St Modwen Logistics and Savills have urged the government to recognise logistics and warehousing as critical national infrastructure, proposing five policy changes to boost the sector’s growth.
The pair have jointly submitted the measures to the government, which is calling for evidence on freight and logistics and the planning system.
The proposals suggest:
- Implementing a national policy recognising industrial and logistics facilities as critical national infrastructure, and introducing guidance which recognises the importance of wider supply chain employment and the indirect gross value added (GVA) as part of the wider planning balance;
- Utilising Savills and St Modwen Logistics’ “suppressed demand” model within national planning practice guidance as the basis for assessing future demand for logistics space;
- Requiring local authorities to set five-year employment land supply targets, mirroring their approach to residential land supply;
- A more effective approach to strategic planning, favouring the reintroduction of a strategic tier of planning, helping to broaden planning authorities’ scope of considerations beyond housing market areas and travel to work patterns when assessing potential new logistics developments; and
- Implementing a government-led training programme to upskill local government planners, local members and planning inspectors on commercial markets and the key trends and market conditions that influence future logistics demand.
According to analysis undertaken by the duo, historic land constraints have suppressed industrial demand by 29% over the past decade.
National availability was consistently below an 8% equilibrium rate – the level at which supply and demand are considered to be in balance – during the period, leading fast-growing firms to halt their expansion plans and creating inefficiencies in supply chains.
Savills calculates that annual demand for new logistics space exceeds the delivery of new facilities by 58%.
The pair said the number of people employed across the sector has grown by 30% in the past decade, compared with 15% for the economy as a whole, while average pay within the sector is higher in all regions of England compared with respective average regional earnings.
The two firms also pointed to increases in higher-skill roles, typically associated with professions relating to tech advances in the sector, and in office-based roles, driven by businesses consolidating their office and industrial operations under one roof.
St Modwen Logistics senior director of planning Richard Hickman said: “Logistics is a high-productivity and high-growth sector and one of the engines of the national economy, supporting an increasing number of high-skilled jobs across the country.
“The policy changes we recommend would unlock the delivery of high-quality new warehouse space in the locations where it is most needed.”
Savills director of economics Mark Powney said: “The logistics sector has been the fastest growing commercial sector in the UK for over a decade. Jobs in the sector pay better than the national average across an increasingly diverse range of occupations.
“It is time the planning system takes measures to plan proactively for commercial uses in order help our struggling economy. As part of this, improving the way we plan for the strong demand from logistics occupiers must be a major focus.”
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