GVA Impacts of Major Transport Schemes Final Report West of England Authorities. 21 December 2012

Transcription

1 GVA Impacts of Major Transport Schemes West of England Authorities 21 December 2012

2 Notice This document and its contents have been prepared and are intended solely for the West of England Authorities information and use in relation to the study of GVA impacts of major transport schemes. Atkins Limited assumes no responsibility to any other party in respect of or arising out of or in connection with this document and/or its contents. This document has 88 pages including the cover. Document history Job number: Document ref: Revision Purpose description Originated Checked Reviewed Authorised Date A For Issue JFC KQ SS/TM JFC 21/12/12 Client signoff Client West of England Authorities Project Document title GVA Impacts of Major Transport Schemes GVA Impacts of Major Transport Schemes Job no Copy no. Document reference Atkins GVA Impacts of Major Transport Schemes 21 December 2012 i

3 Table of contents Chapter Pages 1. Introduction Introduction Background Objectives of this Study Overall Approach Structure of this Report Growth Prospects in the West of England Introduction and Sources of Evidence Growth Prospects West of England Economy Summary of Key Issues Stakeholder Consultations Introduction West of England Overall Strengths and Challenges Business Performance and Constraints to Growth Current Transport and Connectivity Issues Future Challenges Major Transport Schemes Summary of Key Issues Transport in the West of England Introduction Connectivity and the West of England Economy Connectivity and Growth Issues in Specific Areas Summary of Key Issues Major Transport Schemes in the West of England Introduction Strategic Case Accessibility Impacts of Major Schemes Impacts on Growth Areas Scheme Costs Summary of Key Issues Economic Impacts Introduction Standard Economic Appraisal Productivity Impacts Employment Impacts GVA Return on Expenditure Summary of Key Issues Conclusions and Recommendations Introduction Transport is a barrier to growth The transport schemes have a very strong strategic case The transport schemes will improve business productivity The transport schemes will unlock significant growth The transport schemes will deliver very high returns on investment 69 Atkins GVA Impacts of Major Transport Schemes 21 December 2012 ii

4 Appendices 70 Appendix A. Evidence from Other Economic Impact Studies 71 A.1. Evidence from Research Studies 72 A.2. Evidence from Core Cities 75 Appendix B. Stakeholder Consultation 79 B.1. Overview of stakeholder groups 79 B.2. List of stakeholders consulted 80 Tables Table 1. Major Transport Schemes in the West of England 1 Table 2. Socio-Economic Overview of the West of England 17 Table 3. West of England Major Transport Schemes: Strategic Case 45 Table 4. West of England Major Transport Schemes: Accessibility Impacts on Growth Areas 52 Table 5. Major Transport Schemes: Costs 53 Table 6. Major Transport Schemes: Standard Economic Appraisal 56 Table 7. Major Transport Schemes: Productivity Impacts 56 Table 8. Major Transport Schemes: Estimated Productivity Impacts in Table 9. Gross Numbers of Jobs potentially unlocked in 2030 due to Major Schemes 60 Table 10. Gross Numbers of Jobs potentially unlocked in Growth Areas by Table 11. Net Numbers of Jobs potentially unlocked in Growth Areas by Table 12. Assumed Sector Mix in each Growth Area 63 Table 13. Assumed GVA per Job 63 Table 14. Estimated Net Additional GVA (in 2030) in Growth Areas 64 Table 15. Estimated GVA Return on Expenditure 65 Figures Figure 1. Major Transport Schemes in the West of England 2 Figure 2. Impacts of transport change on GVA 6 Figure 3. Future Congestion (2031) in the Bristol Urban Area 32 Figure 4. AM Peak Rail Journey Time Catchments to Temple Quarter Enterprise Zone 34 Figure 5. AM Peak Bus Journey Time Catchments to Temple Quarter Enterprise Zone 35 Figure 6. AM Peak Car Journey Time Catchments to Temple Quarter Enterprise Zone 36 Figure 7. Logic mapping for major transport schemes in the West of England 44 Figure 8. Impacts of Weston Package 48 Figure 9. Impacts of Rapid Transit Schemes 49 Figure 10. Approach to Calculation of Employment Impacts 58 Atkins GVA Impacts of Major Transport Schemes 21 December 2012 iii

5 1. Introduction 1.1. Introduction In October 2012 Atkins was commissioned by the West of England authorities Bath and North East Somerset, Bristol, North Somerset and South Gloucestershire to assess the potential impacts of major transport schemes on Gross Value Added (GVA), economic activity and regeneration in the West of England. These schemes include: Bath Transportation Package; Weston Package; Ashton Vale to Temple Meads Rapid Transit; North Fringe to Hengrove Package; South Bristol Link; Greater Bristol Metro Phases 1 and 2; New Rail Stations Package; Temple Quarter Transport Package; and M49 New Junction. These schemes are presented in Figure 1 (overleaf) and described in more detail in Table 1. Table 1. Major Transport Schemes in the West of England Scheme Bath Transportation Package Weston Package Ashton Vale to Temple Meads Rapid Transit North Fringe to Hengrove Package South Bristol Link Greater Bristol Metro Phase 1 Greater Bristol Metro Phase 2 New Rail Stations Package Temple Quarter Transport Package M49 New Junction Description Improvements to three Park and Ride facilities and nine bus routes in and out of the city, city centre improvements and better signage (new signs on key routes inwards directing motorists towards the centre and parking sites). This scheme is under construction. Improvements to M5 Junction 21, A370 Gateway improvements that include widening Marchfields Way, and a package of enhancements to Worle station including a new car park, bus interchange on each side of the station, extended and / or new bus services to the station and measures to improve bus reliability. This scheme has Department for Transport (DfT) Full Approval. One of the links within a new rapid transit bus network which aims to provide a faster and more reliable service, AVTM will run from the Long Ashton Park and Ride site towards the city centre which it serves via an anti-clockwise loop. Work on the ground is expected to commence in Rapid transit link connecting employment hubs such as Cribbs Causeway, Aztec West, Science Park at Emerson s Green and Bristol City Centre with key residential areas in the north and south of the city. Work on the ground is expected to commence in The SBL will enable rapid transit services to operate between the A370 Long Ashton Park & Ride site and Hengrove Park. It will see the creation of a new single carriageway road which will have bus-only lanes and mixed-use walking / cycling paths along part of its length. Work on the ground is expected to commence in Half-hourly train services for the Severn Beach line, local stations between Temple Meads, Bath Spa and Weston-super-Mare and the reopened Portishead line. Phase 1 was included as a priced option within the recent Great Western Rail Franchise tender documents. This scheme is in development. Half- hourly train services to Yate and hourly services on the reopened Henbury line, with additional stations at Horfield and Ashley Down. This scheme is under investigation. New rail stations at Saltford (between Temple Meads and Bath Spa), Ashton Gate (on the reopened Portishead line) and Corsham (between Bath Spa and Chippenham). These stations would form part of the Greater Bristol Metro. This scheme is under investigation. A package of investment to support access to the Enterprise Zone, in particular to increase capacity on the surrounding highway network and improve public transport and pedestrian access. This package is currently under detailed investigation. For this study, an indicative package was tested. A new intermediate junction on the M49 linking to the proposed Avonmouth / Severnside Enterprise Area. This scheme is currently under investigation. Atkins GVA Impacts of Major Transport Schemes 21 December

6 Figure 1. Major Transport Schemes in the West of England Atkins GVA Impacts of Major Transport Schemes 21 December

7 This report describes our findings on the potential impacts of these schemes, both individually and collectively, across the West of England as a whole and in helping to unlock growth in the sub-region s priority areas for growth Background Local authorities and businesses in the West of England are working together, through the West of England Local Enterprise Partnership (LEP), to support economic growth and attract new investment and jobs to Bristol, Bath, Weston-super-Mare and the surrounding areas. The LEP has identified a vision to encourage sustainable economic growth and the creation of substantial numbers of new private sector jobs by: Supporting growth of key sectors: including creative and media, advanced engineering, microelectronics, environmental technologies and tourism; Driving innovation and creativity and the development of new technologies, products and services; People: skilling the workforce to meet the needs of businesses, retaining existing talent, raising aspirations and marketing talent to inward investors; Business: assisting business start-ups and growth; Place: making the West of England highly attractive to inward investors and existing companies by securing improved transport, improved infrastructure and access to premises, facilitating new housing and maintaining high quality of life to retain and attract highly skilled workers. This vision is set out in the West of England LEP Business Plan 1, which also identifies the measures that will be used to determine its success: 95,000 new jobs by 2030; 3.4% annual growth in Gross Value Added (GVA) by 2020; Over 1 billion of private sector investment over the next 5 years; A well-motivated workforce with the skills to meet business need; and The foundations for a long-term sustainable economy. The Business Plan highlights the importance, amongst other factors, of taking action to tackle barriers to growth, including transport. It also highlights the importance of maximising the potential of the West of England s Enterprise Zone and Enterprise Areas. Improving Transport Infrastructure is identified as the first action in the Business Plan, which includes delivery of the five existing major schemes 2, delivery of the West of England Local Sustainable Transport Fund (LSTF) project, input into the Greater Western Rail Franchise and technical specification for the electrification of the Great Western Main Line and development of the programme of further major schemes. The West of England s Enterprise Zone and Enterprise Areas will be pivotal to unlocking the future economic potential of the West of England: Bristol Temple Quarter Enterprise Zone: adjacent to Bristol city centre and encompassing Temple Meads railway station, this covers 70ha, will offer over 240,000 sqm office and mixed-use floorspace and has potential to create up to 17,000 new jobs over a 25 year period; Avonmouth Severnside Enterprise Area: an industrial area of international significance including the Port of Bristol, this includes 84ha in Avonmouth and 462ha in Severnside, with up to 1.6m sqm of logistics or industrial floorspace, with the potential to create 6,000-12,000 new jobs; Bath City of Ideas : following the riverside corridor westwards from the city centre, this comprises 98ha, with the potential for 200,000 sqm office space to accommodate high-value business sectors and the potential to create up to 9,000 new jobs; Science Park Enterprise Area / Emerson s Green Enterprise Area: adjacent to the A4174 Avon Ring Road, it is the home of the Bristol and Bath Science Park and will provide a focal point for businesses in the science, technology, creative and digital media sectors. Covering 45ha, it has capacity for 180,000 sqm floorspace and up to 7,000 jobs; 1 West of England Local Enterprise Partnership Business Plan , approved at LEP Board meeting on 8 December 2011, located at 2 The existing programme of major schemes is the Bath Transportation Package, Weston Package, Ashton Vale to Temple Meads Rapid Transit, North Fringe to Hengrove Package and South Bristol Link. Atkins GVA Impacts of Major Transport Schemes 21 December

8 Filton / A38 Enterprise Area: based on the existing advanced engineering cluster in the North Fringe, this includes 95ha developable area, with capacity for some 185,000 sqm floorspace and 7,000-12,000 new jobs by 2026; and Junction 21 Enterprise Area: this covers 72ha readily-available employment land directly adjacent to Junction 21 of the M5 in Weston-super-Mare. Development is already taking place on new office space and a new Business Quarter and there is an objective to deliver 10,000 jobs by Collectively, these locations are projected to deliver approximately 60,000 of the target for 95,000 new jobs in the West of England by The success of these areas is therefore central to the future economy of the West of England. In addition, there is a shared priority to secure the regeneration of South Bristol, with the objective of delivering 10,000 new jobs in this area. In planning new transport infrastructure in the West of England, it is therefore important to both address the barriers to growth caused by congestion and poor accessibility and to maximise the potential to unlock new jobs in these priority areas for growth Objectives of this Study The objectives of this study are to assess the likely impacts of the proposed transport schemes on GVA 3, the creation of new jobs and other quantitative and qualitative economic indicators to provide a compelling and evidence based case for funders and stakeholders. The study has two main aspects: Assessing the economic impact of a package of interventions across the West of England area; and Assessing the economic impact of a package of interventions on a particular location, and the contribution this would make to the delivery of job growth targets. The schemes assessed include: 1. Bath Transportation Package; 2. Weston Package; 3. Ashton Vale to Temple Meads Rapid Transit; 4. North Fringe to Hengrove Package; 5. South Bristol Link; 6. Greater Bristol Metro Phase 1; 7. Greater Bristol Metro Phase 2; 8. New Rail Stations Package; 9. Temple Quarter Transport Package; and 10. M49 New Junction. Assessments include the impacts of these schemes individually and combined at the West of England level and on the priority growth locations previously identified. In each case, there is a requirement to assess the overall GVA impact, the GVA return on capital investment, and the number of new jobs created Overall Approach The approach taken has been to identify lessons from previous studies, both within the West of England and elsewhere, and to draw on this experience in developing a robust but proportionate approach to assessing the potential impacts. This has included the following elements: Review of the standard approach to economic appraisal, used by the Department for Transport (DfT) in estimating economic impacts at the national level, and consider implications for the assessment of impacts in the West of England; Assessment of work previously undertaken to estimate potential impacts across the West of England; Review the emerging body of evidence from other studies undertaken elsewhere in the UK that point to best practice in the assessment of economic impacts at the city region level; 3 Gross Value Added (GVA) is a measure of the value of goods and services produced in an area, industry or sector of an economy. Atkins GVA Impacts of Major Transport Schemes 21 December

9 Research with a range of stakeholders to obtain detailed evidence on the extent to which the transport network is constraining growth in the West of England, together with evidence on how the package of schemes would help unlock growth; and Development of a tailored approach to assessing the extent to which the package of schemes will help unlock economic growth in the West of England. These elements are discussed in the following section Standard economic appraisal The Department for Transport (DfT) has long-established methodologies for assessing the impacts of transport investment on the national economy, which are based on the valuation of journey time savings and reductions in vehicle operating costs. These methods and the underlying theory are defined in DfT s WebTAG appraisal guidance 4, which is used as the basis for assessing the benefits of transport schemes in business cases to secure the funding of schemes. In addition, methodologies have been more recently developed to estimate wider impacts that were not previously taken into account in appraisal. These include taking account of: The effects of imperfect competition; Increased tax revenues to Government resulting from more people joining the labour market; and Benefits of business clustering and increased knowledge transfer through agglomeration of activity. This approach to the assessment of wider impacts is now part of mainstream transport appraisal 5 and is included in the calculation of overall benefits to inform business cases for schemes. WebTAG also includes guidance on assessing the potential impacts of transport interventions on employment in defined Regeneration Areas. This guidance is not considered further in this report as its objective is to assess the additional value of jobs locating in areas of deprivation and regeneration need, rather than elsewhere, making it less relevant for this study of impacts across the sub-region. Additionally, if a scheme does not impact on a defined Regeneration Area, there is no need for this type of assessment. The approaches described in WebTAG focus on net impact to the national economy and, as such, do not provide a description of the distribution of impacts and their implications for the economy of a sub-region such as the West of England. There is clear evidence that transport provision strongly influences land use activities, and improved accessibility results in changes in economic activity, with new employment sites and housing being attracted to an area as businesses and residents adjust activity in response to improved accessibility. It is therefore important to understand the distribution of economic impacts at the sub-national level as well as the net impacts forecast at the national level through the WebTAG approach. In particular, it is necessary to understand the benefits at the West of England level, with a particular focus on implications for GVA and job creation in the sub-region Evidence from the West of England The West of England has previously commissioned other studies to assess the economic impacts of major transport schemes in the sub-region. KPMG was commissioned in to undertake a wider economic impact assessment of a package of schemes and its report highlighted a number of important issues. Transport schemes impact on local economies in two ways: Improvements to the transport network reduce journey times (hence reducing business costs) and bring businesses closer to each other and potential employees, with agglomeration benefits resulting from increased clustering. These effects increase productivity of existing businesses through reduced business costs and improved knowledge transfer; and 4 WebTAG can be found at (refer to Unit 3.5: The Economy Objective ) 5 Guidance on the assessment of these wider benefits is in WebTAG Unit : The Wider Impacts Sub-Objective 6 Wider economic assessment of transport schemes in the West of England Partnership area, KPMG, 3 rd August 2010 Atkins GVA Impacts of Major Transport Schemes 21 December

10 Changes in the connectivity of different locations influence their relative competitiveness, which influences where businesses and households choose to locate. Improving the accessibility of a location would be expected to result in increased activity, with jobs and workers attracted from outside the West of England. KPMG considered both effects in its study. It considered the net national productivity effects using DfT s WebTAG approach to assessment of business time savings and agglomeration effects. Potential changes in the types and distribution of economic activity were also assessed. The figure below presents the approach that was taken to assess the overall impacts on GVA in the West of England: Figure 2. Impacts of transport change on GVA 7 The study assessed the combined impacts of the following schemes, which were at that time included within the Regional Funding Allocation (RFA) programme: Bath Transportation Package; Weston Package; Ashton Vale to Temple Meads; North Fringe to Hengrove Package; South Bristol Link; Portishead Rail Corridor; Greater Bristol Metro; M5 Junction 21 Bypass; Callington Road Link / A4 Bath Road Improvements; and Emerson s Green to Temple Meads Rapid Transit. The package of schemes assessed during the KPMG study therefore differs from the package under consideration during this new study. The first five schemes were successfully taken forward into the current major schemes for delivery during the current Spending Review period. However, substantial value engineering took place during the development of the Best and Final Funding Bids, so it is not possible to directly compare the schemes assessed in 2010 with those now being taken forward for delivery. The M5 Junction 21 Bypass, Callington Road Link and Emerson s Green to Temple Meads Rapid Transit are not being considered in this new study, whilst the Portishead Rail Corridor is now included within Phase 1 of the Metro scheme. In addition, the M49 New Junction and Temple Quarter Transport Package have been 7 Ibid., Figure 4 Atkins GVA Impacts of Major Transport Schemes 21 December

11 identified as key priorities during the last year, linked to the designation of the Enterprise Zone and Enterprise Areas. Nevertheless, the KPMG study provides an important evidence base and principles that should be taken into account in this new piece of work, including: There are clear links between transport supply and economic outcomes in different places across the sub-region: there are statistically significant links between connectivity to labour markets and to other businesses by car and public transport and the pattern of employment in different areas; These relationships were used to forecast how changes in transport supply could influence the levels of employment across the sub-region; The net increase in employment in the West of England, due to businesses relocating into the area from elsewhere, was then estimated on the basis of the proportions of jobs that are mobile between city regions in England; Using this approach, it was estimated that the transport projects could potentially unlock almost 9,000 jobs in the sub-region by 2016; Changes in business productivity were calculated from reductions in business time savings and agglomeration impacts; Total changes in economic output (GVA) were calculated from the changes in employment and productivity, using the approach shown in Figure 2; Using forecast GVA per worker for each sector, this was estimated to result in increased economic output in the West of England by around 637m in 2016, in 2006 prices; Not all of this increase in GVA would represent new national economic activity, as some will be due to a competitive response to changes in locational factors that attract businesses and jobs to the sub-region. It is assumed that these would re-locate from elsewhere in the UK. This would comprise over 90% of the overall GVA effect, equivalent to approximately 580m in 2016; However, the supply side effects from reduced journey times and increased agglomeration would result in an overall increase in productivity at the national level. This was estimated at around 9% of the total increase in GVA, or around 57m in 2016; and If it is assumed that 35% of GVA is taken in tax, the 57m increase in national GVA would result in an increase in tax revenue to the Treasury of around 20m per annum. The total discounted cost of the 10 schemes would be 361 million (discounted to 2006, in 2006 prices). On this basis, the total 637m increase in GVA in 2016 would represent an annual increase in GVA in 2016 of around 1.8 per unit of total discounted cost. The West of England used this evidence to support the Best and Final Funding Bids for the five major schemes to be funded in the current Spending Review period. The Strategic Case notes that these five major schemes alone are forecast to deliver additional economic output of 356m per annum in 2010 prices National research evidence and best practice As discussed above, DfT s approach to the assessment of impacts is focused on the benefits to the national economy, and the assessment of impacts at a sub-regional level is still in its infancy. However, a number of research studies have been undertaken in recent years and there is an emerging consensus on the issues that should be addressed. These include the following points: Studies have been undertaken on potential sub-regional economic impacts in a number of large urban areas across England, with a focus on the impacts of major road schemes and public transport projects; These have estimated the potential numbers of jobs that could be attracted to the area following improvements to the transport network, if all other requirements for the development (such as other infrastructure and a skilled workforce) were in place; Most of these approaches are based on establishing relationships between connectivity and economic density at a zonal level: following improvements to connectivity, these relationships are used to forecast economic density, hence potential numbers of jobs in each area. An assessment is then made of the proportion of jobs that could be considered to be footloose, i.e. with the potential to relocate to the area under consideration. The total number of jobs potentially attracted to the area is then estimated, together with resulting GVA; and Most of the studies have estimated the potential for several thousands of jobs unlocked in the areas benefiting from major transport investment, where the other conditions for development are met. Atkins GVA Impacts of Major Transport Schemes 21 December

12 However, in many cases, the study reports provide limited evidence about how improved transport accessibility would help unlock job creation in areas that have been targeted for regeneration and growth. Transport investment is most effective when aligned with regeneration and land use strategies and other interventions to promote growth, including skills and inward investment activities. It is therefore important to take a place-based approach to growth that sets out an integrated strategy to achieve the full growth potential of each area. Other studies have made allowance for businesses relocating into the area of study from other parts of the UK. The potential of businesses relocating to the area (from outside the sub-region) means that the scale of GVA impacts identified in the West of England is likely to be considerably larger than the net national benefits identified through the standard economic appraisal approach required by DfT. A summary of the current evidence from other economic impacts studies in provided in Appendix A. The studies undertaken elsewhere have highlighted that transport schemes are likely to have major impacts on employment GVA at the sub-regional level. These include the following headlines: In the case of the proposed Manchester Rail Hub, which is currently being progressed by Network Rail, annual GVA benefits are forecast to be billion in 2021 (in 2007 prices) due primarily to attracting new business to highly productive business locations; In the West Midlands, the extension of Midland Metro through Birmingham city centre is forecast to unlock 1,300 new jobs, whilst a wider package of extensions could unlock over 14,000 new jobs; In Nottingham, the extension of Nottingham Express Transit to the west and south of the city is forecast to result in the creation of up to 10,000 new jobs by In Manchester, the extension of Metrolink, with four new lines, is forecast to create more than 3,200 new jobs; In Leeds, the New Generation Transport rapid transit scheme is forecast to create around 4,000 additional jobs in Leeds city centre; and In South Yorkshire, the proposed rapid transit scheme linking Sheffield and Rotherham via the Don Valley is estimated to unlock 5,900 jobs, with a resultant 200m increase in regional GVA. These studies demonstrate that other major cities are forecasting large employment and GVA impacts from their programmes of transport investment. Although the studies have each adopted their own specific methods to forecasting the impacts, it is possible to benchmark the impacts of these investments on GVA and make judgements on the GVA return on investment. Key headlines from these analyses are as follows: Scheme Scheme Type Present Value of Costs Increase in GVA (per annum) Increase in GVA per Unit Cost Manchester Rail Hub Rail capacity 930 million 2.8 billion 3.0 Nottingham Express Transit Light Rail 500 million+ ~ 400 million <1 Sheffield Rotherham BRT Bus Rapid Transit 28 million ~ 200 million ~7 Major rail investment has the potential to deliver large economic returns, with the Manchester Hub delivering up to 2.8 billion in GVA uplift. The associated capital cost would be around 530 million and a total Present Value of Costs (including increased rail operating costs) would be around 930 million. This represents a high GVA return on investment, of around 3 additional annual GVA per unit of total discounted cost. Light rail schemes (Midland Metro, Nottingham Express Transit and Metrolink) are forecast to unlock the creation of several thousand new jobs in the cities served. Applying typical figures for GVA per worker, these could be expected to translate into additional GVA of around 500 million in the West Midlands, 400 million in Nottingham and 150 million in Greater Manchester. However, these should be considered alongside the high costs for light rail schemes: for example the cost of delivering the Nottingham scheme is in excess of 500 million, which would result in just under 1 additional annual GVA return per unit of discounted cost. Atkins GVA Impacts of Major Transport Schemes 21 December

13 The bus-based rapid transit projects in Leeds and Sheffield are also forecast to result in the creation of several thousand new jobs, with additional GVA of around 200 million in Sheffield. Capital costs for the Sheffield scheme are estimated to be 34 million, with a Present Value of Costs of 28 million. This indicates a high GVA return, of over 7 additional annual GVA per unit of discounted cost. This high figure reflects the importance of the rapid transit scheme in unlocking major development sites (and associated jobs) in the Don Valley Regeneration Area. This evidence indicates potentially very high annual GVA returns on investment from major transport projects in other major English cities. These are driven by attracting inward investment through improved accessibility and unlocking major development areas. These principles also apply in the West of England, particularly in terms of unlocking new development in the priority areas for growth in the Enterprise Zone, Enterprise Areas and Regeneration Area in South Bristol Stakeholder Perspectives It is important that the assessment of economic impacts is informed by the insights of those people and organisations with a detailed understanding of the operation of the West of England economy. These include the business community, representative organisations, property agents and those in the public sector with responsibility for economic development. These insights are important in complementing the more quantitative, model-based approaches outlined above. Discussions about the key factors that drive business growth and the scale of the problems on the transport network ensure that there is a real world assessment of why transport matters for the West of England economy. Furthermore, the insights are important in exploring how connectivity improvements will help unlock increased business productivity, attract inward investment and unlock new development sites. In-depth interviews have therefore been undertaken as part of this study to provide these detailed insights and to help inform the assessment of the potential impacts of the package of schemes Issues to be addressed in this study In considering the impacts of transport schemes on the economy of the West of England, it is necessary to take into account two key elements: Productivity changes (within the national economy): estimated on the basis of reductions in journey times for businesses, directly reducing business costs, plus agglomeration benefits through business clustering effects; and Relocation of businesses and jobs to the West of England: changes in connectivity of locations, which affects their competitiveness, influencing where businesses and households choose to locate. The first element (productivity changes) considers the net national impact on the economy and is addressed through the standard DfT WebTAG appraisal framework. Evidence on these impacts is available through a range of sources, including economic appraisal and business cases for each project. In some cases (for example the Temple Quarter EZ Transport Package), this information is not directly available, and an alternative approach is required to assess the impacts. The second element (relocation of businesses and jobs to the area) considers the impact of the changes on the West of England economy in particular and must take into account how the projects relate to the latest projections of economic growth in the area and the focusing of economic development in the Enterprise Zone (EZ) and Enterprise Areas (EAs). Approximately 60,000 of the forecast 95,000 forecast new jobs by 2030 will be focused on the EZ and EAs. There is also an expectation of potential to deliver a further 10,000 new jobs in the South Bristol regeneration priority area. The remaining balance (25% of the total) would be distributed across the West of England, including other parts of the main Bristol urban area, smaller towns and rural areas. For the purposes of our analyses, we therefore focus on the key areas defined by the EZ, five EAs and regeneration priority area. The focus of the analysis is on understanding the extent to which the economic potential of these areas will be constrained by future accessibility challenges, and the potential to unlock new development, jobs and economic activity through improved accessibility. This draws upon quantified evidence on the estimated impacts of improved accessibility in each area, but also complements this with indepth evidence from the research with stakeholders. Atkins GVA Impacts of Major Transport Schemes 21 December

14 1.5. Structure of this Report Following this introductory chapter, the report is structured as follows: Chapter 2 sets out the potential growth prospects for the West of England economy, based on its current economic performance and the ambitions from partners to support sustainable growth; Chapter 3 presents the findings from the detailed programme of qualitative engagement with a range of stakeholders to explore key issues, including the importance of the transport network to businesses, future challenges and constraints to growth, impacts of the transport schemes on connectivity, and the implications for current and potential businesses in the West of England; Chapter 4 discusses how current and future transport challenges in the West of England are likely to constrain growth in the sub-region, drawing on both existing sources of evidence and the findings from the stakeholder research described in Chapter 3; Chapter 5 provides an overview of the transport schemes themselves, including the strategic case for intervention, analysis of impacts of the schemes on accessibility in the sub-region and identification of potential impacts on the local economy; Chapter 6 discusses in detail the potential economic impacts. This draws on evidence that has already been identified in previous work to assess the net national economic impacts based on the standard WebTAG approach, and then identifies the ways in which the impacts of the schemes could manifest themselves in the local economy, particularly through unlocking new jobs in the sub-region; and Chapter 7 presents our conclusions and recommendations. In addition, the report includes technical appendices, as follows: Appendix A presents a summary of the key findings from the benchmarking and review of national best practice in assessing GVA and wider economic impacts of transport interventions; and Appendix B presents more detail of the approach to undertaking the stakeholder interviews. An Executive Summary of this report is also available, titled Unlocking Our Potential: The Economic Benefits of Transport Investment in the West of England 8. 8 The Executive Summary is located at Atkins GVA Impacts of Major Transport Schemes 21 December

15 2. Growth Prospects in the West of England 2.1. Introduction and Sources of Evidence Within this chapter, the policy context of the West of England and specific growth areas (EZ, EAs and regeneration priority area) are discussed with specific relevance to transport, employment and housing growth. Alongside this, an overview of the socio-economic character of the sub-region and the areas of study is provided, demonstrating the different characteristics of the growth areas. The study has drawn on a number of sources including key policy documents such as the West of England LEP Business Plan and the Core Strategies for Bath and North East Somerset, Bristol, North Somerset and South Gloucestershire. This chapter first sets out growth prospects for the West of England, drawing on perspectives from national growth policies, the shared priorities of the West of England and the specific objectives of specific areas as identified in the Core Strategies for the four authorities. The chapter then continues in setting out the key economic issues that need to be addressed, and the potential implications for the delivery of major transport infrastructure projects Growth Prospects This section considers prospects for economic growth, first drawing on national evidence and the emerging consensus on key drivers of growth, with a particular focus on the key issues of relevance to the West of England. This is then followed by consideration of key evidence and policies at the West of England level and consideration of specific issues identified in the Core Strategies for the four authorities National Picture Eddington Transport Study (2006) The Eddington Study sought to examine the long-term links between transport and the UK's economic productivity, growth and stability. It concluded that transport networks support the productivity and success of urban areas and their catchments by getting people to work, supporting deep and productive labour markets and allowing businesses within the area to reap the benefits of agglomeration. The issues raised in the Eddington Study are highly relevant to the current character and operation of the West of England. The area has a strong labour market and a business base with a balance between breadth and specialism of sectors (e.g. strong presence of finance, aerospace, advanced engineering and creative sectors), with strong clustering / agglomeration benefits that are well recognised in the sub-region. The strength of the sub-regional economy is balanced against the issues of congestion and connectivity that vary across different areas. These challenges are well recognised and the packages of transport measures seek to address congestion and improve connectivity in key areas such as Avonmouth / Severnside, Bath, Bristol city centre, the North and East Fringes, South Bristol and Weston-super-Mare. The packages have the potential to unlock labour markets, open up development sites and associated employment opportunities and improve connectivity across the sub-region. Commons Select Committee, Transport and the Economy Report (2011) The Commons Select Committee inquiry into transport and the economy reported in The report welcomed the Secretary of State s focus on improved transport to help support and stimulate the UK economy and to reduce the economic disparities between different parts of the country. It highlighted the major constraints to potential national growth caused by congestion and limited capacity on the UK s road, rail and air networks, and noted that, despite reductions in public spending due to the difficult economic conditions, investment in the transport system should remain a high priority in order to support economic growth. Atkins GVA Impacts of Major Transport Schemes 21 December

16 The West of England submitted evidence to the inquiry, demonstrating that additional transport investment is a key lever to drive the continued economic success of the area, enabling it to play a leading role in the UK s economic recovery and growth potential. The West of England authorities consider it is important that the area s growth potential is not constrained by poor transport infrastructure and services which adversely affect access to labour markets, hamper business productivity and create congestion. The submission drew on the findings from the wider economic assessment of transport schemes undertaken by KPMG in 2010, as discussed in Chapter 1 of this report. KPMG s study assessed how a programme of major transport schemes proposed in the area would support employment growth and increase business productivity. The assessment identified clear links between transport supply and economic outcomes, including links between connectivity (to labour markets and other businesses) and the pattern of employment in the area. This highlights that improved connectivity helps deliver employment growth and improved productivity. Lord Heseltine Review, No Stone Unturned in Pursuit of Growth (2012) This recently published review considers an economic plan for the UK to drive the generation of national wealth. Central to the report is consideration of the balance of economic development responsibilities between central government, local government and the private sector. The Review advocates the devolution of funding from central government to LEPs to enable economic development to be tailored to local challenges and opportunities. The Review supports the development of local economic plans and national level sector-specific policies. Critically it highlights the importance of maximising limited public money as a means to lever additional investment from the private sector. Localism is a key feature with local decisions and understanding noted as central to increasing capacity for growth at a local and subsequently at a national level. LEPs should develop business plans for their areas with a clear vision and goals. Each LEP should become the lead agent for competitive bids for all funding they would need to demonstrate clear objectives and vision, contribution to national aims and local support. The Heseltine Review points to an increasingly important role for natural economic areas to work together to drive growth, including a shared vision and business plan, effective partnerships between public and private sectors and improved coordination of funding to deliver growth objectives. The West of England should be well placed in this respect. Infrastructure Funding The national context for the funding of transport infrastructure is rapidly evolving. In 2011 the government signalled its intention to simplify local transport funding streams, to focus on maintenance and integrated transport block funding, the Local Sustainable Transport Fund and major scheme funding. However, this needs to be considered in the context of wider initiatives to support economic growth, including the Regional Growth Fund, Growing Places Fund and other mechanisms to unlock investment in infrastructure, together with more recent announcements on infrastructure funding. The Regional Growth Fund (RGF) is a 2.4 billion fund operating across England from 2011 to It supports projects and programmes with significant potential for economic growth that can create additional, sustainable private sector employment. Over 90% of Round 1 and Round 2 RGF projects and programmes have started while the successful Round 3 bids were announced in October 2012 and will receive a conditional allocation from the 1.05 billion of extra funding (subject to due-diligence). The West of England Local Enterprise Partnership was one of the successful Round 3 bidders, securing an allocation of over 50 million. Key projects that will benefit from this funding include the Temple Quarter Enterprise Zone and the Enterprise Areas in Bath and Weston-super-Mare. The Growing Places Fund (GPF) provides 500m to enable the development of local funds to address infrastructure constraints, promote economic growth and deliver jobs and houses. In the West of England, GPF has been pooled with the RGF award to form a Revolving Infrastructure Fund (RIF). The RIF enables the delivery of infrastructure required to unlock or serve development that will bring about economic and / or housing growth in the West of England. The revolving nature of the fund means that all funding released should be repaid to allow the money to be reinvested in other infrastructure projects. The Temple Quarter Enterprise Zone is a key project to benefit from this funding. Atkins GVA Impacts of Major Transport Schemes 21 December

17 Alongside these funding streams, in 2012 the Government announced funding for the Highways Agency for the Pinch Point Programme, which will tackle bottlenecks on the motorway and trunk road network. It was announced in October 2012 that the second stage of pinch point funding (worth 170 million) will enable the Highways Agency to deliver 57 vital road improvements to boost the economy, reduce congestion and improve safety. A third stage of projects will be announced in Within the West of England, projects to be funded in Stage 2 of the programme include improvements to M5 Junctions 16 and 17, which will help unlock growth in Filton and Cribbs Causeway. The Government has identified infrastructure investment as a key driver of economic growth, both through the National Infrastructure Plan and through recent announcements. The Chancellor s autumn statement 2012 signals a clear intent to focus on major transport investment, which (for example) includes 170 million for a local pinchpoint fund to tackle bottlenecks on local roads in England. It is therefore clear that a range of potential funding streams are available, alongside the new devolved major schemes funding stream, to enable the delivery of new transport infrastructure in the West of England. The Bristol City Region City Deal, in particular, will give the ability to flexibly apply different funding streams to support growth aspirations West of England Context West of England LEP Business Plan The vision of the West of England Partnership which is endorsed by the LEP includes making the West of England highly attractive to inward investors and existing companies by securing improved transport, environmental and broadband infrastructure and providing access to a range of employment land and premises. Inadequate transport systems are identified as a barrier to business growth which the LEP seeks to tackle as a matter of urgency. The West of England needs enhanced transport infrastructure and services to deliver the LEP s key economic objectives, improve access to jobs, reduce congestion and carbon emissions, attract new business and maintain the strong performance of existing business. Key to achieving these objectives is the delivery of the five major transport schemes: Ashton Vale to Bristol Temple Meads Rapid Transit, South Bristol Link, North Fringe to Hengrove Package, Bath Transportation Package and the Weston Package. Key growth sectors identified in the Business Plan include: Creative and media; Advanced engineering, aerospace and defence; Micro electronics; Environmental technologies and marine renewables; and Tourism. The Business Plan sets a target of 95,000 new jobs by 2030 and 3.4% annual growth in GVA by West of England Local Economic Assessment The West of England is a rapidly growing and prosperous area. Its strong economic performance has historically been reflected in its higher than average GVA per head. Its economy has a diverse sectoral base with particular strengths in aerospace, the creative and environmental industries, IT and microelectronics, finance and tourism. As a result, a high proportion of local employment is in high-value knowledge intensive industries. The area is home to a number of major international businesses. Economic growth and investment over the last decade has been facilitated by the availability and relative low cost of business sites and premises, in particular greenfield business park sites on the edge of Bristol in the North Fringe area, adjacent to the M4 and M5. Atkins GVA Impacts of Major Transport Schemes 21 December

18 The LEA identifies the delivery of the Temple Quarter Enterprise Zone in Bristol and the five Enterprise Areas as being central to delivering higher levels of economic activity, with the potential to deliver 60,000 of the 95,000 jobs by The area adjacent to the M4 / M5 interchange in the North Fringe is a key employment location, which owes its success largely to its good strategic accessibility. It is a cluster for the important Advanced Engineering, Aerospace and Defence sector. The North Fringe is also a cluster for high-value Finance, insurance and professional services businesses, as are the city centres of Bristol and Bath. The LEA recommends that measures are taken to ensure that the West of England remains an attractive location for this sector, including continuing to meet property requirements in Bristol City Centre and the North Fringe. Bath and Bristol are also creative industries hotspots. The provision of suitable premises is an ongoing challenge within the area, as businesses need to be able to cluster and co-operate. Specially developed business communities such as Paintworks (located in the Temple Quarter Enterprise Zone) are seen as ideal for such businesses to cluster but more affordable space is also required. The Enterprise Zone is an important cluster for creative industries while certain Enterprise Areas have a complementary creative industries focus, such as Bath Riverside. Avonmouth / Severnside, the North Fringe, central Bristol, Claverton Down in Bath (Wessex Water) and the outskirts of Weston-super-Mare are all locations with large concentrations of employees in Low Carbon businesses including Environmental Technology and Marine Renewable Industries. Bristol and the North Fringe also have significant clusters of high technology companies specialising in software, semiconductor design and wireless technology. The LEA identifies good transport connections as a factor contributing to the economic competitiveness of the area. It states that pressure on public transport and the road network, alongside perceived congestion and accessibility issues, may discourage businesses from locating in the area or cause them to relocate to other locations. The assessment states that traffic levels closely correlate to economic activity, and can impact on journey times, the cost of congestion, air quality and carbon emissions. Between 1999 and 2009 the volume of traffic on the West of England s roads increased by 11% compared with 8% nationally while in some areas such as the North Fringe within South Gloucestershire, traffic levels have grown by 15% reflecting the largescale growth in the area s employment. Perceptions of congestion by residents and businesses mean that it is an important issue to be addressed. Perceived congestion could act as a deterrent to businesses looking to locate to the area, as well as potentially causing existing companies to locate elsewhere. Modelling work has also identified that congestion is a real cost to the sub-regional economy: the Joint Local Transport Plan 3 for the West of England estimates that the cost of congestion will be approximately 600 million per year by Joint Local Transport Plan The vision of the JLTP 9 is the development of an affordable, low carbon, accessible, integrated, efficient and reliable transport network to achieve a more competitive economy and better connected communities. Supporting economic growth is one of the five key transport goals of the Plan. Key elements of achieving this goal include implementing the programme of major transport schemes, tackling congestion, improving journey times, providing alternatives to the car, ensuring access to employment growth areas and supporting the delivery of houses and jobs Core Strategies in the West of England Bath & North East Somerset The Core Strategy 10 makes provision for 11,000 new homes and 8,700 new jobs. It emphasises the need to create the conditions for a more environmentally sustainable economy with increased local employment, less overall commuting and a strong low-carbon business sector. 9 This is the third Plan, covering the period Atkins GVA Impacts of Major Transport Schemes 21 December

19 Providing the appropriate business space in the right locations is considered critical to attracting investment and enabling business growth. All areas of Bath & North East Somerset are seen as having a part to play in its overall economic success but growth should be focused on brownfield land in the urban areas of Bath, Keynsham and the larger settlements in the Somer Valley. Bath, the main economic driver, is identified as the primary focus for new development. A strategy of delivering more homes than jobs in the city is aimed at addressing the existing commuting imbalance that sees more people commuting in than out of the city. The Council's policy of 'smart' growth seeks to promote higher value sectors rather than just volume growth. Key areas of change within the city are along the riverside, especially in the western corridor. Strategic objective 7 (Economy & Growth) focuses on delivering well connected places accessible by sustainable means of transport. The Core Strategy states that the Local Development Framework will deliver this in conjunction with the Joint Local Transport Plan by ensuring that development is supported by high quality transport infrastructure and promoting improved access to services especially for rural and more remote areas. The approach of the Local Development Framework is to continue the longstanding theme of reducing car dependency and the Core Strategy reflects the Council s commitment to reducing the need to use cars for many trips within Bath by placing a greater emphasis on improving the local public transport infrastructure. Bristol The vision identified in the Core Strategy 11 is for a city of sustainable communities that combine housing, employment, retail, education, training and leisure functions, all linked by a strong public transport network. At present, however, traffic congestion and journey time unreliability make Bristol one of the most congested cities in Britain. In order to tackle congestion and air pollution, the Core Strategy s vision is for a less cardependent city and an emphasis on walking, cycling, bus, rapid transit and rail. Major improvements to transport infrastructure will be made to enhance links between existing communities within South Bristol as well as between South Bristol, the city centre and the north of the city. There is an aim to provide 30,600 new homes between 2006 and 2026 with a minimum target of 26,400. South Bristol is identified as a priority focus for development and regeneration including: 60,000m² of net additional office floorspace; Up to 10 hectares of new industrial and warehousing land in the major regeneration areas; and 8,000 new homes. The city centre will also be the focus of growth and development including: 150,000m² of net additional high quality office floorspace; 7,400 new homes; and Improved transport systems and connectivity. North Somerset North Somerset s economy is closely linked to Bristol, with the main towns (Weston-super-Mare, Clevedon, Portishead and Nailsea) having high levels of out-commuting to the neighbouring city. Out-commuting (e.g. to the North Fringe of Bristol) is dominated by the use of private cars with low public transport use (less than half the national average). North Somerset residents who commute out of the area have on average much higher incomes than people who work within the area. 10 Bath & North East Somerset Draft Core Strategy with Proposed Changes Incorporated, March Bristol Adopted Core Strategy, June 2011 Atkins GVA Impacts of Major Transport Schemes 21 December

20 A priority objective of the Core Strategy 12 is improving accessibility through the delivery of major transport schemes and local improvements to ensure that people are encouraged to make more sustainable transport choices, particularly in the four main towns. The Strategy supports travel management policies and development proposals that encourage an improved and integrated transport network and allow for a wide choice of modes of transport as a means of access to jobs, homes, services and facilities. According to the Core Strategy, transport schemes should: Deliver better local bus, rail and rapid transit services in partnership with operators; Mitigate against increased traffic congestion; and Improve connectivity within and between major towns both within and beyond North Somerset. In terms of future growth, Weston-super-Mare is identified as the area s major economic centre catering for the employment, retail, social and leisure needs of its population while also attracting visitors. The Core Strategy sets a target of a minimum of 14,000 new homes in the area by Weston-super- Mare will be the focus for new residential development, including the strategic allocation at Weston Villages. Outside Weston-super-Mare, most additional development will take place in Clevedon, Nailsea and Portishead. The Strategy also seeks to provide at least 10,100 additional jobs between 2006 and The focus of employment development will be at Weston-super-Mare primarily through town centre and gateway regeneration and the new development at Weston Villages which will provide a balanced mix of homes and employment opportunities. South Gloucestershire Tackling congestion and improving accessibility is a key issue for the Core Strategy 13. It identifies that South Gloucestershire s strategic position on the road and rail network has encouraged high levels of growth in housing and employment but this has led to high rates of traffic growth, increasing congestion, unsustainable commuting patterns and longer journey times, particularly in the North Fringe of Bristol. Congestion and longer journey times have created difficulties in delivering a reliable public transport service. Congestion hot spots are a significant problem. Since 1991 traffic on the roads of South Gloucestershire has increased faster than the national average, particularly within the North Fringe of Bristol. More households in South Gloucestershire have access to a car than the national average and the proportion of households with 2 or more cars is significantly higher than the national average. Despite improvements made to the public transport system, traffic congestion continues to adversely affect bus journey times and reliability. South Gloucestershire has benefited from a buoyant economy but must provide for the land and transport infrastructure needs of existing and new businesses to ensure the continuation of this economic prosperity. This is a key priority given the importance of supporting economic growth and job creation in response to the recent recession. The Core Strategy makes provision for up to 26,400 new homes over the period Approximately 4,060 dwellings were completed between 2006 and 2011 requiring an additional 22,340 new homes until The Bristol North Fringe / East Fringe urban areas are identified as the focus for much of this growth, specifically the two key areas of Patchway / Cribbs Causeway and West of the M32 / East of Harry Stoke. In terms of employment, the final development phase at Science Park Enterprise Area / Emerson s Green in the East Fringe of Bristol is expected to support over 6,000 jobs. 12 North Somerset Adopted Core Strategy, April South Gloucestershire Core Strategy incorporating Post-Submission Changes, December 2011 Atkins GVA Impacts of Major Transport Schemes 21 December

21 Summary of Key Issues The discussion above has demonstrated that there is a national imperative to deliver economic growth, and infrastructure investment has been identified as an important driver of this growth. The West of England is performing well compared to other parts of the UK and has strong potential to help drive forward future national growth. The area has a good representation of growth sectors and partners have developed a Business Plan that seeks to maximise the benefits of growth to unlock up to 95,000 new jobs by The four Core Strategies provide the spatial planning framework to unlock this growth, through proactive planning of housing and employment allocations to enable this growth to occur West of England Economy This section builds on the discussion above, by providing evidence to demonstrate the strong performance of the West of England economy, including GVA, employment and business, together with data on population and the labour market of the sub-region. The following datasets have been used to form the socio-economic profiles: Population Census 2001, Mid-Year Population Estimates ; Skills, Economic Activity Census 2001 (ward level), Annual Population Survey 2011 (benchmark data); Travel to Work Census 2001; Unemployment Claimant Count data ; Deprivation Indices of Multiple Deprivation (IMD), 2010; Employment Business Register and Employment Survey ; and Business Structure Annual Business Inquiry Workplace Analysis The latest data is used wherever possible but it should be noted that, at ward level, the majority of the latest data is from the 2001 Census. Socio-economic conditions have changed substantially during the last decade, and the figures should therefore be treated with caution. Nevertheless, they are useful in painting the picture of the relative strengths and challenges in each of the growth areas. Bristol s GVA per head in 2009 ( 25,216, in 2009 prices) was significantly higher than the national average, and that for the West of England ( 20,399) was also above that of the UK as a whole ( 20,341). The main socio-economic characteristics of the West of England are summarised in Table 2. Table 2. Socio-Economic Overview of the West of England Employment and Business Population and Labour Market Travel to Work Jobs: 530,000 in The number of jobs in the West of England increased by 0.3% between 2008 and 2011 while it declined by 1.2% across England. Key sectors: The largest employment sectors are Health (13.2%), Retail (10.1%), Education (9.6%) and Business administration and support services (8.9%). Size of businesses: Micro businesses account for 84% of all businesses in the area but this proportion is lower than the national average. Population: 1.1m in 2010, rising faster than the national average. Working age residents: Higher than the national average, particularly Bristol (70%). Economic activity: Slightly higher than national average. Claimant count rate: Lower than average but has risen across all areas over the period (reflecting the wider economic climate). Skills: Highly qualified workforce, particularly Bristol (42% qualified to NVQ4+). Deprivation: Out of the four local authorities only Bristol has higher than average levels of deprivation. Net import of labour: Bristol is a net importer of labour while B&NES, North Somerset and South Gloucestershire are net exporters. Containment rate: South Gloucestershire has the lowest containment rate at 60% and Bristol the highest at 75%. 14 The claimant count rate is used as a proxy for unemployment (especially when comparing different areas) but it is not the same as the unemployment rate. The claimant count rate is lower than the actual unemployment rate as some categories of unemployed people are not eligible to claim unemployment benefits and others who are eligible may not claim benefits for various reasons. Atkins GVA Impacts of Major Transport Schemes 21 December

22 The key economic headlines are discussed in more detail below Employment and Business Employment across the West of England stood at approximately 530,000 in 2011, which accounted for approximately 2.3% of all employment across England. Latest employment data shows that between 2008 and 2011 employment increased across the West of England by approximately 0.3%, whilst it declined by 1.2% across England over the same period. This highlights the resilience of the sub-region s economy under difficult economic conditions. South Gloucestershire in particular achieved strong growth in employment (4.6% between 2008 and 2011). The sub-region s largest employment sectors are Health, Retail and Education. The Professional, scientific & technical, Business administration & support services and Manufacturing sectors also account for significant levels of employment. In terms of each of the authorities in the West of England, Bristol has a comparatively large proportion of those employed in the Financial & insurance sector at 8.8%; 4.8 percentage points greater than the national average. South Gloucestershire has the greatest proportion of those employed in the Manufacturing sector across all benchmark areas at 12.0%, which was 4.7 percentage points greater than the average across the West of England. Bath and North East Somerset has comparatively large proportions of people employed in the Health, Education and Accommodation & food services sectors, while North Somerset has relatively large proportions of those employed in the Transport & storage and Retail sectors. Both Bristol and South Gloucestershire have relatively large proportions of people working in the Professional, scientific & technical and Business administration & support services sectors. Consistent with the national picture, the West of England is dominated by micro-businesses (those with 1-10 employees). However, the proportion across the West of England (84.3%) is smaller than the national average (85.3%). Compared with England, the area has slightly greater proportions of small (11-49 employees), medium ( employees) and large businesses (200+ employees). Bath and North East Somerset has the greatest proportion of micro-businesses, whilst Bristol has the greatest proportion of large businesses. The rate of VAT registrations in an area can be used as a proxy measure of the level of entrepreneurship within the economy. Overall, of the four authorities, South Gloucestershire experienced the lowest levels of new business formation per resident population between 2000 and 2007 (latest available data). Over the seven year period, Bath and North East Somerset experienced the greatest levels of new business formation per resident population Population and Labour Market The population of the West of England is growing at a faster rate than the national average and stood at 1,098,000 in Bristol experienced the greatest rate of population growth (7.0%) in the sub-region whereas South Gloucestershire experienced the lowest (2.8%). The West of England has a slightly greater working age population than the national average, with Bristol in particular having a particularly high proportion of people of working age (70%). The West of England also has a highly qualified workforce, with Bristol having 42% of its working age population qualified to NVQ Level 4 or above. At the same time Bristol also has the greatest proportion of those with no qualifications in the sub-region at 12.5%. Economic activity across the West of England is slightly higher than the national average while the claimant count rate is lower than average. However, mirroring the national trend, the claimant count rate has risen across all areas between 2006 and Bristol has the highest rate of people claiming unemployment benefits in the West of England at 4.0% and has experienced the greatest increase since 2006 at 1.7% Travel to Work Bath and North East Somerset, North Somerset and South Gloucestershire are net exporters of labour, with more commuting trips made out of the authority areas than inwards. Conversely, there is a net import of labour in to Bristol. South Gloucestershire has the lowest containment rate, with 60% of people both living Atkins GVA Impacts of Major Transport Schemes 21 December

23 and working in the district. Bristol City has a relatively high containment rate of 75%, and if the West of England is taken as a whole, the figure is 89% Issues in Growth Areas More detailed analyses have been undertaken of the economic and social challenges in the areas served by and adjacent to the Enterprise Zone, five Enterprise Areas and Regeneration Area in South Bristol. In addition, analyses are presented for Bristol City Centre as one of the primary economic drivers of the West of England. The analyses highlight the following issues. In most cases, there is limited correlation between business performance and the social characteristics of people living in the area. This is because there is significant net in- or out-commuting at the local level, with businesses drawing in their labour pool from a wider area. In most cases social outcomes for residents of each area are not necessarily closely tied to the performance of local businesses. The social characteristics of each area are generally complex, with different levels of economic activity, unemployment, skills and deprivation. The evidence suggests that apparently lower than average skills levels or economic activity in an area do not necessarily point to significant wider challenges of deprivation. Deprivation is a complex issue and depends on a number of inter-related social factors that extend far beyond the availability of jobs in the local area. The inner urban area of Bristol, adjacent to the city centre and Temple Quarter, faces challenges consistent with those typically seen in the inner city. These include low levels of economic activity, unemployment and high levels of deprivation. These are often close to areas of growth and regeneration, with highly skilled (and high-income) residents living nearby, taking advantage of close proximity to the city centre. The challenge in promoting growth in the city centre and Temple Quarter is to maximise the pool of skilled labour (from across the wider West of England) to meet the needs of existing and future businesses in these areas. South Bristol faces multiple social and economic challenges, including high levels of unemployment, low skills levels and extensive and acute deprivation. This appears to be operating alongside relatively poor business performance, with a high dependence on public sector jobs and low value-added activity in retail and manufacturing. There is significant out-commuting from the area due to lower numbers of jobs than working residents. There is a major challenge in encouraging job creation, to both boost economic activity and improve social outcomes. Avonmouth / Severnside is a major growth opportunity, with strong levels of growth since 2008 and a strong concentration of logistics firms, building on the cluster of activity at the Port of Bristol. There are highlevels of in-commuting into the area, reflecting an imbalance between the numbers of jobs and working residents in the area, and there is constrained access to nearby residential areas resulting from the nature of this location and severance effects of the M5 and M49 motorways. Overall skills levels in the area are currently low, with pockets of unemployment and deprivation. The key challenge in this case is to support the delivery of new jobs with improved accessibility, including allowance for commuting into the area (including from North Bristol and the North Fringe). Bath has strong potential for smart growth and benefits from highly-skilled residents, a high proportion of which are working age, with low unemployment and low levels of deprivation. There is currently a large amount of in-commuting into the area: high housing costs in Bath mean that many working in the city live elsewhere. One of the key challenges for Bath is to improve self-containment, to help reduce the pressures caused by in-commuting. The focus for the Enterprise Area is to generate high-quality jobs that deliver high added value and are well matched to high levels of skills of people living in the city. South Gloucestershire has a complex economic geography with recent challenges of major jobs losses in both the Filton and Emerson s Green areas, although for different reasons. Residents of Emerson s Green benefit from high levels of employment, average skills levels and low levels of deprivation. There are high levels of out-commuting from the area, reflecting differences between their skills and the types of jobs available in the local area. Filton, meanwhile, is a major employment hub for the sub-region, with major manufacturing sites at BAe, Airbus and Rolls Royce. Skills levels of residents in the area are, however, relatively low, and there are large volumes of in-commuting, particularly from other parts of the North Fringe and Bristol. The challenge here is to ensure that the Enterprise Areas are able to draw upon highly skilled employees from across the West of England labour market. Atkins GVA Impacts of Major Transport Schemes 21 December

24 Weston-super-Mare needs to create more jobs: the town exports large amounts of labour, primarily to other parts of the West of England. The residents of Weston-super-Mare have high levels of economic activity and there is low unemployment. Meanwhile, there has been a small increase in numbers of jobs since 2008, indicating that the economy has been stable. The primary challenge is to unlock large numbers of new jobs to increase economic self-containment and reduce out-commuting from the town. The West of England operates with a complex economic geography. It is critical to ensure that businesses in the growth locations are able to draw on a suitably skilled labour market to address their growth aspirations. Conversely, it is critical to ensure effective options for travel to work, particularly in terms of connecting areas of employment need with suitable job opportunities Summary of Key Issues Policy documents at all levels (local, sub-regional, national) recognise the important role of transport in supporting economic prosperity while congestion and the perceptions of congestion are identified as serious barriers to economic growth. At the national level, the policy framework and emerging concepts for project funding highlight the links between provision of infrastructure and economic growth potential. Transport investment should be clearly focused on challenges such as congestion and poor connectivity, and in unlocking benefits such as sector clustering and improved labour market access and mobility. Investment in the transport system is considered to be a key element in unlocking economic growth and an important factor in attracting and retaining businesses. There is also a clear focus on improving public transport services in terms of capacity and reliability and encouraging a shift towards more sustainable modes of travel including bus and rail. At the city region level, there are strong partnerships and leadership through the West of England LEP. The Business Plan and ongoing work of the LEP has identified ambitious plan for growth, through key sectors and focused at key locations. The identification of focused locations for growth, through the Enterprise Zone and Enterprise Areas, is strongly aligned with the package of planned transport improvements. Sub-regional ambitions are reflected in the objectives of the local authorities in the West of England. All have ambitious goals for housing and employment growth over the coming years. The provision of appropriate infrastructure (including transport) is vital for enabling sustainable development and achieving the desired levels of growth. There is a strong link between development and transport infrastructure with development being focused in areas benefitting from good transport infrastructure and, in turn, transport investment being vital in facilitating further development. Atkins GVA Impacts of Major Transport Schemes 21 December

25 3. Stakeholder Consultations 3.1. Introduction This chapter presents a summary of discussions held with a range of stakeholders with an interest in unlocking economic growth in the West of England. The consultations are central to informing the study with regard to transport and connectivity issues across the sub-region. In order to capture a broad range of views the following groups of stakeholders were included in the consultation process: Representative organisations of businesses (e.g. Confederation of British Industry, Institute of Directors, Business West and Federation of Small Businesses); Local businesses; Local property and land agents; Economic development professionals from the West of England Local Authorities; and Further and Higher Education institutions. The list of stakeholders and contacts was developed in conjunction with the client team. A full list of the stakeholders consulted, as well as a brief overview of the role and area of focus of the various stakeholder groups, is provided in Appendix B. A set of semi-structured questions was drawn up prior to the commencement of the stakeholder consultation. The questions were agreed with the client group and tested and revised following an initial trial consultation with each stakeholder group. The questions covered a range of topics including an overview of the consultee s organisation, performance and growth plans where applicable, transport and connectivity issues and details relating to the specific major transport measures planned across the West of England. Consultations were undertaken as a mix of face-to-face and telephone interviews to maximise participation. The discussions and comments set out in this chapter are intended to be non-attributable and have been gathered on the basis of confidential engagement with stakeholders. Where of particular note, direct quotes have been taken from the consultation process but these remain anonymous to the organisation which provided them. It should be noted that the chapter sets out the views and opinions that were raised by the consultees only, and the summary section draws out the key themes and recommendations based on the information given by the consultees West of England Overall Strengths and Challenges The most commonly mentioned advantages of being located in the West of England sub-region were quality of life, high skill base, graduate retention, access to the motorway network and mainline rail links and the overall image of the sub-region. Other benefits stated included proximity to London, a diverse and stable economy, the airport and leading universities. The strategic location of the West of England and proximity to London were identified as important to business location and investment. The proximity to the M4 and M5 and associated easy access to the motorway network were also noted as important for business operation and inward investment to places such as Weston-super-Mare and the North Fringe. Business representatives, in particular, highlighted the importance of sector clustering (especially banking / finance, creative / media and high tech manufacturing) in the sub-region which brings significant strengths to the economy. One business consulted stated that they were located in Bristol because it is a hub for insurance and legal related services. The long history in the area of innovation and commerce was noted as a key strength along with the depth and breadth of the successful economy. An overarching vision and strategy for the area, that takes a forward looking approach and is strongly focused, was seen as important by a number of consultees, as was the focus of the Enterprise Areas and Enterprise Zone on key sectors which build upon the existing strengths of the area in aerospace, defence, energy, digital media etc. Conversely, issues such as poor perceptions of connectivity and traffic congestion on the road network were noted as negative influences on business and business reputations in the sub-region. One property agent believed the transport network is one of the biggest drawbacks of Bristol City and that it is continuing to Atkins GVA Impacts of Major Transport Schemes 21 December

26 depress demand and property values in the city-region. All consultees were very supportive of the range of transport packages proposed, noting the overarching benefits that they would bring to the area in general. In addition, high house prices and affordability issues were noted as the disbenefits of a successful economy Business Performance and Constraints to Growth Wider issues such as the difficult economic climate and low levels of demand faced by businesses, the planning system, business confidence and access to finance were raised by stakeholders as barriers to growth and a hindrance to business performance in general. The current economic climate was particularly highlighted by the majority of stakeholders as having suppressed demand and having made levels of business costs more critical. Issues for Businesses Businesses felt that issues such as access to customers and suppliers, property costs, access to finance and also suitable staff were central to business performance and growth. Transport and connectivity were also raised as being key factors in enabling people and goods to be moved and contributing to a positive image of an area that is open to business. The importance of transport was noted by one business representative organisation as top of the pile for most businesses. Business consultees stressed the value and benefit of strong sector clustering in the sub-region and the wider perception of the sub-region as a positive area in which to do business, with high skill levels and graduate retention associated with high quality education providers. Barriers to growth included physical transport connections but there is also a broader challenge of general business confidence due to the current difficult economic climate. Transport network constraints (congestion, lack of reliability etc) were thought to be central to changing employee behaviour and also working patterns for businesses. Businesses in the sub-region have adapted to manage the issues and challenges that the current network experiences (congestion hot-spots, parking issues, etc) by altering working and operation patterns to minimise cost and time implications. Overall provision of employment land was felt to be sufficient and generally in suitable locations. The constraining issue for new development was access to funding and low demand. In key locations, growth and unlocking of development land was seen as a given if infrastructure was in place, for example public transport links to the Science Park Enterprise Area / Emerson s Green and the M49 intermediate junction at Avonmouth / Severnside. Consultees highlighted the importance of the growth potential from the Enterprise Zone and Enterprise Areas and the need to make suitable provision for the SME market to enable growth to occur. Infrastructure, including both high-speed broadband and transport, was highlighted as important to enabling growth and new development to occur. It was felt by a number of consultees that future business growth and location decisions would be more strongly related to transport infrastructure. For example, businesses may decide to move out of Bristol City centre, because of congestion issues, if it is not essential to stay on operational grounds. Issues for Skills Providers The further education providers, while not raising concerns over transport issues as a constraint to growth of the sites themselves, raised the issue of cost of travel to students as a significant barrier to the take-up and continuation of educational study. This could therefore be a potential constraint to developing skills in the current and future labour market in the West of England. Transport infrastructure was seen by FE providers as enabling further opportunities to access the type of courses offered and the locations in which they could be delivered, through improved accessibility to the city centre and other sites. Provision of a direct link between the city centre and the UWE campus was identified as critical to the masterplan set out by the University at the Frenchay Campus as the focus of future growth. Issues relating to staff and student commuting, accessibility between sites and parking provision on the sites of both Further and Higher Education institutions are being considered through updates of Travel Plans. Travel Plans are being updated in part due to the fact they have reached the end of the plan period and also to support new developments at Frenchay Campus for UWE and Parkway for City of Bristol College. Atkins GVA Impacts of Major Transport Schemes 21 December

27 Issues in Rural Areas Transport provision and general accessibility were noted as issues for businesses located in more rural areas, with specific reference made to this issue in North Somerset. Limited public transport provision can impact on the ability of residents to access employment, especially for shift-based work, due to poor frequency of services. The cost of public transport is also noted as an issue for employees accessing jobs in more rural areas. Business growth is also hindered in some areas due to the age of existing business premises Current Transport and Connectivity Issues Current Travel Demand Staff commuting is dominated by car-based travel; however the extent varies by business type and location with factors such as provision of parking and access to public transport affecting the mode of travel. Employees commuting to out of town locations mainly travel by car, as the public transport network is not currently seen as a viable option for many employees. In some locations, such as the North Fringe, poor public transport is cited as a key reason for employees dependence on cars. A majority of those consulted said that their organisations promoted the use of other modes such as walking and cycling, providing dedicated cycling facilities, along with encouraging car sharing as alternatives to car travel. As an example, one business actively encourages green travel and the use of public transport, through implementing a cycle scheme and providing season ticket loans to employees. The main issue for businesses in encouraging modal shift is the limited availability and / or reliability of public transport options this was especially noted in locations such as the North Fringe and Avonmouth / Severnside. Safety of cyclists was often raised as an issue by consultees due to limited cycle lanes and levels of congestion. The exception to the car as the dominant mode for commuting is in businesses located in city centres (Bristol and Bath) where parking space is limited and costly, and also at sites where parking rationalisation has been enforced, thus forcing modal shift to occur. For example, one business located in Bristol City Centre said that 70% of its employees travel to work by bus, 20% by train, and the remaining 10% use their cars, walk or cycle. One business in Bath noted that most staff travel by non-car modes, with many commuting by cycle from within Bath and by train from Bristol Current Challenges and Issues Current Locational Strengths Consultees often outlined the importance and benefit gained from the existing transport network in terms of staff commuting and business use; the following were noted as key advantages: Proximity to the M4 and M5 motorways; Frequent and reliable rail links to London; and Recent improvements to bus services including the Greater Bristol Bus Network. Importance of Connectivity to Businesses Transport networks and connectivity were noted by consultees as a key issue, being important to business operations in general and also to the operation of other key institutions such as universities and further education colleges. A number of consultees raised the point that transport infrastructure was important; infrastructure shortcomings can deter investment and in the medium-term transport related issues could be a barrier to the ongoing success of the sub-region. Infrastructure provision can also alter land use patterns and influence business locations, especially in relation to the congested city centres of Bristol and Bath. Atkins GVA Impacts of Major Transport Schemes 21 December

28 Access to customers and suppliers is a critical issue for business operation and performance. Businesses noted the importance of motorway access and rail links for business trips. The vast majority of access by suppliers and customers is via the road network across the West of England area. Congestion was reported as a problem in general, especially in key areas of employment (North Fringe, Bristol city centre) and on key commuter routes (e.g. the exit from Weston-super-Mare at Junction 21) at peak periods. Improvement to the Great Western Main Line was noted as key to businesses in the area as it will strengthen the link between Bristol and London with a frequent and reliable service which was highlighted as important to businesses. The electrification was deemed significant as it would reduce the journey time between London and Bristol to 1 hour and 20 minutes and would speed the link to Heathrow airport noted as important to a number of businesses for business related travel. Perceptions of Connectivity A number of consultees felt that transport issues detract from the area as a place to do business and that the impact would worsen going forward if transport challenges were not tackled successfully. Congestion was generally felt to be a concern for the future with consultees feeling it would worsen over time without interventions taking place to improve infrastructure. There was concern from businesses and business representatives that the perception of worsening congestion could hinder both business growth and inward investment. This was linked to the issue of a lack of orbital routes around the city, for both road and public transport modes. The focus of transport into the centre of Bristol and a lack of options to avoid this when the city centre is not the journey destination were raised by a wide range of consultees as a key issue. One agent commented that, in their search for properties, some businesses rule out particular areas from the outset due to poor access and connectivity. In particular, access to the South Bristol area was highlighted as the most prominent issue. Many consultees remarked on the success of the north of Bristol in comparison to the less-developed area to the south of the city. One agent commented that new investment mainly goes to the north of the city as a result of the strong transport connections. Consultees believe that poor access to the south of Bristol is deterring investment and that there is limited interest in locating in the area amongst businesses. Several consultees highlighted that any scheme that links areas in the south and north of the City would be beneficial. Bristol City Centre and the area around Temple Meads were seen as significant pinch-points of congestion for all users. North Bristol is also known for congestion at peak times due to high car usage in the area and limited public transport options in the North Fringe. This area was also felt to have suffered from significant growth without supporting strategic planning of transport for business occupiers. Bath was felt to lack a sufficient bus network which added to congestion in the centre. Road connectivity is generally felt to be good by further and higher education consultees. However, they acknowledge that certain areas suffer significant congestion, especially during peak periods and in the centre of Bristol, Bath and outskirts of Weston-super-Mare. The most significant issue for FE and HE providers was in getting staff and students to education sites. Peak time travel is difficult and congested, particularly in the city centre and North Fringe areas. This perception was also highlighted by business consultees issues of journey time reliability were noted frequently, especially where there is a reliance on car based travel. Several businesses that rely on delivering and receiving goods said they arrange transportation at times outside of peak hours to avoid congestion and negative impacts on productivity. The majority of consultees did not perceive the bus network to be particularly suitable and issues of reliability, cost and efficiency of services were raised. In addition, concern was raised about the robustness of the transport network in general, with many areas and routes felt to be at capacity which would ultimately hinder growth in the area. There was a general consensus that a reliable and robust public transport network must be provided as a viable alternative to car based travel. Integration of modes and routes was also noted as central to increasing public transport usage, especially provision of bus only lanes to allow efficient flow, although the practical difficulties of implementing this were noted by consultees due to physical constraints of space on roads. Linkages between routes and services were raised as a key issue for UWE, which would benefit considerably from improved connectivity and integration of modes to supplement the services provided by the university itself. Atkins GVA Impacts of Major Transport Schemes 21 December

29 The lack of public transport to out of town locations, particularly business parks, has also been raised as an issue. One consultee gave anecdotal evidence of a number of businesses noting that poor access to Aztec West would discourage them from locating in this area, specifically congestion and insufficient public transport. A rapid transit link was highlighted as being highly important for out of town business parks, as current bus services are insufficient. Accessibility to the Science Park Enterprise Area / Emerson s Green was highlighted as a real issue and it was commented that an M4 junction into the area would make a vast difference Future Challenges Consultees considered that growth and future prospects could be constrained without suitable investment in infrastructure. One business representative stated that if the schemes do not go ahead there will be real limitations on businesses ability to grow, as poor transport infrastructure is a significant restraint on growth. A public sector representative commented that the West of England is seen as economically successful and has the right ingredients to be even more successful, but poor transport infrastructure could prevent the rapid growth the West of England is capable of. Several consultees believe that if improvements are not made to the transport network, inward investment will be deflected, demand will be reduced and growth across the West of England area could stagnate. In particular, many consultees believe that if changes are not made to improve access and connectivity to South Bristol, there will be polarisation of the city between the growing north and the stagnating south. One business representative believes that businesses in the south of Bristol are at a real disadvantage compared with the north of the City due to poor transport connections. Lack of investment in infrastructure was also deemed to impact on business behaviour in the future in terms of locational decisions and which sectors cluster in specific areas. Consultees stated that the Bristol area needs a transport system that gets people moving around the City, one business representative stated that the area needs a public transport network that is as part of daily life as it is in London and that allows people to use public transport as a default choice. To ensure the continuing success of the sub-region consultees felt that it was vital to be able to move people and goods around using efficient and reliable transport networks. Improvements will add to the well-being and quality of life that the West of England area provides, attracting more investment and occupiers and encouraging businesses to start-up and expand in the area. The perception of transport in the area will slowly improve, attracting more investment in the long term. Delivery and implementation of the proposed major transport schemes is critical. Many consultees commented that several of these schemes have been in the pipeline for years, and action is now needed to help boost confidence and investment. Consultees generally felt that the poor reputation of the Bristol cityregion transport network is worse than the reality and that transport schemes need to be implemented to help change perceptions of the area and improve the transport network s reputation. Importantly, one of the main issues raised was the need to link together and integrate transport schemes and improvements, particularly across the four local authority areas, to ensure they are effective and worthwhile. As one business consultee commented, a holistic package of transport improvements is required. The schemes in isolation will achieve benefits, but these could be minor improvements compared to the level of benefits that could be achieved if the schemes are delivered as a package. Importantly, once the schemes have been delivered, the West of England authorities need to communicate and raise awareness of the improvements that have been made, outlining all of the benefits. Challenges relating to encouraging the use of public transport and raising awareness of schemes as they are implemented were raised by consultees. Marketing material should be widely distributed to help improve the reputation of transport in the area and potentially attract more investment. Forward planning and ongoing investment in the transport network was highlighted as vital. There was a general consensus among consultees that planning for growth and change in key development areas, such as the Avonmouth / Severnside Enterprise Area, is essential to facilitate growth and secure further investment. It was commented that there has been significant under-investment in transport infrastructure in recent years, and this issue must be addressed and prevented from occurring again in the future. Atkins GVA Impacts of Major Transport Schemes 21 December

30 3.6. Major Transport Schemes Overall, the schemes were deemed by consultees to provide a good fit with the economic and general ambitions for the West of England. Together the packages were felt to provide the breadth of change that would be required in order to improve connectivity and accessibility across the sub-region, thereby providing viable alternatives to car travel and enabling changes in mode choice. The packages of interventions together were felt to offer real benefits to the West of England as a whole. The packages were considered to be very important to future growth given the current capacity issues on the existing transport networks. Almost all consultees believed the overarching benefit of the package of schemes would be the improved flow of traffic due to changes in behaviour and increased public transport provision as an attractive alternative to car travel. This will be especially beneficial to commuters travelling at peak periods. The following section presents an overview of benefits of each scheme, as noted by the consultees, along with any associated ongoing issues or points for further consideration. Bath Transportation Package Consultees believe that improvements to the park and ride facilities and bus services will help provide viable alternatives to driving into the city centre. A business consultee in the Bath area noted that the scheme had the potential to be significant for the city-wide transport network. It was noted that a reduction of congestion in the centre would provide improvements that are felt by all users of the transport network, mainly through improved journey times and reliability. Weston Package Consultees with an interest (business or access) in the Weston-super-Mare area noted that the package could bring improvements, with the package described as hugely beneficial by one business consultee. Generally there was a consensus that implementation of the Weston Package would enable development in the wider area, making it more attractive to businesses and one property industry representative described it as an excellent scheme which would open up the economic potential of the area. Improvements to Junction 21 are particularly popular with businesses in Weston-super-Mare as they expect the improvements to reduce congestion and improve journey time reliability. Consultees noted that the package of improvements will help commercial development in the area, although it was highlighted that disruption during works to Junction 21 would need to be carefully managed to ensure that impacts upon businesses are minimised. Improvements to Worle Station are expected to provide both time savings and convenience benefits to commuters and businesses. The scheme could help provide an alternative modal choice for commuters into and out of Weston-super-Mare and Bristol, potentially improving labour market access to employment opportunities. Ashton Vale to Temple Meads Rapid Transit The bus rapid transit link is perceived as being key to assisting other schemes, and bringing significant benefit through more reliable public transport. The scheme was described by business consultees as highly important and desperately needed as it will help employees travel to work and provide businesses with greater access to a larger pool of potential employees. One consultee highlighted the improved links to the education facility at Bower Ashton, for which it is considered that improved public transport services to the site will allow the facility to expand its offer and provide additional services. North Fringe to Hengrove Package This scheme was described by one of the property consultees as the biggest single enabler to new development and the most significant BRT route. It was also perceived as potentially ground-breaking by a business consultee. Another person said that it was a tremendous idea to link the northern parts with the south of Bristol as it will widen employment opportunities. It is believed that the scheme will be of overall significant benefit to Bristol in terms of improving public transport options, and providing a viable alternative to using the car. Along with the Greater Bristol Metro, its implementation is felt to be central to the benefits from the package of schemes. The scheme may help to attract more occupiers to business parks such as Aztec West. Atkins GVA Impacts of Major Transport Schemes 21 December

31 It also has the potential to contribute to the extension of the student catchment area to include South Bristol and increase public transport capacity to education facilities in the south of the city. One consultee believes that a direct link into the University of the West of England s Frenchay Campus will help connect the city centre and university directly, providing significant benefit to students. South Bristol Link The South Bristol Link scheme was described by many consultees as one of the most important schemes, and vital to the regeneration aims in the south of the city. Property agents in particular noted the significance of the South Bristol Link, with one describing the scheme as the single biggest economic driver for Bristol, and another noting that the scheme will reap huge benefits for employment and economic development. Many consultees believe that the scheme will significantly improve general accessibility to South Bristol, providing easier and faster access to the area. Improved efficiency, faster and more reliable journey times to the south of the city will create opportunities for existing businesses to expand their customer base and grow the business through easier access to new market areas. The scheme could potentially encourage and incentivise existing businesses to remain in the area and not re-locate. The scheme is seen as key to assisting the other schemes and bringing significant benefit through more reliable public transport. Another property agent stated their belief that the scheme will free-up the Bristol conurbation, encouraging more people to seek employment in the area and providing businesses with greater access to a larger pool of potential employees. The scheme has the potential to increase public transport capacity to South Bristol education facilities, potentially enabling an expansion of the current education offer in the area. Some consultees believe the scheme will improve access to the airport, although one consultee identified the need to provide a direct link to the airport to further improve accessibility. Greater Bristol Metro (Phases 1 and 2) and New Rail Stations Package Consultees believe that the Greater Bristol Metro will make a significant difference to Bristol. Along with the North Fringe to Hengrove Package, its implementation is felt to be central to the benefits from the package of schemes. The scheme is deemed particularly important for commuters, particularly those travelling on the Portishead line. It is predicted that the Metro will provide a viable alternative to the car, and increase the flow of employees to key centres. The scheme is also deemed to be very important for access to educational facilities. Consultees identified access to and from the stations as an issue in terms of reliability and speed, particularly by connecting bus services. Consultees highlighted the need for good car parking, and park & ride schemes. It was also noted that consideration of the impact of passenger traffic on the freight users of the rail line will be important. The main benefit of New Rail Stations Package was highlighted as improved access to city centre areas. Improved access will make travelling to work easier and provide employers with greater access to a larger pool of potential employees. Temple Quarter Transport Package The importance of this scheme in unlocking the development potential of the site was highlighted by consultees. A public sector representative noted that, a decent level of investment in transport infrastructure is vital to bring sites like the Temple Quarter Enterprise Zone forward. Education providers also identified that the scheme has the potential to help improve links to the education facility at Bower Aston, potentially allowing the facility to expand its current offering. M49 New Junction This scheme was highlighted as one of the most important schemes in terms of unlocking development around the port and the wider Avonmouth Severnside employment area. One property industry consultee noted that the new junction would be fundamental to the growth and development of the distribution / industrial market in the area ; this view was supported by a business representative in that the scheme could Atkins GVA Impacts of Major Transport Schemes 21 December

32 create immediate results / development, and many were in agreement that, without the scheme, growth could be limited due to increasing congestion. Consultees believe that the scheme could help accelerate growth and development in the area by attracting more businesses and investment. The scheme was also noted by property consultees as having the potential to help diversify the area and increase the variety of land use on the site Summary of Key Issues The following sets out a brief summary of the key themes, issues and recommendations that have been identified and drawn out from the stakeholder discussions. Connectivity and the West of England Economy Transport provision is widely recognised as highly important to business operation and development potential; Ongoing investment in transport infrastructure is seen as very important for the prosperity and operation of the West of England economy; There is a need to capitalise on the benefits that the West of England area has to offer, by improving transport infrastructure and unlocking the potential for further growth in the area; Reliance across the sub-region is mainly on car-based travel for both commuting and business trips; Public transport provision is currently felt to be poor in terms of reliability and coverage of service, with many believing that it does not currently offer a viable alternative to using the car; Businesses and organisations are increasingly aware of, and taking action on, staff commuting; Growth and unlocking of key development areas relies on improved transport infrastructure and linkages. Key Principles in Investing for Growth Forward planning and an overarching vision and strategy for the transport network are key to the future success of the area; Investment in transport packages and implementation is required before users will be encouraged to change mode; A reliable, efficient and robust public transport network is critical to the network being attractive to users and fully utilised; To create more employment opportunities and widen the pool of potential employees for businesses, improved public transport links in and around the West of England, particularly the South Bristol area and out of town business parks, are essential; Improved transport links to key development areas are a priority to ensure growth, investment and new development. Integration: in the network and across the West of England Linkages between modes and types of public transport are required to create a fit-for-purpose transport network that will enable future growth; Integration between the transport packages is critical, so that the whole is greater than the sum of the parts; Integration and joint working within the West of England is critical to enable businesses to invest and grow with confidence; Buy-in and joint working with businesses and other local organisations is essential. Many organisations support the use of more sustainable forms of transport and could actively encourage more employees and other users to utilise the public transport network once improvements have been made. Business Support and Communicating the Benefits of the Packages The proposed transport packages are overall very positively supported by consultees, all noting the wider benefit to the West of England sub-regional economy and central to achieving future growth; Once schemes have been implemented and improvements made, the wider area should be informed and key benefits communicated. Marketing the transport improvements will help to address the negative image of transport in the area, and to potentially attract further investment into the area; Atkins GVA Impacts of Major Transport Schemes 21 December

33 4. Transport in the West of England 4.1. Introduction This chapter describes the relationships between transport and the economy of the West of England. It draws on evidence including the West of England Joint Local Transport Plan (JLTP) 15, surveys undertaken by the Local Enterprise Partnership, previous study work by KPMG and the findings from the stakeholder engagement discussed in the previous chapter. It then explores the challenges associated with growth in the economy of the sub-region, including the challenge of increased congestion as the numbers of people living and working in the West of England increase. More detail is also provided for each of the areas that are priorities for growth, including the EZ, five EAs and South Bristol Regeneration Area. The evidence in this chapter demonstrates the importance of intervention to tackle current and future accessibility problems to maintain the competitiveness of the West of England and to provide the capacity needed to unlock future growth in the sub-region Connectivity and the West of England Economy It is first important to recognise that the West of England benefits from good strategic connectivity, with good motorway and rail links to other parts of the UK, deep-water facilities at the Port of Bristol and expanding air connections to major European cities via Bristol Airport. These links are a key element underpinning the economic competitiveness of the sub-region. Fast and frequent rail services to London and other cities are important in supporting the needs of professional services businesses in central Bristol and a major logistics hub has developed in the Avonmouth / Severnside area, which is adjacent to the Port of Bristol and which has direct access to the motorway network The importance of public transport and road connectivity As part of the 2010 study of wider economic impacts, KPMG assessed the relationship between connectivity and employment density at a zonal level within the West of England. It developed coefficients relating connectivity and employment density for key sectors of the economy: Manufacturing, Construction, Consumer Services and Producer Services. The analyses confirmed that there is a strong correlation between connectivity and employment density for all sectors of the economy, as follows: Connectivity by car has a stronger influence than connectivity by public transport for all sectors; The coefficients for commuting and business to business travel by car are similar for all sectors, indicating that accessibility by car, for both commuting and for business travel, is currently important for all sectors of the economy; However, public transport connectivity, for both commuting and business-to-business travel, is much more important for the Consumer Services and Producer Services sectors than for Manufacturing or Construction. This is consistent with intuition. Most commuting and business-to-business travel is by car, even in most urban locations that are well served by public transport. Manufacturing and construction activity tends to take place in industrial areas or on the edges of urban areas that are less well served by public transport, and public transport accessibility is a less important locational factor, both in terms of access to workforce and for business travel. Consumer Services activity (including retail) tends to be located in urban areas where access to customers is important, including access by bus. Producer Services businesses tend to be located in central areas, where they benefit from good access to clients, both locally and in terms of good strategic rail links to London and other cities, and public transport is important for many commuting journeys to central areas. 15 West of England Joint Local Transport Plan (West of England Partnership, March 2011), located at Atkins GVA Impacts of Major Transport Schemes 21 December

34 This is supported by the findings of the stakeholder research described in Chapter 3. Most of the businesses surveyed confirmed that accessibility by car is the most important factor to their business operations. However, for businesses located in the centres of Bristol and Bath, public transport access is critical: both in terms of rail connections to London (and Heathrow) for business travel, and for enabling efficient access for the West of England labour market Public transport quality and road congestion Transport provision across the West of England is variable, with traffic congestion on many parts of the road network and significant issues with public transport. Issues are consistently raised about the reliability of bus services and the costs of fares. Whilst demand has risen on the rail network, services on many corridors are not frequent and there are problems of overcrowding. The stakeholder research indicated that many businesses and organisations are actively addressing the impacts of travel at their organisation, including supporting alternatives to commuting by car. However, a consistent challenge in encouraging modal shift is the limited availability and / or reliability of public transport options, which is a particular issue in the North Fringe and Avonmouth / Severnside. Measures to manage travel demand therefore have limited effectiveness if there are insufficient public transport alternatives. These issues have given rise to perceptions among many including the business community that the current transport network is not meeting the needs of the West of England economy. These issues, and the economic implications, are already established. For example, as already noted in Chapter 2, the JLTP estimates that congestion will cost the area s economy approximately 600m per year by 2016, based on modelling of forecast traffic conditions. The West of England Local Enterprise Partnership delivers a quarterly Barriers to Growth survey, which seeks to assess business confidence and to identify and monitor immediate barriers that are constraining business growth. The Quarter / survey revealed that, when asked about being located in the West of England area, the majority (52%) indicated the overall attractiveness of the area. Specifically, in relation to transport, 18% indicated proximity to transport links (rail, road and motorway) as being the main benefit of the location, although traffic congestion was identified by 22% of respondents as the most significant disadvantage. The subsequent Quarter 3 survey revealed that: Journey times on the transport network and reliability of the transport network were reported to impact negatively on the day-to-day operations of almost half of the businesses surveyed (47% and 44% respectively); and When asked about potential transport improvements, the majority (77%) stated that reduced congestion would have a positive impact on their business, with 76% stating that reduced journey times would have a positive impact. This is supported by the findings of the stakeholder research described in Chapter 3. A large proportion of the businesses and other organisations surveyed identified that congestion, accessibility and the quality of public transport are key issues that are constraining the growth potential of the West of England Summary: connectivity and the current economy In terms of the current economy in the West of England, we can conclude that: Connectivity matters in different ways to different sectors of the economy. Different parts of the West of England have particular locational advantages, which draw on both accessibility advantages and historic economic strengths. For example, central Bristol has a concentration of business services, Bath is strongly oriented towards the visitor economy, Filton supports Aerospace and advanced manufacturing and Avonmouth / Severnside is focused on heavy industry and logistics. The concentration of business services in Bristol city centre draws on the accessibility of the skilled labour market from the wider West of England area and good rail access to London. The clusters of advanced 16 West of England LEP Barriers to Growth Survey Report, Quarter (West of England Local Enterprise Partnership), located at Atkins GVA Impacts of Major Transport Schemes 21 December

35 manufacturing at Filton and logistics at Avonmouth / Severnside have developed around good access to the Strategic Road Network (together with the rail network for freight movements from Avonmouth). Shortcomings on different parts of the transport network affect different sectors to a greater or lesser extent. For example, Professional Services firms are more affected by delays on the rail network whilst firms producing or moving goods would be more affected by incidents and delays on the road network. The Barriers to Growth surveys indicate significant problems on the transport network: over one in five respondents recently noted that congestion is the main disadvantage of being located in the West of England, whilst journey times impact negatively on almost half of all businesses Connectivity and Growth The West of England has the ambition to deliver up to 95,000 new jobs by 2030 and 3.4% annual growth in GVA by 2020, which will be delivered both through higher productivity and increased numbers of people working and living in the area. Forecasts indicate that this will lead to substantial increases in travel demand: without action being taken, it is likely that most of the increased travel demand will be by car, leading to large increases in traffic congestion. Whilst some demand could be accommodated through public transport, it is likely that more local rail services would reach capacity and would not be able to accommodate further growth in demand. Bus services would suffer from the effects of traffic congestion, increasing journey times, reducing reliability and further reducing their attractiveness to people who have alternative travel choices Public transport accessibility As noted above, accessibility by bus and rail has, to date, been less important than accessibility by car for most businesses. However, in the case of more central locations, including the centres of Bristol and Bath, public transport is likely to play a more important role, particularly given increasing constraints on highway capacity. In the case of Temple Quarter, the development of Temple Meads as a major transport hub, together with the development of the Greater Bristol Metro, would result in an emphasis on rail access. At present, the configuration of the rail network means that accessibility is relatively good in certain corridors and poor in others. For example, in North Somerset, people can drive to Nailsea & Backwell station and access Temple Meads by rail in less than 45 minutes. Much of the Bath urban area (including time taken to access Bath Spa station) is less than a one hour journey from Temple Meads. However, much of the Bristol urban area is not well served by the rail network, with limited numbers of stations, low service frequencies and poor connections between services. If improvements are not made, the rail network in its current form will continue to play only a minor role in catering for future travel demand in the West of England. Buses will be affected by increasing levels of congestion on the road network, which will reduce effective catchment areas. Again, these catchment areas are highly uneven, being affected by congestion hotspots and other factors. For example, whilst most of South Bristol will in future lie within 45 minutes from Temple Meads, large parts of North Bristol will lie more than 60 minutes away. This is due to long journey times passing through the city centre. Conversely, there are long journey times from South Bristol to employment opportunities in the North Fringe, a situation that will worsen with increased congestion in the future. This issue, of limited and uneven bus journey times to key destinations, will apply across much of the subregion if action is not taken to improve services. This will significantly constrain the ability of the bus network to provide viable choices for many critical journeys in the sub-region. Bus patronage could therefore stagnate (or decline) if measures are not taken to improve the competitiveness of the bus as the primary form of public transport, particularly within the urban areas Forecast congestion The figure overleaf presents forecast congestion in the Bristol urban area in This compares actual traffic speeds in the morning peak period with free-flow traffic speeds in the absence of delays due to other traffic. The difference between actual and free-flow speeds represents the scale of traffic-related congestion: on links shown in red, morning peak hour traffic speeds are less than half the typical free-flow speed. Atkins GVA Impacts of Major Transport Schemes 21 December

36 Figure 3. Future Congestion (2031) in the Bristol Urban Area Atkins GVA Impacts of Major Transport Schemes 21 December

37 This indicates that there will be widespread congestion in the central area, much of South Bristol, several radial routes into the city, at key motorway junctions, on the M5 Avonmouth Bridge and towards Westonsuper-Mare. This will therefore be a challenge to the sub-region as a whole, in terms of costs to increased businesses, the overall competitiveness of the sub-region and in unlocking new development. The congestion hotspots in the city centre, South Bristol and the North Fringe will be particular challenges in unlocking the full potential of the Enterprise Zone and Enterprise Areas. Similar challenges will also be faced at Weston-super-Mare, with a major congestion hotspot at Junction 21, and in Bath, with high levels of congestion on radial routes and in the city centre Summary: connectivity and the future economy From the evidence that is available, if major transport improvements are not delivered, it is possible to conclude the following points about connectivity and the future economy in the West of England: Economic growth will increase travel demand through increases in the numbers of people living and working in the West of England. The failure to deliver significant improvements to bus and local rail services will constrain future travel choices, reducing the scope for public transport to accommodate the needs of people and businesses in the West of England. The shortcomings of the public transport network are likely to increasingly impact on the competitiveness of the sub-region. Accessibility by public transport is likely to become increasingly important as many businesses seek to locate in places with good quality access to the labour market and good strategic connectivity to markets. The limited catchment of the local rail network and increasingly long journey times by bus within the urban areas will reduce the overall depth of labour markets and limit the potential for clustering benefits. Failure to take action will continue to fuel car-dependency and traffic growth. This will give rise to significant increases in congestion. In addition to significantly adding to business costs through increased journey times and the need to make allowances for worsening journey reliability, this has the potential to significantly constrain new development, both in terms of reduced investor confidence and constraints in the planning system. This could significantly constrain future job creation and economic growth Issues in Specific Areas The discussions above highlight the broad challenges faced in planning for growth in the West of England. The LEP Business Plan proposes that a large proportion of this growth should be directed to the Enterprise Zone, five Enterprise Areas and Regeneration Area in South Bristol. This means that failure to address transport constraints in these priority locations will significantly constrain the growth potential of the West of England as a whole. It is therefore important to address the specific issues in each area to determine the extent to which growth could be constrained. The following section describes the key challenges that will be faced, in each of the growth areas, in the absence of major improvements to the transport network. It therefore highlights key issues that need to be addressed to unlock the full economic potential of each growth area. In all cases it will be necessary to proactively influence travel behaviour to reduce the need to travel by car, which will require substantial improvements to walking and cycling networks and bus and rail services. In addition, consideration is given to the issues at Bristol Airport as the international gateway to the area Case Study: Temple Quarter, Bristol Temple Quarter has been identified as having significant potential for driving economic growth across the sub-region, benefiting from being a gateway to the West of England, with frequent and fast rail journeys from Temple Meads to London and other major cities. However, the area is currently far from meeting its full potential, with a mix of vacant plots, former industrial uses and a poor sense of place. The designation of Enterprise Zone status is expected to result in the transformation of this area to fully capitalise on its gateway potential, attracting high value-added businesses that benefit from clustering and good public transport links. However, if action is not taken to significantly improve transport connections, accessibility to this area will be constrained by the limited connectivity of the rail network, limited bus passenger capacity and congestion on Atkins GVA Impacts of Major Transport Schemes 21 December

38 the road network. There is limited potential to accommodate large numbers of additional car trips because of capacity constraints on the road network around Temple Meads. The delivery of new jobs at Temple Quarter will therefore be dependent on securing a very high mode split by non-car modes for trips to / from the area, which is likely to be substantially higher than the current average for the city centre. Figure 4 presents rail accessibility to Temple Quarter if no improvements are made. This is measured by total access time (time taken to access the station, plus time spent on board the train). Figure 5 presents bus accessibility to Temple Quarter if no improvements are made. This is measured by total access time (time taken to access the bus stop, plus time spent on board the bus). Figure 4. AM Peak Rail Journey Time Catchments to Temple Quarter Enterprise Zone This shows the importance of rail services in providing a deep journey time catchment to the city centre. As already noted, large parts of rural North Somerset are able to access Temple Meads by train in less than 45 minutes and much of the Bath urban area is less than a one hour journey. However, the Bristol urban area is not well served by the rail network: large parts of the city do not have stations and, for those areas with stations, services are not frequent, with limited potential to carry significant numbers of commuters. If significant improvements are not made, rail will only be able to accommodate a very small amount of the future travel demand generated by Temple Quarter. Atkins GVA Impacts of Major Transport Schemes 21 December

39 Figure 5. AM Peak Bus Journey Time Catchments to Temple Quarter Enterprise Zone Buses will be affected by increasing levels of congestion on the road network, which will reduce effective catchment areas. Whilst most of South Bristol will lie within a 45 minute journey time catchment (access time + in-vehicle time), large parts of North Bristol will lie more than 60 minutes from Temple Quarter. Given that significant numbers of Temple Quarter employees could be expected to live in North Bristol, this will constrain the ability of the bus network to accommodate future commuting needs. Furthermore, given the large numbers of people commuting in future to Temple Quarter, a step change in the capacity of bus provision to the area will be required. This will require new services, with high frequencies and high levels of capacity, to address the access requirements of the area. Failure to deliver major improvements to bus access will substantially constrain the ability to unlock the development potential of the Enterprise Zone. Figure 6 uses congestion data to estimate journey time catchments by car to the Temple Quarter area: light green shading indicates journey times up to 30 minutes; light blue indicates up to 40 minutes. Atkins GVA Impacts of Major Transport Schemes 21 December

40 Figure 6. AM Peak Car Journey Time Catchments to Temple Quarter Enterprise Zone Highway Congested Link Time Comparison with Free-Flow Time More than double Free-Flow Time % greater than Free-Flow Time 25-50% greater than Free-Flow Time 0-25% greater than Free Flow Time From this, we can conclude the following: From the North: although the M32 will experience peak period congestion, journey speeds are higher than other routes into the city, and this corridor will play a key role in providing access to the city centre and Enterprise Zone from the north; From the North-West: the catchment is much more constrained, due to very high levels of congestion on the A38 and A4018 (and the need to cross the city centre). The A4 Portway will also be highly congested, particularly on the approach to Cumberland Basin, increasing the journey times from M5 Junction 18; From the West and South-West: there is a relatively deep catchment, benefiting from relatively freeflowing traffic on the A370 Long Ashton bypass, although traffic will be slower-moving on other parts of the route; From the South: the catchment is constrained due to congestion on the A37 and the road network in the south of the city, this is despite the A37 providing direct access to the edge of Temple Quarter; From the East: the catchment is constrained due to highly congested traffic on the A4 and A420 corridors towards Brislington and Kingswood, despite Temple Quarter being located adjacent to the A4 corridor on the east side of the city centre. Temple Quarter will benefit from relatively good strategic access to the motorway network via the M32, but access from much of Bristol and the wider West of England will be highly constrained by future levels of congestion. This confirms that there is very limited road capacity for car-based commuting from within the West of England to Temple Quarter, and emphasises the importance of access by non-car modes. The analyses also demonstrate that the effects of congestion will not be felt equally: certain corridors will suffer much worse congestion and journey time catchments will be skewed by poor road infrastructure in certain areas. The same principles apply to all of the areas in which major employment growth is planned: the configuration of transport infrastructure will significantly affect accessibility in different directions, which will impact on both Atkins GVA Impacts of Major Transport Schemes 21 December

41 commuting and business travel. This must be taken into account in considering the extent to which congestion and accessibility problems will constrain the potential for growth in each area South Bristol Regeneration Area South Bristol faces particular challenges in unlocking regeneration and new employment to improve economic prospects and outcomes for local residents. As identified in previous chapters, the area has complex needs but transport issues are a particular challenge in unlocking the potential of the area. Several of those people consulted through this work made specific reference to the transport problems in South Bristol, highlighting the disadvantages compared with the north of the city. It was also highlighted that the accessibility challenges result in some businesses having limited interest in considering locating in the south of the city. This challenge will become progressively more serious as travel demand increases in the city and traffic conditions deteriorate with increased congestion. Much of the area is not connected to the rail network: although there are stations at Bedminster and Parson Street, services are not frequent and access to Temple Meads is poor. The area is therefore dependent on bus services to meet the accessibility needs of people living and working in the area. However, increasing congestion in the area will directly impact on buses, meaning that much of the city centre (and its employment opportunities) will be at least 45 minutes journey time from much of South Bristol. Conversely this also means that employers will have limited accessibility to the labour market, with much of the north of the city located more than one hour from most of South Bristol. Congestion will be a particular challenge, with significant constraints to highway accessibility in South Bristol. Model forecasts indicate that a large area can be reached to the south east (via the A37 Wells Road) within 20 minutes and Bristol Airport can be reached within 30 minutes (via the A38). However, access to other destinations is highly constrained. Access to the Cumberland Basin is poor, due to long delays in the Parson Street area, and Junction 18 of the M5 is more than 50 minutes from Hengrove. Given the importance of good quality access to the Strategic Road Network to existing and future businesses in South Bristol (as evidenced by the recent survey), this is likely to significantly impact on the attractiveness of this area for business. As part of a separate commission a telephone survey was conducted with businesses in South Bristol in October Businesses were asked to identify the factors that are most important to the operation of their business: 67% identified transport links to customers, 53% parking at their premises and 36% transport links to suppliers. More than half (54%) reported that they are affected by congestion and 71% were concerned about congestion increasing in future, with the main concerns being the time taken to get to destinations, staff arriving late and delays in making and receiving deliveries. The survey responses also demonstrate that improved connectivity will be the most important factor in the potential growth and retention of businesses in South Bristol Avonmouth / Severnside Enterprise Area The Avonmouth and Severnside industrial area has developed as a result of its close proximity to the Port of Bristol and good access to the motorway network. The area is characterised by large premises, with low employment densities, with heavy volumes of goods vehicles and an industrial character. Large parts of the area particularly Severnside have very limited public transport provision, although the Severn Beach line provides rail services to Temple Meads. The future transport challenges in this area will depend on the aspirations for future growth. The aspirations to date have been to focus on logistics and industrial floorspace, which will largely depend on high quality access to the motorway network. Avonmouth benefits from direct access to the M5 and M49 motorways, although there is likely to be increased future congestion on the local road network adjacent to Junction 18, together with slow-moving traffic on the M5 Avonmouth Bridge. Severnside, despite having grown significantly in catering for major logistics and industrial operators, does not have direct motorway access. The A403 instead provides access to the M48 to the north and M5 at Avonmouth, with significant volumes of traffic using local roads. Severnside includes a site with an extant planning permission from the 1950s, which, in planning terms, does not require transport improvements. However, further development at Severnside will require significant improvements to highway infrastructure, including realignment of the A403 corridor and improved access to the motorway network. Atkins GVA Impacts of Major Transport Schemes 21 December

42 Consultees highlighted that substantial development would follow in the Severnside area with the future completion of a new junction on the M49 motorway. Recent study work has identified the potential to intensify development in Avonmouth / Severnside, which will require greater attention to improving non-car modes for commuting to the site, including significant improvements to local bus services. In the absence of improved public transport, the potential of Avonmouth / Severnside is likely to be limited to logistics and industrial uses Bath City of Ideas Enterprise Area The Enterprise Area extends westwards from central Bath along the Upper and Lower Bristol Roads (A4 and A36 corridors) along the River Avon corridor. This area is proposed to focus on growth sectors including creative industries, professional services, engineering consultancy and software development. However, substantial investment will be required to fully unlock the potential of this area. The A4 and A36 corridors are key bus routes into Bath, with Park & Ride services also operating along the A4 from the Newbridge Park & Ride to the city centre. However, traffic flows are high and traffic is a particular problem in the city centre, causing congestion, severance and impacting on environmental quality. Better management of roadspace is required in the city centre, to reduce delays to bus services, to reduce the dominance of cars and freight and to improve the quality of the public realm. The city has complex travel challenges, with large numbers of people travelling into the city from surrounding towns and villages. Significant numbers of people commute into the city centre by rail (including from Bristol), bus and Park & Ride, whilst walking and cycling are options for travel within the city. Reflecting its World Heritage Site status, the city also draws large numbers of visitors (both from across the UK and worldwide) and there are large numbers of car trips within the city. Whilst Bath is well served by bus services, with good penetration to most areas, there are major problems with reliability of services due to congestion. The key challenge in delivering the planned level of employment growth in the riverside area is therefore to maximise commuting by walking, cycling and public transport, manage traffic demand and manage the impacts on the highway network, particularly in the city centre and along the A4 and A36 corridors. This will require major improvements to public transport through the site from the city centre, to improve the attractiveness of buses as a travel option and to ensure sufficient capacity for the future numbers of people expected to work in the area. It will also be necessary to deliver strong packages of smarter choices measures to influence travel behaviours, both in the businesses in the riverside area and city centre Science Park Enterprise Area / Emerson s Green Emerson s Green lies alongside the A4174 Ring Road, which provides transport access around the eastern edge of the city and subsequently to the M32 and M4 / M5 motorway corridors. It is home to the Bristol and Bath Science Park (which includes the National Composites Centre), which provides a focal point for science, innovation, technology, creative and digital media businesses. In addition there are links to other nearby employment areas and an adjoining new residential community. The area is not located near to the rail network and is completely dependent on bus services to provide public transport accessibility. Buses currently operate along the A432 corridor at the western edge of the area, and also serve the existing Emerson s Green residential area, but bus accessibility is otherwise currently relatively poor, and limited to the corridor extending north-east from the city centre towards Yate. The area benefits from direct access from the A4174 Ring Road, with lower levels of forecast congestion than in other parts of the West of England. However, numerous stakeholders commented about the relative distance and journey times to access the motorway network. Analyses confirm that congestion will become increasingly severe on the approach to M32 Junction 1 at Hambrook, which will impact on journey times and reliability. Congestion will also worsen on the Ring Road in the Kingswood area to the south. This means that there will be delays (and impacts on journey reliability) for traffic travelling from further afield. Congestion will also occur on the local road network in Staple Hill and Mangotsfield, which will impact on local journeys to work. These challenges are likely to significantly impact on the attractiveness of the site to potential investors and occupants, particularly in terms of perceived distance from the motorway network and the constraints to strategic accessibility to the site. Atkins GVA Impacts of Major Transport Schemes 21 December

43 Filton / A38 Enterprise Area The Filton Enterprise Area is located on the North Fringe alongside the A38 in close proximity to the M4 / M5 interchange, providing direct access to London, South Wales, the Midlands and South West. It builds on long-established strengths in advanced engineering, defence and aerospace, with a global reputation for innovation. It includes a new strategic allocation of 50ha of employment land (located within the Cribbs / Patchway New Neighbourhood) with further capacity for around 50ha on surrounding sites, and will enable clustering alongside existing world-leading businesses. The site is bisected by the Henbury rail freight line although there are not currently any passenger services on this line: the nearest station is at Patchway, which only has hourly services to Bristol Temple Meads and Cardiff. Frequent bus services operate along the adjacent A38, connecting Thornbury and Cribbs Causeway with the city centre. Orbital bus services also connect Avonmouth, Westbury-on-Trym and Southmead with Parkway and Frenchay, although these are not frequent. Large parts of the North Fringe and north Bristol lie within 45 minutes travel time, although frequencies are variable and services are affected by congestion. Several of those stakeholders consulted specifically mentioned poor public transport links in much of the North Fringe, particularly to the business parks on the northern edge of the area, for example Aztec West. This issue was cited by some businesses as a factor which would dissuade them from locating in the area. Whilst this lies to the north of the Enterprise Area, the perceptions of poor public transport accessibility in the North Fringe are likely to influence travel behaviour, and significant improvements to services are likely to be required to accommodate future demand. The North Fringe area suffers from traffic congestion, which is due to high volumes of in-commuting to major areas of employment from residential areas in North Bristol, other parts of South Gloucestershire and further afield. Forecasts indicate that congestion will become acute at M5 motorway Junction 16 (by Aztec West) to the north, together with the A38 towards the city centre, B4056 towards Southmead and on key routes to the east. Journey times for commuters will therefore become longer, journeys will become less reliable, and access to the motorway network will become more difficult. This is likely to impact on the attractiveness of the site to investors and constrain the full potential to unlock new jobs in the area Junction 21 Enterprise Area This Enterprise Area is located immediately adjacent to Junction 21 of the M5 in Weston-super-Mare. Development is already taking place, with the Weston Gateway Business Park, new offices at Locking Parklands and infrastructure works taking place for the Weston Airfield Business Quarter. Overall, 72ha of employment land is being developed with planning permission and access to the road network. A key objective of this development is to encourage economic development in Weston-super-Mare: at present, large numbers of people commute out of the town to Bristol and other parts of the West of England. The area benefits from access to the nearby Worle Parkway railway station, with half-hourly rail services to Bristol and the south. However, this currently plays a modest role in catering for commuting out of the town, and there is a high level of car dependence for travel to Bristol and other parts of the West of England. This results in heavy traffic flows and long delays on the A370 approach to Junction 21 during the morning peak, and delays on the motorway exit during the evening peak. This major congestion hotspot is impacting negatively on business perceptions of the area, and stakeholders consider that this is having a negative effect on the perceptions of investors. Increased travel demand will exacerbate congestion problems, and it is likely that this major access issue will significantly constrain the future potential to unlock employment growth in the town Bristol Airport In addition to the growth areas described above, it is important to highlight the issues at Bristol Airport, as the international gateway to the West of England and a critical economic asset in its own right. The airport provides scheduled and chartered flights to destinations across Europe and beyond. In 2011, the airport was the ninth busiest in the UK by passenger numbers, with almost 5.8 million terminal passengers, or 2.6% of the national total 17. Demand has remained robust during the last five years, with virtually no change since 2006 against a backdrop of a reduction in air travel of almost 7% across the UK, and 17 Source: CAA UK Airport Statistics 2011, Table 1 Atkins GVA Impacts of Major Transport Schemes 21 December

44 reductions of almost 5% at Birmingham and 15% at Manchester. In terms of more locally based competing airports, there were reductions of 27% at Exeter and 39% at Cardiff Wales. Bristol Airport is therefore successfully maintaining its role as the primary international gateway to the West and Wales. The airport has ambitious plans for growth, and North Somerset Council granted planning permission for expansion to the airport in February This will include expansion of the terminal to just over double its current floor area, new piers and aircraft stands, two multi-storey car parks and an interchange for public transport services. Development will take place incrementally to respond to increases in demand over time. The airport is a key employer, with an increase from 1,500 to over 2,900 employees in the last eight years, and over 3,500 new jobs forecast to be created in the South West of England following expansion, of which 900 will be located on site 18. Even more significantly, airport expansion will unlock the potential for new routes from the airport, including business-focused flights to major European cities, North America and the Middle and Far East. Accessibility to the airport is therefore critical, both for staff and passengers. It is located on the A38 to the South West of the city. Fast and frequent Airport Flyer services operate from Marlborough Street Bus Station and Temple Meads, with intermediate stops in Bedminster. However, road access is less good, with traffic required to negotiate congested roads in South Bristol, including the Parson Street Gyratory, Winterstoke Road and the Portway. This significantly adds to journey times to the airport. In future, increased traffic demand will significantly increase delays in South Bristol, which will result in longer (and less reliable) journeys to the airport. As the economic significance of the Airport increases, it will be critical to ensure efficient accessibility from the wider West of England. Increased journey times to the airport will directly impact on the competitiveness of businesses relying on access to the airport Summary of Key Issues From the discussions in this chapter, it is possible to highlight the following key issues about the impacts of transport on the current and future economic potential of the West of England and the economic implications if significant improvements are not made to the transport network. Connectivity matters in different ways to different sectors of the economy. Different parts of the West of England have particular locational advantages, depending on current road, rail and public transport provision, which matter in different ways to different sectors of the economy: motorway access matters for the production and movement of goods, rail connections matter for Professional Services businesses. Shortcomings on different parts of the transport network affect different sectors to a greater or lesser extent. Professional Services firms are more affected by delays on the rail network whilst firms producing or moving goods would be more affected by incidents and delays on the motorway network. The Barriers to Growth surveys indicate significant problems on the transport network: over one in five respondents recently noted that congestion is the main disadvantage of being located in the West of England, whilst journey times impact negatively on almost half of all businesses. Economic growth will increase travel demand through increases in the numbers of people living and working in the West of England. The failure to deliver significant improvements to bus and local rail services will constrain future travel choices, reducing the scope for public transport to accommodate the needs of people and businesses in the West of England. Without investment, the shortcomings of public transport are likely to increasingly impact on the competitiveness of the sub-region. Public transport is likely to become increasingly important as businesses seek to locate in places with good quality access to the labour market and good strategic connectivity to markets. The limited catchment of the local rail network and increasingly long journey times by bus within the urban areas will reduce the overall depth of labour markets and limit the potential for clustering benefits. 18 Source: Atkins GVA Impacts of Major Transport Schemes 21 December

45 Failure to take action will continue to fuel car-dependency and traffic growth, resulting in increased traffic delays. In addition to significantly adding to business costs through increased journey times and the need to schedule allowances for worsening journey reliability, this has the potential to significantly constrain new development, both in terms of reduced investor confidence and constraints in the planning system. This could significantly constrain future job creation and economic growth. Business is committed to playing its role in managing travel demand. Those organisations consulted demonstrated a high level of commitment to managing the impacts of their operations, including encouraging car sharing and promoting cycling and public transport. Effective travel planning will also be a crucial aspect of managing the impacts of new development, particularly in the growth areas, which will be important in unlocking the full potential of each area. However, the effectiveness of measures will be severely constrained if action is not taken to improve public transport connections to each area. Failure to provide adequate connections to the priority growth areas will significantly constrain the future economic prospects of the West of England. The transport challenges are specific to each of the growth areas, but common challenges include provision of sufficient public transport capacity within the urban areas, constrained road capacity and varying levels of congestion, which collectively reduce accessibility to each area and will constrain potential job creation. Atkins GVA Impacts of Major Transport Schemes 21 December

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47 5. Major Transport Schemes in the West of England 5.1. Introduction This chapter describes the major transport schemes that have been identified to tackle the challenges and help unlock economic growth in the West of England. As highlighted in the brief, these include: 1. Bath Transportation Package; 2. Weston Package; 3. Ashton Vale to Temple Meads Rapid Transit; 4. North Fringe to Hengrove Package; 5. South Bristol Link; 6. Greater Bristol Metro Phase 1; 7. Greater Bristol Metro Phase 2; 8. New Rail Stations Package; 9. Temple Quarter Transport Package; and 10. M49 New Junction. The purpose of this study is to assess the impacts of individual schemes at the West of England level, and also the collective impacts of the schemes at the West of England level and on key locations that will be the drivers of growth in the sub-region. The schemes, and the locations of the growth areas, are shown in Figure 1 on Page 2 of this report. In order to understand the economic impacts of the schemes, it is first important to provide an overview of each scheme, the case for intervention and their impacts on accessibility. This chapter uses a range of sources of evidence to describe each scheme, depending on their state of readiness: Schemes 1-5 are already well developed and are programmed to commence within the current Spending Review period: information on these schemes is available from the Best and Final Funding Bids that were submitted to DfT in September ; Information on the Greater Bristol Metro and New Rail Stations (Schemes 6-8) has been drawn from studies undertaken by Halcrow for the West of England authorities in ; The Temple Quarter Transport Package is described in a Study Report prepared by Halcrow for Bristol City Council in ; and The impacts of the M49 New Junction are described in an Economic Assessment Report prepared by Mott MacDonald for the Highways Agency 22. This chapter starts by describing the strategic case for each project, before considering the transport impacts, which will inform the assessment of economic impacts in the next chapter Strategic Case There is a clear strategic case that can be presented for intervention through all of the projects. This strategic case has been informed through logic mapping, which describes the problem, considers the vision being sought for the West of England, and identifies the mechanisms through which transport improvements will be made to unlock growth. Figure 7 overleaf summarises these mechanisms. There are two key aspects to be considered: the labour market and business connectivity. In both cases, there are two fundamental challenges: first, a high level of dependence on the car (or the road network in the case of most freight movements), and second, high levels of congestion increasing journey times and costs. Each scheme has a different emphasis on improving travel choices and tackling congestion, based on addressing the specific issues in each area. 19 The Best and Final Bids can be found at 20 West of England Area Rail Studies, Halcrow for West of England Partnership, April Transport Report for Temple Quarter Enterprise Zone, Halcrow for Bristol City Council, June M49 New Junction: Economic Assessment Report, Mott MacDonald for Highways Agency, June 2012 Atkins GVA Impacts of Major Transport Schemes 21 December

48 Figure 7. Logic mapping for major transport schemes in the West of England Challenges Impacts of schemes Direct Economic Outcomes Wider Economic Outcomes Issues are specific to different sectors and different places Balance of transport impacts is specific to each scheme Balance of economic outcomes is specific to each scheme Labour market Limited public transport alternatives high car dependence Traffic congestion longer commuting journeys Improve choices for commuting & education journeys Improve traffic conditions for commuting journeys Increased depth and skills base of labour market Agglomeration of business activity Improved competitiveness of sub-region Enhanced perceptions of quality of life Improved perceptions by potential inward investors Traffic congestion longer and less reliable business journeys Improve traffic conditions for business journeys Improved confidence to invest by indigenous businesses Business Connectivity Limited alternatives to the car for business journeys Improve travel choices for business journeys Reduced business travel costs Capacity unlocked to accommodate new economic activity Dependence on road network for most deliveries Improve reliability of freight movements Wider induced effects in subregional economy As discussed in previous chapters, each area (and the businesses within these areas) faces specific challenges, so the emphases differ in each case. The logic mapping approach should, of course, recognise that the schemes have been designed to address different challenges. Figure 1 (on Page 2) sets out the overall approach to supporting economic growth through major transport investment in the West of England, and the key principles of each scheme are summarised in Table 3. Atkins GVA Impacts of Major Transport Schemes 21 December

49 Table 3. West of England Major Transport Schemes: Strategic Case Scheme Key challenges to be addressed Key impacts of scheme Potential economic outcomes Bath Transportation Package Weston Package Ashton Vale to Temple Meads North Fringe to Hengrove Package South Bristol Link - Quality of local bus services - High car use for travel to city centre - Congestion on road network across the city - Impacts on quality of place in city centre - Limited capacity for growth - High numbers of people out-commuting, mostly by car - Severe delays on approaches to M5 J21 - Poor business perceptions of competitiveness of Weston-super-Mare - Very limited capacity for growth - Limited public transport capacity on key corridor into Bristol city centre - High car use for travel into city centre - Congestion on critical parts of local road network - Poor public transport access in S Bristol, long bus journey times in N Fringe - Poor cross-city N-S public transport links - High car use in N Fringe and M32 corridor - Extensive congestion on road network - Poor public transport access in S Bristol - High car use for many journeys - Acute, widespread congestion, with long delays on primary route network - Poor reliability of freight journeys - Heavy traffic flows through urban area - Improved bus access to City of Ideas EA - Increased bus patronage - Mode shift from car - Improved journey times and journey reliability on road network - Improved quality of place in city centre - Improved access to railway stations, to reduce dependency on car for travel out of Westonsuper-Mare - Improved road and bus access to J21 EA - Significantly reduce delays at J21 - Step-change in public transport capacity and quality from N Somerset into Bristol - Significant mode shift from car - Improved journey times on local roads - Improved PT access in South Bristol - Step-change in PT access in North Fringe - Significant mode shift from car - Improved journey times on local roads in N Fringe - Improved PT access from west - New road to connect to Long Ashton Bypass: large reduction in journey times to the west (and M5 at Junction 18) - Improved road and public transport access and lower journey times to Bristol Airport - Reduced traffic in sensitive urban areas, opportunity to reallocate existing roadspace to public transport - Improved depth of labour market - Reduced business travel and goods movement costs - Improved visitor perceptions and increased visitor spend in the city - Unlock capacity for growth in City Centre & City of Ideas EA - Improved access to jobs for residents of W-s-M - Reduced business travel and goods movement costs - Improved business competitiveness in W-s-M - Improved perceptions of W-s-M as a business location - Unlock capacity for growth in Junction 21 EA - Improved depth of labour market from N Somerset into Bristol - Reduced business travel and goods movement costs - Unlock capacity for growth in City Centre & EZ - Improved depth of labour market (for businesses in North Fringe) and better access to jobs elsewhere (residents in South Bristol) - Improved access to education & training - Reduced business travel and goods movement costs - Unlock capacity for growth in City Centre, Filton / A38 EA, Science Park Enterprise Area / Emerson s Green & South Bristol - Improved depth of labour market (for businesses in South Bristol) and better access to jobs elsewhere (residents in South Bristol) - Improved access to education & training - Large reductions in business travel and goods movement costs - Unlocked access to new geographic areas for business markets - Improved business competitiveness of South Bristol - Unlock capacity for growth and vital regeneration in South Bristol Atkins GVA Impacts of Major Transport Schemes 21 December

50 Scheme Key challenges to be addressed Key impacts of scheme Potential economic outcomes Greater Bristol Metro Phase 1 Greater Bristol Metro Phase 2 New Rail Stations Package Temple Quarter Transport Package M49 New Junction - Limited capacity, frequency and quality of local rail services for travel between Bath, Westonsuper-Mare, Yate and Bristol - Limited direct rail connectivity between key economic centres in the West of England: reliance on travel by car for many journeys - No rail access from the Portishead corridor: reliance on A369 (delays on approach to J19) - Limited rail access to many parts of the Bristol urban area and key places generating high levels of out-commuting - Limited opportunities for rail-based Park & Ride - Limited capacity for rail to cater for major development growth in key locations near rail network (Temple Quarter, Bath, Filton, Westonsuper-Mare) - Limited accessibility and capacity of bus services - Limited accessibility by local rail services - Post-industrial legacy: poor permeability for active modes - Severance of much of the area by transport infrastructure (Temple Circus, railway tracks) - Highly congested road network, with very limited capacity for additional traffic - Poor access to M5 and M49 motorways from Severnside - Poor local road network and goods vehicles using inappropriate routes - New rail connections between Portishead and Bath and Severn Beach via Temple Meads: reduced reliance on travel by car - Improved capacities and frequencies on local rail services - Improved rail connectivity between key centres, reducing reliance on travel by car - Further improvements to rail connectivity between key centres, reducing reliance on travel by car - New rail services connecting Henbury / Filton to Temple Meads, supporting Filton / A38 EA and delivery of new housing - Improved access to rail network for communities within Bristol urban area and places generating high rail demand - New opportunities for rail-based Park & Ride, including congested A4 Portway. - Improved accessibility across Bristol urban area and increased bus patronage through provision of new bus services - New highway, walking and cycling infrastructure to improve permeability and legibility and reduce severance - Measures to tackle severance caused by heavy traffic flows in Temple Circus area (to be investigated further). - Step-change in access to motorway network, particularly for key sites in Severnside area - Significant improvements in journey times for goods traffic - Reduced traffic flows on local roads - Improved accessibility to employment for residents of Portishead - Significant increase in depth of labour market for businesses in central Bristol - Improved ease of travel for business journeys between key WoE centres - Increased options for business locations - Support growth at Temple Quarter EZ - Further increase in depth of labour market for businesses in central Bristol - Further improved ease of travel for business journeys between key WoE centres - Increased options for business locations - Unlock capacity for growth at Filton / A38 EA - Support growth at Temple Quarter EZ - Further increase in depth of labour market for businesses in central Bristol - Improved business perceptions of competitiveness of city region - Support growth at Temple Quarter EZ - Improved depth of labour market (via improved rail and bus services) - Maximise connectivity benefits of Temple Meads and improved access to London - Cater for essential access needs of businesses, enabling effective business operations - Unlock full economic potential of Temple Quarter EZ - Large reduction in travel costs for goods vehicles in Avonmouth / Severnside area - Improved competitiveness of Avonmouth / Severnside as a major logistics hub for the South West - Unlock growth at Avonmouth / Severnside EA Atkins GVA Impacts of Major Transport Schemes 21 December

51 5.3. Accessibility Impacts of Major Schemes A number of the transport schemes have been modelled, using the G-BATS3 strategic transport model of the Bristol area and the Weston Model. The Bath model was not available in the study timeframe and for the Bath Transportation Package a more qualitative description of the impacts has therefore been undertaken. A series of maps have been produced to present the impacts of the schemes, on the basis of the scale of transport user benefits in 2031 at a detailed zonal level. These are taken from the difference in transport user costs between the Without Intervention and With Intervention transport model outputs. The analyses are focused on time savings as the primary benefit of these projects, for both public transport users and for cars and good vehicles. These are mapped as a geographical access indicator at the model zone level, which allows the identification of geographical areas that will benefit most from the transport schemes Bath Transportation Package The impacts of the Bath Transportation Package are described in a report produced by Mott MacDonald to support the process of seeking Full Approval for the project 23. Inspection of the output data presented in the report indicates that the Package will deliver benefits for a wide range of transport users in the city, including a wide range of journey lengths. Park & Ride users are forecast to experience significant benefits resulting from increased Park & Ride capacity (hence greater ability to find a space) and reduced time spent waiting for Park & Ride buses. These Park & Ride users are drawn from a wide catchment but the primary beneficiaries will be businesses and other activities in the city centre. There will also be significant benefits to users of the road network across the city due to decongestion benefits following mode switch to bus and Park & Ride services in the city. Again, the main area to benefit will be the city centre, although benefits will be experienced at a city-wide level Weston Package Figure 8 (overleaf) shows the forecast impacts of the schemes proposed within the Weston Package on users of the road network in the Weston-super-Mare area. This demonstrates that there will be substantial benefits in Weston-super-Mare town centre and in parts of the Junction 21 Enterprise Area. This is because the package will encourage mode shift to bus for local journeys, the train for longer-distance services (with improved facilities at Worle Parkway) and deliver major improvements to Junction 21 for drivers. The improvements to Junction 21 will improve accessibility for residents of the area on the eastern Fringe of Weston-super-Mare and along the A370 corridor through Congresbury. There will be localised increases in traffic delays in the Worle area, which will be due to increased numbers of people arriving at Worle Parkway station to use train services. Along with people cycling and arriving by bus, there will also be increased numbers of cars, which will slightly increase traffic delays across a small area. In addition, a small localised increase in traffic delay is forecast in the Sandford area, along the A368 corridor to the east of Weston-super-Mare. This is likely to be due to increased traffic being able to access this route due to improved traffic conditions on this route in the Locking area. Overall, however, the Weston Package is forecast to deliver accessibility benefits for traffic in the Westonsuper-Mare area. The overall scale of the benefits is discussed further in Chapter Schemes serving the Bristol Urban Area Figure 9 shows the combined impacts of the three rapid transit schemes: Ashton Vale to Temple Meads, North Fringe to Hengrove Package and South Bristol Link. 23 Bath Transportation Package: Economic Assessment Full Approval, Mott MacDonald for Bath & North East Somerset Council, May 2012 Atkins GVA Impacts of Major Transport Schemes 21 December

52 Figure 8. Impacts of Weston Package Atkins GVA Impacts of Major Transport Schemes 21 December

53 Figure 9. Impacts of Rapid Transit Schemes Atkins GVA Impacts of Major Transport Schemes 21 December

54 This demonstrates that there will be significant benefits (shown in blue and green) resulting from the three rapid transit schemes in large parts of the Bristol urban area. These benefits will be due to improved journeys for existing public transport users, mode shift from car to rapid transit, and decongestion benefits to other traffic. Analysis using accessibility mapping has indicated that the rapid transit schemes would result in a 4% increase in the number of people living within 400m of a bus stop, equivalent to almost 16,000 people. On the north side, the North Fringe to Hengrove Package will enable re-routing of traffic away from congested routes onto the new Stoke Gifford Transport Link, providing traffic benefits in the North Fringe. The fast and frequent rapid transit services will be attractive to drivers, encouraging mode shift for journeys to the city centre, reducing traffic and delivering indirect benefits on the A38 congested Gloucester Road corridor. The new M32 junction will offer significant benefits, by enabling direct rapid transit services via the M32 and unlocking the masterplan for the University of West of England on Coldharbour Lane. Central Bristol will benefit significantly from improved public transport connectivity to the north and south (through the North Fringe to Hengrove Package) and west (Ashton Vale to Temple Meads), including high quality rapid transit services from the Long Ashton Park & Ride site. Reduced traffic flows (resulting from drivers switching to rapid transit services) will also substantially reduce congestion and improve journey times for drivers in the city centre. South Bristol will also benefit, with significant improvements in road access via the South Bristol Link, reduced congestion on the existing road network and rapid transit services reducing journey times for public transport passengers. Hengrove and Filwood will particularly benefit from a major improvement in road access to the west, linking to the A370, Brunel Way and the A4 Portway, whilst the industrial area adjacent to Winterstoke Road will benefit from reduced congestion following the diversion of through traffic onto the South Bristol Link. Bristol Airport will also benefit from enhanced bus connections and rapid transit feeder services. The map indicates that there could be some areas where the package would result in some small increases in travel costs. These are due to minor effects of traffic diversion and are not considered significant. In some cases (e.g. Downend), these are understood to be due to the re-routing of local bus services following the delivery of rapid transit along the Ring Road to Emerson s Green. In practice, services would be planned to minimise negative impacts on existing users. In addition, some negative impacts are shown on the A38 corridor towards the Airport and Wrington. This could be due to re-routing of traffic onto the A38 from other routes to take advantage of the improved road connections via the South Bristol Link. In addition, the provision of a new junction on the A38 for the South Bristol Link will result in a small increase in traffic delay. However, the areas served by the A38 corridor are mainly rural and the relative impacts would be fairly minor Sub-Regional Impacts of Rail Schemes Indicative modelling has been undertaken to assess the potential impacts of the Greater Bristol Metro scheme, which demonstrates that there will be substantial benefits to both existing rail users and users of the road network following mode shift to the improved rail services. There will be particularly strong benefits for those people travelling to and from the corridors directly served by the improved rail services. These include inner urban Bristol, Yate, Weston-super-Mare, Avonmouth and the corridor through Keynsham to Bath. Particularly high benefits are identified in the Clevedon and Portishead areas, as people who currently travel to Nailsea and Backwell to access the rail network will instead be able to use direct services from Portishead. The large improvements to rail services will, in turn, result in a significant reduction in car use, which will deliver decongestion benefits on the road network. These impacts will be particularly important in and around Portishead: for example, this will help address the high levels of congestion forecast on the A369 on the approach to the M5 (as shown in Figure 3). Some caution should be applied because further work is required to model in greater detail the impacts of Phases 1 and 2 of the Greater Bristol Metro and the New Stations Package. Nevertheless, the analyses demonstrate the importance of the Greater Bristol Metro scheme in helping to increase levels of rail Atkins GVA Impacts of Major Transport Schemes 21 December

55 accessibility in the West of England, which will help deliver a shift from the car and reduce congestion on key corridors. The impacts of the New Stations Package have not been modelled, but on the basis of the available evidence, it would appear that the benefits of new stations at Saltford and Corsham could be significant. Saltford would build on the benefits seen at Bath, Oldfield Park and Keynsham, with an improvement in rail connectivity in this corridor between Bath and Bristol. Corsham, meanwhile, would improve connectivity to Bath from the east. However, further work would be required to assess the potential impacts on existing rail passengers of increased journey times resulting from the time spent stopped at the new stations Temple Quarter Transport Package In contrast to most other schemes, the purpose of this package is to cater explicitly for the travel needs generated by this major growth location, rather than providing wider transport benefits to other parts of the city. For this reason, it has not yet been assessed using the G-BATS3 transport model. However, study work undertaken by Halcrow 24 has demonstrated that the failure to deliver a comprehensive package of transport measures for Temple Quarter would severely compromise the ability to deliver the Enterprise Zone. The benefits of a future Transport Package will be in enabling the projected 17,000 workers to travel to the Enterprise Zone, with a strong focus on access by rail from elsewhere in the sub-region (through the rail schemes described above), large numbers of additional bus services providing access from across Bristol, and walking and cycling for more local journeys. The feasibility of innovative transit solutions to connect with Cabot Circus and the city centre is also being considered, and options to route future bus rapid transit services through the Enterprise Zone are being investigated. A concept has also been developed for reducing the severance effect of Temple Way, either by encouraging diversion of orbital traffic onto outer routes through the completion of the Callington Road Link, or through placing Temple Way into tunnel. However, the costs of this latter option would be very high, and it may be more feasible to develop lower-cost solutions to tackle this severance problem. The benefits of this package will be to improve the integration of Temple Quarter with the city centre, effectively extending the city centre to the south east. Together with the measures to improve public transport integration and dramatic improvements to Temple Meads as the main rail gateway to the city, this has the potential to transform accessibility between Temple Quarter and other parts of the city centre M49 New Junction Modelling outputs for this scheme were not available within the study timeframe; however the Economic Assessment Report 25 has been provided. This demonstrates that there will be very large benefits to the Avonmouth / Severnside area from the provision of direct access onto the M49 motorway, reducing times and distances to access the motorway. Almost half the total benefits of the project would be due to trips to / from the Avonmouth / Severnside area. The modelling also forecasts significant benefits for journeys to / from the Filton / Patchway area, the northern part of Bristol and Bristol city centre. The scheme will help to reduce volumes of traffic to / from Avonmouth using local roads, which will bring particular benefits to the Cribbs Causeway area Impacts on Growth Areas The analyses described above provide clear evidence on the scale of accessibility impacts of each scheme on the key growth areas in the West of England. These impacts are summarised in Table 4 overleaf. 24 Ibid Ibid. 22 Atkins GVA Impacts of Major Transport Schemes 21 December

56 Temple Quarter South Bristol Avonmouth / Severnside Bath City of Ideas Science Park Enterprise Area / Emerson s Green Filton / A38 Junction 21, Weston-super- Mare GVA Impacts of Major Transport Schemes Table 4. West of England Major Transport Schemes: Accessibility Impacts on Growth Areas Growth Areas Scheme Comment Bath Transportation Package Weston Package +++ Ashton Vale to Temple Meads North Fringe to Hengrove Package South Bristol Link Greater Bristol Metro Phase 1 Greater Bristol Metro Phase 2 New Rail Stations Package Temple Quarter Transport Package M49 New Junction +++ Impacts concentrated on Bath urban area, significant proportion of benefits experienced in city centre and Enterprise Area. Impacts concentrated on Weston-super-Mare and surrounding areas of North Somerset. Significant proportion of benefits experienced in J21 EA. Impacts across wide catchment from North Somerset, benefits to TQ and S Bristol from improved PT accessibility. Improved PT access from S Bristol, moderate decongestion benefits in Filton, modest PT access improvements at Emerson s Green. Major improvement to road journey times from Hengrove, major decongestion benefits in the Ashton Gate area. Increased rail catchment to Temple Quarter and Bath, modest improvement in rail access from Avonmouth and Weston-super-Mare. Further increase in rail catchment for Temple Quarter, re-opened stations would be adjacent to Filton EA. Potential benefits to S Bristol with re-opened station at Ashton Gate, improved access to Bath with new stations at Saltford and Corsham. Major improvement in access to Temple Quarter through improved access for active modes, new bus services, improved highway access. Major improvement to road access, with significant reductions in journey times for goods vehicles accessing Severnside. Key No impact + minor positive impact ++ moderate positive impact +++ major positive impact Atkins GVA Impacts of Major Transport Schemes 21 December

57 5.5. Scheme Costs The outturn capital costs of the transport schemes are presented in Table 5 below. In addition, certain projects have made allowance for annual operating costs. In order to ensure comparability of the projects, and to facilitate the economic appraisals in the following chapter, the table also includes the Present Value of Costs (PVC) for each project where this information is available. The PVC is the total value of the project costs, based on when project costs are forecast to be incurred, discounted to 2002 and in 2002 prices, which enables the projects to be compared. This therefore takes account of when costs relating to preparation, construction, maintenance and operation are due to occur, and derives a single project cost for the purposes of project appraisal. In the case of the rail schemes (Greater Bristol Phases 1 and 2 and New Stations Package) and the Temple Quarter Transport Package, the development of more detailed costings is ongoing and the PVC of each project is therefore provisional (and will need to be refined in due course). Costs have been estimated for two options for the M49 New Junction: however the preferred option still needs to be confirmed and further work will be required to refine the cost estimate. Scheme Table 5. Major Transport Schemes: Costs Forecast Outturn Capital Cost ( m) * Present Value of Costs ( m) Bath Transportation Package 20m 29m Weston Package 16m 9m Ashton Vale to Temple Meads Rapid Transit 50m 42m North Fringe to Hengrove Package 102m 84m South Bristol Link 43m 38m Greater Bristol Metro Phase 1 36m Greater Bristol Metro Phase 2 27m New Rail Stations Package 16m 77m** Temple Quarter Transport Package 50m 42m** M49 New Junction: 4-slip option 19m 16m M49 New Junction: 2-slip option 13m 11m Sources of data: Best and Final Funding Bids; Rail studies for the West of England Partnership in 2012; Study Report on Temple Quarter Transport Package; and M49 Economic Impact Assessment Report. * Outturn costs use a 2011 Price Base. ** PVCs for rail schemes and Temple Quarter Transport Package are initial estimates. In most cases, the Present Value of Costs is lower than the forecast outturn (capital) cost, reflecting the process of discounting costs back to a 2002 base. However, the Bath Transportation Package includes provision for the ongoing annual costs of operating enhanced bus services, which are included in the total Present Value of Costs; in this case the Present Value of Costs is therefore higher than the forecast outturn capital cost for the Package Summary of Key Issues From the discussions in this chapter, the following points can be made about the impacts of the programme of major schemes in the West of England. There is a strong strategic case for each project. There is clear evidence of problems caused by poor connectivity in the areas served by the projects, and each project is designed to address these challenges. The projects will deliver a combination of more attractive public transport services, mode shift away from the car and faster and more reliable journeys for all users of the transport network. Atkins GVA Impacts of Major Transport Schemes 21 December

58 The projects will deliver economic benefits: including both reduced business costs and improved accessibility for travel to work, which will help improve efficiency in the labour market. Furthermore, they will help to unlock wider benefits through improved perceptions of the sub-region, from both existing businesses and potential inward investors. Each scheme will deliver accessibility benefits in specific areas: detailed analyses confirm that the schemes will help tackle the accessibility challenges in the targeted areas, through mode shift and reduced journey times. The schemes are complementary, delivering benefits in different areas: for example the benefits of the Bath and Weston Packages are focused primarily on these areas, the benefits of Rapid Transit are focused along the corridors, the M49 New Junction will focus on Avonmouth / Severnside and the Greater Bristol Metro will have wider sub-regional impacts. The costs of the schemes are at varying levels of detail. The five schemes currently working through DfT s major schemes programme have been developed to a high level of detail and there is a strong level of confidence in the costs. In the case of the rail schemes, indicative cost estimates have been developed, although these will require significant further refinement. The scope of the M49 New Junction is still subject to confirmation and more detailed cost estimates will be required as the project proceeds. In the case of the Temple Quarter Transport Package, a more refined scope for the Package will need to be developed. Atkins GVA Impacts of Major Transport Schemes 21 December

59 6. Economic Impacts 6.1. Introduction This chapter describes the projected economic impacts of the transport projects in the West of England. It starts by summarising the standard economic appraisal of the projects, based on the work to date in developing their business cases. This analysis is presented in Section 6.2. This standard approach offers one perspective to assessing the economic impacts of the projects. However, there are further approaches that can be taken to provide deeper insights into the potential impacts of the schemes on the West of England economy. Section 6.3 assesses the impacts of the schemes on productivity, in terms of the costs and benefits experienced by businesses that contribute directly to national GVA. This analysis considers both the total discounted benefits and an estimate of annual impact in a future year with the schemes in place. This productivity analysis is based on DfT s approach to assessing impacts at the national level. It does not fully capture all of the potential impacts in the West of England. These wider factors include the improved overall competitiveness of the sub-region, improved perceptions by inward investors and improved confidence to invest by existing businesses. Together with the effects of providing new capacity to unlock growth, this would result in the unlocking of additional jobs in the sub-region. Section 6.4 therefore sets out the approach to estimating the impacts of the schemes in unlocking new employment in the growth areas, with resultant gross and net job creation following the delivery of the schemes, together with the GVA impacts of these new jobs. At the national level, it would be assumed that a large part of this effect would be due to relocation of jobs from elsewhere in the UK and this could not therefore be considered to be a national economic gain. However, the key focus of this work is in understanding the impacts within the West of England. Section 6.4 demonstrates that the impacts of unlocking the creation of new jobs will be the most significant impact on the economy of the area Standard Economic Appraisal The business cases for the projects have, to date, been based on technical work that follows DfT s WebTAG appraisal guidance, the use of which has been mandatory for all projects seeking DfT funding. As discussed in Chapter 1, this standard approach to the appraisal of economic value of net national welfare benefits 26 is based on the valuation of time savings and vehicle operating costs. In addition, allowance can be made for economic benefits of more reliable journeys, through reduced need for scheduling allowances in planning for unforeseen delays. Provision is also made for so-called wider impacts that are not captured through the approach based on the valuation of time and operating cost savings. WebTAG also enables the valuation of savings from reduced accidents, improved air quality and reduced carbon emissions, although these are treated as separate objectives within DfT s appraisal methodology. For the purposes of this study, given the focus on the economic impacts of the projects, we have excluded these impacts from our assessments. Table 6 presents the total Present Value of Benefits (PVB) from those impacts that are conventionally included in the standard economic appraisal of transport schemes. This is a single figure to represent the future stream of net national benefits following the completion and opening of the schemes. It is based on a 60-year appraisal period, with the benefits discounted to a 2002 base year. This means that the assumptions are consistent with the calculation of the Present Value of Cost (PVC) of the scheme, as described in the preceding chapter. The table also presents the Benefit to Cost Ratio (BCR) (calculated by dividing PVB by PVC) which is the key metric for assessing the value for money of schemes. The table excludes the Greater Bristol Metro Phases 1 and 2, New Stations Package and Temple Quarter Transport Package. As previously discussed, the modelling of these packages is still at a very early stage 26 Benefits to society as a whole, not just direct impacts on the economy Atkins GVA Impacts of Major Transport Schemes 21 December

60 and initial analyses demonstrate potentially substantial changes in travel choices and routings on the network, with potentially very high economic benefits. However, it would not be appropriate to present these figures at this early stage in the assessment process. Our approach is instead to consider the wider (employment) impacts of the projects, which are addressed later in this chapter. Scheme Table 6. Major Transport Schemes: Standard Economic Appraisal Forecast Outturn Capital Cost ( m) * Present Value of Costs ( m) Present Value of Benefits ( m) Benefit to Cost Ratio (=PVB / PVC) Bath Transportation Package 20m 29m 120m 4.1 Weston Package 16m 9m 58m 6.2 Ashton Vale to Temple Meads Rapid Transit 50m 42m 262m 6.2 North Fringe to Hengrove Package 102m 84m 301m 3.6 South Bristol Link 43m 38m 369m 9.7 M49 New Junction 27 19m 16m 135m 8.4 Sources of data: Best and Final Funding Bids 28 (data for Ashton Vale to Temple Meads uses latest modelling evidence as used for Public Inquiry) and M49 Economic Impact Assessment Report 29. * Capital Costs are based on a 2011 Price Base. In all of the cases in the table above, there are very strong Benefit to Cost Ratios, with total benefits at least three times greater than project costs. In some cases, for example the M49 New Junction and South Bristol Link, the forecast benefits are between eight and ten times greater than the project costs. All of the schemes assessed therefore offer excellent value for money, when considered on conventional economic grounds Productivity Impacts It is also useful to consider the impacts of the projects on productivity 30 alone, in terms of reduced business costs, improved efficiency, agglomeration effects through increased clustering and increased business output. These elements are included within the standard appraisal described above, but it is useful to consider them separately to understand the potential direct impacts of the projects on GVA. These are summarised below. The final column divides the total PVB calculated using this approach by the PVC for each scheme (from Table 6). Scheme Table 7. Major Transport Schemes: Productivity Impacts Business Users & Providers ( m) Reliability Impacts ( m) Wider Impacts ( m) Productivity PVB ( m) Productivity PVB / PVC) Bath Transportation Package 24.3 Not stated Weston Package Ashton Vale to Temple Meads North Fringe to Hengrove Package South Bristol Link M49 New Junction 82.0 Not stated 8.2 (min) Sources of data: Best and Final Funding Bids (data for Ashton Vale to Temple Meads uses latest modelling evidence as used for Public Inquiry) and M49 Economic Impact Assessment Report. This demonstrates that all of the projects will make significant contributions to economic growth by helping to improve the productivity of businesses in the West of England. The main impact is through reduced journey 27 M49 New Junction: the four-slip option has been considered in this study. 28 Ibid Ibid Direct impacts on the economy only Atkins GVA Impacts of Major Transport Schemes 21 December

61 times and reduced vehicle operating costs, but in many cases improved reliability will also be important, adding between 5% and 20% to the benefits from reduced journey times and operating costs. Wider impacts (comprising the effects of agglomeration, output effects and Exchequer benefits of increased numbers of people working) are also significant, adding a minimum of a further 10% to productivity benefits, and up to 25% in the case of the South Bristol Link. This is a key point demonstrating the potential of the South Bristol Link to unlock economic benefits that are significantly greater than those simply assessed through time and cost savings. The final column demonstrates the value of the projects on productivity grounds alone, before taking any account of the wider welfare benefits to individuals (through easier, lower cost commuting and other journeys) outside of this definition of benefits to businesses. In the case of Bath, the analysis indicates that this narrow definition of productivity benefits almost matches the costs, even without including the effects of more reliable journeys for the economy of the city. In the case of two rapid transit projects (Ashton Vale to City Centre and North Fringe to Hengrove), the productivity benefits are appreciably higher than the costs. Those schemes including improved highway access (Weston Package, South Bristol Link and the M49 New Junction) deliver productivity benefits that are between three and six times greater than the costs, which reflects the very large benefits to businesses resulting from improved movement of goods traffic and business travel. There is a broad correlation between the total welfare benefits (determined from the standard economic appraisal) and the benefits resulting from productivity impacts. Those schemes with the highest total benefits using standard appraisal (South Bristol Link, 369m and North Fringe to Hengrove Package, 301m) will also have the highest productivity impacts ( 209m and 117m respectively). In the case of the Bath Transportation Package (with total benefits of 120m), the forecast productivity benefits ( 27m) are lower than might otherwise be expected. One factor causing this could be the exclusion of reliability benefits in the appraisal. In the case of the M49 Junction (total benefits of 135m), the productivity benefits are very high ( 90m). This reflects the nature of this scheme in providing access to the Avonmouth / Severnside area: the benefits result from the significant accessibility improvements for large volumes of goods traffic to / from this area. It is also useful to assess the potential annual net productivity impacts in the future, as a result of the completion of the projects. A future year of 2030 has been taken: this enables comparison of these productivity impacts due to improved travel conditions (in terms of improved transport supply) with the longterm impacts due to increased employment in the area. As a simple ready-reckoner, it has been assumed that the benefits in 2030 will be equivalent to approximately 6% of the total discounted benefits. On this basis, the annual productivity benefits to the economy are estimated to be approximately as follows: Scheme Table 8. Major Transport Schemes: Estimated Productivity Impacts in 2030 Productivity PVB ( m) ESTIMATED Annual Impact ( m, 2030) Bath Transportation Package 26.7m 1.6m Weston Package 31.6m 1.9m Ashton Vale to Temple Meads Rapid Transit 61.3m 3.7m North Fringe to Hengrove Package 116.7m 7.0m South Bristol Link 209.2m 12.5m M49 New Junction 90.2m 5.4m Total 535.4m 32.1m These six schemes are forecast to increase productivity by 32 million in 2030, of which 27 million is forecast to be delivered by the five schemes currently being progressed through the DfT major schemes programme. The estimates shown above represent the net impact of the schemes on national productivity. However, the projects are likely to unlock substantially higher levels of GVA in the West of England, which will be due to Atkins GVA Impacts of Major Transport Schemes 21 December

62 the effects of the schemes in unlocking new employment, hence encouraging economic activity to locate in the key growth areas in the West of England, rather than elsewhere in the UK. The following section therefore discusses the potential scale of the benefits focused within the sub-region Employment Impacts The primary benefits to the West of England of the major schemes will be in unlocking the economic potential of the priority growth areas, through improved accessibility, which will facilitate expansion of existing activity, improve the attractiveness of the sites to potential investors and facilitate development in each location. Assessments have been undertaken of the potential numbers of jobs that could be delivered at each location, first without any transport improvements, and second, with the package of schemes in place, assuming in both cases that all other requirements to support the development of the growth areas (such as other infrastructure and suitably skilled work forces) are in place and that transport is the only constraint to delivery of the forecast employment in each area Approach to Calculations The elements of the approach are summarised in Figure 10 below. Figure 10. Approach to Calculation of Employment Impacts Atkins GVA Impacts of Major Transport Schemes 21 December

63 The initial input assumptions (shown at the top of the diagram) include: Assumed level of importance, for different sectors of the economy, of different aspects of connectivity (access to the motorway network, access to the rail network and access to the local transport network); Estimated proportions of different sectors in the future employment mix in each growth area. These two factors are then used to assess the overall importance of different aspects of connectivity in the delivery of new employment in each growth area. The starting point in the process is to assess the scale of growth that can be accommodated if no transport improvements are made. This is shown in the orange box in Figure 10. This includes the following steps: A range of sources of evidence, including the accessibility analyses in Chapter 5, is used to assess the scale of challenge for each area in terms of access to the motorway, rail and local transport networks; Estimation of the scale of development (number of jobs) that can be accommodated in each area given the scale of the transport challenges identified. One consideration is that the long-term nature of development (and future jobs) in each growth area has not been determined in detail, so it has been necessary to make a series of assumptions about the future development mix at each location. The assessment of the accessibility of each site was also developed through a series of scores and weightings relating to relevant characteristics such as the severity of local congestion and proximity of the nearest mainline rail station. However, the approach is transparent and input assumptions can be tested to assess the potential implications for each location. Following the development of this baseline, reflecting the future scale of growth that could be delivered in each area in the absence of transport improvements, it is then possible to assess the potential scale of growth that could be accommodated following the delivery of the transport schemes. This is shown in the green box in Figure 10. This includes the following steps: Using the evidence from transport modelling and other sources, assess the likely scale of improvement in access to the motorway, rail and local transport networks; Estimate the overall scale of challenge with transport improvements in place, in terms of access to the motorway, rail and local transport networks; and Using this evidence, assess the estimated scale of development that could be delivered in each location with the transport improvements in place. From this, it is possible to identify the scale of development (and gross number of jobs) that would be unlocked in each area by the transport improvement(s), as shown in the blue box in Figure 10. These gross employment impacts are discussed in Section below. Following this, by making a series of assumptions about multiplier effects in the West of England economy, it is possible to estimate the net number of additional jobs and resultant GVA impacts. These impacts are discussed in Sections and that follow later in this chapter Gross Employment Impacts Table 9 shows the estimated number of jobs that could be delivered in each area, by 2030, with and without the proposed transport interventions. The difference between the two figures is the estimated gross number of jobs that would be unlocked as a result of the transport schemes. Atkins GVA Impacts of Major Transport Schemes 21 December

64 Table 9. Gross Numbers of Jobs potentially unlocked in 2030 due to Major Schemes Growth Area Potential No of Jobs in Each Growth Area No of Jobs (No Transport Improvement) No of Jobs (With Transport Schemes) Gross No of Jobs Unlocked Due to Schemes Temple Quarter EZ 17,000 3,400 9,300 5,900 South Bristol 10,000 1,000 5,000 4,000 Avonmouth / Severnside 10,000 2,000 5,500 3,500 Bath City of Ideas 9,000 1,800 4,000 2,200 Emerson's Green 9,000 2,200 3, Filton / A38 4,000 1,200 1, J21, Weston-super-Mare 11,000 2,700 5,500 2,800 Total 70,000 14,300 34,100 19,800 Source: Atkins On the basis of the assumptions made, in the absence of any new transport interventions to help unlock the growth areas, it is estimated that only around 14,000 jobs in total (gross) would be delivered by 2030 from the total potential of up to 70,000 jobs across the seven locations. Following the delivery of the package of schemes, it is estimated that around 34,000 jobs (gross) could be delivered by The resulting gross number of jobs unlocked by the transport schemes would therefore be almost 20,000 jobs. However, as already noted, these estimates are based on a number of assumptions, including the following: The assumption that all other requirements for development at each location are already in place and that transport provision is the only constraint to the delivery of the employment forecasts for the growth areas; Assumptions on the forecast sector mix in each development area (e.g. logistics, manufacturing, business services and public sector). As discussed above, connectivity factors differ by sector for example, improvements to motorway access matter more for logistics firms than for the public sector, so the overall employment response will depend on the forecast sector mix in the area benefiting from the improvement; Assumptions about the scale of development that could be accommodated in each location given the scale of the transport challenges if no transport improvements are made; and Assumptions on the scale of accessibility challenge for each area with and without the transport improvement in place. In the absence of detail about the long-term development mix in each area, it has been assumed that there would in most cases be a balance of representation from different sectors, except where there is clear evidence otherwise. For example, it was assumed that Temple Quarter would be focused on business services and businesses in emerging sectors, whilst Avonmouth and Severnside would be focused on logistics and manufacturing. Gross Impacts by Growth Area This approach can also be used to estimate the numbers of jobs unlocked by each transport scheme in each of the identified growth areas. These impacts are summarised in Table 10. Atkins GVA Impacts of Major Transport Schemes 21 December

65 Temple Quarter South Bristol Avonmouth / Severnside Bath City of Ideas Science Park Enterprise Area / Emerson s Green Filton / A38 Junction 21, Weston-super- Mare GVA Impacts of Major Transport Schemes Table 10. Gross Numbers of Jobs potentially unlocked in Growth Areas by 2030 Growth Areas Scheme Total Bath Transportation Package 1,300 1,300 Weston Package 2,800 2,800 Ashton Vale to Temple Meads North Fringe to Hengrove Package , , ,400 South Bristol Link 800 2,500 3,300 Rail Schemes (Metro, New Stations) Temple Quarter Transport Package 1,700 - * ,700 2,500 2,500 M49 New Junction 3,500 3,500 Total 5,900 4,000 3,500 2, ,800 19,800 *: potential future benefit, which will depend on future development in Avonmouth / Severnside area. Source: Atkins. The employment impacts of the Bath Transportation Package and Weston Packages are concentrated on Bath and Weston-super-Mare respectively, as expected. The three schemes in the Bristol urban area unlock new employment in South Bristol, Temple Quarter and the two Enterprise Areas in the North and East Fringes. The impacts of rail schemes, meanwhile, are likely to be concentrated on Temple Quarter and Bath. The Temple Quarter Transport Package will unlock additional development (hence jobs) at Temple Quarter and the New M49 Junction will unlock new jobs at Avonmouth / Severnside Net Employment Impacts To calculate the net additionality of employment creation unlocked by the transport interventions, it is important to take into account the following effects: Leakage: the proportion of jobs that would be taken up by people living outside the West of England; Substitution: the proportion of jobs that will be displaced from elsewhere in the West of England; and Multiplier effects: the additional jobs that will be supported as a result of supply linkage and income multiplier effects. Net additionality has been calculated in accordance with the HCA Additionality Guide (Third Edition). The basic additionality assumptions used are as follows: Leakage (L): given current high levels of self-containment in the West of England, it has been assumed that the vast majority of new jobs will be taken up by people living in the area. Therefore leakage is assumed to be only 10%; Substitution (S): it has been assumed that the majority of businesses and jobs created will be new to the sub-region and only a relatively low proportion of 25% will be displaced from elsewhere in the West of England; Multiplier effects (M): a composite multiplier of 1.40 has been used, which is considered to be appropriate for the sub-regional level 31. This means that for every 100 jobs unlocked by the transport improvements, a further 40 will be indirectly supported as a result of supply chain linkages and employees spending part of their income in the sub-regional economy therefore supporting further jobs. 31 The HCA Additionality Guide gives ready reckoners for the local (neighbourhood) and regional levels only. Atkins GVA Impacts of Major Transport Schemes 21 December

66 Temple Quarter South Bristol Avonmouth / Severnside Bath City of Ideas Science Park Enterprise Area / Emerson s Green Filton / A38 Junction 21, Weston-super- Mare GVA Impacts of Major Transport Schemes Based on these assumptions, the calculation to convert the gross number of jobs to net job creation is as follows: Net Jobs = Gross Jobs * (1-L) * (1-S) * M = (100%-10%) * (100%-25%) * 1.40 = The number of net new jobs created in the West of England is therefore calculated by multiplying the number of gross jobs by Table 11 summarises the net numbers of jobs unlocked in each of the growth areas, disaggregated by scheme. Table 11. Net Numbers of Jobs potentially unlocked in Growth Areas by 2030 Growth Areas Scheme Total Bath Transportation Package 1,200 1,200 Weston Package 2,650 2,650 Ashton Vale to Temple Meads North Fringe to Hengrove Package , ,250 South Bristol Link 750 2,350 3,100 Rail Schemes (Metro Bristol, New Stations) Temple Quarter Transport Package 1, ,550 2,350 2,350 M49 New Junction 3,300 3,300 Total 5,550 3,750 3,300 2, ,650 18,600 Source: Atkins. The total number of net additional jobs resulting from the delivery of the transport schemes is estimated to be just under 19,000 jobs GVA Impacts From this, it is then possible to estimate the additional GVA generated in the West of England. The first step is to estimate the proportions of jobs unlocked by sector in each location; the second step is to then apply data on GVA per worker for each sector. At present, the future employment mix at each location cannot be forecast with certainty. It is therefore necessary to make assumptions on the potential mix, based on the targets that have been identified by the LEP for each location. These assumptions are set out in Table 12. Atkins GVA Impacts of Major Transport Schemes 21 December

67 Table 12. Assumed Sector Mix in each Growth Area % of new jobs at Temple Quarter EZ Manufacturing Logistics Business Services Public Sector Emerging Sectors % - 60% % of new jobs at South Bristol 25% 25% 25% 25% - % of new jobs at Avonmouth / Severnside Enterprise Area % of new jobs at Bath City of Ideas Enterprise Area % of new jobs at Science Park Enterprise Area / Em. Green % of new jobs at Filton / A38 Enterprise Area % of new jobs at J21, Westonsuper-Mare Source: Atkins 20% 80% % - 40% 20% 20% 20% - 40% 50% - 30% - 20% - 30% 50% 20% - The corresponding data on GVA per worker, by sector and in 2009 prices, is shown in Table 13. Table 13. Assumed GVA per Job Manufacturing Logistics Business Services Public Sector Emerging Sectors GVA per job (2009 prices) 32 47,170 53,320 43,240 42, , Source: ONS Labour Productivity statistics, Nominal GVA per hour worked, by NUTS 2 sub-region In estimating the future GVA impacts of the schemes, DfT s WebTAG guidance has been used to forecast changes in the real value of GVA per worker. Using this data, it is estimated that GVA per worker will increase, from the 2009 base, by 10% in 2016 and by 41% in 2030, in real terms. Table 14 uses the estimates of net employment unlocked by each transport scheme to assess the potential GVA impacts (in 2030) of the transport schemes in each of the growth areas. 32 For the Gloucestershire, Wiltshire and Bristol/Bath area 33 No GVA per job statistics were available for this sector, therefore the average across all sectors was used 34 Ibid. Atkins GVA Impacts of Major Transport Schemes 21 December

68 Temple Quarter South Bristol Avonmouth / Severnside Bath City of Ideas Science Park Enterprise Area / Emerson s Green Filton / A38 Junction 21, Weston-super- Mare GVA Impacts of Major Transport Schemes Table 14. Estimated Net Additional GVA (in 2030) in Growth Areas Growth Areas Scheme Total Bath Transportation Package 73m 73m Weston Package 172m 172m Ashton Vale to Temple Meads North Fringe to Hengrove Package 45m 29m 74m 6m 62m 55m 22m 145m South Bristol Link 45m 154m 199m Rail Schemes (Metro Bristol, New Stations) Temple Quarter Transport Package 96m 0 51m 6m 153m 142m 142m M49 New Junction 242m 242m Total 334m 245m 242m 124m 55m 28m 172m 1.2 bn Source: Atkins. On this basis, it is estimated that the transport schemes would unlock approximately 1.2 billion additional GVA by In Section 6.3 above, it was shown that the estimated net national productivity impacts of the five current major schemes 35, calculated using the DfT approach, would total approximately 27 million per annum by However, as already noted, the GVA impacts in the West of England resulting from the unlocking of the growth areas and resultant job creation would be much higher than the net national impact. Table 14 indicates that the net additional GVA to the West of England in 2030 resulting from the delivery of these five schemes would be approximately 660 million per annum, if transport is the only constraint to development. This will be due to expansion of existing businesses, the creation of new business start-ups and relocation into the area either inward investment from outside the UK or relocation from other parts of the UK. This demonstrates that the effects of the transport improvements on the West of England economy are forecast to be many times larger than the net national impact. The forecast impact of 660 million (in 2030) from the five major schemes within the current funding programme is higher than the estimate of 356 million (in 2016) that informed the development of the Best and Final Funding Bid submissions 36. Whilst there are differences due to the assessment year, a major difference is due to the focus in this latest study on the potential scale of employment unlocked in the priority growth areas for the sub-region GVA Return on Expenditure If the transport improvements are considered as the final step in enabling development in the identified growth areas, there is clear evidence that the value of the jobs unlocked by the projects will deliver large overall returns on the capital expenditure. Table 15 compares the forecast GVA impacts in 2030 with the discounted scheme costs determined in the preceding chapter. However, it should be emphasised that this is a particular viewpoint, considering the return on the investment in a situation where all other requirements 35 Bath Transportation Package, Weston Package, Ashton Vale to Temple Meads Rapid Transit, North Fringe to Hengrove Package and South Bristol Link 36 As noted in Section on Page 7 of this report. Atkins GVA Impacts of Major Transport Schemes 21 December

69 for the growth areas are in place and paid for (such as other infrastructure and a skilled workforce) so that adequate transport provision is the only constraint to successful delivery of the jobs. If a wider perspective is taken, the value of the growth in GVA associated with the growth areas should be compared against the costs of providing all the requirements for the development, not just the transport element. Table 15. Estimated GVA Return on Expenditure Scheme Forecast Outturn Cost ( m) Present Value of Costs ( m) Increase in GVA (2030) ( ) Increase in GVA per Unit Cost Bath Transportation Package 20m 29m 73m 2.5 Weston Package 16m 9m 172m 19.0 Ashton Vale to Temple Meads Rapid Transit 50m 42m 74m 1.8 North Fringe to Hengrove Package 102m 84m 145m 1.7 South Bristol Link 43m 38m 199m 5.2 Rail schemes (Metro, New Stations) 91m* 77m* 153m 2.0 Temple Quarter Transport Package 50m* 42m* 142m 3.4 M49 New Junction 19m 16m 242m 15.1 All schemes 390m 337m 1.2 bn 3.6 * Initial estimates of costs for rail schemes and Temple Quarter Transport Package, to be confirmed following further study These analyses demonstrate that, when comparing GVA associated with unlocked jobs with the cost of the transport schemes, all of the schemes will deliver very large GVA returns per unit of expenditure, with an average 3.60 additional GVA in 2030 per 1 discounted cost. This assumes that all investment in other requirements to unlock this development has already been undertaken. The very large estimated returns for the Weston Package and M49 New Junction reflect the ability of the two projects to unlock new employment in Weston-super-Mare and Avonmouth / Severnside at a relatively low cost. The Temple Quarter Transport Package and South Bristol Link will also deliver particularly strong levels of GVA return per unit of cost, reflecting the focus of these schemes in directly unlocking new employment in Temple Quarter and South Bristol Summary of Key Issues From the discussions in this chapter, the following points can be made about the economic impacts of the programme of major schemes in the West of England. The schemes demonstrate a very strong economic case using DfT s standard approach to appraisal. The Benefit to Cost Ratio (BCR) is very strong for all of those schemes where detailed appraisal has been undertaken. Indicative testing of the rail schemes also suggests that there will potentially be very high levels of benefits, although detailed figures cannot yet be quoted. All of the schemes will make significant net contributions to national economic growth by helping to improve the productivity of businesses in the West of England. The schemes will, collectively, deliver substantial improvements to business productivity. However, this approach using the DfT methodology is focused on net economic benefits at the national level, rather than the spatial distribution of the impacts and the ways in which they manifest themselves through changes in economies at the local level, such as in the West of England. The primary sub-regional benefit of the package of major schemes will be in helping to unlock the latent economic potential of the West of England. This includes helping to unlock large numbers of new jobs in the sub-region. The approach to undertaking this assessment was based on assessing the numbers of jobs that could be accommodated at each of the major growth locations, with and without the transport schemes in place (assuming that all other requirements for development at each location were in place). Atkins GVA Impacts of Major Transport Schemes 21 December

70 This assessment indicates that this unlocking effect could result in the creation of up to almost 20,000 gross jobs and up to 19,000 net jobs across the sub-region. A large proportion would be delivered through the Temple Quarter Enterprise Zone and the Enterprise Areas at Avonmouth / Severnside, Bath, Science Park Enterprise Area / Emerson s Green, Filton and Weston-super-Mare, together with the Regeneration Area in South Bristol. The total estimate is dependent on assumptions about the land use characteristics of each location, the scale of development that could be accommodated without any significant transport improvements and the scale of the accessibility challenges, with and without improvements. Further work will be required, in some cases, to scope the issues associated with certain locations, in particular at Temple Quarter. It is estimated that this could unlock additional GVA in the West of England of some 1.2 billion per annum by 2030 in 2030 prices. Of this, approximately 0.6 billion could be unlocked through the five major schemes currently being delivered, and the balance would be unlocked from the rail schemes, Temple Quarter Transport Package and M49 New Junction. The package of schemes will deliver a very high return on capital investment, totalling on average 3.60 additional annual GVA in the West of England per unit of cost, if the full value of the GVA associated with the jobs is compared against the costs of the transport schemes. This assumes that all investment in other requirements for development has already been accounted for. Very high levels of return are forecast in Weston-super-Mare and Avonmouth / Severnside, and high levels of return are also expected from investment to support growth at Temple Quarter and South Bristol. Atkins GVA Impacts of Major Transport Schemes 21 December

71 7. Conclusions and Recommendations 7.1. Introduction This study has demonstrated that transport is a major barrier to economic growth in the West of England, and that investment in the programme of major schemes will play a key role in unlocking new growth. This chapter sets out the key conclusions from the work that has been undertaken Transport is a barrier to growth Connectivity matters in different ways to different sectors of the economy. Different parts of the West of England have particular locational advantages, depending on current road, rail and public transport provision, which matter in different ways to different sectors of the economy: motorway access matters for the production and movement of goods; rail connections matter for Professional Services businesses. Shortcomings on different parts of the transport network affect different sectors to a greater or lesser extent. Professional Services firms are more affected by delays on the rail network whilst firms producing or moving goods would be more affected by incidents and delays on the motorway network. Interventions to tackle transport problems will, likewise, benefit different sectors in different ways. Effective operation of the strategic road, rail and local transport networks is critical to the competitiveness of the economy. However, the Barriers to Growth surveys indicate significant problems on the transport network at present: over one in five respondents recently noted that congestion is the main disadvantage of being located in the West of England, whilst journey times impact negatively on almost half of all businesses. Economic growth will increase travel demand through increases in the numbers of people living and working in the West of England. The failure to deliver significant improvements to bus and local rail services will constrain future travel choices, reducing the scope for public transport to accommodate the needs of people and businesses in the West of England. The shortcomings of public transport are likely to increasingly impact on the competitiveness of the sub-region. Public transport is likely to become increasingly important as businesses seek to locate in places with good quality access to the labour market and good strategic connectivity to markets. The limited catchment of the local rail network and increasingly long journey times by bus within the urban areas will reduce the overall depth of labour markets and limit the potential for clustering benefits. Failure to take action will continue to fuel car-dependency and traffic growth, resulting in increased traffic delays. In addition to significantly adding to business costs through increased journey times and allowances for worsening journey reliability, this has the potential to significantly constrain new development, both in terms of reduced investor confidence and constraints in the planning system. This could significantly constrain future job creation and economic growth. Business is committed to playing its role in managing travel demand. Those organisations consulted demonstrated a high level of commitment to managing the impacts of their operations, including encouraging car sharing and promoting cycling and public transport. Effective travel planning will also be a crucial aspect of managing the impacts of new development, particularly in the growth areas, which will be important in unlocking the full potential of each area. However, the effectiveness of measures will be severely constrained if action is not taken to improve public transport connections to each area. Failure to provide adequate connections to the priority growth areas will significantly constrain the future economic prospects of the West of England. The transport challenges are specific to each growth area, but common challenges include provision of sufficient public transport capacity within the urban areas, constrained road capacity and varying levels of congestion, which collectively reduce accessibility to each area and will constrain potential job creation. Atkins GVA Impacts of Major Transport Schemes 21 December

72 7.3. The transport schemes have a very strong strategic case There is a strong strategic case for each project. There is clear evidence of problems caused by poor connectivity in the areas served by the projects, and each project is designed to address these challenges. The projects will deliver a combination of more attractive public transport services, mode shift away from the car and faster and more reliable journeys for all users of the transport network. The projects will deliver economic benefits: both through reduced business costs and improved accessibility for travel to work, which will help improve efficiency in the labour market. Furthermore, they will help to unlock wider benefits through improved perceptions of the sub-region, from both existing businesses and potential inward investors. Each scheme will deliver accessibility benefits in specific areas: detailed analyses confirm that the schemes will help tackle the accessibility challenges in the targeted areas, through mode shift and reduced journey times. The schemes are complementary, delivering benefits in different areas: for example the benefits of the Bath and Weston Packages are focused primarily on these areas, the benefits of Rapid Transit are focused along the corridors, the M49 New Junction will focus on Avonmouth / Severnside and the Greater Bristol Metro will have wider sub-regional impacts. The costs of the schemes are at varying levels of detail. The five schemes currently working through DfT s major schemes programme have been developed to a high level of detail and there is a high level of confidence in the costs. In the case of the rail schemes, high-level cost estimates have been developed, although these will require significant further refinement. The scope of the M49 New Junction is still subject to confirmation and more detailed cost estimates will be required as the project proceeds. In the case of the Temple Quarter Transport Package, a preferred scope for the Package will need to be developed The transport schemes will improve business productivity The projects demonstrate a very strong economic case using DfT s standard approach to appraisal. The Benefit to Cost Ratio (BCR) is very strong for all of those projects where detailed appraisal has been undertaken. Indicative testing of the rail schemes also indicates that there will potentially be very high levels of benefits, although detailed figures cannot yet be quoted. All of the projects will make significant contributions to economic growth by helping to improve the productivity of businesses in the West of England. The projects will, collectively, deliver substantial improvements to business productivity. However, this approach using the DfT methodology is focused on net economic benefits at the national level, and does not identify the distribution of impacts and the way in which they would affect local economies, including the West of England The transport schemes will unlock significant growth The primary sub-regional benefit of the package of major schemes will be in helping to unlock the latent economic potential of the West of England. This includes helping to unlock large numbers of new jobs in the sub-region. The approach to undertaking this assessment was based on assessing the numbers of jobs that could be accommodated at each of the major growth locations, with and without the transport schemes in place, assuming all other requirements for development in each location were in place. This assessment indicates that this unlocking effect could result in the creation of up to almost 20,000 gross jobs and up to 19,000 net jobs across the sub-region. A large proportion would be delivered through the Temple Quarter Enterprise Zone and the Enterprise Areas at Avonmouth / Severnside, Bath, Science Park Enterprise Area / Emerson s Green, Filton and Weston-super-Mare, together with the Regeneration Area in South Bristol. The total estimate is dependent on assumptions made about the land use characteristics of each location, the scale of development that could be unlocked without any significant transport improvements and the scale of the accessibility challenge for each site, with and without the improvements. Further work will be required, in some cases, to scope the issues associated with certain locations, in particular at Temple Quarter. It is estimated that this could unlock additional GVA in the West of England of some 1.2 billion per annum by 2030 in 2030 prices. Of this, approximately 0.6 billion could be unlocked through the five major Atkins GVA Impacts of Major Transport Schemes 21 December

73 schemes currently being delivered, and the balance would be unlocked from rail schemes, Temple Quarter Transport Package and M49 New Junction The transport schemes will deliver very high returns on investment The package of schemes will deliver a very high return on capital investment, totalling on average 3.60 additional annual GVA in the West of England per unit of cost, if the full value of the GVA associated with the jobs is compared against the costs of the transport schemes. This assumes that all investment in other requirements for development has already been accounted for. Very high levels of return are forecast in Weston-super-Mare and Avonmouth / Severnside, and high levels of return are also expected from investment to support growth at Temple Quarter and South Bristol. Atkins GVA Impacts of Major Transport Schemes 21 December

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75 Appendix A. Evidence from Other Economic Impact Studies Atkins GVA Impacts of Major Transport Schemes 21 December

76 A.1. Evidence from Research Studies Publication Transport and the Economy West of England Context (2010) 011/cmselect/cmtran/writev/economy/te50.htm Transport / GVA Links Highlights the Eddington Transport Study (2006) - transport networks support the productivity and success of urban areas and their catchments by getting people to work, supporting deep and productive labour markets and allowing businesses within the area to reap the benefits of agglomeration. Outlines findings from a wider economic assessment of transport schemes in the West of England Partnership area (KPMG, 2010). KPMG s study assessed how a programme of major transport schemes proposed in the area would support employment growth and increase the area s productivity. The assessment identifies that there are clear links between transport supply and economic outcomes, including links between connectivity (to labour markets and other businesses) and the pattern of employment in the area. This highlights that improved connectivity helps deliver employment growth and improved productivity. Key findings from the study included: - The schemes produce 1.8 of GVA for every 1 of transport capital investment. - GVA impact is comparable to that of half of the construction industry in the Area, and represents an increase equivalent to 2% of West of England economic output. - The ten priority schemes assessed would directly contribute 9,000 new jobs within the Area. The Northern Way (2010), Transport s Impacts on the Size of the Economy. ownloads/evidence%20base/transport%20&%2 0the%20Economy/Transports_Impacts_on_the_ size_of_the_economy_-_overview_paper.pdf Highlights the difficulty in quantifying increases in GVA as a result of transport investments. Lists a number of innovative and ground breaking studies that have produced estimates of additional economic activity resulting from transport investments (including by KPMG and Spatial Economic Research Centre (SERC), London School of Economics). These studies suggest that the impact of major transport investments on GVA could be up to three times the size of welfare benefits assessed in a conventional cost benefit appraisal. The Northern Way commissioned the Institute for Transport Studies (ITS) at the University of Leeds to review the work that has been undertaken to date and provide their views moving forward. Key findings include: - Transport investment can lead to a GVA uplift by stimulating a productivity increase in a local economy and leading to redistribution of economic activity from elsewhere. - The GVA benefits of rail investments can be significant and overall the evidence so far suggests that on a per traveller basis rail investment has a greater productivity impact than road investment. - Prioritising on a basis of GVA benefits per pound would give a different answer to a conventional benefit cost ratio. Conventional cost benefit analysis does not consider location, whereas in the GVA benefit calculations, both location and the area over which impacts are assessed are important influences on the estimates of GVA uplift. - ITS identifies that estimates of GVA uplift are a measure of economic potential, and that in order to realise this potential Atkins GVA Impacts of Major Transport Schemes 21 December

77 Publication Transport / GVA Links further investments may be needed such as in skills and training. ITS recommend that alongside GVA assessment, work should be undertaken to understand the capacity of a local economy to deliver the economic potential. - ITS conclude that the methods to estimate the potential GVA impact of a transport investment are in their infancy and further work is required. Wider Economic Analysis of Network Rail s Proposed Solution to the Manchester Rail Hub (KPMG, 2010) KPMG examined the implications of Network Rail s proposed solution to the Manchester Rail Hub, for employment and productivity across the Northern Way. KPMG calculated that the overall GVA impact of the proposed solution is 2.1 billion in 2021 (based on 2007 prices). This GVA impact is comprised of the following: Productivity impacts from costs savings and agglomeration - Businesses become closer together, benefiting from closer links and greater specialisation, driving up productivity. - Businesses benefit from wider / deeper labour markets. - Time saving benefits / more productive use of travel time. Productivity impacts from influencing sectoral mix - Statistical evidence shows that areas with good rail connectivity tend to attract more productive business sectors. Impacts of expanding employment - Improved rail connectivity will improve the competitiveness of the areas served, attracting businesses and people into the labour market. Productivity impacts of redistributing employment - Rail investment in the Manchester Hub attracts employment to those areas which gain from the service changes. These areas tend to be the denser / more productive parts of the Northern Way area (e.g. Central Manchester) therefore this tends to increase the productivity of these jobs. Sensitivity testing where crowding is included shows that overall benefits grow by 32% to around 2.8 billion per annum in 2021 in 2006 prices. Reducing the generalised costs faced by commuters would increase the impact of the investment on Greater Manchester s labour market footprint and increase productivity benefits. Greengauge21 (2010) High Speed Rail in Britain: Consequences for Employment and Economic Growth. Greengauge 21 commissioned KPMG to analyse the impact of High Speed Rail on national employment, wages and long term economic growth. Key findings include: - Improved rail connectivity can enhance productivity and employment and contribute to economic growth. Overall, HSR could boost annual GVA in 2040 by between 17 billion and 29 billion. - More productive businesses offer higher wages and attract people into the labour market. It is estimated that HSR could Atkins GVA Impacts of Major Transport Schemes 21 December

78 Publication Transport / GVA Links contribute between 25,000 and 42,000 additional jobs in Britain. - HSR could help to spread prosperity outside of the most productive areas of the South East and London. Prioritising investment to support our economy - A new approach to appraisal methodology (Network Rail, 2010) brary/downloadmedia.ashx?mediadetailsid=381 2 Highlights the need for a new approach when prioritising spending - need to prioritise spending in a way that best supports economic growth. Demonstrates examples of where this approach has already been applied and where real economic impacts of schemes have been considered including: Prioritising schemes on the basis of their impact on jobs, productivity and therefore economic output - Greater Manchester Transport Fund (GMTF), GMPTE: The GMTF will deliver a 1.5 billion programme of transport investment over a ten year period. The programme to be delivered reflected a local prioritisation exercise that focused primarily on economic impacts. Potential transport interventions were modelled to understand their potential impact on output (measured in terms of GVA) through changes in employment and productivity. The approach focused on maximising the impact on the size of GVA, and improving accessibility to employment for the most vulnerable 25% of wards (IMD). - Jubilee Line Extension Impact Study: The study identified a range of wider impacts of the extension that may not have been picked up by a conventional transport appraisal. These included economic and labour market activity; land use; development activity; property market activity; and environment and sustainability. The study highlights the extent to which transport, regeneration and housing schemes can complement each other. The land use changes that have resulted from the improved transport infrastructure have multiplied the benefits of the scheme. Using a new approach to consider the impact of interventions on worklessness - Manchester Buses, GMPTE: A study undertaken by consultants including KPMG for DFT and GMPTE investigated the potential impact of changes to the coverage and pricing of the bus network on worklessness within the city region. The study found that access to employment opportunities through the public transport network could represent a barrier to entering the labour market, and that these barriers could be lowered through targeted improvements to the network and/ or fares interventions. - A reduction in worklessness will have national and local benefits, particularly the reduction in the cost to the taxpayer of supporting worklessness. Atkins GVA Impacts of Major Transport Schemes 21 December

79 A.2. Evidence from Core Cities City Scheme Scheme Description Wider Economic Impacts Methods mentioned Links Midland Metro Light-rail between Birmingham and Wolverhampton via West Bromwich and Wednesbury (opened 1999) new jobs generated Property values enhanced by an estimated 19m d/projekte/ /849/fc_1/study_job_creat ion_clean_technologies_oct_2 004.pdf (general study) Birmingham Midland Metro (Birmingham City Centre Expansion) Extension from Snow Hill station through the heart of the city (approved 2012) Boost employment by 1,300 jobs Increase GDP by 50m per annum CityCentreExtension.aspx Leeds Midland Metro (general expansions) New Generation Transport (NGT) Package of extensions, including Birmingham city centre extension (proposed but not yet approved) Three routes of trolleybuses into Leeds city centre (approved 2010) Metro extensions have the potential to create 14,500 new jobs 73.9% of these would be from Regeneration Zones This would add 513m to the region s economy Creation of around 4,000 additional jobs in Leeds city centre by 2030, representing 4% increase in city centre employment Further 250 jobs will be created as a result of operating and maintaining NGT 14% uplift to conventional scheme economics 176m (2.6%) annual GDP uplift for Leeds city centre arising from scheme Calculated using Urban Dynamic Model, simulating how urban area evolves over time, focusing on linkages between transport; businesses and the local economy; population and land use. utureroutes.aspx nlyres/8fae d8-85b9- ADA0806D79E8/0/NGTProgram meentrybusinesscasesubmissi onmarch2012.pdf (most recent business case) Manchester Metrolink (current network) Light rail system with five lines into Manchester city centre (original network opened 1992, has been developed since) Very little effect (but surveys were carried out only a few months after opening, so may not have captured more long term effects) rivate/level2/instruments/instrum ent002/l2_002c.htm Metrolink Expansion Four new lines into Manchester city centre, plus several line extensions. Many Generate more than 3,200 new jobs in city by 2026 (Volterra report has breakdown of where each job would be in the region) Analysis considered cross-sectional relationship between om/stories/840- other_publications (Volterra Atkins GVA Impacts of Major Transport Schemes 21 December

80 Newcastle Tyne and Wear Metro replacing heavy rail, making services more frequent (approved 2007) Light rail system serving Newcastle, Gateshead, Sunderland, South Tyneside and North Tyneside (opened 1980) Each job would create output of 4-10k more per annum Expanded workforce would boost the area s economy by almost 160m by 2026 House prices could rise by up to 12,000 Move to productive jobs estimate for 2026 in 2006 prices is 28m Pure agglomeration estimate for 2026 is 4.2m Cumulative central scenario values to 2026 (discounted back to 2002): 139m move to productive jobs, 20m pure agglomeration Residential property values increased by 1.7% two months after opening of the system, compared to two months previously house prices, accessibility and other factors. For purpose of move to productive jobs, assumed jobs would have otherwise been in area of origin. Additional Economic Benefits of Metrolink report) s/7e742e ad5-0cb93c24ee81/0/csr_case_f or_the_regions pdf Nottingham NET Phase 2 Extending existing tram network to Clifton and Chilwell, expanding from one line to three. Creation of up to 10,000 additional jobs in Greater Nottingham by 2021 (most estimated to be concentrated in Nottingham itself) Could boost the local economy by 390m/year Construction would give 11m worth of business to local firms se2map/key- documents/nottingham- Express-Transit-Phase-Two- Full-Business-Case-July pdf (business case) k/tram-team-s-given-areapound-11m-worthbusiness/story detail/story.html (newspaper article) struction/clifton-silverdale.pdf (local leaflet) Sheffield South Yorkshire Supertram Tram system serving Sheffield (opened 1994) Employs 260 people directly Has indirectly created an estimated jobs along the track in the Lower Don Valley area Line 1 might lead to 295 jobs, line 2 d/projekte/ /849/fc_1/study_job_creat ion_clean_technologies_oct_2 Atkins GVA Impacts of Major Transport Schemes 21 December

81 between 380 and 1275 (jobs in local economy, not system construction). Application for funding suggested Line 1 would create 1135 jobs and Line pdf (general study) rivate/level2/instruments/instrum ent002/l2_002c.htm (general study) South Yorkshire BRT Phase 1 Proposed BRT scheme connecting centres of Sheffield and Rotherham, as well as existing and proposed developments in Lower Don Valley Estimated 5,900 jobs will be unlocked by the scheme (including 500 construction jobs) Will create access to 4,072 existing jobs that would otherwise not be located near a public transport route Increase in Regional GVA of 200m per annum Overall contribution of wider impacts estimated at 6.5m Wider impacts forecast using WITA (Wider Impacts in Transport Appraisal, from DfT) Calculations carried out in accordance with methodologies set out in TAG Units 2.8 and ns/investment-in-local-majortransport-schemesupdate/south-yorkshire.pdf Atkins GVA Impacts of Major Transport Schemes 21 December

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83 Appendix B. Stakeholder Consultation B.1. Overview of stakeholder groups Business Representative Organisations Engagement took place with a range of business organisations, including the Confederation of British Industry (CBI), Institute of Directors (IoD) and Business West. The CBI covers the South West region and undertakes lobbying on behalf of organisations in the region, predominantly larger industrial / professional sectors. The IoD has a regional role and represents around 500 members who are predominantly decision makers in large businesses. The IoD focuses on sharing of best practice, skills, governance issues and maximising benefits for directors and senior managers. Business West is the Chamber of Commerce for the areas of Bath, Bristol, North Somerset and South Gloucestershire. The organisation focuses on economic issues and a key task is the matching of people and skills to businesses. Existing Businesses A range of existing businesses were consulted including small, medium and large enterprises based in the areas of Bristol centre, North Fringe, Bath, South Bristol, Avonmouth and Weston-super-Mare. Numbers of employees at these businesses covered the full range, from less than 10 to over 5,000 people, with a spread across key sectors of manufacturing / engineering, retail, distribution / logistics and professional services. Use of the transport networks by businesses in the West of England varies significantly and is dependent upon the type and location of the business operation. From the research undertaken through this study, there is evidence that those businesses providing deliveries of goods to other businesses are concerned with road access issues. Other businesses focusing on professional services are more concerned with staff commuting. Property and Land Agents The property and land agents consulted operate across the West of England, dealing with locations ranging from small town centre sites to larger re-development sites, across a variety of sectors for the residential, retail, office, industrial, logistics and distribution markets. Demand for office space is naturally high in the Bristol City Centre area, with industrial sites in high demand in the Avonmouth/Severnside and North Fringe areas due to their strong strategic locations. Demand for property and land is reportedly the lowest in the South Bristol area, which is blamed on poor transport infrastructure by many of the consultees. The recession has led to a sharp decline in demand for property. Demand for office space is especially low, particularly speculative development. The majority of office stock is previously owned, with smaller amounts of Grade A office space available. There is high demand for, but lack of, residential properties, particularly family housing units. Local Economic Development Economic Development Officers in Bath & North East Somerset, North Somerset and South Gloucestershire Councils were consulted as part of this work. Central to the role of local economic development are the fields of inward investment, business support and employee related schemes. These fields promote the area as a business location, help to change perceptions of areas as places to do business, support businesses wishing to relocate, business start-up and growth plans and offer support to get local residents back in employment. A prominent issue in Bath is the lack of suitable new business premises. The Georgian buildings are often not suitable for modern businesses and a shortage of new premises could potentially affect inward investment. Across North Somerset around 8,000 businesses are identified of which 70 are deemed major employers (>100 employees). Bristol Airport and North Somerset Council employ significant numbers of staff alongside major supermarket chains and other food manufacturers. Business location is often based on historic legacy of business operation and those within the food and drink sector are also located in more rural areas. Atkins GVA Impacts of Major Transport Schemes 21 December

84 Employment in South Gloucestershire is focused in the North Fringe area, where significant major employers are based, including Airbus and the MoD. Skills are below average in the area, creating a mismatch between the highly skilled jobs offered by some of the major employers in the area and the less skilled workforce. Further and Higher Education Provision of further and higher education is strong across the West of England. The City of Bristol College and South Gloucestershire and Stroud College provide a range of courses for students including a broad mix of vocational, A-Level and degree level programmes in a full range of subjects. Both colleges operate over a number of dedicated sites in Bristol and South Gloucestershire with over 30,000 students and over 2,000 staff each. The University of the West of England (UWE) main site of operation is Frenchay Campus in the North Fringe, with 20,000 students, along with a further three sites of operation. The UWE offers a full range of degree level programmes. The University has approximately 2,600 staff members with around 1,500 on campus on an average day. B.2. List of stakeholders consulted Consultees (in alphabetical order) Airbus Bath & North East Somerset Council - Economic Development Boeing Defence UK Bristol Airport Bristol Property Agents Association Buro Happold, Bath Business West and Chambers of Commerce Carter Jonas LLP, Bath City of Bristol College Confederation of British Industry (CBI) DAS Legal Expenses Insurance Company Ltd, Bristol Destination Bristol DHL Urban Consolidation, Avonmouth, Bristol GVA Grimley, Bristol Hartnell Taylor Cook LLP Homes & Communities Agency (HCA) Howdens Joinery, South Bristol Institute of Directors (South West) Jones Lang LaSalle, Bristol Knight Frank, Bristol Marks and Spencer, Bristol Atkins GVA Impacts of Major Transport Schemes 21 December

85 Mike Knight Tyres, Avonmouth, Bristol NHS Blood and Transplant (NHSBT) North Bristol NHS Trust North Somerset Council - Economic Development Rapide System Supplies, Weston-super-Mare Savills, Bristol Smurfit Kappa, Weston-super-Mare South Gloucestershire & Stroud College South Gloucestershire Council - Economic Development The Bristol Port Company University of the West of England (UWE) West of England LEP Atkins GVA Impacts of Major Transport Schemes 21 December

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