Midlands Connect Business Research

Transcription

1 Midlands Connect Business Research Midlands Connect Partnership December 2015

2 Table of contents Chapter Pages Executive summary 4 Introduction 4 Supply chain links 4 Connectivity needs 4 Transport related constraints and opportunities 5 1. Introduction Appointment Project context and aims Approach Structure of the report 8 2. Existing information Introduction Supply chain Connectivity Summary 14 Case Study: Wedge Group Galvanising Consultation Introduction Key messages Sector specific issues 19 Case Study: Atkins Ltd 19 Case Study: Toyota Summary 23 Case Study: Jaguar Land Rover Business survey Introduction General business information Supply chain and client linkages Current issues and importance of connectivity Summary Summary of key findings Introduction Supply chain links Connectivity needs Transport related constraints and opportunities 41 Appendices 43 Appendix A. Consultation participants 44 A.1. Focus group attendees 44 A.2. One-to-one business interviews 45 2

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4 Executive summary Introduction Transport and connectivity are important factors affecting business operations and influencing business decisions. Different business sectors have different connectivity needs but all share a common need for fast, reliable, and cost-efficient transport connections to their customers, employees and suppliers. This study has used a combination of desktop research, analysis of the results of a bespoke business survey, and focused engagement with prominent Midlands businesses and business representatives to enhance our understanding of the connectivity needs of businesses across three key sectors: professional services, manufacturing, and logistics. Supply chain links Supply chains are vital for the daily operations of manufacturing and logistics businesses. The reliable and timely delivery of materials and products is a key requirement for the efficient operation of these sectors. The widespread adoption of just in time production models, and a clear trend towards shorter delivery times and more local distribution networks make connectivity and reliability prime factors affecting business performance and productivity. Professional services businesses typically have less reliance on suppliers (e.g. office supplies, IT support, and legal services) but also benefit from reliable and well-connected supply chains. Physical distance between a business and its suppliers is important, but not the sole criterion for choosing suppliers. In an increasingly global economy, businesses choose their supply chains based on good connectivity to suppliers, as well as quality and price of service. Reflecting the above, Midlands businesses have strong supply chain links within the Midlands but also have strong supply chain links with other parts of the UK, as well as overseas. The mapping of supply chain links shows a strong supply chain corridor that stretches to the North West and Yorkshire to the north, and London and the South East to the south. Some businesses also have strong economic links with international markets such as Europe, Asia, and North America. This necessitates good transport links to ports and airports. Felixstowe, Southampton and Dover are the most important ports for Midlands businesses. In terms of airports, Birmingham International and East Midlands are the Midlands two major international airports, although some businesses have to use Heathrow and the London airports, or Manchester airport because of the wider range of international destinations they serve. Research shows that the in-flight element of air freight is around 30% of the overall travel time. This highlights the importance of providing good connectivity to airports in order to minimise travel times and costs. Transport routes to major airports are therefore of significant importance to businesses, as are transport routes to major ports. Connectivity needs Different sectors have different connectivity needs. These reflect typical business locations, as well as the typical locations of their clients and supply chains. Professional and business services companies tend to be located in urban locations such as city centres. Public transport is of great importance to them both in terms of being easily accessible by their employees, and being able to connect to their clients. Professional services businesses typically rely on rail travel for business trips, as it enables business travellers to make more efficient use of their journey time (e.g. working using laptops or smartphones). Many professional services businesses also require good connectivity to airports for international travel. Good road connectivity is also important to professional services businesses, especially in terms of connecting with areas that are not well connected by rail services. Good public transport connections (including bus services) are vital for enabling businesses to attract and retain employees. Public transport is also important to many manufacturing and logistics businesses, which are typically located in out of town locations. However, there is concern that some industrial employment areas are not well 4

5 served by bus services, making it difficult for employees without cars to travel to work. This makes it particularly difficult to provide apprenticeships, which form an important part of the national skills strategy. Manufacturing and logistics businesses use the rail network for business travel but primarily rely on the road network for freight transport. Freight movements take place across all directions, criss-crossing the Midlands from East to West and North to South. Some originate and/or terminate in the Midlands while others just cross the Midlands on their way elsewhere. Road traffic and congestion in the Midlands have a number of layers including local traffic, regional traffic, and national as well as international traffic. The combination of these create bottlenecks in many locations across the Midlands. Segregating these types of traffic is viewed by many businesses as pivotal for improving connectivity and journey reliability. Demand for road freight is expected to continue to increase as a result of a growing population (which results in increased demand for goods and therefore more goods and materials to transport) and the growing trend for shorter delivery times which necessitates more local distribution centres, and smaller and more frequent deliveries. Most manufacturing and logistics businesses currently make little use of rail freight because of the limited rail network and the high costs of rail freight compared to road freight. There is widespread acknowledgement however of the potential benefits of developing a more extensive and competitive rail freight network, therefore reducing road movements. Transport related constraints and opportunities Traffic congestion and disruption to the road and rail networks have genuine and considerable impacts on the operations of Midlands businesses. Many businesses in the logistics sector in particular operate at low profit margins, which in some cases can be as low as 1%-2%. Delays on the road network as a result of traffic congestion or other forms of disruption increase fuel and staff costs as drivers and vehicles spend more time on the road. Businesses may also be liable to paying financial penalties for missing delivery deadlines. This is increasingly an issue given the rapid growth of online retailing, and strong demand for next day and just in time deliveries. Furthermore, the unreliability of the road and rail networks force businesses to make inefficient and costly travel decisions, such as starting journeys much earlier than normal in order to compensate for any unexpected delays. Major manufacturing businesses operate 24 hours a day, seven days a week. This continuous production model necessitates the reliable and timely delivery of supplies and movement of goods. Delays and disruption to the transport network can have a direct impact on production, especially where there is limited available space for storing goods. Disruption to production has indirect and induced impacts on suppliers and other businesses that depend on the operation of large manufacturers. Transport constraints and the perception of transport constraints can also affect businesses ability to attract new customers and enter new markets. In a modern economy, Midlands businesses compete with businesses across the UK and around the world. Poor connectivity (real or perceived) is an important factor affecting their ability to expand their customer base. Major manufacturing businesses generate significant levels of supply chain expenditure. At present, a large proportion of that expenditure leaks out of the Midlands (and the UK in general). It is in the Midlands economic interest to retain as much of that expenditure as possible, and the provision of a reliable and well connected transport network is a key factor for achieving that. At present, the quality and perception of public transport services in the Midlands is a major issue. Many businesses feel that existing public transport services do not provide sufficient levels of frequency, capacity, reliability and quality. Furthermore, there is widespread concern about the lack of integration between the various bus and rail services, with London frequently named as an example of a well-integrated and wellplanned public transport network. Businesses located in out of centre locations (primarily manufacturing and logistics businesses) have raised concerns about the limited public transport options for their employees. This affects their ability to recruit younger workers (including apprentices) who may not have access to a car. 5

6 The need for investment and improvements to the strategic road network emerged as a recurring theme during the engagement with the business community. Improvements to the M6 are considered particularly important due to severe congestion issues, including at key junctions such as M6/M5, M6/M42, and M6/M54. Congestion around Birmingham is a major issue, with local and through traffic combining to create bottlenecks. For example, much of the traffic from the North West to London and the South East passes through the Birmingham area. Many businesses consider the M6 Toll to have limited impact in terms of reducing congestion. But there is widespread consensus across the business community that it is important to have more efficient schemes that divert traffic around Birmingham. With regard to the wider road network other key improvements identified as part of the engagement with the business community included improved links between the A38 and A50, improvements to the strategic A49 route to improve connections with the North West, better connectivity between Worcestershire and Staffordshire, and the provision of a by-pass for the western side of the Black Country. Businesses identified East West connectivity as an important constraint, both in terms of the road and rail networks. Leicester in particular was often identified as being poorly connected to the rest of the Midlands. Better horizontal connectivity across the Midlands would support closer business links, expanded supply chain and customer markets, and better access to wider labour market pools. In conclusion, this research has provided additional evidence that transport connectivity constraints adversely affect productivity, efficiency and competitiveness. Transport connectivity has a direct influence on business decisions, including choice of suppliers and target markets. Disruption to the transport system can have a genuine and direct impact on business operations, particularly in terms of profitability and productivity. In a highly competitive international economy, excellent connectivity is a key competitive factor. One that the Midlands economy needs to improve on, if it is to fulfil its full potential as the UK s engine for growth. 6

7 1. Introduction 1.1. Appointment Atkins was appointed by the West Midlands Transport Authority (West Midlands ITA) in June 2015 to undertake a research study on the supply chains links and connectivity needs of three of the Midlands key business sectors: professional and business services, manufacturing, and logistics. The research adds to the growing evidence base of the Midlands Connect project which is seeking to outline a strong strategic economic case for transport infrastructure investment in the Midlands. The appointment follows on from work undertaken in late 2014 which looked at the economic impacts (GVA and job creation) associated with improved connectivity across the Midlands. This piece of research supports the ongoing process of gaining a better understanding of the scale of trade movements and connections amongst the key growing sectors in the Midlands Project context and aims Midlands Connect is an ambitious initiative to identify transport connectivity improvements to maximise longterm economic growth in the Midlands. This will provide a platform for engagement with Government, High Speed 2 Limited, Network Rail and Highways England to influence long-term investment in the strategic transport network across the Midlands. To maximise benefits to the wider Midlands, Midlands Connect brings together a partnership between Local Enterprise Partnerships (LEPs) and Local Authorities across the Midlands (working with Network Rail and Highways England) to develop the strongest possible case for strategic transport investment in the Midlands. The focus is on connecting towns and cities in the Midlands, both to each other and to key cities and gateways outside the Midlands, to realise the region s full economic growth potential. The Midlands Connect initiative comprises two key work streams: Strategic Communications: developing a One Voice approach to ensure that the Midlands reaches a unified position on what strategic interventions are required to maximise the growth potential of the region; and, A programme of technical work: in parallel with Route Studies by Network Rail and Highways England, this is focused on building the strongest economic case for strategic transport investment in the region. This research will support engagement with the Midlands business community to better understand their markets, supply chains and connectivity needs. The research is focused on three key sectors across the Midlands including business and professional services, manufacturing and logistics. The objectives of this research include the following: 1. Identify key market and supply chain connections for different sectors and different parts of the Midlands at present this understanding is very weak and needs to be improved; 2. Understand how improved connectivity would benefit businesses in different sectors and different parts of the Midlands and where improved connectivity would have maximum impact; 3. Support the development of a future framework for enhanced supply chain collaboration across the Midlands; and, 4. Secure buy-in and ongoing support from the Midlands business community including OEMs and supply chain businesses to Midlands Connect activity Approach The scope of the research was set out and agreed with the West Midlands ITA prior to commencement. The research drew upon a number of specific tasks in order to develop understanding of the connectivity needs and supply chain linkages of professional services, manufacturing and logistics businesses in the Midlands. The following provides an overview of the key tasks undertaken as part of this business research: 7

8 Desk Research The starting point was a desk-based review of existing data and relevant reports. A range of sources were reviewed including information available online from relevant organisations including LEPs, trade bodies/ associations and economic forums. In addition a number of relevant organisations such as trade bodies, networking organisations and business support organisations were contacted. This review and contact process enabled the extent and level of information available to be captured to support this research. Business Surveys The design and roll-out of an online survey was undertaken by the Midlands Chambers of Commerce. The survey was targeted at businesses operating in the Midlands in the professional services, manufacturing and logistics sectors. The survey sought to gather data in order to strengthen the understanding of the geographic distribution and economic value of different markets and supply chain groupings for these sectors in the Midlands. The survey was web-based using the Survey Monkey application. The survey was advertised by the Chamber to a range of businesses in terms of geographic location, business size and sector. Business Focus Groups and Interviews Qualitative research was also undertaken with a small sample of businesses from the three key sectors across the Midlands. These interviews and focus groups provided an opportunity to explore the issues of connectivity need and supply chain linkages in more depth with key businesses from the professional services, logistics and manufacturing sectors. These more detailed conversations were undertaken to understand in more detail the dynamics of markets and supply chains, along with the role of the transport network in enabling these interactions. A mix of small sector focus groups (based on the three sectors) and one-to-one business interviews were used to gather more detailed insights. Focus group meeting were held across the Midlands including in Birmingham (professional services), Telford (manufacturing), Worcester (logistics and manufacturing), Derby (manufacturing) and Northampton (logistics). Mapping and Analysis The results of the business survey and stakeholder consultation were analysed and mapped to identify the key supply chain links and connectivity needs of the professional services, manufacturing, and logistics sectors in the Midlands Structure of the report The structure of the remainder of this report is as follows: Section 2 provides an overview of existing information on the three sectors relating to supply chain linkages and business connectivity; Section 3 summarises the key themes and information gained from the consultation activity, including focus groups and individual business interviews; Section 4 provides a summary of the information collected from the business survey; Section 5 summarises the key findings from the research. Appendix A - list of consultees. 8

9 2. Existing information 2.1. Introduction An important starting point for the research has been the review of existing available information and data relating to the manufacturing, logistics and professional services sectors, their use and need for connectivity and supply chain linkages. A range of sources were reviewed including information available online from relevant organisations including LEPs, trade bodies/ associations and economic forums. In addition a number of relevant organisations such as trade bodies, networking organisations and business support organisations were contacted. This review and contact process enabled the extent and level of information available to be captured to support this research. Overall the review identified a lack of freely available data providing insight or any level of detail of supply chain operations and links for the logistics, manufacturing or professional services sector. There is some existing evidence of the supply chain links of the advanced manufacturing and automotive sectors, but little evidence regarding professional services. The importance of connectivity is a more central theme. All of the Local Enterprise Partnership s which cover the geography of the Midlands have a focus on transport and infrastructure investment and improvement in order to support business growth and development. The majority of reports and other documents found provide some contextual insights. The following section sets out a summary of key information and data found during the review Supply chain Transport Technology Profile- Birmingham A 2011 profile 1 of the high growth transport technology sector in Birmingham was carried out by Birmingham City Council. This identified 216 firms operating in the transport technology sector, employing some 12,700 people directly and contributing 360m to the city s economy. It is a growing sector with a 45% business birth rate over the five years to The sector in Birmingham has a higher representation of large and medium employers due to the significant manufactures and suppliers in the area, such as Jaguar Land Rover and Dunlop. Firms in this sector are spatially clustered, with smaller firms in the city centre and larger ones located along the M6 corridor and key rail lines. The sector in Birmingham includes manufacture and supply for the automotive, rail and aerospace industries. In automotive terms there is a concentration of high volume manufacture and supply. This however is also coupled with growth in niche supply and manufacture for specialist companies such as Morgan and Walker-Adams. Businesses in the rail sector support design, signalling, IT, engineering and construction. In aerospace the city has two significant Tier 1 suppliers (GKN and Goodrich) which also support a wide number of smaller Tier 2 and 3 supply companies. The clustering in the city facilitates collaboration including a joint venture between Rolls-Royce and Goodrich (Aero Engine Controls) which has the engineering and manufacturing base in Birmingham. Advanced Manufacturing Profile - Birmingham A 2011 profile of the advanced manufacturing sector in Birmingham was carried out by Birmingham City Council. This identified in excess of 750 businesses operating in the sector, employing some 19,000 people and contributing over 600m to the city s economy each year. Over the five years to 2010 the sector saw a 4% growth in business numbers in the city. Birmingham has a range of high technology manufacturing businesses covering a number of industries including aerospace, automotive, and medical technology. Firms tend to be located outside of the city centre in the key industrial areas which provide good road and rail access connections. In particular there is a spatial cluster along the Aston Expressway and to the northeast of the city along the M6. 1 Profile of Birmingham s Transport Technologies Industry, Birmingham City Council,

10 Birmingham has a large number of firms in electronics, marine, aerospace and other leading edge technology sectors. With contribution from the three Birmingham universities the sector is supported in terms of commercially-focused research and development activity, leading innovations and developments. The report identifies a number of areas for growth of the sector particularly in low carbon, medical and transport industries. The nature of advanced manufacturing firms in the area (e.g. Jaguar Land Rover) require an advanced supply chain to deliver goods. Just-in-time and sequence delivery plans are used throughout the supply chains, these operations are knowledge intensive and require high levels of capital investment. Turn around times of advanced manufacturing supply chains in the Birmingham area are often very fast due to the nature of the operations. Business and Professional Services - Birmingham A 2011 profile of the business and professional services sector in Birmingham was carried out by Birmingham City Council. This identified in excess of 13,000 operating in the sector, employing some 87,300 people and contributing over 3bn to the city s economy each year. Over the five years to 2010 the sector saw a 16% increase in employment in the sector in Birmingham. The profile estimates that this sector accounts for around a fifth of the city s economy. The business and professional service sector businesses are clustered in key urban centres, particularly the city centre as well as along key road and rail routes. Automotive Supply Chain - UK A report by the Automotive Council UK 2 outlines investment and activity by UK manufacturers in order to support and facilitate future growth, this includes expanding opportunities and investment for the UK supply chain. Presently good opportunities for investment and growth of the UK supply chain exist. The report notes a strong appetite for local sourcing. This is seen to bring key benefits of a responsive supply chain and importantly reduced logistics costs. During the economic recession UK supply chain businesses experienced a 26% fall in sales with many businesses closing due to either reduced cash flow or operational reasons. Over the period an estimated 25,000 jobs were lost from the supply chain as the sector contracted by more than a quarter. The UK vehicle market is dominated by imported products, the UK OEMs imported nearly 12 billion-worth of parts, whilst there were also a further 1 billion of other automotive-related products imported. Using a greater UK supply chain will support the case for further UK investment by vehicle companies, in turn investment by the vehicle companies in the UK will support the investment case for supply chain businesses. A feature of the automotive manufacturing process is the considerable lead-in time for production by the supply chain, with a minimum of two years from supplier nomination to full production. The report notes that the UK supply chain s share of available UK business has fallen in recent years - this in part is due to historic sourcing decisions made several years ago and fact that once appointed suppliers to the sector do not usually change until there is a major change in product/ specification (e.g. a new vehicle model). From 2014 this trend has started to reverse with the report outlining growth in the UK supply chain sales to UK customers of 20%. A supply chain competitive programme was launched by the Automotive Council. This has provided 90m of investments to increase competitiveness and grow suppliers of all sizes throughout the automotive supply chain. The report outlines 48 individual supplier projects have been supported with investments of 12.6m already made in capex, R&D and skills to create and safeguard more than 1,200 jobs across the automotive supply chain. A 2010 Automotive Council report found that around 80% of all component types required for vehicle assembly operations could in theory be produced by UK suppliers, though in practise not all potential UK suppliers had been selected, and a considerable proportion of what could in theory be locally source was in fact sourced from overseas. The survey found that the actual amount purchased in the UK equated to around 36% of OEMs global purchasing spend. The combined UK purchasing value of the UK-based automotive, commercial vehicle and yellow goods manufacturers at that time was estimated to be 7.4 billion per annum. The main barriers to UK sourcing were found to be uncompetitive unit cost, and a lack of capable, qualified suppliers with sufficient capacity. 2 Growing the Automotive Supply Chain: The Opportunity Ahead, Automotive Council UK, March

11 ADS Trade Organisation ADS is the main trade organisation for all companies operating in the UK Aerospace, Defence, Security and Space industries. The ADS website contains a list of ADS members who are OEM approved companies. In the East Midlands two companies are identified providing for aircraft and components based in Derby and Nottingham. In the West Midlands six companies are identified supplying engineering parts for aero, power, defence and nuclear industries. These are based across the West Midlands including Worcestershire, Oldbury, Nuneaton, Wolverhampton, Redditch and Smethwick. UK Automotive Sector Strategy The strategy outlines a key challenge for the automotive sector as the relative weakness of the domestic supply chain. Only around one third of the required parts for vehicle manufacture are sourced from within the UK. Central to increasing the value and extent of the supply chain to the sector is developing a stronger chain to enable companies to take a greater share of the supply network. Importantly the strategy notes the need to further understand barriers to growth for UK firms, key to this are: Supporting inward investment: The Government set up a new Automotive Investment Organisation (AIO), park of UKTI, which is guided by the Automotive Council. The AIO s aim is to improve the image of the UK as a place for automotive suppliers to invest and provide first contact to key potential investors; Improving access to finance: Access to finance is vital to help the UK supply chain grow. A key issue is access to tooling finance. Without it the UK supply chain, including SMEs, cannot support vehicle manufacture growth and production is likely to go abroad; and, Development programme: to enhance supplier capacity and capability. Manufacturing Impact in Midlands 3 According to this report, manufacturing accounts for 15% of the Midlands total output, with logistics accounting for 18%, and services for 21%. The report notes that the interaction between the manufacturing, production and services sector seems to have been overlooked, however there is a productive relationship between these three sectors. Also noted is the reduction in manufacturing employment, however output from the sector has grown and productivity increased. Transport Equipment Manufacturing- D2N2 Sector Action Plan The Transport Equipment Manufacturing (TEM) sector covers the production of aerospace, marine, automotive and rail transport vehicles and is significantly more productive (by 40%) than elsewhere in the UK. It is characterised by the presence of a small number of Original Equipment Manufacturers (OEM) or Primes, linked to complex and highly sophisticated supply chains that operate on a global scale. The D2N2 area has a strong association with the transport equipment manufacturing sector, given the presence of a number of large and globally significant employers such as Toyota, Rolls Royce and Bombardier, with JCB plants straddling the border. The plan identifies four OEM which have complex, global supply chains. It notes that there are very few Tier 1 suppliers in the region and it is very difficult for SMEs to engage directly with OEM businesses of this scale. A Smith Institute and SMMT report 4 notes that the supply chains of automotive OEMs are component based. For example a OEM will be split by commodity (trim, body and chassis, powertrain and electrical) from the Far East, sub-frames sourced locally due to their weight, exhausts, radiators and cooling systems from the UK as they do not ship well, while gearboxes come primarily from Germany and Austria. The Smith Institute report notes that major suppliers with a UK base have been reducing in recent years. The economic recession in the UK forced a further shift to suppliers based in Eastern Europe at lower costs than could be provided in the UK. The companies in this supply chain also serve the rail and marine markets. The plan notes that UK vehicle manufacturers do not publish details of their supply base therefore it is not possible to ascertain the number of suppliers in the East Midlands. Given the complexity and reach of the supply chain the local element could in fact refer to Europe as a whole. Emphasis of supply chains in the UK should focus on aspects of competitive advantage (e.g. advanced engineering) and goods which are difficult to transport. 3 Assessing the secondary economic impact of manufacturing in the Midlands, Birmingham City University, Give them some credit! a survey of the barriers to funding the UK s automotive supply chain; Andrew Rumfitt for Smith Institute June

12 There are many firms that contribute to the lower end of the supply chain, but many of these operate across a number of sectors and not just Transport Equipment Manufacturing. Support for a broader Advanced Manufacturing and Engineering SME initiative is therefore needed. Local SMEs are also active in supplying OEM/Primes and their supply chains outside the region. Point 2 of the Sector Action Plan relates to enhancing supply chain development which relates to support for the development of the supply chain. This includes development and funding for initiatives which enable SMEs the potential to participate in supply chains and develop their business capabilities in line with this. The Plan notes that for the automotive sector the UK supply chain is relatively weak, with only around one third of automotive parts sourced in the UK (compared to 65% in Germany). Increasing the proportion of UK content in UK manufactured cars requires a stronger UK chain, with the potential for 3billion of contracts annually that UK-based OEMs wish to source in the UK but currently cannot. The Plan also notes a strong aerospace supply chain with 700 companies and 45,000 employees across the Midlands. This concentration is strongly linked to Rolls-Royce operating from Derby Connectivity Logistics and Transport - Vision 2035 Vision 2035 is a report by the Chartered Institute of Logistics and Transport (UK) that considers the future of the logistics and transport sector in the UK. In terms of freight transport the report anticipates an increasingly agile and flexible supply chain to ensure high quality service. The capability of infrastructure and levels of congestion are noted as key aspects to affect freight transport going forward. Differentiation in the supply chain, segmented supply chains (according to service and cost requirements), and the development of collaborative partnerships between logistics operators would increase the opportunities for multi-modal transportation. National passenger networks will see the overall demand for mobility over the next 25 years continue to rise, due to both economic and population growth. Expanded capacity of networks will be required, including provision of HS2 for rail. The report notes a number of findings, these being most relevant to this research: Provision of effective freight transport capacity and reliable journey times must be key priorities to support recovery and growth; Long supply chains, liable to disruption and high cost increases, need to be reconsidered, moving production and distribution, where practical, nearer to the point of consumption; The logistics and transport sectors should take the lead in promoting a reduction in both freight and passenger traffic by supporting shorter, more localised supply chains. The various LEPs have their individual transport strategies. The Greater Lincolnshire LEP s transport strategy is considered below as an illustrative example of the importance of transport for businesses and the economy. Greater Lincolnshire LEP - Transport Strategy The document notes the importance that businesses within Greater Lincolnshire place on good connectivity, with transport accessibility being the highest priority. There is an identified link and need between the area s growth sectors, such as food manufacturing and tourism, and good transport connectivity. The Strategy anticipates development and growth to be more probable where transport provision is provided. Crucially transport is seen as a key enabler to new development and investment. Influence on transport and connectivity beyond the LEP area is noted as important due to the spatial operation of businesses in the area. Greater Lincolnshire LEP - Manufacturing Sector Plan The plan recognises Greater Lincolnshire s focus on manufacturing and engineering sector employment. The manufacturing sector in the area provides 3.4bn a year to the Greater Lincolnshire Economy and employs 57,000 people and is identified as a key sector for continued growth and investment. The Plan sets out a number of priority actions to support growth in the manufacturing sector, including most relevant to this research Priority 4 - location and infrastructure. These actions cover roads, ports, rail and air connectivity. 12

13 In terms of road connectivity improved infrastructure is needed, to be targeted in area of greatest impact. Provision of a number of connecting by-passes and link roads are noted as well as key junctions improvements to unlock development sites. Dualling and upgrade of the A160 is underway. Further investment in port facilities is required in order to facilitate development land being unlocked for further business growth as well as creation of port facilities at Scunthorpe. Midlands Perspectives (2015) The report notes that for the Midlands consideration of productivity is best done using a supply chain view, specifically an enterprise-to-enterprise view of business connectivity and interaction. The prominence of SMEs in the Midlands supply chains and dispersed nature of these businesses, often results in multiple businesses involved in manufacture and transit between the design stage and final product. The report notes that effective local connectivity infrastructure would obviously support an uplift in productivity. Similarly, reducing delivery times would facilitate greater competiveness internationally. The report notes that a key factor influencing productivity performance in the Midlands relates to supplier delivery times. The dispersed nature of the manufacturing supply-chain, as noted above means that the capability to transport outputs and inputs in a timely manner is critical to competitiveness. The report uses Purchasing Managers Index (PMI)-derived supplier delivery times as a proxy to demonstrate the effectiveness of the regional transport and connectivity infrastructure. Figure 2-1 shows a correlation between supplier delivery times and manufacturing productivity when supplier delivery times fall productivity increases and vice versa. Figure 2-1 Supplier Delivery times and Manufacturing Productivity Source: Midlands Perspectives, West Midlands Economic Forum, March West Midlands Metropolitan Freight Strategy 2030 The report focuses on the development of air freight services in the West Midlands area. Freight infrastructure supports and facilities output growth in the metropolitan area. Expansion of Birmingham Airport completed in 2014 will provide substantial additional freight capacity from the airport. This will in turn require capacity and improve linkages to the Regional Logistics Sites - Daventry, Hams Hall, Birch Coppice and Telford International. The report looks to understand the associated potential increase in demand on infrastructure and the likely beneficiaries of improved connectivity with regard to air freight. The report notes that the in-flight element of air freight is around 30% of the overall travel time. It is therefore critical to ensure pre and post-air infrastructure is sufficient in order to maximise benefits to the sector. In terms of infrastructure provision the report highlights the need to consider developing access to rail network both northeast and southwest of Birmingham Airport, through the reinstatement of the Whitacre link. The importance of air freight links, as a key element of the supply chain, is highlighted in the report. 13

14 Enhanced Aviation Links - Midlands 5 The report notes the importance of air freight connectivity to an economy given the level of global trade and associated supply chains. The majority of goods transported by air are higher value (e.g. machine tools, aircraft/ auto parts) and just-in-time for time sensitive production processes. The report highlights how the manufacturing sector could benefit most notably from air access given the comparative advantage of the sector in the Midlands based on location quotients compared to the UK and Southeast markets. The report notes that the sectors within which the Midlands retains specialisation are more likely to benefit from increased freight connectivity Summary The readily available information relating to supply chains and connectivity requirements of businesses is mostly contextual. There is very limited research that is specific to supply chains/ connectivity for the manufacturing, logistics or professional services sectors, particularly in relation to a Midlands geography. The availability of Midlands specific information is limited. The majority of information relates to a whole sector or UK-wide. Connectivity is a key cross-cutting issue for business and economic growth. LEP-level documents clearly set out the importance and focus on infrastructure investment to support business growth. Infrastructure provision, and the associated level of connectivity it brings, is broadly seen as a key facilitator for business growth. Supply chain linkages are not well documented for manufacturing, professional services or logistics sectors, at a UK or Midlands level. Proximity to supply chains, and level of connectivity, is a particular issue for businesses requiring just-intime delivery and quick turnaround of supply products. For automotive manufacturing in particular research identifies the potential to grow the supply chain in the UK. 5 Exports, Economics and Connectivity, West Midlands Economic Forum,

15 Case Study: Wedge Group Galvanising The Wedge Group is the UK s largest hot dip galvanizing organisation. It has 14 plants across the UK employing around 800 people, including two sites in the Black Country with 250 people. The Black Country sites operate a fleet of around 15 HGVs. Supply chain and customers The company has a very fragmented and complex supply chain. It does not operate in a clear vertical supply chain, which means connectivity is vitally important to business operations. The company has clients throughout the UK and Europe. Connectivity The road network is very important to the operations of the business. However, operating its fleet of HGVs results in regular issues of peak travel congestion and poor journey speeds and reliability. The company is not part of just-in-time supply chains so exact timing of deliveries is not business critical (as it is for the automotive industry), however quick turnaround of manufacture and delivery are important. A turnaround of 24 hours is not unusual, with 2-3 days being the average. Traffic congestion and connectivity issues result in the inefficient and unproductive use of staff s time. For example, in order to ensure that staff are on time to attend meetings they often need to make early starts/ late finishes, in order to mitigate or avoid the issue of congestion and journey reliability. Connectivity to airports is important to the business. The Wedge Group is involved in the European General Galvanisers Association and staff regularly fly to Brussels (plus other EU countries) for meetings and conferences. In addition, air connections are important for connecting with the company s international sites in Germany and the United States. At present, most of the Group s international business trips are made from/to Heathrow Airport. The company would welcome further improvements and investment in the regional airports, as improved air connectivity would result in time and cost savings. Transport infrastructure investment The company believes that improvements and investment to the main arterial road network would be beneficial to business operations, as a reliable road network with fewer delays is vital to businesses. Improvements to junction 10 of the M6 (which are underway) will be very welcome, as the area is currently very congested at all times of day. The use of intelligent traffic signals at all junctions could improve journey speeds and reliability. The review of cycleway/ bus only routes on key network routes (where they are not well used and provide little benefit to bus and cycle users) could be reviewed as they negatively affect private/ business users. Better integration between transport modes and more joined up thinking at the Midlands and national levels would be beneficial to businesses. For example, a link connecting HS2 and HS1 to allow business travellers to better connect to Europe in an integrated way would be an advantage to many businesses. 15

16 3. Consultation 3.1. Introduction The following provides an overview of the consultation activity undertaken as part of the research. This qualitative aspect of the research included common sector focus groups and one-to-one interviews with businesses. These more detailed conversations were undertaken to understand in more depth the dynamics of markets and supply chains, along with the role of the transport network in enabling these interactions for individual businesses and across the defined sectors. Focus group meetings were held to capture the views of representatives from businesses and interested organisations representing the professional services, manufacturing and logistic sectors. A total of seven focus group meeting were held across the Midlands including in Birmingham (professional services), Telford (manufacturing), Worcester (logistics and manufacturing), Derby (manufacturing), Coventry and Stafford (combined sectors) and Northampton (logistics). Attendance at each of the groups ranged between two and 12 people, representing a specified sector for each particular focus group. One-to-one interviews were also undertaken with a small sample of manufacturing, professional services and logistics businesses in the Midlands. Business contacts were provided by the Chambers of Commerce and LEPs. A set of key themes were drawn up in order to guide both the focus group and one-to-one discussions with businesses. Detail was sought relating to the following aspects: Location of supply chains/ clients; Use and importance of road and rail links; Importance of access to ports/ airports; Current connectivity constraints (e.g. congestion, journey reliability) and their impact upon business operations (e.g. increased costs); and, Future infrastructure investment priorities. The following provides a summary of the recurring themes and key messages that emerged from the focus group discussions Key messages A number of key points were raised in all or multiple focus group sessions. The following points were noted by consultees as particularly relevant, regardless of location or sector representation General Throughout the Midlands the competition for road space is strong and has risen considerably in recent years. The move by smaller supply chains to use vans, the rise of internet shopping deliveries and increased car commuting has reduced road capacity. One group of consultees estimated an additional five million more vans/hgvs on the road, placing roads under considerable extra pressure. Linked to the view of increasing competition for road space is the central location of the Midlands. The region acts as a through-route for national and international traffic travelling north/ south. This creates a bottleneck of road traffic when through traffic is alongside regional traffic. Broadly all groups consulted noted a general need for improved integration of transport modes. This would support greater choice of mode for business use, and support reduced congestion on roads and rail links. Linked to this was a broad view of often inadequate public transport provision which pushed people into using car-based travel. The role and developments in technology were noted as relevant by a range of consultees. Technology has allowed people to change their behaviours to avoid congestion and traffic issues across the Midlands generally (e.g. arrive very early to avoid traffic but then can actually do work while wait for meeting due to Wi- Fi). A strong broadband and mobile connection throughout the country was therefore noted as important in 16

17 order to povide an opportunity to reduce the need for some travel. There is a crucial need to provide a combination of infrastructure and technology to support business growth. Any investment and improvements to infrastructure in the Midlands should also look beyond the region, external connections to the rest of UK and Europe were noted as equally important as local ones for business operations. Businesses noted that the majority of investment plans take too long from concept to delivery, there is a real need to get on with things in order to properly support growth. Demonstrable improvements on the ground are the real benefit to business growth and economic development. Consultees also highlighted that agglomeration benefits are important to many businesses. A final general key point raised by consultees was that investment must demonstrate direct support for economic growth and business expansion. Rail Services and Infrastructure Generally rail services were noted as the preferred mode for business travel, enabling travellers to make better use of their travel time. However, consultees noted a number of issues with the current rail network including lack of capacity on key routes, e.g. peak travel on Coventry to London routes. Cross-country rail services were also noted as limited, with a lack of direct connections beyond the region. The rail service between Worcester and London was identified as poor, especially for business users. The provision of a Midlands version of Crossrail was noted as being beneficial in order to link the numerous centres together across the region. One key issue noted as a failing by consultees was the 600m investment in Birmingham New Street railway station which has not provided a capacity for further expansion. The exception to rail for business use was for certain professional services, such as surveyors, which required access to sites or a range of areas within one day, and thus the use of a private car was preferred. Consultees highlighted that generally the rail network was not used for freight movements. This was due to passage via Manchester and Birmingham making it slower than road haulage, it has limited service and is expensive. It was noted that if railheads were available close to manufacturing plants businesses would use them to reduce road movements however the rail freight network would also need to become more competitive Improvements and future priorities The focus group discussions included views on the locations and types of infrastructure improvements which should be a priority for future investment and action. Strategic Road Network A reoccurring theme was the need for investment and improvements to the Strategic Road Network. The motorway network in particular was outlined as a priority for investment and intervention. The M6 was noted as particularly important due to severe congestion issues. Improvements to key junctions of the M6/ M5 and M6/ M42 were also raised due to the critical link these provide for the local and national economy. In addition improved connections between the M54 and M6 Northbound were outlined as important. Consultees from the Telford area outlined improved access to the M6 from Telford would be a benefit. With regard to the wider road network other key links were highlighted by consultees as priorities for improvements. These included the A38 and A50, including improvements to the links between the two roads. Similarly improvements to the strategic route of the A49 to improve connections with the North West were outlined as important. Improved connectivity between Worcestershire and Staffordshire would be beneficial to businesses in these areas. Provision of a by-pass for the western side of the Black Country was also mentioned by some consultees. Finally, a number of consultees felt the M6 Toll is currently an under-utilised resource operating below capacity. The high cost of using the toll road results in limited use by logistics and manufacturing sector businesses as part of their distribution routes. Traffic management A number of the focus groups outlined use of traffic management techniques as a means to improve current transport infrastructure and help tackle issues of congestion, pollution and journey speeds/ reliability. Suggested changes included opening up bus lanes for use by HGVs/ high occupancy lane for cars and 17

18 motorbikes in order to reduce pollution and congestion in busy areas (e.g. in Birmingham City Centre), as well as reducing costs associated with freight movements. Provision of additional road capacity, through the extension of carriageways, in order to reduce congestion was also suggested. It was however acknowledged that road expansion alone would not be sufficient, additional lane capacity often results in more vehicles over time. A number of consultees felt greater use of intelligent traffic lights at major/ key junctions would improve traffic flows and reduce congestion/ improve journey speeds and reliability. East/ West Connectivity Many consultees highlighted the need to improve connectivity between the East and West Midlands. Currently this link is deemed poor which restricts business growth and interaction. Consultees felt that if improvements were made to east west connectivity this would support the expansion of existing businesses markets, growing access to both customer base and labour market pool. Rail A number of consultees perceived a need to improve the rail system in order to help alleviate pressure on the Strategic Road Network. Linked to this improved integration between buses and rail was also highlighted as a way to support reduced road congestion. Developing the evidence base Consultees posed a number of ideas relating to both the need, and means of developing the evidence base to support focused investment in transport infrastructure across the Midlands. One suggestion was the rollout of a perception survey in order to capture the views businesses have in the region of current infrastructure. Linked to this consultees felt that it was important that the messages of Midlands Connect, and request for support for the evidence base, were provided to a wider set of businesses, not just the usual group. This was seen as particularly important in order to ensure a very robust evidence base, providing a full and clear picture of current and future connectivity needs. However, the experience of undertaking the business survey for this study demonstrates that many businesses suffer from consultation fatigue and A final point was that the Midlands needs to co-ordinate the efforts to develop a robust evidence base, working together across the East and West midlands to ensure messages are sent out as one voice with a clear aim and objectives Locational-based issues As the focus groups and businesses consulted were located across the Midlands the discussions raised a number of specific locational-based issues, including in: Birmingham: Access to the good public and private transport network in the city centre helps to support businesses in provision of good customer services and helps to attract a high calibre of staff. The short distance from city centre offices to key public transport hubs is critical - Bromsgrove, Solihull, Lichfield - these are all key areas for commuters, particular for those employed in professional services. Further business growth in the city centre will have impacts across a much wider area due to local connections. The perception, and actual experience of congestion in the Birmingham area is very strong including thoughts of the M6 as a car park and Birmingham New Street overcrowded at peak travel times. Birmingham International Airport has a good reputation however journey times to the airport can be an issue for business users with poor road connections but good accessibility by rail. Telford: The area has substantial potential for growth, there is spare capacity to enable development and growth to take place. However, there are issues with road connectivity to the M6 and rail links with other parts of the Midlands. Black Country: Issues on the M6 and poor road connectivity. Space to growth however a branding exercise would be beneficial to improve perceptions and raise the area s profile. Derby: Some consultees felt that the East Midlands lacks an effective commuter rail network which limits the labour market pool for businesses. 18

19 Stafford: population growth and high commuting levels are putting pressure on the transport network. Many people do not work locally and current public transport connectivity is poor. There is a need to improve public transport provision but associated with this there will be a need to change people s attitudes to public transport due to past poor experiences and limited options Sector specific issues As the focus groups and businesses consulted represented the sectors of professional services, manufacturing and logistics across the Midlands the discussions raised a number of sector specific issues which are set out below Professional services Discussions with representatives from the professional services sector across the Midlands highlighted that for this sector supply chain linkages were not an issue due to the nature of the business. Businesses within the professional services sector are however part of the supply chain to the clients they serve therefore geographic location to access clients is important as is travel outside of the Midlands region. Good transport links are important as they help support a good level of client/ customer services in terms of visiting clients quickly and easily when required. Linked to this was a need for better integration of transport modes to provide an efficient journey for business travellers and commuters. Provision of an integrated information service, similar to that provided by Transport for London, would be advantageous to the Midlands. Consultees from the professional services sector noted that journey reliability was of particular importance for business travel, affecting efficiency, productivity, and costs. However, both public transport and road reliability is currently lacking, primarily due to congestion. For the professional services sector, location is particularly important. In perception terms, clients want to see them in the right, and easy to access, locations. Professional services businesses that spend much time out of the office / visiting sites (e.g. surveyors) require good access to the road network. It follows that their office locations are driven by good access to the strategic road network. Consultees from the professional services sector in the Birmingham area indicated that their markets are often restricted due to poor east/ west connectivity. Many do not actively look for business in the Leicester/ Nottingham areas as connectivity is poor, making access to any clients in these locations difficult. Improvements in east/ west connectivity would therefore open up new markets for professional services companies located in both the East and West Midlands. Case Study: Atkins Ltd Atkins is a design, engineering and project management consultancy employing 8,700 people in the UK, including over 1,300 staff in 10 offices across the Midlands. Clients The company has a large number of UK clients including both public and private sector organisations. Historically company office locations within the Midlands were chosen on the basis of strong relationships, and provision of services, to clients based close to these offices. Over the last 10 years the company has shifted emphasis, moving from a regional to a national remit for business operations. The Atkins Birmingham office currently serves a range of clients. Key client organisations include Birmingham City Council, Highways England, Network Rail and High Speed 2. These organisations have key offices in the Midlands, and the presence of Atkins offices in the area, particularly central Birmingham, is important for developing and maintaining client relationships. Connectivity Provision of good road and rail networks is important for business operations. The proximity of the central Birmingham office to Birmingham New Street Station is particularly important for the operation of the business. Good connectivity between the central Birmingham office and key clients (in the Midlands and beyond) is important for developing and maintaining relationships, as well as for delivery of actual work contracts. Road and rail networks are vital for staff commuting to Atkins offices in the Midlands. Accessibility between office locations in the Midlands and key railway stations is generally good. The proximity of the 19

20 central Birmingham office to Birmingham New Street Station is a benefit to the business in terms of providing a manageable commute for a large number of staff. However, the ease and feasibility of changing between modes of travel for staff (either as commuters or travelling to client offices/ sites) can be problematic. This change of mode (for example rail to bus) can be difficult as different transport networks and modes are not always well integrated. The recent Birmingham New Street station re-development caused difficulties for rail users but has successfully created an attractive and accessible arrival gateway. Given the frequent use of Birmingham New Street station for both commuting and business trips, this has been an important development for the company. Proximity and easy access to Birmingham Airport is helpful but not critical to business operations. Transport infrastructure investment As is typical for many professional services businesses, investments to improve public transport links and integration of modes would be most beneficial to the company s operations. Investment to improve the transport links and connectivity between Birmingham, as the main hub, and the key surrounding conurbations is very important. Improved accessibility between Birmingham and areas such as Solihull, Dudley and Wolverhampton would benefit the business. These linkages should provide quick and effective access between key locations in order to support broader economic growth, not just within the city centre. Improvements to east-west rail links would also be advantageous to the business. Currently there is a break point between key rail stations for east-west travel meaning more difficult and longer journeys. Improving east-west links would increase the size of the labour market that was within a manageable commute. This in turn would support business growth by reducing pressure on staff resources and making recruitment easier, allowing the business to grow to serve key clients and major projects (e.g. High Speed 2) Manufacturing Connectivity Consultees from the manufacturing sector in the Midlands highlighted that the road network is very important for the sector. Manufacturing companies can find it difficult to get employees to work as many industrial areas have poor public transport services resulting in greater reliance on private transport. The existing road network was highlighted as problematic for manufacturing businesses, the lack of capacity a key issue and the many competing users of the network alongside manufacturing businesses. The issues of congestion and journey reliability were noted by consultees as push factors for businesses to move away from the UK in general. Other European locations (e.g. Northern France) are seen as more appealing due to good connectivity as well as more capacity on the network resulting in lower travel costs and time savings. With the exception of the use of the Channel Tunnel for the rail freight of exports, rail is generally not considered a viable option by many businesses. This is because of the limited rail freight network and higher costs compared to road freight. Better integration and improved rail heads would help reduce inconvenience, making rail a more viable option for the transport of supplies and finished goods. The potential benefits of rail freight are demonstrated by the fact that Jaguar Land Rover currently uses rail freight to move approximately 50% of all cars produced at its Castle Bromwich facility. Many of these are transported to the Port of Southampton. Benefits of rail freight include higher capacity per movement (e.g. a train can carry 180 vehicles compared to only on a road transporter), and greater journey reliability, as well as obvious environmental benefits. Companies have raised issues such as the dominance and preference for passenger travel on the rail network, congestion on the West Coast Mainline network, disruption caused by industrial action, and the need for improvements to rail heads as factors constraining the more widespread use of rail freight. In terms of airports, East Midlands Airport is used to transport goods and services to Europe, with Heathrow used for long haul flights. However many consultees outlined limited use of Birmingham Airport, because of its limited range of flights to key business markets. In general, due to the high cost of air freight, many 20

21 businesses use Birmingham Airport as a back-up / emergency alternative when just in time production or deliveries are at threat due to disruptions elsewhere (e.g. disruption at the Dover / Calais crossing). Focus group attendees in Derby and Derbyshire noted that access to ports is highly important, conversely those in Worcester noted little use of ports or airports for their business operations. Links to ports on the east coast, including Grimsby and Felixstowe are particularly important for goods out to the EU. There was a general feeling that UK ports are operating well but there is often significant road traffic congestion to reach them. However attendees in all groups highlighted the importance of the connections, and any associated disruptions at Dover / Calais. The Channel Tunnel, in particular is a critical link for supply chains and customers in Europe. Much of the UK s trade is with Europe and passes through Dover/Calais. Any disruption to Tunnel Channel services (e.g. such as the recent strikes and stoppages of services) particularly affects manufacturing businesses working to just-in-time production. The delay in this supply link causes considerable disruption to manufacturing processes, particularly for major automotive producers. The more efficient use of other ports around the UK was highlighted by consultees as a possible alternative to avoiding delays at Dover. The greater use of Liverpool, Felixstowe, Southampton and London Gateway ports could spread the distribution of freight traffic and help reduce congestion and delays. However this depends on good transport links to these ports. Supply chains Consultees highlighted that there was the potential to develop Midlands-based manufacturing supply chains if transport links are improved. Currently there is a shortage of haulage companies and trucks to serve the automotive industry. Manufacturers in Derby noted a mostly international, rather than local, supply chain: large companies tend to import composite parts from Europe (France/Germany), as many local companies are seen as too small to supply. However, this is susceptible to blockages (e.g. French strikes). By comparison those in Worcester indicated that much of the manufacturing supply chain was within the Midlands. For buyers, it is preferable to have large, local suppliers. This minimises supply delivery times and reduces risk and delays. Better connectivity between major conurbations could contribute to stronger supply chain links between locations that currently do not have many economic links, e.g. Coventry and Northamptonshire. 21

22 Case Study: Toyota Toyota is a leading car manufacturer and one of the world s largest companies. It has a strong presence in the Midlands, employing 3,000 people in Derbyshire. Approximately 85% of its production is exported, meaning that international connectivity is of great significance. The company also has an engine manufacturing plant in Wales, which produces 1.6, 1.8l and hybrid engines. Approximately half of these engines are used by the plant in Derbyshire. Therefore good connectivity between its plants in Derbyshire and Wales is critical. Supply chain and customers Approximately 85% of cars produced in the Midlands are exported to Europe via the Port of Grimsby. The company has a highly integrated supply chain and adopts the Just-in-Time (JiT) production model. Toyota does not have a parts warehouse on site, and therefore relies on regular road freight small delivery lots for JiT production. Recent Channel Tunnel disruption and delays have caused significant problems to the JiT delivery of supplies, with associated costs to the business. The company would find it helpful to have more suppliers in the UK, as it would enhance the reliability of supply due to shorter physical distance, and technical problems could be resolved more quickly. Reliability of supply is the key issue for Toyota and attracting more Tier 1 automotive supply to the UK is an issue of national importance. Connectivity Toyota s operations rely on the road network as all parts and supply are delivered by road transport. All of the cars exported are transported by road to the Port of Grimsby. The company does not see any major issues on the road network, however road logistics have to be managed to avoid issues on the road network, such as congestion during peak travel times. Rail freight is not considered to be a viable option at present. However the company would be interested in the potential of rail freight. For example, it may be interested in using the proposed rail head at Egginton Common (junction of A38 and A50) to transport cars. This could result in reduced costs and carbon footprint, and an increase in the number of vehicles shipped. 22

23 In terms of international business trips, the Midlands is well served by East Midlands and Birmingham International airports. For business trips to Japan, the company mainly uses Manchester airport (flights to Japan via Helsinki) and Heathrow (direct flights to Japan). In terms of improvements to the transport network, Toyota has not identified any urgent priorities for major transport infrastructure investment. Smaller schemes such as flyovers on the A50 at Uttoxeter (to avoid roundabouts which slow traffic and increase travel time) and on the A38 at Derby would be a benefit for logistics operations Logistics Connectivity The road network is critical to the logistics sector in the Midlands with issues of traffic congestion and journey reliability noted by consultees. Logistics sector consultees indicated that managed motorways do help keep traffic moving. However, the lower speeds affect fuel efficiency as HGVs take a long time to speed up again. Consultees also highlighted that better road information, including interactive road traffic information along the strategic road network (e.g. journey time between points X and Y) would enable improved route planning by drivers, saving time and money. Consultees raised the potential scope for logistics optimisation, facilitated by GPS and electronic signalling system. This would have the added advantage of reducing road traffic. Operational issues The logistics sector operates with low profit margins, as low as 1-2%. Any delays or disruptions have a direct impact on both productivity and profitability. Given the sector s strong links to the European market, Channel crossings to and from France are of critical importance. Recent disruptions and ongoing issues at Calais are causing significant problems for the logistics sector, including longer delivery times, higher staff and fuel costs, fines for migrant stowaways and costs associated with contaminated goods (where migrants have been found on board trucks). Closer to the Midlands, congestion around Birmingham is a significant issue. Even though the M6 Toll operates below capacity, the rates for use are considered too high for most logistics firms and therefore there are few trucks making using it. The A49 is an important link into Wales. Improved connectivity to Wales would be advantages to the sector as would provision of better facilities (e.g. services) for HGV drivers. The growth in internet shopping, consumer expectations for fast deliveries, increasing pressures for just in time deliveries, and the proliferation of effectively 24 hour delivery operations are affecting the operations of logistics businesses. For example, drivers start their deliveries earlier (in some cases as early as 3am) to avoid peak congestion. Changes in the operations of major retail firms (e.g. Argos, Littlewoods and Asda) have reduced the amount of work from these companies for logistics firms. Goods are not distributed from a central warehouse but to customers direct from store, reducing demand for logistics firms. However, demand for logistics support is still strong from the automotive sector Summary The consultation highlighted the following key messages: A number of connectivity issues were raised by the consultees, irrespective of sector or location, these included road congestion and increasing competition for space on the road network; The central location of the Midlands region means that the demand for road capacity is greater, with high volumes of through traffic, particularly on north-south routes. Consultees noted this as an additional issue for consideration, in particular to ensure connectivity out of the region is also maintained to a high level; 23

24 Rail travel is a key mode for business travel but currently has limited use for freight movement. A number of consultees noted that investment in suitable rail heads has the potential to make rail freight a more viable and attractive mode; Consultees placed significant emphasis on the importance of the Strategic Rail Network. Congestion, lack of capacity and poor reliability were the key issues. Many consultees highlighted investments to improve key routes as a priority; The role of technology and management of traffic should be maximised in order to help reduce current congestion problems; Promotion of transport infrastructure investment in the Midlands should be done with one voice in order to maximise the benefits; The professional services sector benefits from access to public transport and a central location which provide proximity to clients and access for high calibre staff. The sector requires journey reliability for business travel; The road network is important to both the manufacturing and logistics sectors. These sectors find the issues of congestion and poor journey reliability a challenge to business operations; Access to ports for the supply chain is a key issue, particularly for large manufacturing companies. Delays at ports (e.g. Calais) can cause significant costs and disruption to businesses in the manufacturing and logistics sectors; Consultees noted the potential to develop the supply chain for the manufacturing sector both within the Midlands and the UK; and, The logistics sector faces a number of important operational issues including low margins and substantial impacts from travel delays. 24

25 Case Study: Jaguar Land Rover Jaguar Land Rover is a premium automotive manufacturer with a strong base in the Midlands. The company s global headquarters are located in Whitley, Coventry. Its research, design and product development centres are based in Gaydon, Warwickshire and at the Warwick Manufacturing Group at the University of Warwick. In the Midlands, the company also has manufacturing facilities at Solihull and Castle Bromwich and an engine manufacturing centre in South Staffordshire. The company has experienced strong levels of growth in the past five years, more than doubling sales and employment, and tripling its turnover. More than 80% of its products manufactured in the UK are exported to over 170 countries around the world. Transport connectivity is important to JLR as it directly relates to business costs and efficiency. Fast, reliable, and cost-efficient transport connections are necessary for JLR to get its products to customers, its employees to work, and connect the business with its wider supply chain. The company s transport infrastructure needs relate to three business requirements: Delivering products to its customers Connectivity to strategic transport infrastructure is important to support the company s global product delivery operation. Last year, Jaguar Land Rover sold more than 462,000 vehicles, with more than 80% of vehicles being exported. The distribution of finished products to the extensive customer base within the UK and internationally requires ease of access and good links to the strategic road network, ports, rail freight, and airports. Good connectivity and journey reliability are critical for ensuring that customer requirements are met and exceeded. Connectivity to rail and port hubs supports Jaguar Land Rover s exports, with finished vehicles shipped around the world on up-to 40 vessels a week from the UK. Rail freight also provides environmental and cost benefits to the company, helping to reduce traffic volumes and lower its carbon footprint. 25

26 Connecting the business to its supply chain Business to business connectivity is important to Jaguar Land Rover s operations. The company operates a large supply chain with approximately 2,600 suppliers located both in the UK and abroad. As part of the manufacturing process, the supply chain operates using 'just in time' logistics with components delivered to sites being immediately used in the production process, helping to minimise the storage of stock on site. This approach to production requires high quality and reliable transport networks to ensure maximum efficiency in operations. Because of the distribution of the supply chain, good connectivity to airports is also important for business flights outside of the UK. Recruiting and retaining a talented workforce Jaguar Land Rover views its people as its most valuable asset, with a requirement for high-calibre staff, covering a wide range of roles enabling the company to operate to its maximum potential. To support this employees need access to a good transport network, providing links within the UK and globally to ensure employees can get to-and-from work with ease. Globally, the company employs around 36,000 people, as part of that, the UK workforce accounts for 34,000 employees, making Jaguar Land Rover the largest employer in the UK automotive sector. Due to the nature of the business there is a need to attract people from a relatively widespread labour market area. In this regard connectivity and accessibility to the company s sites is critical to retaining and attracting highly-skilled individuals. 26

27 4. Business survey 4.1. Introduction The design and roll-out of an online survey was undertaken by the Midlands Chambers of Commerce. The survey was targeted at businesses operating in the Midlands, and covered businesses within the professional services, manufacturing and logistic sectors. The survey sought to gather data in order to strengthen the understanding of the geographic distribution and economic value of different markets and supply chain groupings for these sectors in the Midlands. The survey was web-based using the Survey Monkey application. The Chamber promoted the survey to businesses in the relevant three sectors, covering a range of geographic locations across the Midlands, as well as the full range of business sizes. Due to the various means of distribution and promotion of the survey it is not possible to state a response rate, however a total of 290 responses were received. The following provides a summary of the information received, demonstrating issues of connectivity and supply chain linkages within and across the three sectors in the Midlands General business information The survey was targeted at businesses in the three sectors of focus for this research. In total 290 responses were received as follows: 51% from the professional services sector 44% from the manufacturing and engineering sector; and, 5% from transport and logistics. The survey requested the business location to be stated. Approximately 53% of respondents were located in the East Midlands and 46% in the West Midlands (approximately 2% did not state a location). Table 4-1 sets out the breakdown of responses by business location from across the Midlands. A total of 29% of responses were provided by businesses located in the West Midlands Metropolitan County, followed by 16% from Northamptonshire County and 9% from Derbyshire. Table 4-1 Business Location Proportion of responses by location Proportion of responses (%) West Midlands Metropolitan County 29% Northamptonshire County 16% Derbyshire 9% Nottinghamshire County 9% Leicestershire County 6% Warwickshire County 5% Derby City UA 4% Milton Keynes UA 4% Nottingham City UA 4% Lincolnshire County 4% Staffordshire County 3% Leicester City UA 2% Shropshire UA 2% Telford and Wrekin UA 1% Worcestershire County 1% Herefordshire UA 1% 27

28 Business Location Proportion of responses (%) Stoke-on-Trent UA 1% Rutland UA 0.5% Not stated 2% (Question response rate: 98%) Respondents were asked to indicate the size of their business operation in the Midlands, based on the number of employees. Table 4-2 sets out the responses by number of employees and business sector. Considering the business size of all responses micro and small businesses (up to 49 employees) accounted for 70% of businesses. This compares to 82% in the business and professional services sector, 58% in the manufacturing and engineering sector, and 53% for transport and logistics businesses. Medium sized businesses ( employees) accounted for a higher proportion of respondents in the manufacturing sector (31%) and transport and logistics (27%) compared to just 8% of professional services respondents and 19% of total responses. Large businesses ( employees) were relatively similar across all sectors, ranging from 7% for logistics to 9% for manufacturing. Table 4-2 Number of Employees Business size - number of employees by sector Business & Professional Services (%) Sector Manufacturing & Engineering (%) Transport & Logistics (%) Grand Total - All responses Less than 5 45% 12% 7% 28% % 12% 13% 14% % 11% 13% 11% % 23% 20% 17% % 19% 7% 11% % 13% 20% 8% % 6% 0% 5% % 3% 7% 4% 1,000-4,999 1% 1% 13% 1% 5,000 or more 1% 1% 0% 1% Total 100% 100% 100% 100% (%) Table 4-3 outlines the turnover of business respondents, by sector. Approximately 42% of respondents have a turnover of less than 1m, including the majority of respondents in the professional and business services sector (60%). Table 4-3 Company Annual Turnover ( ) Business turnover ( ) by sector and total Business & Professional Services (%) Sector Manufacturing & Engineering (%) Transport & Logistics (%) Grand Total - All responses (%) < 1m 60% 24% 14% 42% 1m to less than 2m 9% 13% 21% 11% 2m to less than 5m 9% 21% 7% 14% 5m to less than 10m 4% 13% 14% 8% 10m to less than 20m 5% 8% 0% 6% 20m to less than 50m 4% 9% 14% 6% 50m to less than 100m 2% 3% 7% 3% 28

29 Company Annual Turnover ( ) Business & Professional Services (%) Sector Manufacturing & Engineering (%) Transport & Logistics (%) Grand Total - All responses (%) 100m to less than 500m 3% 7% 14% 5% 500m to less than 1bn 2% 1% 7% 2% 1bn or more 3% 2% 0% 3% Total 100% 100% 100% 100% 4.3. Supply chain and client linkages Most businesses (77%) responded that the Midlands was the most important or very important location in terms of where their supply chains are located. This was followed by London (36%), the North West (35%), and Yorkshire (30%). As Figure 4-1 illustrates, there is a clear supply chain corridor stretching from the North of England to London and the South East. 80% UK locations considered "most" or "very" important in terms of Midlands businesses' supply chains 70% 60% 50% 40% 30% 20% 10% 0% Midlands London North West Yorkshire East of England South East of England North East Wales South West Scotland Northern Ireland 29

30 Figure 4-1 UK supply chain links of Midlands businesses 30

31 The vast majority of respondents (86%) also stated that the Midlands was the most important or very important location in terms of where their customers are based. This is followed by London (54%), the North West (51%), and the South East of England (48%). 90% 80% 70% 60% 50% 40% 30% 20% 10% UK locations considered "most" or "very" important in terms of where Midlands businesses' customers are based 0% Midlands London North West South East of England East of England Yorkshire North East South West Wales Scotland Northern Ireland In terms of the importance of the international supply-chain for Midlands businesses, approximately 42% of respondents identified Europe as most important or very important, followed by Asia (20%) and North America (19%). 45% 40% 35% 30% 25% 20% 15% 10% 5% Non-UK locations considered "most" or "very" important in terms of Midlands businesses' supply chains. 0% EU Asia North America Middle East and Africa Non EU Europe (including Russia) Australasia Central and Southern America 31

32 Similarly, Europe is the most important international market for Midlands businesses, with 48% of respondents describing it as most or very important in terms of where their customers are based. Other important international markets include North America (27%) and Asia (22%). 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% Non-UK markets considered "most" or "very" important in terms of where Midlands businesses' customers are based. 0% EU North America Asia Middle East and Africa Non EU Europe (including Russia) Australasia Central and Southern America Midlands businesses, which have supply-chains in international markets, identified Birmingham Airport (61%), Heathrow Airport (47%), and East Midlands Airport (39%) as the most important airports for their operations. Felixstowe (32%), Southampton (17%), and Dover (17%) were identified as the most important ports (Figure 4-2). 70% Principal UK ports and airports used by Midlands businesses with international supply chains 60% 50% 40% 30% 20% 10% 0% 32

33 Figure 4-2 chains Most important ports and airports for Midlands businesses with international supply 33

34 Similarly, Birmingham Airport was identified as the most important airport for businesses with international customers (71%), followed by Heathrow Airport (57%), East Midlands Airport (38%), and Manchester Airport (32%). Felixstowe was identified as the most important port (24%), followed by Southampton (12%) and Dover (11%). 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Principal UK ports and airports used by Midlands businesses with international customers It is interesting to note that the results of the business survey identify Birmingham Airport as the most important airport for Midlands businesses. However, participants in the focus group meetings often made the point that they primarily use Heathrow and the airports around London for their international trips, as Birmingham airport does not always serve the destinations they require. Therefore, a possible interpretation of the business survey responses is that many Midlands businesses consider the presence of a regional international airport to be very important for their operations, but the limited service to key international business markets from Birmingham and East Midlands airports necessitates longer trips to airports outside the Midlands Current issues and importance of connectivity Both the road and rail networks are important for businesses. The road network typically provides the main mode for the transport of goods and materials, while the rail network is usually the preferred mode for business travel as it enables business travellers to make more efficient use of their travel time. Overall, 58% of respondents described the road network as being critical to their business supply chain. A further 22% described it as important. At the same time, 14% of respondents described the rail network as being critical to their business supply chain, and 22% as important. 34

35 70% 60% 50% 40% 30% 20% 10% Importance of the road and rail networks for businesses' supply chains. 0% Critical to the business Important to the business Neutral Not very important to my business Not at all important to my business Road Rail The road network is also very important for connecting with customers, with 72% describing it as critical and 19% as important. The rail network is of greater importance for connecting with customers than it is for businesses supply chains, with 56% of respondents describing it as either critical or important. 80% 70% 60% 50% 40% 30% 20% 10% Importance of the road and rail networks for connecting with customers. 0% Critical to the business Important to the business Neutral Not very important to the business Not at all important to the business Road Rail Approximately 71% of respondents consider that the road network constrains (at least to a moderate degree) their business activity in terms of connecting with customers and supply chains. In total, 21% of respondents consider the road network to be a critical constraint, 23% a significant constraint, and 27% a moderate constraint. Only 13% responded that the road network does not constrain or impact their business operations. 35

36 35% 30% 25% 20% 15% 10% 5% Extent to which road and rail networks constrain business activity in terms of connecting with customers and supplychains. 0% Critical constraint, preventing access to markets and suppliers Significant constraint, impacting on access to markets and suppliers Moderate constraint, with some impact Minor constraint, Does not constrain at with marginal impactall, with no impact on margin Road Rail In comparison, 44% of respondents consider the rail network to be at least a moderate constraint to their business operation, with 8% describing it as a critical constraint, 12% as important, and 24% moderate. Over half of respondents (56%) consider the rail network to have no or marginal impact on their business operations. When asked to identify the different ways in which the road network impacts on business operations, the most common responses included congestion and delays due to traffic (74%), poor journey reliability (49%), and long journey times (41%). 80% 70% 60% 50% 40% 30% 20% 10% Ways in which the road network impacts on business operations 0% Congestion and delays due to traffic Poor journey reliability (e.g. due to accidents) Long journey times Fuel costs Problems with parking or deliveries The most common ways in which the rail network impacts on business operations includes the high price of train fares (39%), poor service reliability (29%), service crowding (28%), service frequencies (26%), and long journey times (22%). 36

37 40% Ways in which the rail network impacts on business operations 35% 30% 25% 20% 15% 10% 5% 0% Train fares Service reliability Service crowding Service frequencies Long journey times 4.5. Summary The responses to the business survey provide interesting insight into the current supply chain links and connectivity needs of businesses across the Midlands. The vast majority of respondents stated that the Midlands is either the most important or a very important location in terms of both their supply chains and where their customers are located. This confirms the diversity and robustness of the Midlands economy and the strong links between Midlands businesses. While Midlands businesses have supply chains and customers across the UK and overseas, the Midlands is the single most important location for most businesses. The survey results also show the widespread links of Midlands businesses with other parts of the UK, and in particular London, the North West, the South East, Yorkshire, and the East of England. Many Midlands businesses also have strong links with international markets. The European Union is the biggest non-uk market in terms of both supply chain links and customer bases. More than 4 out of 10 respondents consider the EU to be either the most important or a very important market. This is followed by North America and Asia. Businesses use a variety of modes to connect with their customers and supply chains, including road, rail, ports and airports. According to the survey responses, the road network is clearly the most important. Over 90% of respondents describe the road network as being either critical or important for connecting with their customers, and 80% describe it as either critical or important for their supply chains. Rail is also important but primarily in terms of connecting with customers. For many businesses rail is the preferred way of undertaking business trips as it allows travellers to make more efficient use of their travel time (e.g. working while travelling), and in most cases rail travel offers better journey time reliability compared to driving. However, rail is of lesser importance for connecting with supply chains as only 14% of respondents describe it as being of critical importance, compared to 58% for the road network. In terms of ports and airports, businesses with international customers and supply chains use a combination of both, including Birmingham, Heathrow, East Midlands and Manchester airports, and Felixstowe, Southampton, and Dover ports. Airports are particularly important for business travel, while ports are of greater importance for businesses importing or exporting goods and materials. Approximately seven out of ten respondents consider that the road network constrains (to a greater or lesser extent) their business activities in terms of connecting with their customers or supply chains. In comparison, less than half of respondents consider the rail network to be a constraint to their operations. 37

38 Some of the key ways the road network impacts business operations includes travel delays due to traffic and congestion, poor journey time reliability, long journey times, and increased fuel costs because of increased travel times. Ways in which the rail network affects business operations include high train fares, poor service reliability, crowded trains, and service frequencies. 38

39 5. Summary of key findings 5.1. Introduction The Midlands Connect Economic Impact Study demonstrated the potential for substantial economic benefits from improving strategic connectivity in the Midlands. Midlands businesses face a number of connectivity challenges, including congested road networks, long and unreliable journey times, and inadequate rail connections. These problems directly affect businesses daily operations, their competitiveness, and their financial performance. Unless these problems are addressed in a systematic and co-ordinated manner, they are expected to become more severe over time, further constraining the Midlands economic performance. The Midlands is an important part of the UK economy, its engine for growth, and therefore a strong and thriving Midlands economy benefits the UK as a whole. This study has provided fresh, evidence-based analysis on the supply chain links and connectivity needs of three key sectors of the Midlands economy: professional and business services, manufacturing, and logistics. It has utilised a range of information sources including desktop research, a business survey, a series of focus group meetings with business representatives, and one to one interviews with prominent Midlands businesses. The findings of this research provide valuable insight into how Midlands businesses use the transport network, what transport-related challenges they face, and how these challenges affect their business decisions and business operations Supply chain links Midlands business have strong supply chain links within the Midlands. The vast majority of respondents to the business survey identified the Midlands as the most important or very important location in terms of where their supply chains are located. This is not surprising as many businesses choose to be located near their supply-chains to maximise efficiencies and minimise costs. At the same time, Midlands businesses do not confine themselves to the boundaries of local and regional economies. In a modern economy, proximity to suppliers is equally important to price and quality of supplies and services. Reflecting this, Midlands businesses have strong supply chain links with other parts of the UK, as well as overseas. London, the North West, and Yorkshire are important supply chain locations for many Midlands businesses, as are Europe, Asia, and North America. The implication of the above is that Midlands businesses require good connectivity with their supply chains across the Midlands, but also with those located elsewhere in the UK and overseas. The mapping of the survey results shows a clear corridor of economic activity and business movements connecting the North with London and the South East through the Midlands (Figure 5-1). 39

40 Figure 5-1 UK regions considered important for Midlands businesses in terms of supply-chain and client locations 5.3. Connectivity needs Different sectors have different connectivity needs but they all share one common characteristic: the need to reliably and cost-efficiently connect to their clients and supply chains. Professional and business services companies tend to be located in urban locations such as city centres. Public transport is of great importance to them both in terms of being easily accessible by their employees and being able to connect to their clients. Public transport is also important to many manufacturing and logistics businesses, which are typically located in out of town locations. However, such companies expressed concerns that bus services in many cases do not serve industrial employment areas, making it difficult for employees without cars to travel to work. This makes it particularly difficult to provide apprenticeships, which form an important part of the national skills strategy. Bus and rail services (and the seamless integration between different modes of public transport) are therefore of great importance. The road network is also important but the preferred mode of transport for business trips is rail, as it enables business travellers to make more efficient use of their journey time (e.g. working using laptops or smartphones). Manufacturing and logistics businesses also use the rail network for business travel but primarily rely on the road network for freight transport. Freight movements take place across all directions, criss-crossing the Midlands from East to West and North to South. Some originate and/or terminate in the Midlands while others just cross the Midlands on their way elsewhere. This is an important issue raised by businesses as part of this research. Road traffic and congestion in the Midlands have a number of layers including local traffic, regional traffic, and national as well as international traffic. The combination of these create bottlenecks in many locations across the Midlands. Segregating these types of traffic is viewed by many businesses as pivotal for improving connectivity and journey reliability. Reducing the speed limit on country roads could be a potential way of discouraging their use by national and international traffic and segregating these types of movements from local traffic. 40

41 Demand for road freight is expected to continue to increase as a result of a growing population (which results in increased demand for goods and therefore more goods and materials to transport) and the growing trend for shorter delivery times which necessitates more local distribution centres, and smaller and more frequent deliveries. Manufacturing and logistics businesses currently make very little use of rail freight because of the limited rail network and the high costs of rail freight compared to road freight. There is widespread acknowledgement however of the potential benefits of developing a more extensive and competitive rail freight network, therefore reducing road movements. At present businesses also make little use of commercial waterways for freight movements. The greater use of commercial waterways provides another opportunity to relieve congestion on the road network. Good connectivity to airports and ports is important to many businesses, particularly those with international customers or supply chains. Air travel is important for business trips while ports remain a key way of connecting with overseas markets. Felixstowe, Dover and Southampton are among the main ports used by Midlands businesses. In addition to the region s two main airports, Birmingham International and East Midlands Airport, many Midlands businesses also use the airports in London and the South East for their business trips. Some businesses feel that Midlands airports do not cater well for the needs of business travellers but are more geared towards the tourist market. Research shows that the in-flight element of air freight is around 30% of the overall travel time. This highlights the importance of providing pre and post-air infrastructure in order to minimise travel times and costs. Transport routes to major airports are therefore of significant importance to businesses, as are transport routes to major ports. Figure 5-2 Ports and airports considered important for Midlands businesses 5.4. Transport related constraints and opportunities Traffic congestion and disruption to the road and rail networks have genuine and considerable impacts on the operations of Midlands businesses. Many businesses in the logistics sector in particular operate at low profit margins, which in some cases can be as low as 1%-2%. Delays on the road network as a result of traffic congestion or other forms of disruption increase fuel and staff costs as drivers and vehicles spend more time on the road. 41

42 Businesses may also be liable to paying financial penalties for missing delivery deadlines. This is increasingly an issue given the strong growth in online shopping, and next day and just in time deliveries. Furthermore, the unreliability of the road and rail networks force businesses to make inefficient and costly travel decisions, such as starting journeys much earlier than normal in order to compensate for any unexpected delays. For business travellers, time travelling by car or train is less productive than time spent in their office or meeting clients. Therefore long and unreliable journey times affect their productivity and efficiency, which in turn affect business performance. Transport constraints and the perception of transport constraints can also have affect businesses ability to attract new customers and enter new markets. As an example, businesses consulted as part of this study expressed concern that some international clients were not prepared to travel to the Midlands. In some cases, this forces business to set up offices in London in order to keep existing and secure new international clients. The quality and perception of public transport services in the Midlands is a major issue. Many businesses feel that existing public transport services do not provide sufficient levels of frequency, capacity, reliability and quality. Crucially, there is widespread concern about the lack of integration between the various bus and rail services, with London frequently named as an example of a well-integrated and well-planned public transport network. Businesses located in out of centre locations (primarily manufacturing and logistics businesses) have raised concerns about the limited public transport options for their employees. This affects their ability to recruit younger workers (including apprentices) who may not have access to a car. The need for investment and improvements to the strategic road network emerged as a recurring theme during the engagement with the business community. Improvements to the M6 are considered particularly important due to severe congestion issues, including at key junctions such as M6/ M5, M6/ M42, and M6 / M54. Congestion around Birmingham is a major issue, with local and through traffic combining to create bottlenecks. For example, much of the traffic from the North West to London and the South East passes through the Birmingham area. Many businesses consider that the M6 Toll has failed to reduce congestion because so few people use it. In particular, few businesses are using it as they consider it to be too expensive. But there is widespread consensus across the business community that it is important to have more efficient schemes that divert traffic around the Birmingham box. With regard to the wider road network other key improvements identified as part of the engagement with the business community included improved links between the A38 and A50, improvements to the strategic A49 route to improve connections with the North West, better connectivity between Worcestershire and Staffordshire, and the provision of a by-pass for the western side of the Black Country. Businesses identified East West connectivity as an important constraint, both in terms of the road and rail networks. Leicester in particular was often identified as being poorly connected to the rest of the Midlands. Better horizontal connectivity across the Midlands would support closer business links, expanded supply chain and customer markets, and better access to wider labour market pools. 42

43 Appendices

44 Appendix A. Consultation participants A.1. Focus group attendees The following sets out the attendees at each of the focus group sessions: Birmingham - Professional Services Mark Robinson, Solicitor Rachel Bell, WMITA Marilyn Castry, Chamber of Commerce. Simon Marks, EC Harris. Non-exec Director with GBS LEP Daniel Brett, PBA Anthony Wiggins, Surveyor Mike Best, Turley Associates Patrick Twist, Pinsent Masons Adrian Bates, Turner and Townsend Ewan Thomas, Ewan Thomas Associates Coventry - Combined Larry Coltman, Coltman Warner Cranston Adam Shuter, Exact Logistics Sean Farnell, Burgis & Bullock Roger Dowthwaite, Coventry & Warwickshire LEP John Nollett, Nollett Business Solutions Amrik Bhabra, ADECS Ltd Paul Carvell, SFB Group Derby - Manufacturing Tim Bagshaw, Head of Business and Innovation at Northamptonshire Enterprise Partnership Phillip Bruce, Scott Bader Northampton - Logistics Ian Blattie, Knights of Old Greg Cater, Yusen Logistics Stafford - Logistics and Manufacturing Andrew Buckman, Kingston CPC Ken Stepney, JCB/LEP Jonathan Dale, Stoke-on-Trent and Staffordshire LEP Tim West, Wynns Mary Werrington, ATR/LEP Marilyn Castree, Lichfield Tamworth and Chase Chamber of Commerce and Industry Telford - Manufacturing Wayne Langford, Black Country LEP Kevin Plews, Plews Bros Ltd Nick Payne, Road Haulage Association Bill Jenrich, Charlton & Jenrick Andrew Fay, STADCO Jacqui Casey, Marches LEP Worcester - Logistics and Manufacturing Paul Howard, Rotec International Mike Ashton, Herefordshire & Worcestershire Chamber of Commerce Barry Davies, Oakland International Mark Martin, One Creative Environments Ltd / Worcestershire LEP Business Board Gary Woodman, Worcestershire LEP Yan Gittins, Fisher German LLP Jim McBride, Lesk Engineers Ian Edwards, Worcestershire LEP Elizabeth Beatty, Harrison Clark Rickerbys Ltd 44

45 Steve Borwell-Fox, Borwell A.2. One-to-one business interviews Robert Eaton, Birmingham Airport Charlie Allen, Jaguar Land Rover Philip Jones, Tudor Griffith Group Tony Walker, Toyota Colin Leighfield, Wedge Group Adrian Fox, Atkins Ltd 45

46 Ilias Drivylas Atkins Ltd 286 Euston Road London NW1 3AT Atkins Ltd except where stated otherwise. The Atkins logo, Carbon Critical Design and the strapline Plan Design Enable are trademarks of Atkins Ltd.