South Northamptonshire Logistics Study March 2017

A report prepared for South Northamptonshire Council (SNC) and completed by GVA has just been published. The Study provides a thorough and detailed evidence base of the logistics sector and identifies suitable and appropriate opportunities to grow the sector within the District. Some of the more interesting conclusions are as follows:

4.29 The emergence of Northamptonshire as a logistics centre hub is the product of geography and transport developments over many years. The result of these economic and locational factors is likely to be high numbers of HGVs travelling to, from and through Northamptonshire together with the associated impacts on the highway network and local communities.

5.18 The 2013 ELR [Employment Land Review] identified a potential for oversupply [of
warehousing], equating to almost seven times the requirement, despite focusing development around a large number of strategically important sites.

5.19 When balancing the demand and supply of land for logistics activity wider considerations need to be taken into account beyond market demand. Future development should seek to minimise the impact of development on the wider landscape and maximise existing infrastructure provision. This would suggest prioritising land that effectively extends existing centres of activity. This would be suitable at Pineham.

5.20 The allocation of new ‘standalone’ distribution parks at Midway Park and the potential future capacity at Roxhill will need to be considered on the basis of more detailed assessments of environmental, landscape and transport impacts.

9.16 The demand analysis provided in Section 8 of this report shows, via a number of scenarios, that there is likely to be demand from the market for between 22,500 – 130,000 sqm of additional floorspace over and above current stock. Even assuming that the maximum amount of forecasted demand is required these sites [Prologis
Pineham Jn15a and Midway Park Jn16] provide twice as much supply. [DIRFT, Roxhill and Rail Central would
collectively add 2,000,000 square metres of additional floor space, somewhat
beyond the maximum 130,000 predicted to be required by 2036]

10.8 Increasing automation and reliance on technology within the sector is increasing the skills requirements of its workforce, requiring workers in the sector to adapt and develop a much high level and mix of skills in order to operate lines and machinery. Future labour shortages could be exacerbated by the UK’s decision to leave the EU with a high number of warehouse operatives and drivers coming from other EU countries.

10.11 Our review of the logistics sector in the South Northants sub-region has confirmed that there is an established ‘hierarchy’ of logistics activity within the County (and the M1 corridor more widely). DIRFT (Daventry) is an established national distribution hub, with significant capacity for further growth; as such it is the focus for the majority of future activity within the County whilst Milton Keynes provides the major focus for the broader LEP area.

10.15 The nature of activity has enabled South Northants to balance the economic opportunity with wider priorities. Future growth in South Northamptonshire will need to be balanced against a range of other factors, including the impact on the quality of life, open space and protected habitats, junction capacities and the actual local employment impact and benefit in the District.

10.16 These are critical considerations as there are significant risks to the wider economy of the District of not managing the growth of the sector. Many other businesses are attracted to the District as a result of the quality of life on offer to their workers as well as the availability of a highly skilled, highly motivated workforce. Providing significant amounts of new distribution space may, in the long term, have negative impacts on both the perceived quality of place and the availability of labour.

10.17 As highlighted within this report the logistics and distribution sector is anticipated to continue growing over the next 20 years, expanding both its employment base and economic output across Northamptonshire and the wider SEMLEP area. Within this context South Northants is expected to experience only modest growth, reducing its role within the wider market.

10.19 Private sector led proposals are already creating this supply led scenario with over 950,000sqm of additional space being promoted by developers and benefiting from an allocation in planning policy. Adding the unallocated (but privately promoted) Rail Central opportunity would mean the potential to deliver a further 800,000sqm of floorspace. All of these developments would be focussed on strategic distribution activity, with some further space available in other locations for more local scale operations.

10.20 This would dramatically alter the ‘position’ of South Northants in the spatial hierarchy, placing it in line with national hubs at Milton Keynes and Daventry in terms of its scale and focus. This supply driven approach would provide significantly more space than appears to be required when the Experian projections are considered.

10.21 The significant scale of potential growth would deliver a major step change in the demand for labour in South Northants. Based on the ratios in the HCA Density Guide the developments could provide over 20,000 new FTE jobs which, given the largely ‘full employment’ position in the District, could create some significant challenges.

10.22 Whilst the range of employment opportunities provided may give new opportunities to those currently unemployed or not engaged in the District’s economy the most likely outcome is that there will be insufficient supply locally so the District will need to become a net importer of workers. This could have significant impacts on congestion, emissions and other environmental conditions. In the long term it may also have implications for housing demand and supply.

10.23 A further risk would be that, over time, the availability of significant ‘easy to access’ employment could have a detrimental effect on labour availability for the other sectors that South Northants wants to attract and retain. This has been an evident trend in other locations where single industries or employers dominate a market, making recruitment for other parts of the economy more difficult.

10.25 The opportunity to make a ‘step change’ in logistics activity is driven by the opportunity to exploit a distinct asset and differentiate the offer from a number of competing locations. However, despite significant focus and discussion nationally the rail freight industry remains somewhat unproven. Whilst other locations are looking to bring forward facilities these have been slow to come forward. Even DIRFT, the UK’s leading freight interchange, has been slow to deliver its growth potential and there are questions about how integrated the interchange and distribution facilities truly are.

10.26 As discussed in this report the logistics sector relies on its network of locations to be effective and efficient, at present the rail freight network is somewhat immature. To realise the potential of Rail Central as a true inter-modal facility, it is likely to be necessary that a wider range of similar facilities come forward. This will require coordinated country wide lobbying and promotion to support infrastructure delivery and development.

10.27 A key barrier is the rail capacity around London, which currently prevents ports moving more freight by rail from the point of entry into the UK. Again a coordinated approach to lobbying government to address these issues appears to be critical in making the most of the Rail Central opportunity. Without this broader approach it is unlikely that Rail Central will be sufficiently different to support such a significant expansion when there are large allocations in other parts of the area.