The Gatwick Diamond: the next three years
22 June 2017 - Rosemary French
The Gatwick Diamond is in its 15th year and we are about to agree our Strategic Plan to 2020. The research from both Centre for Cities and Grant Thornton, will provide evidence for our direction over the next three years.
The following is taken from a speech by Rosemary French (Executive Director) given at the Gatwick Diamond Economic Forum (15 June 2017).
It is good to hear from Centre for Cities that the Gatwick Diamond economic area remains one of the UK’s best performing areas. Way back in 2007, our original Futures Plan told us, that the GVA for the area was £13.8 billion. Now ten years later, the Gatwick Diamond area has reached £24 billion, a 74% increase. The area has continued to grow despite the recession, austerity and little infrastructure investment, except by the airport.
The Gatwick Diamond has consistently outperformed competing areas and remains a favoured place for businesses to locate, and grow. But, the report also demonstrates some of the pressures that businesses in the Gatwick Diamond face.
We are losing 112,000 commuters, almost a third of our working residents to work outside of the Gatwick Diamond. Although another 100,000 commuters travel into the area to work. We must do something to change this. It was also a surprise to me that our percentage of London commuters is almost double that of the Thames Valley. And yet the economic areas have very similar profiles with an international airport, strong motorway and rail links and a diverse business offer. Such out commuting is causing a considerable pressure on both our infrastructure and our ability to recruit staff.
We currently do not have a satisfactory answer WHY?
How DO we encourage people to work closer to home?
Small Office Space in Town Centres
One answer is to increase the number of knowledge intensive business service jobs. If we want to achieve that, we will need more employment space close to rail stations with good road links – in other words our town centres. And that employment space needs to include sufficient small office space. We need to attract business that are finding London prices too high and would prefer to be based in the Diamond at lower cost and without the commute.
Government’s drive to commandeer office space for housing under PDR rights means that we have lost so much of that space already. Town centres are at risk of being empty during the day when the shops and cafés could be vibrant with office workers. My question is whether we can recover from that.
When the review of PDR comes up, which I am assured by a local MP will be soon, we must provide evidence of the negative effect on our economy. We must lobby for its end. We must not make it easy for developers to make a mint converting employment space into housing. It is such a short-term view and will only end up in increased infrastructure congestion. We must work towards a stronger ‘work local, live local economy’.
The good news is that Burgess Hill, Crawley and Horsham town centres are being regenerated with considerable Coast to Capital and West Sussex County council infrastructure funding and new office space plays a big part in these. But what about our other town centres such as East Grinstead, Epsom, Dorking, Leatherhead, Haywards Heath and Oxted which also need help?
Retain our Young People
Another answer would be to encourage our young people not to leave the area at university age because they will be gone, either for ever or until they return with children 20 years later. That is a lost generation of skilled employees to our businesses.
Most parents want their children to study for a degree. But parents and students now have an option which will mean that they could remain in the area and will not incur a massive debt.
I am referring to Degree apprenticeships. Designed by businesses with universities to create a Degree which is relevant and current for today’s industries. I first came across these some years ago when Nestle launched their business degree apprenticeships. Now government’s Apprenticeship Levy means that big businesses can recoup 90% of the whole £9,000 fee for degree apprentices. And even better, small businesses which do not pay the apprenticeship levy, benefit by not paying any of the fees at all. Of course, this applies to all apprentices at any level but I believe that it will be degree apprenticeships that could go some way to fill that commuting gap of higher level skills.
The Degree Apprenticeship standards are coming through the system and being approved. But our problem is that parents do not know about them nor understand them. Schools will have a big role to play in this. As will the Careers and Enterprise Company. But there is a big culture change that will be necessary. Whatever way you look at it, apprenticeships are still seen as second class by most British parents. It is not like in Germany where they are revered.
The next problem is that there are some significant gaps in degree apprenticeship provision. For example, there are 6 engineering degree apprenticeships approved. But when I spoke with a local HR Manager of a large engineering manufacturing company, she wanted a specific combined Mechanical and Electronic Engineering Degree apprenticeship. I told her that can be solved by getting together 10 businesses who have the same need and designing such a degree with universities. That excited her so much that she went on to ask if she could also have a degree apprenticeship in Logistical Planning! I reckon that many universities already have modules that can be configured and combined to create these degrees.
Of course, large companies like this are bound to be keen because they have already paid the fees in the Apprenticeship Levy which they will lose entirely if they do not spend it. Secondly, once they have an undergraduate in their company and integrated them into the company culture, they will have a loyal skilled employee at the end of the four-year degree. And at the end of those four years they will have employability skills that few normal graduates have at the end of their degrees, as employers keep telling us.
And small companies will be keen too because they have no fees to pay.
I am keen because we will have retained university quality young people in the Gatwick Diamond. They will probably stay with their parents to begin with but then, as the monthly salary rolls in they will rent their own place and create their own life in the area and hopefully stay.
And that means we will have a bigger pool of potential skilled employees.
There is one good piece of local news which can be used as best practice while promoting degree apprenticeships to schools, parents and businesses. On my return, I was delighted to learn that the first tranche of 20 students have started, on software engineering degree apprenticeships with 10 companies. This was very much led by the University of Chichester reaching out to offer this degree apprenticeship to local businesses. And well done for their speed in reacting to a much and often articulated need by local IT and software companies for employees.
Students must spend one day a week or 20% of their time at the university. This is a bit tricky if your business or employee is not on an obvious transport link to say for example the University of Chichester. It is not too easy for a Reigate company to reach the Bognor campus so if Canon decided they wanted to join in, it could be a problem! So, I am exploring how difficult or easy it would be for FE colleges to deliver software engineering degree apprenticeships in collaboration with Chichester. FE Colleges already do ordinary degrees in collaboration with universities such as nursing degrees so it must make sense.
But other local universities are being slow in picking up degree apprenticeships. It is all new, I know, but we have been expecting it and we can now get on with it. So, I am already hassling other universities to get going with their degree apprenticeship offer.
But we all need to work together on this. I need your help in talking to businesses, talking to parents, upselling degree apprenticeships, working out what works for them, encouraging other universities to get on board.
Centre for Cities did not talk much about our many business parks and the role they play, other than Manor Royal. These also have a big role to play in attracting knowledge intensive jobs in both high value manufacturing businesses with research and innovation centres of excellence like Elekta and Edwards Vacuum; and in the Business Services sector.
Soon the new science park at Novartis will certainly be a draw for knowledge intensive jobs. As will the, just approved, North Horsham business park and, in years to come, the anticipated Horley business park.
However, we should not expect a rush of foreign inward investment for the next two years at least because of Brexit uncertainty. Until post Brexit, we should not spend an inordinate amount of time chasing foreign inward investment. I suggest we should aim to retain businesses in the Gatwick Diamond by working together to help them grow. We cannot afford any more lost Legal and Generals, Aviva’s and even Robert Dyas. All long-term resident businesses, all gone. It reminds me of ten years ago when Pfizer and GSK suddenly upped sticks and left.
Another way to attract a large skilled workforce is to improve our transport connectivity through investment in road and rail. Coast to Capital are launching a campaign to find a way to improve the East Croydon junction with a flyover. This will enable trains to move faster on to London. The Gatwick Growth Board led by Stephen Norris and Tessa Jowell has launched a study into transport infrastructure needs in the area which should also come up with recommendations.
The new franchisee on the Reading Guildford line has announced a direct route from Reading though Redhill to Ashford Kent which should bring in more employees from both directions. Work will start soon on the M23 Smart Motorway concept.
And we will have trains to London every two minutes in 2018 through Gatwick.
All good stuff but it is not enough. Not nearly enough. What about the A27 which could bring employees from the coast? What about a cycle route from Crawley to Horsham? What about the A24 bottleneck north of Horsham. What about decent road access to East Grinstead.
Why do we have to accept that billions will be spent in the North and Midlands on infrastructure as outlined in the government’s Industrial Strategy? It is an old, old record that says do not neglect the south, the engine of the UK!
So, yes, the Gatwick Diamond economic area looks good currently, very good. High GVA, high productivity, a highly skilled workforce. But it could all turn on a sixpence. We must be vigilant. We cannot be complacent.