projections have been prepared to project employment in Northampton, Northamptonshire, the MKSM Growth Area and the East Midlands. For instance, the MKSM Sub-regional strategy suggests that 27,600 new jobs could be added in Northampton between 2001 and 2021, representing almost 75% of the 37,200 new jobs figure for West Northamptonshire over the same period, while a total of 81,000 new jobs could be created at the county level. The Experian projections, described above, project zero employment growth for Northampton to 2016 and just 0.2% growth per annum for Northamptonshire and West Northamptonshire.

For consistency with the GVA projections, the same scenarios from the Draft SNEAP have been used to project employment to 2031. In fact the SNEAP ‘preferred’ scenario was also

selected as the preferred scenario in the recent draft 2009 Northamptonshire Strategic Employment Land Assessment (SELA). As for GVA above, the respective employment growth projections for the SNEAP ‘baseline’ and ‘preferred’ scenarios are presented in the

table below alongside the GHK ‘hybrid’ scenario (which again assumes the ‘baseline’

employment growth rate to 2010 before assuming the ‘preferred’ rate to 2031).

Northampton is again projected to grow at the same rate as for West Northamptonshire to 2031.

It should also be noted that there is no difference in the employment growth rate for West Northamptonshire (and therefore also Northampton) between the two scenarios as the SNEAP ‘preferred’ scenario assumes the baseline employment projection for West

Northamptonshire. However, while the overall employment totals are the same, the distribution of employment between individual sectors will differ as the preferred scenario focuses employment growth on the priority sectors mentioned previously.

As with the GVA projections, the SNEAP ‘baseline’ scenario only provides employment projections to 2021, so the 2010-21 growth rate has been assumed to continue to 2031, while the 2021-26 growth rate has been assumed to continue to 2031 under the SNEAP ‘preferred’ scenario. However, as the employment projections should be the same for West Northamptonshire and Northampton under each scenario, the 2021-26 rate has also been included for the ‘baseline’ scenario for this area.



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Table A3.10: SNEAP and GHK Employment Growth Projections


ampton West

Northants Total


West Northants

Total Northants

North-ampton

West Northants

Total Northants





These growth rates have been applied to the latest employment data from the Annual Business Inquiry (ABI) to provide employment projections to 2031 in the table below.

Table A3.11: SNEAP and GHK Employment Projections (‘000s)


ampton West

Northants Total


West Northants

Total Northants

North-ampton

West Northants

Total Northants

2007 125.7 188.2 313.1 125.7 188.2 313.1 125.7 188.2 313.1 2011 130.9 196.0 325.7 130.9 196.0 329.3 130.9 196.0 326.6 2016 138.3 207.1 343.3 138.3 207.1 352.0 138.3 207.1 349.1 2021 146.0 218.7 361.9 146.0 218.7 376.4 146.0 218.7 373.2 2026 155.0 232.1 382.6 155.0 232.1 404.6 155.0 232.1 401.0 2031 164.5 246.4 404.6 164.5 246.4 434.9 164.5 246.4 431.1

The data suggest that employment in Northampton is projected to increase by 38,800 between 2007 and 2031 to 164,500 under each scenario. Employment in West Northamptonshire is expected to increase by 58,200 to a total of 246,400 by 2031 under each scenario. Total employment in Northamptonshire is projected to increase to between 404,600 and 434,900 by 2031, representing an increase ranging from 91,500 to 121,800.



[J30256553] 51

ANNEX 4: VISITOR IMPACT ASSESSMENT

Introduction

This Annex provides a brief description of the scale of the Northampton visitor economy, before identifying future trends in visitor numbers and expenditure under the do nothing option and with the town expansion option. The analysis is based on available tourism data12 supplemented by use of the GVA growth rates as estimated for the SNEAP (baseline and preferred scenarios).

The Current Size of the Visitor Economy

Northampton attracted almost 5.9 million visitors in 2007 and more than 7.3 million visitor days were spent in the town. Overnight visitors accounted for 12% of these visitors and 29% of the visitor days and spent £50.80 on average per day. Northamptonshire as a whole received a similar proportion of overnight visitors although they stayed slightly longer and spent slightly more per day. Day visitors to Northampton spent an average of £27.72 per day, which was in line with the county average.

The STEAM tourism data suggests that total visitor expenditure in Northampton totalled £252 million in 2007, supporting approximately 3,800 full time equivalent (FTE) tourism jobs in the local economy at an average of £66,000 of expenditure per FTE job. This is relatively high compared to our experience of tourism multipliers in other local economies, as is the figure of £63,000 of visitor expenditure per FTE job at the county level, also according to STEAM data.

2007 data from the Annual Business Inquiry estimates GVA in the hotels and restaurants sector to be approximately 50% of turnover and it has been assumed that £1 of visitor expenditure enhances local GVA in Northampton by £0.50 before adjusting for multiplier effects. We have assumed a tourism multiplier of 1.1

The additional economic impact of visitors derives from spending by non-residents, assuming that residents would have made discretionary expenditure in the Borough or County if not as visitors. We have estimated the share of day visitors that are non-residents based on the distance travelled using the 2005 England Leisure Visits Survey, there being no direct breakdown of the origins of visitors. For the purposes of this analysis it has been assumed that day visitors to Northampton travelling less than five miles are resident of Northampton, while visitors travelling less than 20 miles to visit Northampton are likely to be Northamptonshire residents. The Leisure Visits Survey suggests that 42% of day visitors to a town travel less than five miles, while 74% travel less than 20 miles. There is no similar data relating to overnight visitors, so it has been assumed that 100% of Northampton overnight visitors reside outside of the Borough and 90% reside outside of the county.

Applying these assumptions suggests that 3.7 million visitors to Northampton travelled from outside the Borough, spending £192 million, which supported 2,900 FTE jobs and £96 million of GVA in the local economy. Of these, visitors from outside of the county totalled 2 million and spent £136 million, supporting 2,150 jobs and £75 million of GVA in the county economy.

12 Northampton STEAM (Scarborough Tourism Economic Activity Monitor) Report 2007. Note Scarborough refers to the town that developed the format of the data monitor. It does not include data from Scarborough!



[J30256553] 52

Tourism Projections under Do Nothing

Tourism data on visitor numbers and per visitor spend from 2004 to 2007 has been used to project future visitor numbers and expenditures to 2031 in the absence of any major redevelopment of the town centre.

The “Do Nothing” option assumes the Grosvenor Centre redevelopment does not take

place, but it does assume a number of other developments in the town centre occur by 2031, even with delays on current plans. This would be expected to generate additional growth in visitors to the town, particularly given the proposed improvements to the station and cultural, leisure and niche retail developments. It is therefore assumed that the visitor expenditure under this option will grow in line with the baseline SNEAP GVA growth projections at around 3.0% per annum.

Table A4.1: Tourism Projections for Northampton in 2031 under the Do Nothing

Option

Visitor

Numbers

Visitor

Expenditure

Employment GVA

Total Visitors 11.9m £513m 7,800 £256m

Additional to Northampton 8.1m £390m 5,900 £195m

Additional to Northamptonshire 4.9m £277m 4,400 £152m

Source: GHK Projections based on Northampton and Northamptonshire STEAM data, England Leisure Visits

Survey 2005, Draft Strategic Northamptonshire Economic Action Plan (SNEAP) 2008) and 2007 ABI data.

The analysis indicates (Table A4.1) that in 2031, Northampton could attract almost 12 million visitors, spending more than £500 million in the local economy (more than twice the 2007 annual total). Of this 8.1 million of these visitors are estimated to travel from outside Northampton and spend an additional £390 million in the local economy, supporting 5,900 additional FTE jobs and almost £200 million of GVA. Of these visitors, 4.9 million are estimated to travel from outside the county and spend around £280 million in Northampton, which is estimated to support 4,400 FTE jobs and more than £150 million in the county economy.

Visitor Economy with Redevelopment

Option 3 assumes the Grosvenor Centre redevelopment takes place, in addition to the other projects and proposed developments for the town centre. The proposed redevelopment of the shopping centre will significantly increase the non-food retail floorspace in the town centre by more than 25%, and raise the quality of Northampton’s retail and leisure offer, which would be expected to have a considerable

impact on the number of visitors and tourism expenditure in the town.

Under this option it is assumed that visitor expenditure will grow in line with the GVA growth projections (under the preferred scenario) at around 3.4% per annum. This rate is 1.2 percentage points higher than the growth rate based on past trends and 0.4 percentage points high than the baseline growth rate in the Do Nothing option. As under the baseline projections, 2007 level multipliers have been applied to estimate the total employment and GVA impacts and additional impacts at the town and county levels.

The analysis indicates (Table A4.2) that if the Grosvenor Centre was redeveloped, along with the other proposed projects, Northampton could attract more than 13 million visitors per annum by 2031, generating visitor expenditure of £565 million in the local



[J30256553] 53

economy and employing some 8,600 FTEs. The additional economic activity in the Borough and County is estimated to be £215m and £168m respectively.

Table A4.2: Tourism Projections for Northampton under the Town Expansion

Option and Additional Activity Compared to the Do Nothing Option, in 2031

Visitor

Numbers

Visitor

Expenditure

Employment GVA

Town expansion option

Total Visitors 13.1m £565m 8,600 £282m

Additional to Northampton 9.0m £429m 6,500 £215m

Additional to Northamptonshire 5.4m £305m 4,800 £168m

Additional Activity compared

with Do Nothing

Total Visitors 1.2m £52m 800 £26m

Additional to Northampton 0.8m £39m 600 £20m

Additional to Northamptonshire 0.5m £28m 450 £15m

Source: GHK Projections based on Northampton and Northamptonshire STEAM data, England Leisure Visits

Survey 2005, Draft Strategic Northamptonshire Economic Action Plan (SNEAP) 2008) and 2007 ABI data.

There are an additional 1.2 million visitors and £52m expenditure attributable to the redevelopment of the Grosvenor Centre, when compared with the do nothing option, in 2031. The estimated additional economic impact of the redevelopment is £20 million of GVA in the Northampton Borough economy and £15 million of GVA in the sub-regional economy.



[J30256553] 54

ANNEX 5: COMPARATOR AND COMPETITOR PROFILES

COMPARATOR PROFILE: READING

City Profile

Reading sits in the heart of the Thames Valley, one of the most successful sub regions in Europe. The sub-regional population is estimated to be 812,000 and the resident population of Reading is 144,000. The wider urban area is home to a population of around 275,000 with a broader retail catchment of over 1.2m.13

The city is home to 13 of the world’s top 30 global brands, including Vodafone,

Verizon Business, Prudential, Wyeth, Microsoft and Cisco.

60% of all South East inward investment arrives in the Thames Valley area with the vast majority choosing to locate in Reading.

It has one of the highest concentrations of ICT firms, confirming its status as Europe’s ‘Silicon Valley’; local ICT employment is some 300% above the national average.

Reading has a relatively high proportion of service sector jobs.

Reading has the 6th highest GVA per head in the UK, and is second only to London in England. Productivity per employee is currently £48,000 compared to £37,000 in the South East as a whole.

Delivery Structure

Reading Borough Council has adopted the Sustainable Economic Development Strategy, which sets out the Council’s strategic response to the South East England Development Agency’s (SEEDA) Regional Economic Strategy (RES) and Thames

Valley Economic Partnership’s (TVEP) Economic Strategy. The Sustainable Economic

Development Strategy sets out the role that the Council plays in helping to shape a sustainable economy, and in supporting local businesses and residents.

Reading UK CIC was originally set up as a Community Interest Company in 2006, but was reconfigured in 2007 to become an Economic Development Company (EDC), and now forms part of the Government’s EDC network. Its main purpose is to “promote and

sustain the economic development of Reading to achieve sustainable prosperity for those that live, work, play, visit, do business and invest in the area”. Its three key areas are attracting and retaining investment; maintaining and enhancing environmental quality and building competitive businesses.

Demographic and Economic Indicators

Reading has experienced minimal population growth between 1981 and 2007, growing below the national average, while employment has grown in line with national trends. A high proportion (70%) of employees work in private services relative to Northampton and the other comparator cities, and GVA per head is more than 50% higher than the national average. However, the most significant differences between Reading and the other comparator cities (including Northampton) are the high levels of retail, and particularly office, floorspace and employment within the town centre.

13 http://www.readingtourism.org.uk/business-facts-and-figures.html


http://www.readingtourism.org.uk/business-facts-and-figures.html


[J30256553] 55

Sources: ONS mid-year population estimates (2007), CLG household estimates (2006), ABI (2007), Census

(2001), BERR VAT Statistics (2008), Regional Accounts (2006), State of the Cities Database (2004),

Experian Retail Rankings, local strategies and reports.

Rationale for Retail Development

The main planning policy document for Reading has been the Reading Borough Local Plan 1991-2006, which was adopted in 1998. This is currently being replaced by the Local Development Framework (LDF), which will retain some of the policies from the Local Plan. One of the objectives of the Borough Plan was to maintain and improve the town centre as a regional shopping centre.

Considerable investments were made by the Council, in partnership with the private sector, in schemes to improve and strengthen the town centre retail offer. These included the development of the Oracle shopping centre and the pedestrianisation of the town's main shopping streets. The Plan regarded the Oracle as ‘the most important

single development in Reading town centre in the 20th century’. The development significantly increased the retail floorspace in central Reading and also complemented wider town centre initiatives, while substantially adding to the range and quality of the town centre offer. Through the Plan, the Council also expressed a ‘fear’ that unrestricted growth of out-of-centre stores could seriously undermine the vitality and viability of existing centres: “If the balance between in-centre and out-of-centre facilities became too heavily biased towards the latter, this could threaten a major town centre redevelopment scheme such as the Oracle.”

14

Impacts of the Oracle Shopping Centre

The Oracle shopping centre opened in September 1999. Located on the banks of the River Kennet, the £250 million scheme provides over 78,000 square metres of shopping and leisure space on three levels either side of the river. There are 2,300 car

14 Chapter 5: Retailing, Reading Borough Local Plan 1991-2006 http://www.reading.gov.uk/Documents/servingyou/planning/borough_plan/bp_chapter5.pdf


http://www.reading.gov.uk/Documents/servingyou/planning/borough_plan/bp_chapter5.pdf


[J30256553] 56

parking spaces in two car parks within the development. The Oracle is owned in a limited partnership between Hammerson and Abu Dhabi Investment Authority (50% ownership each), with Hammerson retaining full control of the scheme15. According to a paper compiled by University of Reading (2005), the new space developed as part of the Oracle increased the retail offer in Reading town centre by about 25%; and as a result, the town rose from 26th to 13th in the Experian retail rankings16.

The Oracle is a prime example of planning policy aimed at preserving the viability of UK town centres to halt the wave of out-of-town shopping centres – or what is referred to as Schiller’s “third wave” of decentralisation

17, and was the first of eight in-house shopping centres to be built in the UK between 1999 and 200318.

Several studies have since been conducted to examine the impacts of the Oracle on Reading town centre19, and the documented impacts have been both positive and negative. These include:

a detrimental impact on retail performance (decline in sales volume) for many stores in the traditional town centre immediately after the opening of the Oracle, with displacement of sales more than offsetting any increase from additional shoppers attracted to the town centre by the new shopping centre.

significant alteration in the pedestrian flow in the existing town centre due to the attraction of the Oracle itself; the relocation of key “magnet” stores from the

traditional town centre to the Oracle or closer to the entrances of the new shopping centre; and the provision of new car parking spaces to the south of the town centre.

a smaller number of independent retailers in the Oracle due to a hardening of attitudes ‘in favour of multiples’ by landlords and ‘excessive’ rent and service

charges.

rising retail wages and increased recruitment difficulties for independent retailers, driven by the opening of the Oracle (combined with already low unemployment rates in Reading).

positive spillover effects from the enhanced attractiveness of the town centre as a whole and the overall increase in shopping trips.

Although The Oracle has been viewed as a catalyst for change, impact studies such as the one undertaken by the University of Reading (2005) argue that the added attraction of the town centre was offset because of the trade displacement impacts. It is also suggested that some adverse effects may have been masked by strong consumer spending and a vibrant local economy.

Reading is likely to be in competition with out-of-town retail parks and regional centres offering free car parking. These include retail parks in the Reading area and other towns such as Oxford, Basingstoke and Bracknell. The Eden development in High Wycombe, which opened in 2008, is also likely to be a current competitor.

15 Reading Transport Commission Response on behalf of Oracle Limited Partnership and John Lewis plc, Transport Planning Practice (2008) 16 ‘Messages from the Oracle: Assessing the Impact of Major In-Town Shopping Centres’ (2005), University

of Reading Business School http://www.henley.reading.ac.uk/rep/fulltxt/2905.pdf 17 Messages from the Oracle: Assessing the Impact of Major In-Town Shopping Centres’ (2005), University

of Reading Business School http://www.henley.reading.ac.uk/rep/fulltxt/2905.pdf 18 Others were located in: Glasgow, Uxbridge, Basingstoke, Birmingham, Dundee, Solihull, Southampton 19 E.g. Oughton et al (2003)


http://www.henley.reading.ac.uk/rep/fulltxt/2905.pdf

http://www.henley.reading.ac.uk/rep/fulltxt/2905.pdf


[J30256553] 57

Success Factors

According to Richard Byard, Economic Development Manager at Reading UK CIC (economic development company for Reading), the Oracle has been a key contributor to Reading’s significant success and growth over the last ten years.

Prior to the opening of the Oracle, Reading was in a lowly position somewhere in the ‘40s-60s’ of the retail rankings. It is currently ranked 18th by the 2008 Experian retail rankings and has consistently been ranked as one of the top retail destinations since the opening of the Oracle . The shopping centre was developed on a riverside location on the site of a former bus depot. It was one of three major schemes, which together formed Phase 1 of Reading’s urban renaissance – the other two being the relocation of the football stadium to the Madejski stadium and the development of Green Park – an international business park. The three developments are viewed as intrinsically linked, and the Oracle was seen as significantly improving the retail and leisure offer of the city to complement the other two developments and act as a catalyst for attracting business tenants.

The Oracle is viewed by Reading UK CIC as integral to the transformation of Reading from a ‘small market town in Berkshire’ to a significant national and international player

in economic and retail terms. Experian forecasts suggest that GVA in Reading will grow at an average of 3.5% growth per annum to 2026 – higher than anywhere else in the South East. Milton Keynes is ranked second, with projected GVA growth of 2.9% per annum, according to Reading UK CIC.

Reading UK CIC has identified several ‘success factors’ which have contributed to the

Oracle’s development:

A stable and open-minded local authority: Reading Borough Council was considered approachable to suggestions and ideas for Reading’s future

development.

The emergence of a clear vision: Although politically controversial, the Reading 2020 Vision elaborated on plans to transform Reading into a city of ‘European

status’, and drew the support of key partners such as Hammerson (developer of

the Oracle), who bought into these ambitions.

Sound partnership structures: The town centre management partnership involved key partners ‘coming together at a senior level twenty years ago to look

at the regeneration of the town centre’. This partnership was viewed as much

more dynamic than ‘traditional’ town centre management partnerships, and

worked towards common goals and shared ambitions. The partnership was also aided by political stability over two decades within Reading.



[J30256553] 58

Oracle before....

Oracle after.....



[J30256553] 59

COMPARATOR PROFILE: DERBY

City Profile

Derby has a population of 230,000. It is an historic cathedral city benefiting from strategic transport access to railway and motorway networks.

It is home to major international companies including Rolls Royce, Toyota, Egg, and Bombardier.

12% of the workforce is engaged in high technology activities – four times the national average.

It is rated number one in England for visible exports per capita20.

It is currently the fastest growing city in England in terms of wealth creation GVA21.

It is identified as one of the UK’s economic hotspots, growing at a faster rate than any other city in England over the last ten years and ranked in the top five UK cities for employment growth22.

It has more listed buildings than the city of York.

Delivery Structure

Derby CityScape Ltd is a not-for-profit urban regeneration company (URC) created in 2003 to respond to the relatively low investment performance in Derby’s city centre.

Since its conception, it has worked in close collaboration with Derby City Council, East Midlands Development Agency (emda) and English Partnerships to secure £620m of investment into the city centre23. Derby CityScape is responsible for the Masterplan, which was devised in 2005, and revised in 2007, to guide the regeneration of the city centre. The Masterplan is expected to attract around £2 billion of investment, based on a 15 year delivery schedule and is considered to embody the economic strategy for Derby.

Plans to create a City Development Company have not yet materialised, but other key organisations in Derby include:

Derby City Partnership – the Local Strategic Partnership and an alliance of various organisations, with ownership of the wider vision of the city’s growth.

Locate In Derby, a group that sits within Derby City Council and is responsible for actively promoting inward investment into the city and providing many support services for business relocation and expansion. This group contains three officers with a role equivalent to Economic Development Officer.


Derby is the largest of the four comparator locations, and is around 15-20% larger than Northampton in terms of population and household numbers. However, employment in

20 http://www.urcs-online.co.uk/companies/company.asp?id=21 21 http://www.urcs-online.co.uk/companies/company.asp?id=21 22 Knight Frank (2008) ‘Derby city centre market activity report’

http://www.derbycityscape.com/files/knight_frank_report.pdf 23 Knight Frank (2008) ‘Derby city centre market activity report’

http://www.derbycityscape.com/files/knight_frank_report.pdf


http://www.urcs-online.co.uk/companies/company.asp?id=21

http://www.urcs-online.co.uk/companies/company.asp?id=21




[J30256553] 60

Northampton has been growing more quickly than in Derby and employment levels, as well as GVA per head, are now similar in both locations. Northampton has a larger number of VAT registered businesses, which highlights the low number of registered businesses in Derby relative to its adult population, although Derby has significantly higher levels of retail and office employment and floorspace in the town centre.





The Masterplan (2005) noted that Derby had a limited retail offer and had slipped down the retail rankings over the last ten years. Retail development in the city centre had been limited during this period, while other major centres in the region had benefited from major retail developments and thereby improved their positions in the retail rankings. Retail analysis has shown that there was significant leakage of retail expenditure from Derby’s catchment area to other centres in the region over this

period, due to the limited retail offer in Derby. The objectives of the Masterplan were to:

Generate a ‘step change’ in the scale of activity in the city centre – acknowledging the need to accommodate significant new development in the central area to successfully serve local communities and the wider region.

Reinforce the existing ‘retail core’ – the proposed Eagle Centre extension (i.e. Westfield Derby) would shift the principal shopping focus within the city centre southwards – a key aim of the Masterplan was therefore to reinforce the traditional specialist retail areas in other areas of Derby (Sadler Gate and Iron Gate) through proactive management strategies.

Impacts of the Westfield Derby Retail Development

Westfield Derby shopping centre opened in October 2007. The one million square foot centre, developed by Westfield and Hermes, involved a £340 million extension and refurbishment of the former Eagle Shopping Centre, representing the largest single retail-led development to complete in the UK at the time. According to the Knight Frank



[J30256553] 61

market activity report (2008), it proved a success, providing over 150 new shops, around 100 of which have been taken by new retailers to the city. An impressive 98% of new units were let by the time of opening and, according to the Experian retail ranking report published in 2008, Derby moved up from 44th to 26th in terms of retail rankings, largely due to the Westfield Derby development.

The shopping centre was viewed as a catalyst in the long-term regeneration of the city centre and was key to reducing the leakage of spending to other centres in the East Midlands, such as Leicester and Nottingham. This spend was likely to be significant given the affluence of households and high average wages in Derby relative to the rest of the region.

"Westfield Derby opened for business 12 months ago and has played a significant role in helping Derby to move up the retail rankings, with the centre welcoming over 25 million visitors this year."24

“Westfield, in Derby, is an attractive development. It's a good concept and works very

well. To have food, leisure and retail in one location is very convenient."

Success Factors

According to David Marshall, Development Director at Derby CityScape (URC), several factors have contributed to Derby’s recent success:

Latent market: Derby was considered to have the ‘greatest potential’ for retail

development in the East Midlands (even over Nottingham), with affluent households, high average wages and therefore high potential spend.

Obtaining the ‘right’ developer: Westfield spent a significant amount of

resources researching potential sites prior to making a decision. They were seen to be highly competent in the pre-application stage and the development was delivered 6 months in advance.

‘Flexible’ city council: The City Council worked well with the developer, allowing

for the significant Compulsory Purchase Order (CPO) to be passed rapidly, and ‘obliging’ the developer in other areas

Planning obligations with social objectives: The City Council and Westfield recognised the need to boost local employment, and ran a joint initiative under planning obligations: a ‘mini job centre’, running training sessions and targeting

new jobs in the shopping centre at disadvantaged groups over a six month period.

A ‘strong’ Masterplan: This factored in the need to consider and improve the

existing retail offer outside the new shopping area, in order to improve the overall retail offer of the city. For example, the Cathedral Quarter has been geared towards niche independent retailers and specialist shops, thereby complementing the Westfield development rather than competing with it.

‘Duality’ of the shopping centre: The centre combines a massive offer of retail, leisure, food, parking facilities and a high quality, 12 screen cinema with capacity of 2,500, which was opened recently by Cinema de Lux – the first of its kind in the UK.

24 http://www.thisisnottingham.co.uk/news/City-slides-retail-rankings/article-406022-detail/article.html


http://www.thisisnottingham.co.uk/news/City-slides-retail-rankings/article-406022-detail/article.html


[J30256553] 62

Westfield Before...

Westfield After...



[J30256553] 63

COMPARATOR PROFILE: CAMBRIDGE

City Profile

Cambridge is a small, historic city situated in the East of England with a population of 120,000. The city has become a centre of high technology activity and has developed a reputation as a world-class knowledge-based economy.

Since the 1970s, the city and surrounding area has been transformed into a world-leading high-technology cluster. The ‘Cambridge Phenomenon’ has been

based largely on the ‘bottom-up’ development of many small, innovative

technology companies, embedded in a rich and diverse science base, which now employs around 50,000 people – particularly in the life sciences and high-technology industries

Cambridge has the highest innovation rate of any city in the UK (Communities and Local Government, State of the English cities) and is recognised by the European Union as a Centre of Excellence for Innovation25

With an average population growth rate of 1.0% per annum, Cambridge had the third fastest growing population in the UK between 1997 and 200726

At £533.40, Cambridge had the fourth highest average weekly earnings in the UK in 200827

Between February 2008 and February 2009 the claimant count in Cambridge rose from 1.4% to 2.0%, but this was the lowest increase in Jobseeker’s

Allowance (JSA) claimants of all English cities28

Delivery Structures

Cambridge City Council is responsible for the Cambridge Development Strategy, which will set out the planning framework to guide the future development of Cambridge. The Development Strategy will also set out the strategic elements of the Cambridge Local Development Framework, which replaces the Cambridge Local Plan and sets out policies and proposals for future development and land use in Cambridge to 2016. Cambridge City Council’s Economic Policy team is currently developing an Economic

Development Statement, which is undergoing consultation with the rest of the Council and should be approved in November 2009.

The city of Cambridge does not have an Urban Regeneration Company or Economic Development Company. Cambridgeshire Horizons, which was formed in 2004 as the Cambridge Infrastructure Partnership, is the local delivery vehicle (LDV) at a sub-regional, rather than city, level. Horizons is a company limited by guarantee with no statutory planning powers, but it holds the responsibility of project managing the delivery of the growth strategy for Cambridgeshire, which equates to at least 73,300 new homes, 50,000 new jobs and over £4 billion worth of new infrastructure by 2021. Other important roles include securing and managing additional funding streams;

25 http://www.gcp.uk.net/greater-cambridge.php 26 NOMIS 2008, Mid Year Population Estimates cited in ‘Cambridge: Closing the Gap’ (2009), Centre for

Cities 27 NOMIS 2009 ASHE, cited in ‘Cambridge: Closing the Gap’ (2009), Centre for Cities 28 Centre for Cities (2009) Cities Outlook 2009. London: Centre for Cities


http://www.gcp.uk.net/greater-cambridge.php


[J30256553] 64

developing ‘quality of life’ and sustainable infrastructure strategies; championing low carbon growth and researching innovative new funding streams29.

A new partnership – Love Cambridge – has been created in collaboration with a broad range of stakeholders from across the city. Love Cambridge builds on the current informal City Centre Management Partnership, which has been led by Cambridge City Council since 1995. Love Cambridge is a not-for-profit company, managed by a board of directors made up of key local stakeholders, including Cambridge City Council. It has a greater commercial focus than the previous partnership and has a primary aim of developing a vision and action plan for the city centre to ensure the city's ongoing accessibility, vitality, vibrancy, safety and sustainability. Love Cambridge is also exploring the possibility of extending its remit to include tourism, which should be a high priority for Cambridge given its historic nature but is not currently a statutory service. Similar companies to ‘Love Cambridge’ have been set up in other historic

cities such as Bath and York to focus more specifically on tourism within the city.





Cambridge is the smallest of the four comparator locations in terms of population and household numbers. Despite being significantly smaller than Northampton. Cambridge has more office floorspace and employment in the town centre. Employment rates are relatively high compared to the other locations, reflecting the particularly high levels of in-commuting. GVA per head is also significantly higher in Cambridge and is 77% higher than the national average.

29 http://www.cambridgeshirehorizons.co.uk/about_horizons/how_we_do_it/


http://www.cambridgeshirehorizons.co.uk/about_horizons/how_we_do_it/


[J30256553] 65


Prior to 1997, shopping policies in Cambridge had ruled out significant shopping developments in the city centre, largely due to assumed environmental and traffic constraints. This was the reason for identifying the Cambridge Northern Fringe as an appropriate location for development in the 1995 Cambridgeshire Structure Plan. In 1996, the County Council adopted a joint strategy with Cambridge City Council and South Cambridgeshire District Council for the development of the eastern end of the fringe (Chesterton Sidings), whilst reserving the west (Arbury Park) for long term needs.

However, the 1997 Cambridge Retail Capacity Study, undertaken by Cambridge City Council and Arup, recommended increasing the retail offer in the City Centre, whilst respecting the unique character of the area and making special provision for access by public transport, including park and ride, to address capacity constraints. The Policy Committee considered the strategic implications of such an option and was informed that there were major planning and environmental advantages for central shopping developments. The city centre proposal was also considered in relation to Structure Plan Policies and a preference for city centre development was considered to be a logical development of Structure Plan objectives.30

Proposals for large scale retail development in the central area of Cambridge were then fully supported. It was considered that this approach would satisfy the concerns of the County Council and be the most appropriate option for meeting the large floorspace requirements of the Cambridge area, in accordance with Government Planning Policy Guidance and the objectives of the Structure Plan.

Impact of Grand Arcade Retail Development

The Grand Arcade shopping centre is a 450,000 sq ft (41,800 sqm of gross floorspace) retail development containing 52 shops (with John Lewis occupying 255,000 sq ft), a 950-space car park and 500-space cycle park. A joint venture between major developers, Grosvenor and Universities Superannuation Scheme (USS), it opened in March 2008 and is the largest retail development in Cambridge for more than 30 years. The major objective of the introduction of the Grand Arcade was to “..bring into the city the retailers that had been frustrated for so long at the lack of decent space and go further towards making the most of the wealthy local catchment and two million students who come to the city each year.”

31

The Grand Arcade has attracted new brands to the area for the first time and there is evidence that it has ‘plugged’ the leakage of shoppers to surrounding areas

32. However, only 36 out of the 52 stores were let (85%) in the five months after the centre opened.

Critical Success Factors

According to the City Centre Manager at Cambridge City Council, there are a number of key factors which have contributed to the retail success in Cambridge:

Addressed large-scale demand for floorspace: Cambridge was seen as being ’desperately in need’ of a retail development with significant square footage,

having previously had a fragmented retail circuit which was largely a legacy from the 1950s-70s. The Grand Arcade has successfully met the demand, particularly

30 Special Environment And Transport Committee: Minutes (1997) 31

‘Grand ambition’ (2008), Retail Week, http://www.retail-week.com/grand-ambition/1798589.article

32 http://www.retail-week.com/grand-ambition/1798589.article


http://www.retail-week.com/grand-ambition/1798589.article



[J30256553] 66

from top-end retailers, for large-scale floorspace. John Lewis, which was on the verge of leaving Cambridge due to the lack of retail floorspace, was ‘won back’

by the Grand Arcade development

Widespread public approval: The Cambridge public are reported to be ‘opposed

to change’ but the construction of the project was relatively unobtrusive, which

helped to gain public approval. Furthermore, existing retail was also reassured by the ‘business as usual’ approach taken and the fact they would not be affected by the Grand Arcade development.

A strong partnership: Partnerships between the developer and the City Council were effective and ensured that the whole city ‘embraced’ the retail

development.

Blending architectural design into the historic context: The Grand Arcade was designed in such a way that it made use of the historic facade of the city, and barely altered the streetscape. This architectural ‘blending in’ ensured that the

city retained its historic nature and has continued to remain popular with tourists and shoppers.

Complementarities with the existing retail offer: The number of shops within the Grand Arcade (52) is relatively small compared to other large modern retail developments. The majority of these shops were additional ‘top-end’ retailers

that had never previously located in Cambridge and this was strictly adhered to in the lettings policy. The development therefore acted as a ‘complement’ to the

existing retail offer in the city centre instead of a ‘threat’ and also prevented

displacement – with very few shops relocating to the Grand Arcade from within Cambridge.

Focus and development of the ‘Unique Selling Point (USP)’: The partnership led

a proactive marketing campaign, which highlighted Cambridge’s strengths as a

retail destination – such as its unique historic environment; rich and diverse mix of retailers and independent status. These strengths help to attract shoppers to Cambridge rather than Peterborough, for example.



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The Grand Arcade before.....

The Grand Arcade after....



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COMPETITOR PROFILE: MILTON KEYNES

Milton Keynes Summary

Milton Keynes has experienced rapid growth in population, employment and GVA over the last forty years.

It is slightly larger than Northampton in terms of population, households and jobs, although productivity is significantly higher in Milton Keynes.

It is well connected with good road and rail links, providing rapid access to London and the Midlands.

The town centre has experienced significant investment and the main shopping centre – the centre:mk – is set for further expansion.

A large number of leisure facilities have also been developed in the centre, including the MK stadium, the National Hockey Stadium, the Milton Keynes Theatre and Gallery, XScape and Milton Keynes Bowl.

Future growth prospects are strong and Milton Keynes is projected to continue growing faster than Northampton, regional and national averages.

Current and future developments are focused on urban extensions as well as the existing urban centre.

Milton Keynes aims to develop 68,600 new homes and an equivalent number of jobs from 2001 to 2031, while 1.4 million sq m of employment land is reported to be available for development from 2007 to 2016.

Policy Review

Milton Keynes is a large town and Unitary Authority, located in Buckinghamshire, in the South East. It was designated a New Town in 1967 and the local population has since quadrupled to more than 228,000. It is also the largest urban centre within the Milton Keynes and South Midlands (MKSM) growth area, identified by the Sustainable Communities Plan (2003) as having potential to be a major regional centre.



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The Milton Keynes Partnership (MKP) was created in 2004 to ensure a co-ordinated approach to planning and the delivery of growth and development. It brings together the Milton Keynes Council, Homes and Communities Agency (HCA), Local Strategic Partnership and independent representatives. The MKP has prepared a long-term vision for Milton Keynes, through the MK2031 project and the Strategy for Growth (2006), to become an iconic city with an international reputation for knowledge-based activities, driven by innovation, technology and a new University. Residents will benefit from an excellent quality of life, living and working in a green, landscaped city, with accessible cultural, recreational and educational activities, and an efficient public transport system. Public services will be delivered effectively in line with the growth of Milton Keynes as it becomes a centre of major regional importance by 2031. The MK2031 project also sets out a series of strategic objectives including:

Prioritising the use of previously developed land, making better use of poorly located employment land, and maximising regeneration opportunities;

Ensuring urban extensions complement the existing urban areas;

Providing new jobs and a more highly skilled workforce, particularly in the higher value, knowledge-based and creative sectors;

Supporting growth with appropriate cultural and social infrastructure;

Integrating development with new and improved public transport systems.

The MKSM Sub-Regional Strategy (SRS) suggests that Milton Keynes “will embrace its

growth potential to mature as a major regional centre, particularly through the substantial development of its central area, supported by a significantly enhanced public transport system to facilitate and support growth in major development areas”. It outlines plans for 68,600 new dwellings between 2001 and 2031, within the existing urban area and through urban extensions to the east and west of Milton Keynes. The SRS states that the proposed level of development needs to be broadly matched by an equivalent increase in employment of 68,600 jobs (i.e. a 1:1 housing to jobs ratio).

The SRS has since been adopted by the South East Plan and Regional Economic Strategy (RES). The RES states that SEEDA is working with EEDA and EMDA to: improve the climate for investment in the MKSM area; stimulate an entrepreneurial and innovative economy, and; ensure learning and skills provision responds to population and business demands. The South East Plan also identifies Milton Keynes and Aylesbury as one of eight ‘Diamonds for Investment and Growth’ with “the potential to act as a catalyst to stimulate prosperity across wider areas, and offer scope for further sustainable growth based on targeted investment in their infrastructure”.


Milton Keynes has experienced strong growth in recent years. Local population, household, employment, business and GVA growth has significantly exceeded regional and national averages. There are currently 139,000 employees in Milton Keynes and almost three-quarters of these are employed in private services. Productivity is particularly high in Milton Keynes and GVA per head is almost 50% higher than the national average. Total GVA was £6.4 billion in 2006, which is the largest of the four comparator locations, including the much larger city of Leicester. There is also a large number of VAT registered businesses given the size of the adult population.

Milton Keynes has performed relatively well compared to Northampton and the other comparator locations. Milton Keynes and Northampton have broadly similar populations, housing and employment levels, and commuting patterns. However, while Northampton has been growing faster than regional and national trends, Milton Keynes has been growing even more quickly. Milton Keynes also has significantly higher levels of office and



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comparison retail employment and office floorspace in the town centre, although Northampton town centre does have more retail floorspace.


(2001), BERR VAT Statistics (2008), Regional Accounts (2006), State of the Cities Database (2004), Experian

Retail Rankings, local strategies and reports.

Retail Development in Milton Keynes

There are two main shopping centres located centrally in Milton Keynes: thecentre:mk and Midsummer Place. thecentre:mk opened in 1979, was expanded in 1995 and then refurbished in 1998, and currently provides 120,000 square metres of net retail space. It is about half a mile in length, making it one of the longest under-cover shopping areas in Europe, and accommodates approximately 230 shops, cafes and restaurants providing more than 3 miles of shopfronts. It has 16,000 parking spaces and attracts almost 30 million visits per year and average annual sales in excess of £500 million.

The adjacent Midsummer Place shopping centre opened in October 2000. The £170 million development provides high quality shops over 42,000 square metres. Together these two sites provide central Milton Keynes with one of the largest retail sites in the country. The latest Experian retail rankings suggest that Milton Keynes is the 19th largest retail destination in the UK with a total comparison retail expenditure of more than £1.1 billion in 2008. This represents significant retail expansion in Milton Keynes which was only ranked the 62nd largest UK retail destination ten years earlier in 1998.

There are also plans to expand the retail offer in Milton Keynes in the future, including a £400 million, 24,000 square metre extension to thecentre:mk. This is reflected in the Experian projections, which suggest Milton Keynes will continue to expand its retail offer relative to other UK retail destinations and increase its ranking to 16th by 2018.

Key Developments

There are a large number of housing, employment and transport infrastructure projects planned, and already being delivered, both within the existing urban area and urban extensions. The MKP Business Plan reports that in addition to the 68,600 houses planned for Milton Keynes by 2031, there is up to 1.4 million square metres of employment land available for development from 2007 to 2016 (half of which is already being developed),



[J30256553] 71

£1.2 billion of transport infrastructure planned, as well as significant investment in schools and education, cultural, leisure and community facilities. The key developments include:

The Western Expansion Area – 6,000 houses, 17 hectares of employment land, schools, community facilities and open space over 360 hectares;

The Eastern Expansion Area – 4,000 houses, 80 hectares of employment land, schools, community facilities and open space over 405 hectares;

The Northern Expansion Area – 455 dwellings, live/work units, hotel and employment space;

Transport improvements such as: the East West rail link providing links with Oxford, Aylesbury and Bedford; improvements to the A5, A421, A418 and M1 including a new coach station and park and ride facility at Junction 14;

A 24,000 sqm extension of thecentre:MK shopping centre;

A 30,000 sqm centre for many of Network Rail's national functions;

The Pinnacle MK office / retail scheme totalling 18,500 sqm;

Numerous other housing, school, retail, employment land, public transport and highways developments.

Future Prospects

The future prospects for Milton Keynes are strong and the town is projected to continue to grow faster than Northampton and the regional and national averages (according to both the trend-based projections and ‘local’ policy-based projections). The 68,600 new houses and jobs planned between 2001 and 2031 will ensure Milton Keynes continues to grow rapidly in order to achieve its aim of becoming a major regional centre by 2031.



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COMPETITOR PROFILE: LEICESTER

Leicester Summary

Leicester is the most culturally diverse city in the UK outside of London; over 40% of its population is made up of immigrants.

Traditionally strong industries include footwear and hosiery, although these are now in decline.

23% of the workforce is employed in manufacturing compared to the national average of 15% - with a particular focus on engineering.

Innovation hub – Leicester is the ‘space capital of the UK’ with the largest space

science research centre in Europe. The world’s first hydrogen powered motorbike,

DNA Genetic Fingerprinting and the jet engine33 were all developed or discovered in Leicester.

The city is home to 350 foreign-owned businesses; more than anywhere else in the East Midlands, and has strong industry connections to Asia and India

Future growth prospects for Leicester are relatively weaker than Northampton and Milton Keynes, with employment projected to fall by 2031.

Policy Review

Leicester has a population of over 280,000 and is the most populous city in the East Midlands. It is located close to the M1 motorway and is on the Midland Mainline. The City of Leicester Local Plan 1996-2016 (adopted 2006) aimed to support the wider work of the City Council and its partners under its “Regeneration Strategy” by providing a framework in

which to consider aspects of physical change in a comprehensive manner.

Alongside East Midlands Development Agency (emda) and English Partnerships, the City Council was a funding partner for the Leicester Regeneration Company (LRC), which has since been subsumed by a new countywide Economic Development Company, ‘Prospect

33 ‘Leicester: a transformed location for business’ (2008)

http://www.investleicestershire.com/websitefiles/Leicester-1%20v02.pdf


http://www.investleicestershire.com/websitefiles/Leicester-1%20v02.pdf


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Leicestershire’. The key role of the LRC was to help deliver regeneration schemes, through the implementation of the Strategic Framework of the LRC Masterplan, which was launched in 2002. One of the five main areas of intervention from the Masterplan was the creation of a strong retail circuit and heart within the Central Shopping Core. The creation of a strong retail centre aimed to increase footfall, strengthen and diversify Leicester’s retail offer and

address several of the structural issues highlighted in the Local Plan as contributing to the general under-development of the city. These issues included:

a flawed retail circuit.

the city centre core being cut off from the rest of the central area by the Central Ring Road, which prevented access to ‘under-utilised assets’, such as the canal and river, the Old Town, New Walk and Castle Gardens.

a ‘break-up’ of functionality, making the advantage of concentration difficult to

achieve.

the lack of a compact and unified centre, preventing interaction between different parts of the City and the realisation of synergies between them.

Retail Development in Leicester

Highcross Leicester shopping centre opened in September 2008. The one million square foot centre, developed by Hammerson and Hermes in a 60:40 joint venture, involved a £350m extension and redevelopment of the former Shires Shopping Centre. The Team Leader for Planning Regional Strategy at Leicester City Council suggested that the only local retail competitor prior to the opening of Highcross was the Fosse Park development in Blaby. Nottingham is also considered a significant competitor.

The Highcross scheme achieved 92% occupancy by space and 87% by value prior to opening and attracted over one million customers in the first two weeks. According to research undertaken by the developer Hammerson, there was a large affluent catchment in Leicester, but the retail offer ‘was not matching their aspirations’. The research also showed

that, before Highcross was completed, only 20% of the city’s retail served affluent residents

– despite this group accounting for 30% of the available expenditure34. According to the Experian retail ranking report published in 2008, Leicester moved from up one place to 16th in terms of retail rankings.

Reports in 2008 suggested 2,000 new jobs were created when the venue opened in September 2008, which helped to reduce job losses in the city compared with the rest of the country. In Leicestershire, the increase in the number of people out of work and claiming benefit in the UK rose by 1.3%, compared with a national figure of 3.5%.35

Negative impacts on the city’s existing retail offer appear to be negligible so far. According

to an article by Property Week in 2008, the city’s traditional main shopping streets of

Humberstone Gate, Gallowtree Gate and Haymarket were not badly affected, with only two empty shops at the time the article was released, one of which was a direct result of the opening of Highcross. At the time of opening, 73% of the retailers and 85% of the restaurants locating in Highcross were new to Leicester.36

Research is currently underway to determine how successful Highcross has been in improving Leicester’s share of retail spending, although anecdotal evidence has suggested

that impacts have been positive to date. David Hughes, chief executive of the county’s

economic development company, Prospect Leicestershire, referred to Highcross’s

34 ‘Hammerson opens Highcross mall in Leicester’, (2008)

http://www.propertyweek.com/story.asp?storycode=3125102 35 ‘Highcross helps buck jobless trend’ (2008) http://www.thisisleicestershire.co.uk/news/Highcross-helps-buck-jobless-trendarticle-403926-details/article.html 36 ‘Hammerson opens Highcross mall in Leicester’, (2008)

http://www.propertyweek.com/story.asp?storycode=3125102



http://www.thisisleicestershire.co.uk/news/Highcross-helps-buck-jobless-trendarticle-403926-details/article.html

http://www.thisisleicestershire.co.uk/news/Highcross-helps-buck-jobless-trendarticle-403926-details/article.html



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performance recently as having ’attracted people into Leicester from our county catchment

area who were lost to the city centre’.37





Leicester has had practically no growth in employment in recent years. Local population, household, employment, business and GVA growth are all significantly lower than regional and national averages. The exception has been GVA, with figures comparable to Milton Keynes and significantly higher than Northampton. GVA per head in Leicester is marginally higher than the national average and is similar to that of Northampton. Leicester has significantly higher levels of office and retail employment and office and retail floorspace in the town centre than Northampton.

Key Developments

The LRC has produced detailed development frameworks for each of its Key Projects. According to the LRC website, its partners have already invested over £20 million in assembling land and ten key projects started on site in early 2006. The Masterplan highlights five major infrastructure projects38:

A 50,000 sqm prime office core or ‘New Business Quarter’, focusing on a re-modelled railway station, the first phase of which has already been completed.

An eight hectare science park (including the National Space Centre) positioned in a riverside setting. The development of the science and technology park aims to create 2,200 jobs in science and technology-based businesses, and to attract and retain graduates from the two world-class universities located in the city.

100,000 sqm of new retail and leisure development, including the Highcross Leicester development.

37 ‘Cross examination’ (2009) http://www.propertyweek.com/story.asp?storycode=3140092 38 http://www.leicesterregeneration.co.uk/keyprojects.html


http://www.leicesterregeneration.co.uk/keyprojects.html


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Provision of diverse residential developments in the city centre through the creation of a new ‘urban village’ in St George’s, comprising approximately 1,700 homes (200

of which have already been completed)

The creation of a major new river and canalside community – the ‘Waterside project’

– a mixed use development with space for 3.500 homes.

The Masterplan is likely to be reviewed in the coming year by Prospect Leicestershire and Leicester City Council, with an emphasis on reassessing the proposed targets for new dwellings through high-density apartment schemes.

Future Prospects

The future prospects for Leicester are weak and the city is projected to grow more slowly than Northampton and only marginally higher than the national averages (according to both the ONS and CLG trend-based projections). Leicester is also the only competitor location projected to experience negative employment growth between 2007 and 2031, according to Experian forecasts.



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COMPETITOR PROFILE: CAMBRIDGE

Cambridge Summary

Cambridge has the highest innovation rate of any city in the UK (Communities and Local Government, State of the English cities) and is recognised by the European Union as a Centre of Excellence for Innovation39.

With an average population growth rate of 1.0% per annum, Cambridge had the third fastest growing population in the UK between 1997 and 200740.

At £533.40, Cambridge had the fourth highest average weekly earnings in the UK in 200841.

Between February 2008 and February 2009 the claimant count in Cambridge rose from 1.4% to 2.0%, but this was the lowest increase in Jobseeker’s Allowance (JSA) claimants of all English cities42.

Cambridge is projected to add at least 73,300 new homes, 50,000 new jobs and over £4 billion worth of new infrastructure by 2021.

Policy Review

Cambridge is a small, historic city situated in the East of England with a population of 120,000. Since the 1970s, the city and surrounding area has been transformed into a world-leading high-technology cluster. The ‘Cambridge Phenomenon’ has been based largely on the ‘bottom-up’ development of many small, innovative technology companies, embedded in a rich and diverse science base, which now employs around 50,000 people – particularly in the life sciences and high-technology industries.

Cambridge City Council is responsible for the Cambridge Development Strategy, which will set out the planning framework to guide the future development of Cambridge. The Development Strategy will also set out the strategic elements of the Cambridge Local Development Framework, which replaces the Cambridge Local Plan and sets out policies

39 http://www.gcp.uk.net/greater-cambridge.php 40 NOMIS 2008, Mid Year Population Estimates cited in ‘Cambridge: Closing the Gap’ (2009), Centre for Cities 41 NOMIS 2009 ASHE, cited in ‘Cambridge: Closing the Gap’ (2009), Centre for Cities 42 Centre for Cities (2009) Cities Outlook 2009. London: Centre for Cities


http://www.gcp.uk.net/greater-cambridge.php


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and proposals for future development and land use in Cambridge to 2016. Cambridge City Council’s Economic Policy team is currently developing an Economic Development

Statement, which is undergoing consultation with the rest of the Council and should be approved in November 2009.

The city of Cambridge does not have an Urban Regeneration Company or Economic Development Company. Cambridgeshire Horizons, which was formed in 2004 as the Cambridge Infrastructure Partnership, is the local delivery vehicle (LDV) at a sub-regional, rather than city, level. Horizons is a company limited by guarantee with no statutory planning powers, but it holds the responsibility of project managing the delivery of the growth strategy for Cambridgeshire, which equates to at least 73,300 new homes, 50,000 new jobs and over £4 billion worth of new infrastructure by 2021. Other important roles include securing and managing additional funding streams; developing ‘quality of life’ and sustainable infrastructure strategies; championing low carbon growth and researching innovative new funding streams43.

Retail Development in Cambridge

The Grand Arcade shopping centre is a 450,000 sq ft (41,800 sqm gross floorspace) retail development containing 52 shops (with John Lewis occupying 255,000 sq ft), a 950-space car park and 500-space cycle park. A joint venture between major developers, Grosvenor and Universities Superannuation Scheme (USS), it opened in March 2008 and is the largest retail development in Cambridge for more than 30 years. The major objective of the introduction of the Grand Arcade was to “..bring into the city the retailers that had been frustrated for so long at the lack of decent space and go further towards making the most of the wealthy local catchment and two million students who come to the city each year.”44

The Grand Arcade has attracted new brands to the area for the first time and there is evidence that it has ‘plugged’ the leakage of shoppers to surrounding areas

45. However, only 36 out of the 52 stores were let (85%) in the five months after the centre opened.

Peterborough is considered the major retail competitor to Cambridge. In October 2008, Hammerson and Morley submitted a planning application to Peterborough City Council for the redevelopment of the Westgate area of the city centre to link it with the existing Queensgate Centre. Marks & Spencer has already committed to the 732,000 sq ft (68,000 sq m) mixed-use scheme, which will include cafés, bars, restaurants and 100 apartments. Combined with the Queensgate Centre, the scheme will cover 1.6 million sq ft (148,640 sq m).


Cambridge has experienced employment growth in recent years, although this has been slightly below the national average. Household growth has been equivalent to the national average, and population growth has exceeded the national average. GVA per head is significantly higher in Cambridge than Northampton and the other comparator locations featured in the table, notable given its much smaller size in terms of population and households. Cambridge has very similar levels of town centre office floorspace to Northampton, although its retail floorspace was much lower than that of Northampton town centre prior to the new development.

43 http://www.cambridgeshirehorizons.co.uk/about_horizons/how_we_do_it/ 44 ‘Grand ambition’ (2008), Retail Week http://www.retail-week.com/grand-ambition/1798589.article 45 http://www.retail-week.com/grand-ambition/1798589.article


http://www.cambridgeshirehorizons.co.uk/about_horizons/how_we_do_it/




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Key Developments

In the 1950s and 60s, city centre and greenbelt development was restricted in Cambridge to maintain the historic character of the city. However, the rapid employment growth in the city has resulted in increased commuting and congestion caused by workers travelling into the city centre from surrounding market towns. In order to redress this ‘jobs-homes imbalance’, policies such as the ‘old’ RPG6 and Cambridgeshire and Peterborough

Structure Plan (2003) set out the release of greenbelt land for housing development.

This explains why many of the key infrastructure projects planned for Cambridge are residential-based. Key development projects are set out in various Area Action Plans and the Cambridgeshire Horizons’ website, while Cambridge City Council has recently

commissioned an infrastructure study. The key developments in Cambridge include46:

Cambridge North West, which consists of two developments:

The NIAB development – named after the National Institute of Agricultural Botany, which is located on the site. A 48-hectare area will be redeveloped to provide a new community, including at least 1,780 new homes, a library, health centre, schools, and green open spaces.

The University Site – 83 hectares of land owned by the University of Cambridge is to be redeveloped as a new higher education quarter for the city. Around 2,500 homes are planned, with half of these allocated as key worker housing for Cambridge University and the Colleges.

Cambridge East - a modern, high quality, vibrant and distinctive urban extension to Cambridge is planned, with between 10,000-12,000 new homes located in 3 different areas to the east of the city. The urban extensions will include a range of employment opportunities, community facilities, schools, open spaces, and other services. Approximately 5,000 jobs are expected to be created as a result of the development.

46 http://www.cambridgeshirehorizons.co.uk/whats_going_on/projects/


http://www.cambridgeshirehorizons.co.uk/whats_going_on/projects/


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Southern Fringe - around 4,000 new homes and a range of new transport services and community facilities are to be built on the southern edge of Cambridge, across four development sites.

A planned expansion of Addenbrooke’s Hospital for research and clinical purposes47.

Future Prospects

The future prospects for Cambridge are strong and the town is projected to continue to grow faster than Northampton and the regional and national averages (according to both the trend-based projections and ‘local’ policy-based projections). The city needs to expand to meet the high demand for housing and employment space. Official government targets expect Cambridge to build at least 19,000 new homes between 2001 and 202148.

47 According to discussion with the Planning Policy team (Steven Miles) in Cambridge City Council, June 2009 48 Cambridge City Council website http://www.cambridge.gov.uk/ccm/navigation/growth-and-urban-expansion/


http://www.cambridge.gov.uk/ccm/navigation/growth-and-urban-expansion/