It is the first and likely to be the biggest. It could also be the most controversial. The 247-acre Coventry & Warwickshire Gateway site is the first major industrial development to be sponsored by the new breed of local enterprise partnerships (LEPs).
But as plans for the site begin to take shape, some in the West Midlands are wondering if this is the best use of the public sector’s time and money. With neighbouring 64-acre Prologis Park Ryton already offering space, and Goodman’s 74-acre Browns Lane site close by, why the big taxpayer-backed push for yet another industrial plan?
Developer Roxhill has been chosen to pursue a scheme that sees a southern plot of 180 acres earmarked for 3.6m sq ft of warehouse space, while a northern 67-acre plot fronting the A45 could see industrial, hotel and ancillary retail uses, totalling 900,000 sq ft.
The site is owned by Sir Peter Rigby, owner of Coventry airport and founder of Specialist Computer Holdings Group. Rigby has been a member of the Coventry & Warwickshire LEP since its foundation and its chairman since August. However, Rigby did declare his interest before the scheme was backed by the LEP.
Midlands industrial specialists have no doubt the Gateway site is first-class. What they do not understand is why it needs help, and why it needs it now.
No need for public sector support
Richard Ludlow, partner at Gerald Eve, says: “This site is premiership standard, very much at the upper end of good, and it will soon find users. Roxhill is extremely competent. But no, it doesn’t need public sector support, not really.”
Ludlow guesses that if speculative warehouse development is to happen in the Coventry area, then the rival Prologis scheme at Ryton is a more likely location than the Roxhill Gateway.
Simon Lloyd, industrial director at DTZ, also gives the Gateway site full marks – and is also puzzled by the priority it has been given by the LEP.
He says he understands that the high upfront costs of large-scale warehouse development can be a problem, and that public sector support can be vital. But he also says there are plenty of alternative sites without such costs.
“Gateway is a good site,” says Lloyd. “But so is the Ryton site, and so is Ansty, both of which have always been targeted for investment. They aren’t a million miles away, and Ryton is next door. Browns Lane is close, too. Of course, occupiers like a choice, but there is no shortage of good land around Coventry. One site getting intervention and another not, does seem odd.”
Prologis is widely seen as the big loser from the LEP’s support of Gateway. Its site at Ryton, barely a runway’s length from the airport, is slated for 1.2m sq ft of warehouse development. The company declined to comment on the Gateway.
Wrong direction
For some, the decision to back the Gateway shows that the LEP is heading in the wrong direction. Critics also cite the failure to appoint a permanent chief executive and the replacement of a private sector-led property advisory group with a public sector-led planning advisory group. The LEP says this is because planning is one of the biggest obstacles to growth.
One victim of the changes is the former chairman of the property advisory group, Opus land director Richard Smith. The new group will be chaired by Coventry city councillor Lynnette Kelly until a permanent appointment can be made. Says Smith: “I was asked if I would continue to be involved, but I declined because I do not agree with the direction the LEP is taking.”
It is hard to deny that local politics has a powerful role to play in the LEP, with Labour-controlled Coventry and Conservative-controlled Warwickshire not always seeing eye-to-eye.
Warwickshire county council is already thinking of pulling out of the government’s City Deal initiative, offered to the Coventry & Warwickshire LEP last month. The plan means more powers for the local council in return for taking on extra economic growth responsibilities. Warwickshire fears it could cost the council £200m it does not have.
Meanwhile, Warwickshire council leader Alan Farnell has voiced concern about the slow progress towards appointing a permanent chief executive for the LEP.
He denies speculation that the county may pull out of the LEP, and resists claims that the LEP has taken the wrong strategy by giving too much prominence to the Gateway site. “We haven’t put all our eggs in one basket,” he says. “There are many sites benefiting from regional growth fund support, although it is true the LEP got off to a slowish start.”
Martin Yardley, appointed chief executive of the LEP for 12 months in September, says his organisation does not need to apologise for supporting the Gateway. “The strategy of the LEP is very clear and focused,” he says. “It is about economic growth, creating high-value jobs and tackling barriers to growth. The Gateway is one of a number of schemes capable of delivering jobs and growth, and for that reason the board has been wholehearted in its support.”
Yardley says the decision to support the Gateway’s claim to be an enterprise zone in 2011 was taken unanimously – and that Rigby declared his interest before the vote. “Other than that, the LEP does not provide preferential support to the Gateway over and above any support given to other development schemes in Coventry and Warwickshire, and applications for any funding that may be available through the LEP are treated purely on their merits.”
Controversial appointment
The choice of Gateway site owner Sir Peter Rigby as chairman of the Coventry & Warwickshire LEP caused outrage among local politicians, and some surprise among property folk.
The Conservative opposition leader of Coventry city council called the move “bizarre” and inappropriate, saying it would “lack credibility” because of a potential conflict of interest.
Coventry South Labour MP Jim Cunningham and Warwickshire Conservative MPs Chris White and Jeremy Wright also claimed there would be a conflict of interest.
Board members insist the decision was unanimous, although it is not clear whether they considered any alternative candidates.
The LEP says board members declare interests before decisions are taken, and that now they have been incorporated, they are governed by company law on conflicts of interest.
LEP chief executive Martin Yardley says: “We are satisfied that any conflicts or potential conflicts that any director may have are dealt with appropriately.
“The current chairman has been a director since the inception of the LEP, and at the expiry of his 12 months as chairman, will have been a director for three years and, unsurprisingly, has decided to stand down at that time. The reason for his election to chairman was to provide continuity and vigour from the private sector to drive the LEP forward in its next phase of development.”
