Local Authorities need to work more collaboratively to agree and allocate employment space according to need
25 February 2019 - Rosemary French OBE
It is exciting that over 4.7m sq. ft of additional business park space is planned for the Gatwick Diamond economic area. Exciting because this level of development has not been seen for at least 20 years; and encouraging that local councils recognise the benefits that new business attracted to the area will provide jobs for the thousands of new homes being built; will return prosperity to their high streets; and in several cases where the councils have actually bought the land, or entered into joint ventures, will provide a much needed source of income in times of public sector austerity.
However, I am concerned that too much focus has been placed on building office space and not nearly enough on industrial units. The Gatwick Diamond economic area grew as a result of the relocation of London businesses after the war to Manor Royal business district in the new town of Crawley, now one of the biggest business parks in the UK. These manufacturing businesses have grown into world leading high tech businesses with considerable R&D, employing highly skilled and well paid staff across the medical, pump, aviation, environmental and digital technology sectors. These businesses have spawned a local supply chain of smaller manufacturers, professional and business services, and knowledge businesses within a 30 mile radius.
Despite Brexit anxiety, despite poor public infrastructure, appalling parking provision and in the face of adversity at so many turns, these businesses have continued to grow, export, train and create more jobs. They need additional space and the anticipated new business parks should provide that. Yes, they do need office space but incorporated within or above manufacturing space. I agree there are many professional, business and digital technology businesses which will jump at the opportunity to occupy the high rise office blocks. Of course, we need to provide these. But there needs to be a balance which reflects our supply chain. A balance of additional industrial space alongside new office space.
The second issue with this planned new commercial space is that developers prefer to offer leasehold and little or no freehold space. So many growing businesses like to buy their buildings as a form of pension and long term asset. The planned offer will continue to frustrate new occupiers who want to locate here, and existing freehold owner occupies needing to expand but can’t due to lack of options.
Of course, I also realise that the cost of land is connected to the drive to build high rise office blocks like Chiswick Park, returning rents twice or three times as high as industrial space. But there is a risk that these remain empty. I have already noticed refurbished high quality office blocks still unoccupied for too long.
The cost of land is also driven by the planning permission given. If planning committees decide that a piece of land should be given permission for business use and not industrial use, then the value of the land soars. High rise office buildings will bring in higher rents for any purchaser. But some planners are loathe to agree to industrial use. Are we in this position because too many councillors perceive manufacturing to be a dirty, unwelcome activity? The reality is that the high tech manufacturing workspace is probably cleaner than most folks’ kitchens! Folk that may well use that well known £100 toaster, rely on the diabetic pens and stoma bags, or whose life is saved by the radiotherapy equipment that is designed and manufactured here!
First published in South East Business Magazine