Introduction

5.1  The main issues that this chapter seeks to address include: the amounts and types of new workspaces that will be required throughout the Greater Nottingham Strategic Plan period and the general locations in which these workspaces should be situated; the diversification of the local economy; and the main regeneration priorities for the area. The chapter also seeks to consider how innovation can be driven, including through links with the Universities, and how best to encourage and nurture new business start-ups. Challenges facing rural areas, such as rural diversification, as well as those facing cities, towns, and other urban areas are also considered.

5.2  This will be particularly important as the economy emerges from the Coronavirus emergency, which is likely to significantly impact on the local and national economy, and prospects for growth.

5.3  This chapter also seeks to consider the challenges that will be faced as a result of Climate Change and the measures and mitigation strategies that will be required to address this threat, as well as seeking to establish how opportunities for companies within the 'greener' products and service sectors can be best realised.

5.4  The NPPF (paragraphs 80 and 82) states that planning policies should help create the conditions in which businesses can invest, expand and adapt. Furthermore, this national policy encourages each area to build on its strengths. It goes on to state that planning policies should recognise and address the specific locational requirements of different sectors and emphasis is placed on supporting clusters of knowledge-based, creative or high technology industries.

Background

5.5  The Councils commissioned planning consultants to produce an Employment Land Study[1] (ELS), published in 2015, to provide more up-to-date employment forecasts and an assessment of employment space needs. Figure 5.1 shows the distribution of employment land and office space set out in the Local Plans across the Nottingham Core HMA.

Figure 5.1: Distribution of Employment Land in Local Plans

5.6  The 2015 ELS Study is now dated and a new employment study will be prepared in support of the new Plan. Unlike housing, there is no standard method for calculating employment land requirements but rather a combination of factors is normally used. Such factors include:

• Past trends in employment space take-up;
• Recent trends in employment space per worker density by sector;
• Meeting the needs of all employment sectors;
• Population forecasts and assessment of local housing need and resultant labour force supply;
• Job forecasts;
• Economic strategies including the D2N2 Local Economic Partnership's Strategic Economic Plan and Local Industrial Strategy; and
• The quality of employment land available and where there are gaps in the portfolio.

5.7  This new Employment Land study should advise on a baseline or minimum amount of employment land provision but will also need to be adjusted upwards to take account of various policy scenarios. These scenarios would need to address the issues, opportunities and challenges facing the plan area, for example, the development of the HS2 Hub Station and its associated economic benefits.

Key Issues, Opportunities and Challenges

5.8  The D2N2 LEP Strategic Economic Plan (SEP) 2030[2] aspires to achieve a high value added local economy. Various sources[3] identify a number of issues, challenges and opportunities for Greater Nottingham's economy and employment prospects, all of which need to be caveated in so far as we are unsure of the scale of impact of the Coronavirus crisis on the economy:

• 90% of new jobs predicted to be in the service sector with manufacturing jobs expected to decline further;
• Strong representation of knowledge-intensive service jobs but relatively few high-technology manufacturing jobs;
• Too many people in low paid work and insufficient numbers in higher paid occupations meaning there is a need to create more high value added jobs and diversify further;
• Upskilling of the workforce and lifelong learning is essential;
• Potential to develop research and innovation capacity further;
• Automation could lead to a significant reduction in jobs in certain sectors but also opportunities in others;
• Economic activity rates, especially in Nottingham City, are below the national average;
• Areas with relatively high levels of unemployment and certain areas in need of regeneration;
• Ageing population with population forecasts showing relatively few additions to the supply of labour;
• Climate change is a major threat;
• Nottingham City Centre is a major regional centre and focus for office-based employment;
• The area has good access to the national transport network, and is therefore attractive to many industries, such as the logistics sector;
• The rural economy is important with agriculture still dominant, but also offers a significant leisure and recreation destination;
• Nottingham has good public transport and potential to expand the tramway (NET);
• More flexible patterns of working;
• HS2 is a major opportunity; and
• There is a proposal to create a Development Corporation to take forward major development at Toton and at Ratcliffe-on-Soar power station within the plan area, and around East Midlands airport, which is just outside.

Local Economy

Further Diversifying the Greater Nottingham Local Economy

5.9  Information on jobs in Greater Nottingham[4], estimates the number of jobs in the area is approximately 315,000 (as of 2018). The area has a lower proportion of manufacturing jobs (10%) than nationally and regionally. The majority of jobs are in the service sector (87%). The economy is more diverse than in the past but a concern is that there may now be too much reliance on lower-order service jobs, especially in the public sector.

5.10  Knowledge-intensive medium- / high-technology jobs are expected to be a key source of employment in the future. In 2018, just over half (53.8%) of the total jobs in Greater Nottingham were categorised as being knowledge-intensive, which is above the regional and national average, although most of these jobs are in the service sector with relatively few high-tech manufacturing jobs. Other growth sectors include: caring services; leisure services; and the visitor economy.

5.11  The proposals to establish a Development Corporation, centred on delivering significant growth at Toton, Ratcliffe-on-Soar Power Station and East Midlands Airport, could play a key role in diversifying the economy, and assisting recovery from the economic impacts of the Coronavirus crisis. Building on each location's unique strengths, in terms of connectivity, economic potential and existing growth plans, the proposal aims for economic additionality, over and above the area's current economic offer.

Manufacturing Space

5.12  Manufacturing employment is expected to decline further, partly because of increased global competition and due to automation. All of the Councils gained industrial space in gross terms, but overall the Councils reported a net decline in industrial space, with the exception of Rushcliffe Borough, see Figures 5.2 and 5.3. This suggests that less industrial space is needed in the future, but an issue is the amount of new space required to meet modern industrial requirements and to replace obsolete space. In some instances, regeneration can require the relocation of certain businesses and these planned / unplanned relocations will need to be addressed.

Figure 5.2: Gross Industrial and Warehousing Space Taken-Up (Sq. M)

Office Space

5.13  Most new jobs are expected to be in the 'Service Sector', although not all of these jobs would require new floor space as many of these would be accommodated within existing sites and premises.

Figure 5.4: Gross Take-Up Office Space (Sq. M)

5.14  Recent trends indicate that across the Greater Nottingham area, approximately 37,000 sq. m (gross) of new office space was developed between 2011 - 2018, see Figures 5.4 and 5.5, but closer inspection indicates that despite the continuing shift to service employment, Greater Nottingham has experienced a net decline (minus 57,000 sq. m), see Figure 5.5, in office space with Nottingham City witnessing the largest decline. The explanation lies within the fact that Nottingham City has the largest amount of office stock and the most conversions of offices to residential has taken place there. Whilst boosting housing supply, this raises issues about the quality of the available office stock. Most conversions in Nottingham City have been of poorer quality office space, so the net loss of floor space to date has largely been a rationalisation of stock, rather than a loss of economic activity. However, should office conversions continue at a similar pace, the supply of lower rent and start-up office space might be threatened.

5.15  The supply of new office space is also giving rise to some concern, with local property agents reporting a lack of quality Grade A[5] office stock available in the City Centre. However, existing planning permissions and the development of new floorspace for HM Revenue & Customs will introduce significant new floorspace to the market.

5.16  A key issue is therefore how much new office space is needed to meet future demand, especially from the knowledge-based sector, and to upgrade the existing stock, and whether the focus should continue to be the City Centre. The proposed Toton Innovation Campus is relevant in this context, and is intended to attract leading companies, universities and research institutions, together potentially delivering up to 11,000 high quality jobs, 5,000 homes, and a range of leisure opportunities[6].

5.17  The new transport infrastructure at the proposed HS2 Hub Station will be highly accessible to Greater Nottingham and facilitate quick and convenient rail travel to other large cities. It is clearly a major opportunity for further growth. Other locations, potentially attractive for mixed-use development, would benefit from transport infrastructure investment, including along the routes of potential NET tramway extensions.

5.18  Achieving a knowledge-intensive local economy is likely to increase the overall number of jobs in the local economy, thereby spreading the benefits of growth. An implication of this is that the planning system would need to ensure sufficient employment space is provided for all economic sectors and overall more business space would be required.

5.19  One factor, which would lead to a downward adjustment to business space requirements, is the trend for more flexible types of working with many businesses downsizing and more people working from home. This has implications for the amount and type of business space likely to be required in the future and potentially increased demand for live / work properties[7]. The Employment Land Study will therefore need to take into account likely increases in worker / space densities (sometimes referred to as 'space less' growth) especially for office space.

Question EMP1: Employment Land and Office Space

• Do you agree that the minimum amount of employment land and office space to be provided should be based on the factors set out at paragraph 5.6?

Question EMP2: Office Development

• Should we focus office development in Nottingham City Centre or should it be at other accessible locations such as around the HS2 Hub Station or at Sustainable Urban Extensions?

Driving Innovation and Supporting Business Growth

5.20  One of Greater Nottingham's strengths is the presence of world-class companies including Boots, Capital One, Experian and Rolls Royce. Important sectors include bioscience and creative media with such innovation being greatly assisted by the presence of two major universities. The University of Nottingham is of international significance for research and Nottingham Trent University is rapidly growing its research and development capacity. The larger companies and the universities in particular are often a catalyst in terms of new firm foundation or start-ups. It is therefore important that spatial planning policy links to the various skills, research and training programmes of the universities / further education sector. Experience to date shows that growing knowledge-based companies in this manner requires close collaboration with the universities and leading companies.

5.21  Incubator and start-up units could be provided within existing or expanded university campuses or specific provision could be provided off-campus on 'themed' parks or as part of the proposals for Toton and Ratcliffe-on-Soar power station through the proposed Development Corporation.

5.22  In order to maximise the potential of the local economy, there will need to be sufficient land, labour and housing available. The amount of housing is considered in Chapter 2. A key demographic challenge and opportunity is the ageing population and workforce. The importance of lifelong learning and addressing unemployment and underemployment to maximise the potential of the workforce will be essential.

5.23  Experience locally suggests most new jobs are created in small and medium-sized enterprises (SMEs)[8] both within knowledge-based and other sectors. It is important therefore that the planning system caters for the needs of SMEs both at the formation stage and as these firms grow. Policies within the Plan should complement other policy support for SME growth and relocation strategies. Options should consider the provision of managed workspace, small units, and need for space for businesses to expand into.

Question EMP3: Driving Innovation and Supporting Business Growth

• How can we drive innovation and encourage start-up companies, including expanding the role of the universities in the area's economy?

Regeneration Priorities

5.24  The highest levels of disadvantaged people are to be found within the City. The percentage of people claiming unemployment benefits is higher within the City than the regional and national average and economic activity rates are lower. As a regional centre located within a relatively self-contained Functional Economic Market Area[9] (FEMA), there is considerable in-commuting from the adjoining Council areas. Wages of residents of the City are lower than the wider Greater Nottingham, regional and national averages.

5.25  It is also the case that more traditional manufacturing industries are most heavily concentrated within Nottingham City and most vulnerable to the threats of competition and automation.

5.26  A recent study[10] looked at the likely impacts of automation concluding that the demand for people with good analytical skills and interpersonal skills would increase while conversely there would be net losses of administrative, secretarial and skilled-trade occupations with mixed fortunes for more elementary occupations. The Aligned Core Strategy identified a number of priority sites for regeneration, largely within Nottingham City and good progress is being made. However, more work needs to be done and further contractions in industrial activity is likely to mean further job losses. Regenerating parts of Greater Nottingham suffering disadvantage is part and parcel of realising the D2N2 vision for the local economy and new regeneration priorities are likely to be identified.

Question EMP4: Regeneration Priorities

• What should the key regeneration priorities be, and where?

Climate Change

5.27  There are potential conflicts between achieving a high-value economy and environmental constraints. However, the two can be compatible. For example, high technology is generally more attracted to areas which achieve a high quality of place for both their businesses and workers. This goes hand in hand with the provision of a generous amount of green infrastructure and improved biodiversity. The aim should be to integrate environmental, economic and social objectives into the overall strategy to achieve sustainable development.

5.28  A key challenge in the future is the threat from Climate Change. Each of the Greater Nottingham Councils have declared a climate emergency. Businesses in Greater Nottingham will need to play their part, but there are potential benefits, for example, from business premises becoming more efficient in terms of energy use and of businesses encouraging their workforce to travel more sustainably. The co-location of jobs, homes, services and facilities to reduce the need to travel and building at higher densities are possible approaches. Greener products and services also form part of a market with huge potential.

Question EMP5: Climate Change

• How can we encourage businesses to address Climate Change and mitigate their environment impacts?

Safeguarding Good Quality Employment Sites

5.29  The existing policy approach seeks to safeguard existing employment sites and allocations unless certain criteria are met. In this context, the Greater Nottingham Councils have permitted the change of use of employment space to other uses, for example, residential and mixed uses, where the sites are considered unsuitable for modern businesses or where they have been marketed for employment without success. The policy seeks to avoid the 'blanket' safeguarding of employment sites in order to make the best use of land generally, boost housing supply and create alternative types of employment where possible. Employment sites considered to be good quality or of strategic significance have been safeguarded for employment use.

Question EMP6: Safeguarding Employment Land

• Should we continue to safeguard good quality employment sites and release sites of lesser quality, unless they contribute to regeneration?

Rural Area

5.30  Many rural businesses have sought to diversify in order to remain competitive. Changes to the Common Agricultural Policy[11] are likely to encourage further diversification. There is a need for planning policies to encourage appropriate diversification schemes.

5.31  The visitor economy is also a significant employer within rural areas. There is a variety of visitor attractions, including country parks, heritage assets, sports facilities, hotels and conference centres. There is also likely to be an increased demand for leisure and recreational facilities and services.

5.32  More 'footloose' businesses may seek premises within the rural area including within villages or vacant rural buildings in the countryside. There are benefits in terms of providing local job opportunities in the rural area, especially where there are pockets of disadvantage and / or lack of accessibility to employment centres. However, a large proportion of the rural area is Green Belt, which acts as a major policy constraint on economic development. Green Belt policy permits the reuse of rural buildings subject to certain criteria and conditions. There is a case for planning policies to be more proactive in terms of identifying and safeguarding suitable small-scale employment opportunities.

Question EMP7: Rural Area

• How can we support rural diversification?