Plans to improve Cornwall’s transport and communications infrastructure could help to bolster the county’s tourist-led economy. Mark Simmons reports
In a county where tourism brings in up to 30% of GDP, it’s not unusual to find attractions promising visitors an experience that is “out of this world”. Come 2018, Cornwall might be the only UK location where this is actually true. This summer the Civil Aviation Authority chose Newquay as one of eight contenders for the country’s first spaceport, which will allow commercial space launches and regular flights from UK soil. If this sounds far-fetched, think again: satellite and space-vehicle technology is already worth £11.3bn to the UK economy and the industry employs more than 35,000 people.
While all bar one of the other spaceport sites are in Scotland, this hasn’t dampened enthusiasm at Cornwall council-owned Newquay Airport.
“There is no place with a better combination of factors,” says Miles Carden from Cornwall Development Company, an arms-length entity of the council. Carden is responsible for , the enterprise zone surrounding the airport (see below).
Paradoxically, the CAA requirements for the spaceport included good terrestrial access, but a location away from densely populated areas. And a 3,000m runway. Newquay scores well here, as it would need to add only 250m to its strip, which can already comfortably land a jumbo jet.
“We are not as remote as some of the other sites,” says Carden. “There is plenty of infrastructure, such as hotels and shops already here, as well as direct flights to London.”
Ah yes, the London flights. Last year Flybe stunned the county when it announced it would be pulling out of the Newquay-London route because it did not believe it was commercially viable as a year-round operation. After a blitz of lobbying from Cornish representatives, the government agreed in March this year to subsidise the route under a four-year public services obligation contract. The new operator will take over at the end of October, and local speculation suggests Flybe will be handed control of the cockpit until 2018.
“The PSO contract will give a degree of stability, allow the airport to plan ahead and encourage more flights into and out of the airport,” says Kim Conchie, chief executive of Cornwall Chamber of Commerce.
It certainly has the capacity – not just for large jets, but for handling around 450,000 passengers annually. However, last year, according to the CAA, it handled only 175,000 and was in 35th place out of the 40 largest UK airports, ranking only slightly higher than Stornoway in the Outer Hebrides.
Ironically, passenger numbers increased in February and March this year, when extra flights were temporarily added after the mainline rail link to Cornwall was severed by a sea-wall breach at Dawlish in Devon. “Some business travellers who started flying for the first time then have stuck with it since,” says Conchie.
While the dramatic pictures of the washed-out tracks made the difficulties for local travellers easy to see, determining the financial effect on the Cornish economy is less clear, with estimates ranging from between £1m and £20m lost per day for the two months that the rail line was closed. Arguably more damaging was the psychological effect on local businesspeople.
“We had clients who were very worried,” says Tim Dwelly, founder of Penzance serviced office The Workbox. “There was a fear about what might happen if they couldn’t travel to see their clients.”
They will, perhaps, be reassured that as soon as Network Rail had repaired the damage at Dawlish it commissioned a report to consider how a repetition could be avoided. The West of Exeter resilience study was published in July: it considers reopening inland rail routes to bypass the troublesome stretch of coastal railway, as well as reinforcing the existing tracks. Unfortunately, using the standard methodology for assessing cost-benefit ratios, none of the options produces anything like the benefit required for a public sector outlay of between £400m and £1.5bn.
However, the study notes that, if the wider economic impact is taken into consideration, the figures may start to stack up – although the alternative routes have problems of their own and could slightly increase journey times. The survey results will be fed into Network Rail’s wider Western route study, a consultation draft of which is due within the next few weeks.
Aerohub
Public-sector funding worth £6m is to be invested to pave the way for a business park at , the Enterprise Zone at the town’s airport. Up to 2m sq ft of business space could be constructed on the 650-acre site. Work will start shortly on the park’s access and supporting infrastructure and should be complete next summer, according to EZ manager Miles Carden, “After that,” he says, “we expect the private sector to pick it up and drive it forward.”
ERDF funding
As Cornwall is the only part of the UK classified as “less developed” by the EU (it has a regional GDP lower than 75% of the EU average), property commentators are keen to see how the next tranche of funding – €293m (£233m) allocated for 2014-2020 – will be spent.
“No one will build offices speculatively without grant funding,” explains Peter Heather, partner at Truro-based agency Miller Commercial. But the top-grade finishes on new buildings – a condition of EU funding – may still be too expensive for local occupiers.
“We are looking at other options for the private sector: not just grants, but alternatives such as loans and equity bonds,” counters Sandra Rothwell, former head of economic development at Cornwall council and now chief executive of Cornwall and Isles of Scilly LEP.
Superfast broadband
A £132m programme funded by Cornwall council, the EU and BT could see Cornwall becoming the best-connected internet county in the UK. Superfast speeds of between 100Mbps and 300Mbps will be available to those with a fibre connection. But local agents are sceptical about whether the enhanced connectivity is affecting occupiers’ property decisions.
“Does it make a difference in pounds per sq ft?” asks Ian Simpson, partner and head of Alder King’s Truro office. “There’s no evidence for that.”
And many firms are still waiting to be upgraded. Tim Dwelly, founder of Penzance serviced office The Workbox, comments: “The roll-out seems to be first reaching those people who will use it least for business purposes.”
Cornwall’s Economy in Numbers
• Population:541,300
Total GVA: £7bn
GVA as % of UK total: 0.6%
GVA per capita: £13,036 (UK average: £21,370)
Total employed: 232,600 (43% of population)
Source: Cornwall Council
Store wars
While development of new business space in Cornwall remains tricky (see box 2), other problems are facing retail developers.
There are battles to create new shops in two parts of the county. At , a consortium of LondonMetric and Mercian Developments is likely to submit a revised planning application next month for an out-of-town shopping centre, after initial plans for 279,000 sq ft were narrowly defeated in January. Although Sainsbury’s, co-anchor with M&S, is contracted to the site, the new application may be for non-food only.
“The £110m lost annually from St Austell residents who go to shop elsewhere isn’t sustainable,” argues Coyte Farm spokesman Simon Hoare.
But Mark Robinson, investment director of Ellandi, co-owner of St Austell’s 155,000 sq ft White River Place shopping centre, suggests planning approval could bring further uncertainty: “If Coyte Farm gets consent but then isn’t viable, it could blight potential town centre and edge-of-town investment in St Austell.”
Further west, in Hayle, two developers are competing to develop on land at Marsh Lane. Both Cranford Developments and Walker Developments have submitted planning applications for up to 167,000 sq ft of non-food retail and leisure space. Cornwall council planner Jeremy Content says the schemes are likely to reach the planning committee for a decision next month or in November.
