Agenda item

The Committee received a report of the Corporate Director of Regeneration, Economy and Growth which provided the strategic context for economic growth in County Durham and the role of employment land in delivering that growth.  It set out the existing employment land in the county, the allocations of employment land for future development, strategic employment sites and progress on delivery; and the allocation of future land for employment growth (for copy see file of minutes).

 

Amy Harhoff, the Corporate Director of Regeneration, Economy and Growth provided a detailed presentation to members with Sarah Slaven, Managing Director Business Durham and Mike Allum, Spatial Policy Manager in attendance to assist with questions. The Corporate Director confirmed that the report and the presentation also provided a breakdown of the various strategic sites in the county which linked to questions that had been previously asked by Overview and Scrutiny Committee members.  In relation to the presentation she explained that it set out the economic context, what employment land we had and confirmed that this was set out in the County Durham Plan, details on what the major employment sites were, how Durham County Council supported businesses and jobs located at these sites and how the Council attracted investment. 

 

Concerning the economic context the Corporate Director highlighted that County Durham needed to be ‘punching its weight both regionally and nationally’ and emphasised the opportunities that existed within the county that included a skilled workforce, high land availability, strategic locations with road and rail transport links, sector specialisms, a world leading university and Devolution.  In relation to the distribution of land she explained that employment land were clusters of land that supported existing employment across the County.  The larger sites were located along the A1 and A19 corridor as they had access to good transport links with the ability to move completed goods.  There were peaks in figures to reflect the big sites taken forward and delivered on land over a five-year period.

 

The Spatial Policy Manager clarified that future employment land had been identified in the County Durham Plan (CDP) which was adopted in October 2020.  There was a national requirement to review the plan every five years however the Levelling Up and Regeneration Bill currently going through Parliament included major reforms to the local plan preparation process with guidance expected later this year. As a result of this legislation DCC may need to review the CDP later next year, with a new plan requiring a new evidence base including a New Employment Land Review.  It was confirmed that key evidence had been included in the Employment Land Review (ELR) on take up rates, demand for employment land and what areas investors were focused on.  The ELR would be updated as part of preparations for a new County Durham Plan.

 

The Corporate Director of Regeneration, Economy and Growth stated that the scale and scope of land for growth, good transport networks and connectivity that reflect the private sector at a regional and national level with a high profile makes a good employment site for investors.  DCC continued to monitor the demand for these sites.

 

The Corporate Director then provided members with key facts in relation to the various strategic sites in the county: NETPark; Durham Innovation District (Aykley Heads); Forrest Park; Integra 61 and Jade Business Park  and then highlighted other major existing employment sites including Aycliffe Business Park, Peterlee Industrial Estate, Seaham Spectrum Business Park with concentrations of employment around Bishop Auckland, Spennymoor, Consett, Stanley, Chester-le-Street, Durham City and Barnard Castle. It was confirmed that the support provided to these sites was different to that provided to the strategic employment sites with strategic sites having more land to develop and the return on investment having to meet the level of borrowing.  In addition, DCC was involved in the development of other sites including Station Place at Merchant Park, South Church Enterprise Park, Drum Industrial Estate and the Bracken Hill Business Park.  

 

The Managing Director, Business Durham noted that support was provided to attract inward investment including infrastructure provision, trade events and a bespoke approach to individual enquiries as well as supporting businesses through an account management approach to understand their expansion requirements and provide softer support to help navigate the market for example funding and finance options such as the Council’s Finance Durham Fund.  There were small incubator connections and networks to support new businesses to grow. She stressed that every business had access to Business Durham for advice and support which had seen significantly more enquiries emerging. She stated that there had been a high capital programme in the last ten years that was a reflection in external grants claimed as it was important to access funding to resource growth.

 

Councillor Crute commented that he thought it made sense to attract businesses along the A1 and A19 corridor as the key word was accessibility.  He was unsure how it would affect outlying towns and villages that were located in more rural areas and highlighted that there was a need to consider how we ensured these employment sites were accessible for residents living in all our Towns and Villages across the county.  He continued that the authority had received reduced transport funding and queried if funding was available through the UK Shared Prosperity Fund (UKSPF) as within the Devolution deal it appeared that Durham County Council would be locked out of transport funding for three years until 2028.  He continued by asking for clarification as to whether the Inclusive Economic Strategy (IES) Delivery Plan which was to be considered by the committee in October under the ‘Place’ theme would provide any more information on actions to address transport links to employment sites across the county.

 

The Corporate Director of Regeneration, Economy and Growth stipulated that every development required a travel plan to ensure that transport was accessible. Additional work had been progressed at the Park and Ride schemes for the larger sites.  The Devolution deal would not enable Durham County Council to access transport funds for the first three years but the authority had the Bus Services Improvement Plan (BSIP) delivery plan to progress the development of passenger services within the county.   She continued that the economic improvement plan was critical to support the strategic sites and there was an expectation that Durham would see future investment in passenger transport services to improve accessibility.  She acknowledged that the provision of public transport to rural areas within the county was a challenge.

 

Councillor Crute requested further information on the IES delivery plan.   The Corporate Director confirmed that more information would be provided at the October meeting of the committee.

 

Councillor Surtees asked if the sale of the HQ at the Sands had hindered the development of the Aykley Heads site and the potential 6000 jobs.   She noted that there were no figures reported for current jobs at the site.  She remarked that the terminology used in the report regarding a ‘new DLI Museum’ at Aykley Heads was misleading and should be amended. 

 

The Corporate Director of Regeneration, Economy and Growth responded that there were no figures reported for current jobs at the Aykley Heads site because figures were forecast on these sites and the potential jobs would be 4000.  The additional capital monies from the sale of the HQ at the Sands were included in the MediumTerm Financial Plan process.  She agreed to look at the wording in the report to reflect the new branding and identity of the former DLI museum.

 

Councillor Surtees reiterated her question as to whether the sale of the HQ at the Sands had delayed the development plan posed for the Aykley Heads site and was it potentially two years behind schedule.  She continued by asking for clarification that if the HQ had not been sold would the development of the Aykley Heads site had progressed further.

 

The Corporate Director of Regeneration, Economy and Growth answered that the Aykley Heads site was now a broader development proposal, it had now a joint venture proposal, which was a different proposition to when the original proposal was considered. She felt that the joint venture at Aykley Heads was progressing at a pace as expected.

 

Councillor Moist confirmed that the Aykley Heads site would be reviewed at a later stage in the work programme of the Economy and Enterprise Overview and Scrutiny Committee.  He was concerned that the proposed number of jobs for the site had dropped significantly from 6000 to 4000 and queried why it had reduced.

 

The Corporate Director of Regeneration, Economy and Growth stated that the numbers were forecast in 2018 and at that time had included the plateau area which was in the Green Belt.  This area was subsequently removed from the site.   

 

Councillor Sterling asked about the time scales involved for sites to maximise the number of jobs expected.  She enquired if businesses were vetted on the number of employees they would bring forward.  She gave Jade Business Park as an example which in phase 1 it had 7 units that were full and queried if this was on track to deliver the number of jobs that had been expected versus the reality of how many there actually were at present.  She congratulated Business Durham on the recent networking event that had been held at Consett Business Park to support smaller businesses.  She believed it had been well received by everyone who attended and participated.

 

The Managing Director Business Durham stated that a forecast was always made on the amount of space against the different metrics and type of expected business occupiers to determine the number of potential employees for a site.  With some applications a unit would be taken to provide growth capacity but did not create large numbers of jobs on day one.  She emphasised that all sites were at the expected level in the phases of their development.

 

Councillor Stead referred to the new Mayoral Combined Authority and the £4.2 billion of investment for the region including £1.4 billion investment fund together with significant funding for transport, education, skills, housing and regeneration and asked that in relation to public transport would County Durham receive extra funding from the Combined Authority and would the £1 and £2 fares scheme currently running across the county continue.  He continued by asking if Business Durham supported businesses within the Drum Industrial Estate at Chester-le-Street, what the occupancy levels were currently and whether there was land available for the further development of the site. He questioned why the Leisure Centre Investment was shown as being down for the year and not operating at the maximum.

 

Councillor Moist informed the Committee that the Leisure Transformation Programme would be addressed later in the committee’s work programme.

 

The Corporate Director of Regeneration, Economy and Growth replied that it was forecast that the devolution deal would bring £4.2 billion of funding to the Northeast.  As Durham was the largest Authority there was an expectation that there would be significant investment in Early Years that would need to be spent by 2026 along with additional funding for Regeneration.  Work was ongoing regionally to develop an investment plan and that County Durham was developing its own investment plan which would draw out clear priorities and play into the development of the regional plan.  The Leisure Centre report was due in the Autumn that would identify the next steps for leisure within County Durham.

 

The Managing Director Business Durham confirmed that Drum Industrial Estate had an active business network, supported by Business Durham, with a mix of private small companies and larger businesses for example in the logistics sector located on site. She agreed to confirm the current occupancy as the small units had a high turnover and also to clarify the position in relation to any further land for development in the area.

 

Cllr Stead asked for confirmation as to whether there was any land available for further development.

 

The Managing Director Business Durham agreed to investigate and provide a response to the member.

 

Councillor Freeman was impressed that the Business School and Atom Bank had been retained in the city within the innovation hub. He asked why it was thought that the site would attract high quality jobs and for detail of timescales as to when there would be units built at Framwellgate Waterside and Aykley Heads.

 

The Corporate Director of Regeneration, Economy and Growth reiterated that it was great that Durham City had retained the Business School and Atom Bank Research making it an innovation hub rather than a business park.  These organisations would help attract high value jobs to the area and confirmed that, this had previously happened with NETPark at Sedgefield which was developed around growth sectors and commented that there was no reason that the county could not do this again.  Aykley Heads was a phased joint venture to develop over eighteen months.  Durham County Council were in the early stages that would look to short list potential investors.  This would be followed by an extensive procurement process and it was intended to move quickly with the development of the site.  The Innovation Strategy would include the demolition of County Hall and delivery of a cleared site with the development of the site taking place over several years.

 

Councillor Marshall commented that he was frustrated in relation to the Integra 61 site, that it had taken years to get movement on this site but other sites had progressed at a faster pace.  He queried as to how Durham County Council could get the accountability right with partners investing in the area to keep to development timescales.  He was concerned that political uncertainty in the Council was holding back investment from the private sector, the sector was losing confidence in the authority as they had no guarantee in relation to future policy and he commented that there needed to be collaboration within the authority to ensure the development of these sites in the future.  He stressed that Durham could not afford for politics to get in the way of moving forward. 

 

Councillor Marshall thought the devolution deal could be lucrative but as Durham were slow to the negotiations, he felt we could lose out if we did not build relationships at a regional level. He was concerned that grant monies had been paid back to the Government as the Council had not spent the funding.  He continued that this should not be the position that the authority found itself in going forward and concluded by highlighting the need to consider how we would get investment into smaller sites across the county.

 

The Corporate Director of Regeneration, Economy and Growth acknowledged that Integra 61 had not progressed at the pace as first anticipated when the agreement was signed. However, the Council were subject to conditions in a commercial contract signed at the time which would be reviewed as appropriate. In terms of the devolution deal there was money available for regeneration and work had been developed around this but there was still a lot to accomplish and engagement with Members was key. 

 

The Managing Director Business Durham reported that monies would be available through the UKSPF, the Prosperity and Growth Scheme had been launched providing £4m in grants to support our industrial estates across the county.  This would be an opportunity to look to see how this funding could be used to support businesses across the County to expand and become more productive. 

 

Councillor Moist stated that the report pinpointed delivery and was full of promise however he wanted to see more action in relation to delivery across the sites.  In terms of inward investment he thought Durham was stagnant in comparison to other areas which seemed to progress at a faster pace. He queried if there were targets that had to be achieved.

 

Councillor Stead queried how good businesses could be attracted to the city centre, what was accountable and what successes there were.  He felt that the perception of the North East might hold Durham back.

 

Councillor Moist asked whether the Aykley Heads site would attract employers from other sites in the county. He continued by asking whether we had sites in the correct locations with the right mix of businesses.  He continued by commenting that  Durham needed to  keep up with demand for  business locations and gave the example of development in Chester-le-Street and asked whether the Drum Industrial Estate  could be expanded through the planning process or what were the plans  for the Go North East bus depot and the former Civic Centre site as it was unclear if this was to be used for a leisure centre or whether  for industrial use rather than houses. 

 

The Corporate Director of Regeneration, Economy and Growth informed the Committee that in the long term 25,000 jobs were to be created by 2035.  In the early years figures would be lower as businesses established themselves.  Delivery of all sites were where they were expected to be. Although Durham appeared to be stagnant it was in line with the region. In relation to the performance of the economy, targets would be set including comparisons and they would look at better targets for the economy going forward.  She welcomed Scrutiny to challenge action and get a picture of the context. She highlighted that the current backdrop was extremely challenging with increased energy bill prices, the rise in inflation and the affects from the pandemic.

 

The Managing Director Business Durham stressed that on a national level Durham was on target in relation to inward investment and in some respects ahead of target.  However, they were not huge size companies but Durham was performing well in the current economic context.  She acknowledged that inward investment did not always come to fruition within one year but the groundwork helped to secure the investment in future years.

 

Councillor Moist commented that he wanted more jobs and prosperity for County Durham and was concerned that Durham was starting from behind the UK average.

 

The Corporate Director of Regeneration, Economy and Growth responded that although Durham was behind in the economy nationally it was on target regionally and on par with similar authority areas to Durham.

 

Councillor Surtees requested information as to where the capital receipt from the sale of the HQ would appear in the MTFP.

 

The Corporate Director of Regeneration, Economy and Growth agreed to look into this and provide a response.

 

Resolved

 

That the content of the report was noted.