Few people would disagree that the economic contribution that consumer and logistics property makes to the UK economy is considerable.
In the UK today, more than 710,000 people work in the logistics sector across a total of 56,000 businesses contributing approximately £100bn gross added value (GVA) to the economy annually, according to the British Property Federation’s December 2015 report Delivering the goods.
The business case for supporting the logistics industry has never been stronger for local government, especially since former chancellor George Osborne decreed that councils are now able to collect all of the business rates revenues on offer.
With around 22% of business rates revenue coming from industrial property – equating to a total rateable value of over £13bn – the opportunity for locally-driven community improvements to infrastructure, transport services, housing and emergency services as a result of these revenues is clear to see.
Development headaches
However, building outside towns and cities can be contentious and highly emotive.
People want the convenience of online shopping and quick delivery, but the economic and social benefits of living near a logistics park – particularly those situated in affluent rural areas – are not always clearly articulated.
On this front, the challenge continues to be how to strengthen the unseen but crucial logistics network that powers a modern, digital economy and drive consumer cost savings through supply chain efficiencies while minimising the impact of the associated infrastructure to local communities.
The very nature of consumer logistics and the boom of e-commerce mean that large areas of strategically located and affordable land is required. Often this is outside built-up areas, as land “in town” typically falls down on the affordability criteria, which can cause friction between developers, local communities, councils and other stakeholders, particularly in less-developed rural areas.
With a growing and more productive population spread across the UK, the competition for land has never been more acute. The need for more housing and jobs, coupled with high levels of internet penetration, all mean that both regional and national government need to buy in to the idea of further development.
While the government’s National Planning Policy Framework is addressing this challenge, more needs to be done to support the growth of our economy.
Clearing the hurdles
As a responsible owner, manager and developer of logistics assets, we work hard to meet the demands of our customers and recognise that this must be done in as sensitive a manner as possible.
The benefits of a logistics park can be significant. They are felt directly through permanent, long-term job creation, an up-skilling of a local workforce and improved local infrastructure; and indirectly through faster and more secure deliveries.
It is, however, incumbent on owners, managers and developers to ensure that any disruption, both during the development of the asset and its ongoing utilisation, is minimised as far as possible.
Significant advances have been made in the technology and materials used to develop these sites helping to reduce carbon footprints and waste, while planning restrictions can help to ensure that any negative impact is offset.
In this regard, positive initiatives we have been involved in have included the building of leisure facilities and the landscaping of large public areas. More recently we have been exploring the provision of academies and further education facilities as part of a wider development.
Engagement with the communities in which we work is critically important. The forum liaison groups that we have set up with local communities have proved an invaluable source of discussion and debate, allowing us to fully understand the concerns of local residents and work towards mutually beneficial solutions.
However, the reality is that one large development can be a more efficient use of land, particularly as it often makes mitigating infrastructure, such as bypasses and rail links, much more viable.
A collaborative outlook
Our ever-changing consumption habits mean that logistics warehousing in strategic areas around the country is going to be an increasingly commonplace feature if we are to expand our economy and, perhaps most crucially, ensure that our shopping arrives on time.
However, we have much work to do to ensure that our neighbours truly feel the benefits of these concentrated clusters, particularly in the quality of jobs created, which span the full spectrum from management and sophisticated IT roles, to drivers and warehouse operatives.
We firmly believe that we are creating opportunities from which all echelons of the community can benefit. It is incumbent on all of us – the developer, the local authority and the local community – to have a continual dialogue to ensure that the full benefits are realised in as sensitive a manner as possible.
Gwyn Stubbings is planning director at IDI Gazeley