Abolition of Regional Spatial Strategies: a planning vacuum? - Communities and Local Government Committee Contents

Written evidence from Gazeley UK Ltd (ARSS 19)


The logistics sector plays a crucial role within the UK economy and on the basis of international comparison it is highly efficient and successful.

Gazeley UK Ltd is a major development player within the British logistics sector.

The logistics sector requires a continuing supply of very large buildings of up to one million sq ft in floor area on individual sites of five acres and above, or parks of up to about 500 acres. The buildings are operated by or on behalf of retailers, manufacturers or third party hauliers. These units serve regional or national markets and typically draw on labour forces from a number of local authority areas. The logistics sector depends on the national highway and rail networks and a variety of measures, some funded by developers, to upgrade these systems.

Gazeley's experience is that individual local planning authorities acting alone are frequently unable, reluctant or unwilling to address the provision of major logistics facilities which serve a regional or national function, within their areas. The characteristics of the logistics sector are such that they can only be considered from a planning policy perspective on a broad canvas.

There have been good examples within recent Regional Spatial Strategies where the needs of the logistics sector were being addressed in a comprehensive manner.

The abolition of RSS's can be seen already to be slowing and making more difficult the procurement of major new logistics developments.

There is a strong overriding need for appropriate planning policies at a sub national or regional level to address the unique requirements of the logistics sector. This would assist major stakeholders and decision makers within this key commercial sector which makes a vital contribution to the national economy.

1.  Gazeley—a leader in UK logistics development

1.1  Gazeley UK Ltd is one of the major commercial property developers in the world, focussing particularly on the needs of the logistics sector. Over the last 23 years Gazeley has completed 60 m sq ft (6 m sq metres) of floorspace across the globe for a variety of occupiers engaged in retail, distribution and manufacturing activities. Our customers comprise leading UK, American, German, French, Italian, Spanish and Japanese companies.

1.2  Gazeley has offices and associated activities in most major countries in continental Europe. Through our ultimate parent company, Dubai World, we have related businesses engaged in logistics development throughout the world, notably in the Middle East and China.

1.3  In the UK our flag ship developments include Magna Parks in Lutterworth, Leicestershire and Milton Keynes—the former, comprising 8m sq ft (743, 000sq metres) of completed floorspace and accommodating c.6,500 jobs is the largest dedicated logistics facility in Europe.

1.4  Whilst most buildings developed by Gazeley are occupied for distribution related activities, some units accommodate large scale manufacturing or processing companies.

2.  Significance of the logistics sector

2.1  Over the last 20 years the logistics sector has undergone fundamental technological and organisational changes which parallel changes in the nature of retailing and in the way that goods are sourced and handled. In contrast to the manufacturing sector the logistics sector has experienced steadily rising employment levels. There continues to be strong occupier demand for new buildings as supply chain requirements constantly change. Take up of strategic sized warehouses (ie over 100,000 sq ft) in the UK during the first half of 2010 was 10.2m sq ft (948,000 sq metres). Development activity for the logistics sector takes place in all regions but with a particular focus on the East and West Midlands, the South East, Yorkshire/Humberside and the North West.

2.2  Retail distribution in the UK is widely regarded as the most efficient in the world. This enables retailers to offer competitive pricing, to provide rapid response times and wide stock ranges to customers and to minimise inventories. The logistics sector is critical to the success of UK plc.

2.3  The UK logistics sector turns over £7 billion per annum and employs 2.3 million people—equivalent to about one in 12 of the country's workforce. Over 200,000 companies are engaged in logistics.

3.  Characteristics of logistics developments

3.1   In order to achieve continuous improvements in productivity and cope with greatly expanded product choices, the average size of a strategic scale warehouse in the UK has increased to c.290,000 sq ft (27,000 sq m). Depending on the nature of the occupier's business, such buildings may serve a national, regional or sub regional function for distribution of goods. Depending on individual company operations goods may pass through standalone warehouses from supplier to retailer or via more complex hub and spoke networks. In recent years there has been an increased focus on port related warehouse operations. Provision of rail accessibility is also increasingly important.

3.2  The buildings which Gazeley develops range between 100,000—1,000,000 sq ft (9,300 sq m-93,000 sq. m.) in floor area, with heights of up to c 60 ft (20m). These units have extensive lorry and car parking areas and ancillary features such a vehicle washing units, buildings for vehicle maintenance, product re-cycling, renewable energy plants, flood storage areas and in some case railway sidings with associated external stacking areas. Such large developments require extensive landscaping on an appropriate scale to screen and soften the visual appearance. Other more sophisticated units may function as data centres in which computers store and handle vast quantities of financial and other commercial records. Individual plots range upwards from about five acres to a large Magna Park project of over 500 acres.

3.3  The units almost invariably operate on a 24/7 basis and attract significant vehicle movements. The buildings typically employ between 200-700 people in a variety of skill areas. The work force is likely to be attracted from within a 30 minute drive time and therefore will reside in a number of different local authority areas.

3.4  The operations frequently require sophisticated handling equipment the costs of which may exceed those of the buildings themselves. The completed capital value of such completed units typically ranges from about £15 million-£80 million.

3.5  The development requirements of the logistics sector can therefore be seen to be highly significant.

4.  What are the strategic planning issues for the logistics sector?

4.1  In relation to logistics it is critical that the planning system can facilitate provision of the right quantity, of the right type of development, in the right locations taking into account all other policy considerations.

4.2  The development needs of the logistics sector are critically determined by location: the location of markets i.e. where the largest population centres are to be found; the location and access to key transport routes ie the principle motorways, trunk roads, railways and container ports; and the location of a suitable labour force. In view of these requirements, major logistics developments can only occur in a limited number of places.

4.3  Almost inevitably major developments for the logistics sector raise issues that impact more than one individual local authority area. These needs must be considered on a wider basis.

4.4  A good example of the way in which the needs of the logistics sector have been addressed in a regional spatial strategy may be seen in the RSS for the East Midlands approved in March 2009. The East Midlands accommodates a larger share of the logistics sector than any other individual region.

4.5  Policy 21 of the East Midlands RSS, a copy of which is attached, was based on research commissioned by the East Midlands Regional Development Agency into the characteristics of, future demand and potential locations for strategic distribution warehousing. The RSS identified a need for 308 hectares (761 acres) of rail connected distribution sites and 76 hectares (188 acres) of non rail linked sites in the region. It also targeted an additional 30 freight trains per day to carry goods in the region. The policy identifies five general locations within the region where strategic warehousing should be directed and identifies the appropriate highway and rail requirements together with other relevant planning policy considerations. A strong policy consideration is to encourage transfer of freight to those limited parts of the rail network which for reasons of adequate height clearance are capable of accommodating trains loaded with large containers.

4.6  Steps have been taken by the various stakeholders to bring forward proposals to fulfil this policy but the demise of the RSS is already casting doubts as to what will be implemented.

5.  The Need for a Regional Perspective

5.1   Local planning authorities have been accustomed to the need to have regard for the strategic or regional planning perspective when producing their own development plans. This is essential since issues raised by the type of developments described above, have implications beyond the boundaries of the individual council. An individual local authority could not normally be expected to have the necessary resources available to research this specialist sector.

5.2 Similarly it is essential to consider the regional dimension when planning applications are submitted for major developments which raise wide strategic considerations. This is especially important since many local development documents are woefully out of date or have failed properly to address the wider needs of the logistics sector.

5.2  Gazeley has been a regular contributor to the production of regional spatial strategies (RSS's), (and indeed with the structure plans and regional planning guidance which proceeded them), to ensure that the approved documents recognise the significance and needs of the development sector of which we are a part. We note with some satisfaction that RSS's in those parts of the country where we have been most active such as the East Midlands, West Midlands and Eastern England, do now recognise the key planning issues facing the logistics sector.

6.  Consequences of abolition of regional spatial strategies

6.1  No detailed planning policy advice exists at the national level in respect of the specific needs of the logistics sector. With the abolition of RSS's a policy vacuum therefore now exists.

6.2  Major logistics developments are not easy to navigate through the planning system at the best of times and the absence of relevant policy can already be seen to be making this process considerably more difficult. Without a regional policy focus, some local planning authorities with whom Gazeley deals are now displaying an entirely parochial view, as was the case before the adoption of suitable regional policy. We have experienced the response that since a strategic distribution warehouse project does not meet a strictly "local need" in terms of employment or function, then provision does not have to be made in a local development document. If this attitude continues to be replicated by the majority of local authorities, then the supply of facilities which meet wider needs will be blocked off.

6.3  Inevitably there will be an adverse impact on the national economy and overall efficiency if new infrastructure to meet the needs of the various supply chains within the UK is prevented.

6.4  Gazeley is most concerned that a policy vacuum at the regional level has been created following the abolition of regional spatial strategies.

7.  Requirement for a wider planning perspective

7.1  In our view there is a clear need for a sub national or regional perspective on the delivery of future major logistics. Gazeley would not wish to be unduly prescriptive as to how such policy guidance is produced. The over riding need is for policy which is relevant, up to date and able to give a clear lead to local decision makers and other key stakeholders in this sector. The very largest rail connected logistics projects are likely to be considered by the Infrastructure Planning Commission for whom we believe high level regional policy guidance on this topic is important.

7.2  Such policy must attempt to quantify the approximate amount of floorspace which each region will need to accommodate.

7.3  At least for those regions which are key to the logistics sector, the policy should identify those general areas where future requirements will need to be accommodated, taking into account their relative locational advantages.

7.4  The policy should identify what key transport infrastructure is required in the case of each identified area of search and the manner in which this is to be delivered. This should deal as appropriate with the necessary highway and rail improvements.

7.5  Finally the policy should indicate the other key planning and environmental requirements, such as the use of renewable energy, which must be achieved.

7.6  Without such policy provision it is our firm belief, based on our experience of the situation prior to the existence of RSS's and upon what we have observed in recent months, that progress to deliver modern logistics requirements will become increasingly hampered.

September 2010

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Prepared 31 March 2011