Barratt Developments socio-economic footprint FY2017

Transcription

1 Barratt Developments socio-economic footprint FY2017 Output descriptions report September 2017

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3 Introduction This report has been prepared by Lichfields to accompany the Barratt Developments PLC ( the Group ) socio-economic footprint for the financial year ( FY2017 ). The purpose is to provide supplementary description and commentary of the various social, economic and environmental outputs generated by the Group s activities, and how these have been derived. Background The analysis of Barratt s socio-economic footprint across the UK economy follows on from the economic footprint analysis undertaken by Lichfields for Barratt in 2013, 2014, 2015 and Although Barratt regularly assesses the economic benefits of single housing developments as part of the planning process, the 2013 assessment was the first time this type of analysis had been undertaken to illustrate the entirety of Barratt s economic footprint at a national level. Since then, the range of indicators reported has been expanded to help measure some of the social and environmental impacts of Barratt s operations. The assessment draws upon data collected through the internal Corporate Sustainability Questionnaire ( CSQ ) which gathers information from each of the individual trading divisions, and well as data held by Group Finance, Group Commercial, Group Procurement and elsewhere. This data has been supplemented by reference to published research, national statistics, and datasets held by such companies as Experian, to estimate these socio-economic impacts. The analysis provides only a partial snapshot of the ways in which Barratt s operations contributes to the UK economy and the local communities in which it operates, and the methodology and output indicators will continue to be developed in future years. 1

4 Investing in new homes New dwellings The number of new dwellings constructed across Barratt schemes in FY2017 was 17,395, including 750 dwellings built through joint ventures. Of these, 3,488 (including joint ventures) were affordable units. These indicators are based on data collected by Group Finance. Land development The upfront costs associated with the development of new housing includes a number of key land investments such as land acquisition costs, which is estimated to equate to 1.0 billion for Barratt schemes in FY2017. Approximately 41% of Barratt s legal unit completions in FY2017 were built on previously developed land (i.e. brownfield sites). These indicators are based on data collected by Group Finance. Camp Hill, Nuneaton 2

5 Employment and skills development Employment The 53,400 jobs generated by Barratt s development activities is a summation of the jobs directly supported by Barratt, its sub-contractors, and the suppliers (for example of construction materials and equipment), as well as induced jobs that are estimated to be supported in the economy through the wage spending of these workers in shops, services and other businesses throughout the UK economy. When compared with the 17,395 new homes delivered by Barratt in FY2017, the combined effect of direct, indirect and induced employment is equivalent to 3.1 jobs per dwelling. The total employment impact of Barratt s development activities is estimated based on the following data sources and assumptions: 1. Direct Barratt jobs are based on the data collected by Group Finance and represent the average number of Barratt employees during FY Sub-contractor jobs are based on the uplift in the total number of subcontractor companies with which Barratt trades in FY2017 (a total of 6,500), assuming the average number of workers employed by these companies is equivalent to 2013 levels (i.e employees per company). 3. Supplier jobs are based on the uplift in the number of supplier companies with which Barratt trades in FY2017 (a total of 5,613), assuming the typical number of workers supported in these firms is equivalent to 2013 levels (i.e employees per company). 4. Induced jobs are based on an employment multiplier of 1.64 to capture the additional level of employment supported in shops, services and other businesses in the national economy from the wage spending of those workers involved with the developments (i.e. Barratt workers, subcontractors and suppliers) 1. 1 The employment multiplier of 1.64 is based on the regional employment multiplier of 1.44 provided in the HCA Additionality Guide (2014), with an uplift made to the multiplier to reflect the national scale of impacts. Economic output The overall employment impacts of Barratt s development activities generate a significant amount of economic output in the national economy, equivalent to approximately 3.3 billion of Gross Value Added (GVA) in FY2017. GVA is a measure of the value of goods and services produced in an area, industry or sector of an economy. The 3.3 billion relates to all jobs supported by Barratt, its subcontractors and suppliers, as well as the induced jobs supported in shops and services from increased wage spending. This estimate is based on the latest GVA per worker averages produced by Experian which are applied to the different types of employment supported by Barratt. Construction GVA is used as a proxy for Barratt s directly employed site based construction staff as well as subcontractor and supplier employment. A blend of office based sectors 2 is used as a proxy to estimate the GVA generated by the remainder of Barratt s directly employed staff. This provides an estimate of the overall economic output (measured by GVA) contributed by Barratt s operations in FY2017. Skills development Barratt is committed to developing the skills of its employees and provides important opportunities for younger people and those entering the labour market for the first time. A total of 184 graduates, trainees and apprentices were employed directly by Barratt in FY2017. This indicator is based on data collected by Human Resources. Supply chain networks The 6,500 subcontractor companies supported by Barratt are employed during the construction phase to build out the residential schemes, while the 5,613 supplier companies support these building activities by providing the materials, equipment and services required during construction. These indicators are based on data collected by Group Finance. Some 90% of the materials used within Barratt schemes are sourced from manufacturers based in the UK. This indicator is based on data collected by Group Procurement. 2 Comprising real estate, professional services, admin & support services, telecoms, computing and IT, media activities, finance and insurance activities. 3

6 Supporting public services SOHO 13, Central London Tax payments The operational and development activities of Barratt in FY2017 generated around million of tax revenue, in the form of Corporation Tax, National Insurance, PAYE, Stamp Duty Land Tax and local Council Tax on new dwellings. The estimate of Corporation Tax, National Insurance, PAYE and Stamp Duty Land Tax generated by Barratt in FY2017 is based on data provided by Group Finance. The Council Tax generated by legal completions in FY2017 is estimated by Lichfields by applying the average national charge for 2016/17 to the dwellings built during FY2017 and profiled to Council Tax bands based on individual unit sales values (provided to Lichfields by Group Finance). New Homes Bonus The New Homes Bonus matches for a six year period the increase in Council Tax income from new homes, or homes brought back into use, with a premium payable on new affordable units. Housing development undertaken by Barratt in FY2017 is estimated to have generated New Homes Bonus payments of approximately million, using assumptions from the Government s latest official New Homes Bonus calculator (December 2016). This estimate is based on the amount of Council Tax generated by the new homes built during the FY2017 year, and a premium is paid for each affordable unit constructed (at a rate of 350 per affordable unit). These New Homes Bonus payments are then profiled over a six year period. It should be noted that the Government recently consulted on a number of options for changes to the New Homes Bonus to better reflect authorities delivery of new housing. In 2016, the Secretary of State for Communities and Local Government announced that from , New Homes Bonus payments would be made for five, rather than six years, and that the payment period would be reduced again to four years from He also confirmed that from 2017 a national baseline for housing growth would be introduced of 0.4%; Bonus payments will only be paid on local area dwelling stock increases over and above this 0.4% benchmark. 4

7 Building stronger communities Apprentices at Barratt North East Resident expenditure The amount of spending in shops and services by residents of the new homes completed by Barratt in FY2017 is estimated at million, supporting in the region of 2,926 jobs within businesses throughout the UK economy. This estimate is calculated by applying average household spending levels derived from the ONS Family Spending Survey (2016 edition) to the number of completed units in FY2017 and assuming that a share of this spending is captured within shops and other services 3. These expenditure levels can then be applied to a national average turnover to job ratio (taken from the ONS Business Population Estimates for the UK and Regions 2016) to estimate the number of jobs in shops and services that could be supported by this additional expenditure across the UK economy. Community contributions The development schemes built by Barratt in FY2017 not only provide new housing units, but also accommodate a number of community facilities, including school places for 3,087 students and 44 local facilities including sports and leisure, health, youth and community centres. Alongside direct provision of new community facilities, in FY2017 Barratt also made contributions to local authorities in the form of Section 106 and equivalent contributions totalling million million was also spent on physical works benefiting local communities including highway and environmental improvements and community facilities. These indicators are based on data collected by the CSQ. 3 National average household expenditure levels per week for different socio-economic groups is provided in the ONS Family Spending Survey (2016 edition), including 455 for the All Households group and 340 as an average across the Constrained city dwellers and Hard-pressed living groups. 4 This figure for FY2017 includes 20.4 million of Community Infrastructure Levy (CIL) payments. 5

8 Safeguarding the environment Barratt supported the planting and retention of 617,708 trees and shrubs in FY2017, delivering a positive impact to local environmental conditions. In addition, 59% of all new developments incorporated the use of above ground landscape-led Sustainable Urban Drainage System (SUDS) solutions to reduce the potential impact of surface water drainage discharges. These indicators are based on data collected by the CSQ. Barratt schemes have integrated a number of measures to reduce the environmental impact of development during both the construction and occupation phases, including recycling 95% of all construction waste. Waste generation has reduced in the year to 5.74 tonnes per 1,000sqft, and CO2e emissions from construction have also reduced to around 2.17 tonnes per 1,000sqft. As a result of Barratt schemes delivered in FY2017, 430ha of greenspace was created through the provision of public open space and private gardens. These indicators are based on data collected by the CSQ. Hollygate Park, Cotgrave 6

9 Comparing performance against FY2016 The table to the right provides a comparison of the various FY2017 socio-economic indicators with the previous reporting year (FY2016). Some of the socio-economic impacts resulting from Barratt s activities have decreased in scale between FY2016 and FY2017, partly reflecting a number of changes to the questions, definitions and guidance provided in the CSQ this year. Socio-economic indicator FY2016 FY2017 Investing in new homes Employment and skills development Supply chain networks Supporting public services Building stronger communities Safeguarding the environment New dwellings constructed (inc Joint Ventures) 17,319 17, % + / - % Change Affordable dwellings constructed (inc Joint Ventures) 2,969 3, % Land approved for investment 1.1bn 1.0bn -9.1% Barratt homes built on previously developed land 48% 41% -14.6% Direct, indirect and induced employment supported by Barratt, its subcontractors and suppliers 55,614 53, % Number of jobs per new dwelling % Economic output (measured by GVA) generated by direct, indirect and induced employment 3.1bn 3.3bn +6.5% Graduates, trainees and apprentices employed directly by Barratt % Subcontractor companies supported 6,846 6, % Supplier companies supported 5,905 5, % Proportion of components manufactured in the UK 90% 90% - Tax generated by Barratt s activities (including Corporation Tax, NI, PAYE, SDLT and local Council Tax) 674.2m 652.7m -3.2% New Homes Bonus payments generated by new homes built (6 year payment) 140.1m 144.6m +3.2% Additional spending in shops and services by residents of new homes 269.3m 266.4m -1.1% Retail and service related jobs supported by this spending 3,113 2, % Local contributions (including affordable housing sales and s106 equivalent contributions) 411.7m 557.9m +35.5% Expenditure on physical works benefiting local communities 59.2m 38.0m -35.8% School places provided 4,382 3, % Local facilities provided (including sports and leisure, health, youth and community centres) % Trees or shrubs planted or retained on developments 638, , % Greenspace created through public open space and private gardens 521ha 430ha -17.5% Tonnes of construction waste generated per 1,000sqft % Tonnes of CO2e emissions from construction per 1,000sqft % Proportion of construction waste recycled 95% 95% - Proportion of developments using above ground landscape-led Sustainable Urban Drainage System (SUDS) solutions 73% 59% -19.2% 7

10 Contacts Speak to your local office or visit our website. Bristol Andrew Cockett Leeds Justin Gartland Newcastle Michael Hepburn Cardiff Gareth Williams London Ciaran Gunne-Jones Thames Valley Daniel Lampard Edinburgh Nicola Woodward Manchester Michael Watts Lichfields is the trading name of Nathaniel Lichfield & Partners Limited. Registered in England, no Registered office: 14 Regent s Wharf, All Saints Street, London N1 9RL Nathaniel Lichfield & Partners Ltd All rights reserved.