Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Milton Keynes Economic Partnership (NT 32)

  The Milton Keynes Economic Partnership, formed in 1994, brings together a range of public and private sector bodies in order to co-ordinate the strategic economic development of the Milton Keynes area. The Commission for the New Towns, now part of English Partnerships, was a founder member of the Partnership, and remains a member. The following comments relate solely to Milton Keynes. Individual members of the Partnership may submit responses on their own account.


  Milton Keynes could be regarded as the most successful of all the New Towns in economic terms. Since designation, the level of employment has never declined year-on-year despite recessions elsewhere. This strength has derived from the policy of economic diversity adopted from the outset. Although some sectors are undoubtedly stronger than others (for example logistics, distribution and retail) Milton Keynes also has a strong manufacturing base, a strong telecommunications and ITC sector, and is a regional centre of business support services. While individual sectors experience cyclical downturns, the diversity (and scale) of the economy has ensured that, in total, employment has continued to grow throughout the last 30 years. (The recent Business Strategies Report placed Milton Keynes as the top job creation centre between 1991 and 2001—over 36,000 jobs were created in Milton Keynes, which was 8,000 more than in any other employment centre).

  Milton Keynes, as a greenfield site, has relatively few older parts; only Bletchley and Wolverton can be regarded as being significant centres pre-designation. The overall employment growth of Milton Keynes has cushioned the impact of the decline of the traditional industries in these areas—while some industries (such as the railway business in Wolverton) have almost disappeared, others have evolved to meet the changing economy of the town (light engineering remains a major employer in Bletchley, but the nature of the products have changed).

  The economic growth achieved by Milton Keynes could only have been possible with the substantial investment in infrastructure made by the Development Corporation. All areas of Milton Keynes have benefited from this investment, although direct investment in regeneration projects has not been a priority of the Corporation/CNT/EP. It is true to say that the local community (including the business sector) would have liked to have seen a higher level of re-investment in regeneration projects but New Town policy inevitably gave priority to activities deemed to be in direct support of the area's growth ambitions.

  As far as long term economic sustainability is concerned, Milton Keynes can now be said to be reaching maturity. The Economic Partnership, while continuing to encourage diversity and growth, is gradually switching the emphasis towards the attraction and development of a higher proportion of knowledge-based, higher added-value businesses.


  An essential component of the success of any new town is the supply of qualified labour within a reasonable commuting distance. While it is unrealistic to expect that the increase in the level, and diversity, of local housing will always match the increase in the scale and nature of employment, the aim should be to achieve a balance.

  Milton Keynes was planned as a regional employment centre and, as such, was envisaged as being a small net importer of labour. In the last few years, as the economic success of Milton Keynes has become more strongly rooted, there has been a considerable increase in the volume of in-commuting. In 2001 the number of in-commuters is estimated at 24,000 (about 20 per cent of Milton Keynes' employment). About half come from within about 10 miles of Milton Keynes, but some 12-15,000 are travelling considerable distances to work. The predicted rate of increase in employment over the next five years (3.5 per cent per annum) is unlikely to be matched by an increase in local housing, so this commuting deficit will worsen to the detriment of both the environment and individual lifestyles. A particular area of difficulty is the provision of affordable housing, given the requirement on English Partnerships to achieve best value in the sale of land.

  It would be counter-productive to the economic health of Milton Keynes (and UK plc) to try to artificially restrict employment growth. Land for housing is available in Milton Keynes, and ways therefore need to be found to encourage a faster rate of sale and, in particular, at prices which can deliver more affordable housing (whether for rent or sale). This requires a more sophisticated level of national policy guidance.


  The layout of Milton Keynes (a grid system), and its relatively low density, has encouraged dependency on the car. These features have, however, played a key role in attracting commercial investment to Milton Keynes. It is very difficult to run an economically sustainable public transport system, although the position will improve marginally as a result of increased density of both employment and residential areas. It is, however, unlikely that a traditional public transport system will ever be developed.

  Instead, Milton Keynes plans to develop a range of initiatives which will lessen the dependence on the car. The bus system is likely to evolve into a "mix" of fast commuter links operating along the main grid system, and slower local services operating through the residential estates. More transport-efficient use of cars will be encouraged through Park and Ride services serving the City Centre, and through car-share schemes and Green Transport Plans for individual businesses.


  Milton Keynes has benefited enormously from having a Master Plan drawn up by the Development Corporation. This has enabled investors to ascertain fairly quickly where development might be possible and under what conditions. The rate of investment would not have been as high as that achieved without the existence of the plan.

  However the release of land by MKDC/CNT/EP has had its difficulties. The rate of progress has been regulated as much by central government and corporate requirements as by local needs. The price at which land has been sold has also been determined by national guidelines rather than by local requirements—for example, Milton Keynes, like many successful areas, needs an adequate supply of affordable housing (as noted above). A key to affordable housing is land prices. Local freedom over land prices would enable Milton Keynes to become more sustainable in housing (and thus transport) terms.


  It is essential that, as assets are developed and transferred to the local authority, adequate provision is made within the local authority to accept responsibility. For example, in Milton Keynes virtually all of the main road system and bridges have been built at the same time; they will depreciate at roughly the same rate. Thus, although the current maintenance cost may be low, there will be a "peak cost" in a few years' time.

  While a dowry at the time of transfer may be suitable in some cases, it is important that the government make provision for the long term liabilities arising from the transfer of assets. It is equally important that the local authority spends any funds allocated for the purpose in the intended way. Consideration should therefore be given to hypothecating (or possibly ring-fencing) government grants to those local authorities who take over responsibility for new town assets.


  Inevitably the growth of Milton Keynes has had an impact on the surrounding region. While short-term fluctuations are inevitable, a long-term balance needs to be achieved. Milton Keynes needs a healthy hinterland within which to operate successfully. The current Regional Planning Guidance Study on Milton Keynes and the South Midlands should be used as a means of ensuring that the economic success generated by Milton Keynes is shared with other local towns. Each must be encouraged to develop its own strategy, not in fear of Milton Keynes, but to complement Milton Keynes. This requires a robust sub-regional framework coupled with strong inter-institutional arrangements.

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Prepared 16 April 2002