Issue and Options 2023

5: Delivering South Warwickshire's Economic Needs

Chapter 5 sets out various options as to how we might meet our economic challenges facing us to 2050 and seeks your views on the 10 key economic issues:

• Issue E1: Growing the South Warwickshire economy
• Issue E2: A low carbon economy
• Issue E3: Diversifying the economy
• Issue E4: Sustaining a rural economy
• Issue E5: lack of business accommodation
• Issue E6: Protecting South Warwickshire's economic assets
• Issue E7: Core Opportunity Area and Major Investment Sites
• Issue E8: Existing employment sites
• Issue E9: Supporting our changing town centres
• Issue E10: Tourism
• Issue E11: Any other economic issues

South Warwickshire is the gateway to the West Midlands benefitting from direct access to London via the M40 and the Chiltern mainline. It is situated only 10 miles from Birmingham, and HS2 will provide direct access to the North. Due to its location, businesses within South Warwickshire are well placed to capitalise on a wide range of economic opportunities, not only from the West Midlands but from the East Midlands, Southeast and Southwest of England. South Warwickshire is traversed by the A46 which is a key strategic route connecting the Humber Ports with the cities of the Severn Estuary.

Issue E1: Growing the South Warwickshire economy

The Government published a Levelling Up White Paper in February 2022 which included several commitments in relation to economic growth. There is a specific recognition of the role Jaguar Land Rover has taken in Coventry & Warwickshire in relation to its contribution it plays to the local economy and community. Both Districts will also benefit from the UK Shared Prosperity Fund, with an additional benefit of Rural Prosperity Funding for Stratford-on-Avon District.

In addition, to the South Warwickshire Local Plan, the two councils are also preparing an Economic Strategy for South Warwickshire that will set out the economic vision for Stratford and Warwick Districts, and how the economy of South Warwickshire can be given the opportunity to continue to flourish and grow. The South Warwickshire Economic Strategy seeks to capitalise on the unique strengths that South Warwickshire benefits from and act as a catalyst for inward investment. This can be summarised as the creativity of its people, the innovation of its businesses and the opportunity of its places.

Coventry and Warwickshire is a £26 billion economy, accounting for 19% of West Midlands GVA and growth in GVA has slightly out-performed regional and national trends. The HEDNA has considered employment land requirements across Coventry and Warwickshire to 2050. These are shown in Table 8. A total of 345.3 hectares of office (Use Class B1) and general industrial (use Class B2) land is required across South Warwickshire to 2050. In addition, a proportion of the 709 hectares of strategic B8 employment land (i.e. warehousing and distribution) identified for the wider Coventry and Warwickshire sub-region will also be required.

South Warwickshire has been successful over many years at attracting major employers across a range of high value sectors, notably vehicle design and engineering, software and games development, and HQ and business professional financial services. South Warwickshire has also long been a strong area for tourism. Key to all of this has been the talent attracted and retained to the area, and the quality of a number of key cultural assets located within South Warwickshire (e.g. the Royal Shakespeare Company and Warwick Castle).

Whilst new employment land allocations along the strategic road network do lend themselves well to logistics - and no doubt there would be interest from occupiers – such activities would fail to maximise the economic potential of South Warwickshire and fail to capitalise on the strengths of the existing sectors and skills of the workforce.

The different types of employment land (e.g. B1, B2 and B8) generate different job ratios and growing the South Warwickshire economy is about maximising the number of additional jobs for the available employment land and not providing employment land per se.

Table 8: Employment Land Requirements to 2050 (hectares)

Issue E2: A Low Carbon Economy

It is important to try and encourage greener businesses into the area as well as encouraging existing businesses to become greener and to have the opportunity for greener initiatives. Businesses may choose to do this in several different ways, for example looking at active travel promotion for employees, adapting existing buildings and looking at new buildings to become more energy efficient. However, the downside to this could mean that businesses find this challenging due to costs, and as such a just transition period is likely to be needed.

The location and accessibility of new facilities relative to their suppliers and customers can help make substantial reductions and a significant contribution towards the goal of net zero.

Whilst many existing commercial buildings may not achieve optimal energy efficiency, there is considerable scope for industry to play a key role in harnessing renewable energy generation.

Current adopted and emerging policy

Issue E3: Diversifying the economy

It is important to ensure that South Warwickshire is attracting a mix of employment to the area which will help to prevent out-commuting and retain residents within South Warwickshire. Typically, Stratford and Warwick have many people employed in the hospitality, retail and tourism sectors which traditionally are much lower paid with those tending to be younger people who are starting work or who are studying and working part-time to supplement their income.

South Warwickshire also has an existing high skilled and qualified workforce and this is something that we should look to continue to support especially for younger people. There could be an opportunity to look at a S106 agreement for large scale developments whereby developers contribute towards the recruitment and training of local people through various initiatives. The training schemes could be targeted at those disadvantaged groups to allow them to gain the necessary skills to increase their access to job opportunities.

Current adopted policy

Issue E4: Sustaining a rural economy

Over half the population of South Warwickshire lives outside of the main urban areas. Whilst many of these residents will commute to these urban areas or outside the District for work, a proportion are employed in the rural economy. The rural economy comprises both land-based / agricultural businesses as well as those general business who operate from a rural location.

Travel to places of work by public transport in South Warwickshire is difficult due to its rural nature and the lack of regular and reliable bus services. It can hinder any job opportunities for people both in Warwick and Stratford district and with Stratford having a predominantly older population, businesses often look to locate in the north of the country where labour supply is better.

One solution is, through the South Warwickshire Local Plan, to look at some alternative sustainable modes of transport in these more rural areas such as mobility hubs, demand responsive transport services and an improvement to rail and active travel, in order to improve accessibility to key employment centres (see Chapter 10). Alternatively, the South Warwickshire Local Plan can explore the diversification of the rural economy.

There are challenges facing agricultural businesses such as having the capital to invest, restrictions from planning legislation, connectivity in rural areas and labour shortages. An important consideration is the skills and training alongside this in order to support any new economic sectors. It is also important that existing businesses are supported as well as developing new business/employment sectors.

With appropriate diversification, businesses may be able to have greater resilience by providing a range of income generating streams. For example, farm shops and tourism can supplement agricultural income which can create new jobs and help sustain the vitality of rural communities. Innovation surrounding technology can also help to support agricultural and rural businesses in adapting to changing circumstances, including helping to address climate change and increasing biodiversity. Farm diversification will, however, most likely mean increased vehicular traffic to and from farms. Another component of the rural economy is the provision of general employment opportunities in rural locations, including within villages, perhaps through the conversion of historic farm buildings that are no longer suited to modern agricultural uses. Again, such schemes, although not significant in themselves can help sustain rural communities.

Current adopted policy

Issue E5: Lack of business accommodation

In South Warwickshire, office accommodation is at a premium and there is an identified issue regarding a lack of grow-on space for businesses to expand.Changing requirements have led to higher demand for hybrid work spaces, and higher quality office space. There is a move towards cellular offices, with these in demand particularly for 2 or 3 people, rather than co-working space. As well as a demand for larger commercial units, there is an ongoing requirement for small industrial starter units. In terms of location, there is a growing preference for town centres rather than out of town business parks.

In Leamington Spa, the gaming industry in particular is experiencing pressures for office space. In the wider market, there is a need for both large and small spaces. One issue identified is businesses who would prefer to move into bigger premises being unable to do so, thus reducing the availability of smaller units for smaller businesses and start-ups.

Current adopted policy

Issue E6: Protecting South Warwickshire's economic assets

South Warwickshire benefits from a number of economic assets that, together, comprise the foundation of the South Warwickshire local economy. This local plan, along with the Economic Strategy, seek to capitalise on these assets and maximise their economic potential. There is not currently a policy in either the Local Plan or Core Strategy which protects all these unique assets, however there are policies which refer to some of these assets and look to protect them, for example, Wellesbourne Airfield.

Unique economic assets in South Warwickshire include:

Silicon Spa – It is the home of the gaming industry. This extends from Leamington out to the surrounding areas of Southam and Warwick employing over 2,000 highly skilled people.

Automotive – Home to the UK's automotive industry. Coventry and Warwickshire has a reputation for being a world class centre for advanced manufacturing and engineering. Aston Martin, JLR and Lotus have a major presence in South Warwickshire. Manufacturing accounts for over 40% GVA in Stratford.

Highly Skilled Workforce – South Warwickshire has a well-qualified and skilled workforce which attracts businesses. Warwick and Stratford have a higher-than-average population with NVQ4 qualifications and above.

Food and Drink – Food and drink is important to the economy and Warwickshire is well known for its quality restaurants, locally produced artisan food and drink, farm shops delicatessens and café culture.

UK Battery Innovation Centre – This is part of a government programme to fast track the development of cost-effective, high performance, durable, safe, low-weight and recyclable batteries. It provides the missing link between prototype battery technology and successful mass production.

WASPS – Top Premiership Rugby Union club moved from London to their current home at the Coventry Building Society Arena in 2014.

Bowls England – The HQ of Bowls England is in Leamington and each year hosts the National Bowls Championships.

Cotswolds National Landscape – This is the third largest protected landscape in England which is popular with walkers and visitors to the area.

Wellesbourne Airfield – The airfield operates as a general aviation airfield which is home to private aircraft and a flying school. It is in close proximity to the University of Warwick and provides the ideal opportunity to attract inward investment as a centre for aviation innovation.

University of Warwick – The main campus is located south of Coventry, and it has an additional campus at Wellesbourne which provides research and education in engineering, manufacturing and technology.

Long Marston Rail Innovation Centre – This is the home to the UK's only circular standard-gauge railway test track and is a base for the University of Birmingham and the Rail Alliance. The Rail Innovation Centre is emerging as a leading cluster in sustainable and digital rail technology through collaborative working with SMEs.

Shakespeare Birthplace – A popular attraction for overseas and UK visitors and is situated in the heart of Stratford-upon-Avon.

Stoneleigh Park – A science and innovation park which is dedicated to the future of farming and home to over 60 businesses.

Castles and Country Estates – South Warwickshire is home to a number of significant country estates as well as Warwick and Kenilworth castle, both of which are major tourist attractions.

Rosalind Franklin Laboratory – The UK's first testing megalab and one of the centrepieces of UK's future test and trace infrastructure. When fully staffed, the laboratory will play a key role in providing employment opportunities in the local area creating up to 1,500 jobs.

Royal Shakespeare Company – It is a major British theatre company employing over 1,000 staff and producing around 20 theatrical productions each year.

Agriculture – Warwickshire is home to a diverse range of farming, food and drink businesses and is approximately 70% agricultural land. Agriculture is important to South Warwickshire as it contributes to the local economy, local communities, protects the local environment and is a large employer to local people.

Current adopted policy

Issue E7: Core Opportunity Area and Major Investment Sites

A Core Opportunity Area has been identified which is shown on Figure 21 below. This comprises the 5 main towns, the A46 Trans Midlands Trade Corridor and the central section of the M40. The university of Warwick's two campuses, Long Marston Garden Village and Rail Innovation Centre, Stoneleigh Park and the automotive hub at Gaydon.

The Core Opportunity Area looks to attract inward investment to drive the South Warwickshire economy as well as encourage inward investment in the most accessible parts of South Warwickshire.

Major investment sites within the Core Opportunity Area include:

• University of Warwick main campus area
• South of Coventry including Coventry Airport, Coventry Gateway and the National Battery Innovation Centre
• Wellesbourne including University of Warwick and Wellesbourne Airfield
• Long Marston area including the Long Marston Rail Innovation Centre
• Stoneleigh area including Stoneleigh Park agricultural science park
• Gaydon M40 J12 area including Jaguar Land Rover and Aston Martin Lagonda

University of Warwick Main Campus Area

The University is a leading employer South Warwickshire and plays an important role within the local economy as well as being of national and international importance. The campus has been developed following a Masterplan approved in 2009 that has now largely been implemented and has lapsed. A further planning application granted in 2019 enabled construction of two major projects and an increase of car parking.

The University has aspirations to continue to improve and develop its campus and therefore the Plan will need to ensure that the aspirations of the University can be met, whilst ensuring any impacts of growth are mitigated. The relevant authorities are currently working with the University to work on an updated Masterplan to 2031, looking at how the University can grow in a sustainable manner with a focus on matters including the level and broad location of growth, sustainable transport and biodiversity. Beyond 2031, the Plan will need to continue to support this major employer and support its continued benefits to the local economy.

South of Coventry Area

The area of South Warwickshire to the south of Coventry has started to see and will continue to see considerable change. Strategic allocations in the current Warwick District Local Plan include large housing sites at Kings Hill and Westwood Heath as well as a sub-regional employment site to the south of Jaguar Land Rover's Head Quarters at Whitley. Planning permission has been granted for development on these sites and construction has commenced in the area.

Warwick University is situated within this area (see above). Coventry Airport is also located within the area. A planning application has been granted for a gigafactory for battery production on the airport site to support the country's shift towards electric vehicles and ultimately carbon neutrality. This development would have the potential to complement existing facilities in the area including the Battery Industrialisation Centre on Whitley South, facilities at JLR and Warwick Manufacturing Group at the University. It would also build on the rich heritage the area has for car production and associated activities.

Significant transport infrastructure improvements have been implemented, are ongoing and are being explored in the area. These include a new bridge over the A45 and transport improvements to connect JLR/Whitley Business Park to the new sub-regional employment site comprising Whitley South and Coventry Gateway. Furthermore, a new £38m scheme under construction will see a new bridge across the A46 and realigned slip roads forming the basis of a new signalised gyratory system at the Stoneleigh Junction of the A46.

Further transport investment is being considered in the area, including whether the Very Light Rail project led by Coventry City Council can serve the university and development in this area. The potential for a new railway station near Kenilworth is being explored. A potential transport corridor, potentially incorporating Very Light Rail and to cater for other sustainable travel modes connecting the new Stoneleigh Junction to Warwick University and with strategic connections towards the proposed HS2 Interchange at UK Central in Solihull is also being explored.

This area has seen considerable interest from promoters through the call for sites although it is important to note that much of the land not subject to existing permissions is within the West Midlands Green Belt and the potential and suitability for growth in this area would need to understand this context and the preferred option for growth.

Wellesbourne Area

Wellesbourne is home to the adjacent sites of Wellesbourne Airfield and the University of Warwick's Wellesbourne Campus. Aviation uses at the airfield are safeguarded in the Core Strategy and the draft Site Allocations Plan is promoting investment growth at the Campus site.

Looking forwards, we see an integral relationship between the university campus and airfield site, with the campus growing as a centre for cross-fertilisation research and development in high-tech automotive, battery and biosciences. The proximity of an operational airfield will enable these technologies to exploit the potential that aviation technology can add to these scientific endeavours. With the possibility for some rationalisation and rearrangement of activities, the airfield site also has the potential to house further industrial and research and development activities related to the campus (i.e. Use Class B2).

Long Marston Area

The Long Marston Rail Innovation Centre is the UK's only looped test track and with its connection to the national rail network, provides a unique opportunity to act as a catalyst for growth in the rail technology sector. Although not one of the UK's traditional rail centres, this part of South Warwickshire it has the potential to exploit the interrelationships with the industry Coventry and Warwickshire is world famous for; automotive and advanced engineering, especially in respect of alternative fuel technology. Existing opportunities in the Long Marston Area also include the employment land on Long Marston Airfield Garden Village and safeguarding the Rail Innovation Centre for rail-based employment and research and development.

Stoneleigh Area

Stoneleigh Park is located to the east of Kenilworth and south of the village of Stoneleigh and may often be referred to as being in the area 'South of Coventry' (see above). This is a major site in the Green Belt, home to the headquarters of the Royal Agricultural Society for England and a number of other agricultural and countryside organisations. The park hosts a wide range of shows and events and is an established part of the rural economy both locally and nationally.

The site will be significantly impacted by HS2 as it intersects Stoneleigh Park. This necessity for change to the site means that the emerging South Warwickshire Local Plan provides an opportunity to reassess the use and purpose of the site and the density of development within it, noting that it currently is located in the Green Belt. There are also opportunities that can be explored to improve access to and through the site with potential benefits if a route could see the main entrance being accessed from the north-west of the site with access stemming from the new A46 Stoneleigh Junction, thus enabling the current route through Stoneleigh to be downgraded to reduce traffic impacts through the village.

Gaydon Area / M40 Junction 12

This automotive hub is home to the iconic British brands Jaguar Land Rover and Aston Martin Lagonda. In addition to the economic activities on the Gaydon proving ground, circa 105ha of land has been allocated in the Core Strategy for employment purposes. Through the SWLP, there is an opportunity to capitalise on the existing economic base and grow this area with further automotive-related manufacturing (i.e. Use Class B2). Whilst well-located to the M40, we do not see this location as appropriate for strategic logistic uses (i.e. Use Class B8).

If additional employment land is to be allocated in the Gaydon area, there is the potential to reconsider the specific use of the existing allocations. The ability to bring forward employment sites the scale of 100ha is of regional West Midlands importance, and the potential for automotive or automotive related investment would reaffirm the West Midlands as the home of the British automotive industry.

Figure 21 - Core Opportunity Area

Current adopted policy

Issue E8: Existing Employment Sites

The current local plans identify a number of sites for economic development. Given the desire to grow the South Warwickshire economy, and to provide certainty to residents, landowners, and investors alike, we propose to carry-over all existing employment allocations into the SWLP.

However, there is one existing allocation that we think should be reviewed in order to better reflect changing circumstances, namely Land at Atherstone Airfield, near Stratford-upon-Avon. Currently, use of the site is restricted to businesses relocating from elsewhere in Stratford-on-Avon District (e.g. Stratford-on-Avon Canal Quarter). Whilst this remains an important objective, we think that relocation is an insufficient incentive to bring forward the site. To ensure that the objective is still achieved, part of the site could be retained for relocating businesses once the site had been developed for new businesses coming into the area.

In addition to designated employment sites, South Warwickshire benefits from thousands of premises in business use across the full range of sectors, whether office, industrial, retail or hospitality uses. Whilst national planning policy is clear that we cannot arbitrarily resist the change of use of such premises, it is legitimate to ensure that as the local planning authorities, we should be satisfied that all reasonable endeavours have been explored prior to change of use. Reasonable endeavours include a satisfactory marketing period with the property marketed at an appropriate value, an independent viability assessment and consideration of a range of alternative commercial uses.

Current adopted policy

Issue E9: Supporting our changing town centres

Town Centres play an important part in supporting economic growth and encouraging investment. It is important to maintain the shopping function of town centres that enhance their respective roles within the local Retail Hierarchy. The NPPF would support planning policies which define a network and hierarchy of town centres in order to promote their long-term vitality and viability and to tackle climate change by minimising daily travel demand. Out of town retail parks and car-based superstores can increase people's need to travel by car. A Town Centre study is being undertaken by consultants which will look at how much retail will need to be planned for over the Plan period as well as the functionality and vision for Town Centres. This will also look to identify locations of where more detailed information/Area Action Plans may be required. The results of this will be published in due course and will be used to inform the Preferred Option.

We believe that a hierarchical approach to retail is the best option to ensure that a vibrant town centre can be maintained whilst also recognising that some retail activity outside of the town centres may be better suited to certain businesses.

In order to ensure that the hierarchical approach can be implemented in the most appropriate way it would be useful to find out whether you think the Local Plan

Current adopted policy

Issue E10: Tourism

South Warwickshire, with its historic and cultural assets as well as beautiful landscapes is a key destination for tourists, and therefore it is important that the South Warwickshire Local Plan contains policies relating to this. Tourism makes up a significant chunk of the area's economy, and it will be important to support this where possible. One particular issue in relation to tourism is the lack of affordable accommodation, which prevents larger tour groups staying overnight, resulting in many 'day trippers'. Day trippers are known to spend less within the town, with those staying overnight spending on average £400 in comparison to £40. This issue also extends to the provision of accommodation for conferences and other business uses.

Another issue related by proxy to tourism is the provision of cultural facilities such as museums, theatres, and music venues, which are not only an attraction for tourists but also residents, and supporting them can help improve the local economy. It will be important that the local plan helps create the conditions to have a thriving heritage and culture sector that not only helps create a sense of place, but helps encourage visitors to the local plan area, and increases enjoyment for those already in it.

Whilst tourism is an important issue that the Local plan will need to address, it is not felt that tourism plays a spatially strategic role, and should therefore be addressed in part 2 of the South Warwickshire Local Plan.

Current Adopted Policy

Issue E11: Any other economic issues