As the economic recovery continues, unemployment falls and confidence continues to grow, a key consideration is how to ensure that a shortage of employment land does not undermine growth, writes Waheed Nazir, director of planning and regeneration at Birmingham city council.
The resurgent manufacturing sector in the UK is leading to an increase in demand for employment land, as companies such as Jaguar Land Rover and JCB expand and build new facilities. The success of these companies is leading to growth in their supply chain, with companies modernising and expanding to meet demand and remain competitive.
We are also seeing an increasing number of manufacturers reshoring production back to the UK, creating further jobs and investment as companies look to improve quality and reduce delivery times.
Demand for industrial floorspace is not limited to manufacturing. The logistics sector is continuing to see significant growth on sites with easy access to the motorway and rail network. This is especially the case in the retail sector, with the likes of Amazon, Lidl and Aldi having significant logistics requirements.
But accommodating this growth is becoming difficult. Companies face limited options as they look for a site to build a new facility or relocate into better-quality accommodation. Since the downturn, there has been a lack of speculative development, and the result is a decreasing pool of available industrial space. Demand for secondhand accommodation has increased, vacancy rates have fallen and there is a shortage of large modern industrial units. These issues have caused industrial land values to nearly double over the past three years; prime values in excess of £500,000 per acre are now being quoted in the Midlands.
In Birmingham I have sought to address this issue through the Birmingham Development Plan and the proposed release of 198 acres of green belt at Peddimore. This site occupies a strategic location close to the main industrial corridor in the north-east of the city, with easy access to the M42 and M6. We are also seeking to protect existing employment land while maximising the amount of general employment land available at the strategically important Washwood Heath site, which is earmarked for an HS2 depot.
We will shortly find out whether the Peddimore proposal has been supported by the secretary of state. However, releasing land from the green belt is difficult, as illustrated recently by the Coventry Gateway proposal, which was rejected on green belt grounds.
Peddimore may ease the supply situation in Birmingham but beyond the city’s boundaries the lack of large strategic employment sites is well known. Large sites have accommodated significant investment in the West Midlands, but many of these sites are now at or near capacity. The lack of a regional strategy means that there is no clear mechanism for promoting large employment sites, and the duty to cooperate is proving to be a far from adequate replacement. Sub-regional planning at either the Local Enterprise Partnership or combined authorities level may be part of the answer.
Much of the discussion in the election campaign focused on the housing shortage but the future government will need to ensure a balanced approach towards the release of land for both housing and employment uses if it is serious about maximising economic growth.
