www.coventry.gov.

uk

Research & Strategy Paper No.

Coventry's Economy 1976 to 2026

DRAFT FOR COMMENTS

by

Myles Mackie Manager, Research & Strategy 1st September 2008

Coventrys Economy 1976 2026 CONTENTS

Section Contents List of maps charts & tables 1 2 3 Background Coventry's changing economic structure Coventry's population and labour market Population of the city The city's labour market Occupational structure Commuter flows Unemployment Economic activity rates Worklessness Business organisation in the city The collapse of the post war business model The changed business culture The Restructuring of the City's business sector Business Structure in 2008 Additional factors contributing to the city's growth Productivity Growth Changed property needs Business Infrastructure New Products Economic Sectors Environment and Sustainability City Centre Lifestyles Image of Coventry Commercial property development Disinvestment in employment buildings and sites Investment in business estate Previously used land Employee densities Demand for large sites Changing employment land uses patterns Investment Disinvestment Trend growth Rates New investment 2000 to 2006 completed projects Ongoing Investment 2006 20011
3

Page 3 5 7 8 14 14 15 16 18 19 21 22 24 25 27 29 31 34 34 35 36 37 38 41 44 47 48 50 51 54 55 56 57 58 60 60 62 64 65

Investment between 2011 and 2016 Investments with in the pipeline Impact on the labour market Labour market implications of growth Conclusion 8 Do the growth figures add up? Population Growth between 2006 and 2026 (a) estimations Population Growth between 2006 and 2026 (b) projections Will the labour force have the right skills? How can the investment be accommodated? Sui generis demand for employment space --The cultural offer -- Other developments -- Planning implications Net New Building space requirement --Site requirement and comparator studies Can the city area absorb this need for employment land? Are the Investment Plans realistic? But what happens if there is a recession? Coventry in the 2020's Factors affecting the economy in the medium term Likely pattern of growth to the 2020s Employment Growth to 2026 Conclusion Employment by sector (percent) since 1971 Major Inward Investors 2000 -2011 Major employment sites that have been redeveloped Job creating developments 1980-2006 Bibliography

66 68 68 71 73 74 74 77 79 83 84 85 86 86 86 88 90 91 93 95 95 96 97 101 102 104 106 108 111

Annex 1 Annex 2 Annex 3 Annex 4

MAPS, CHARTS & TABLES

Type Chart Chart Chart Chart Chart Chart Chart Chart Chart Chart Chart Chart Chart Table Chart Chart Chart Chart Chart Chart map Chart Table Map Chart Chart Chart Table Map Map Map Map Map Map Chart Map Map Chart Map Map Chart Table Chart Chart No Title Employment by Economic Sector 1976 Employment by Economic Sector 1986 Employment by Economic Sector 1996 Employment by Economic Sector 2006 Coventry's Changing employment 1976-2026 Total Population of Coventry 1970 - 2006 Coventry Population aged 15 64 years 1970 -2006 Employment in Coventry 1966 - 2006 Occupational Structure of Male Workers in Coventry 1971 Occupational Structure of Male Workers in Coventry 1991 Occupational Structure of all Workers in Coventry 1991 Occupational Structure of Male Workers in Coventry 2006 Occupational Structure of all Workers in Coventry 2006 Net Excess of Jobs over working residents in Coventry Unemployment Claimant Count in Coventry 1966 to 2008 Unemployment claimant count by ward 1986 Unemployment claimant count by ward 1996 Unemployment claimant count by ward 2006 Economic status of Coventrys working age population 1991 Economic status of Coventrys working age population 2006 Worklessness in Coventry May 2008 Gap between City rate and NIS 153 LSOA rates Top 20 Employers in Coventry 1976, 1984, 1997 and 2007 Location of major employers in Coventry c 1976 Percent change in the number of VAT registered companies in Coventry 1994 - 2006 Number of VAT registered businesses in Coventry 1980 - 2006 Stock of VAT registered businesses in Coventry 2006 Number & average size of workplaces in Coventry 1986 1996 & 2006 Location of major employers in Coventry 2006 Location of some hi tech business activity in Coventry The CSW Technology Corridor The North South Corridor in Coventry & Warwickshire Public green open spaces in Coventry City centre areas of major job losses 1980- 2008 All green open space in Coventry Wards City Centre Major job creating developments 1980-2008 Major development in Coventry city centre since 1980 Land use in Coventry 2005 Major employment sites in Coventry which have been redeveloped since 1980 Major new build employment projects 1980 - 2006 Employment Developments 1980-2008 former land use Build and employment densities on developments 1980-2006 Employment densities by sector Business Floor space 2007 Page 10 10 10 11 13 14 14 15 16 17 17 17 17 19 20 20 20 20 22 22 23 23 26 27 30 30 30 31 32 36 39 39 41 45 41 46 47 50 51 54 55 56 57 59

Type Table Table Table Chart Table Chart Table Chart Table Chart Table Table Chart Charts Chart Chart Table Chart Chart Chart Chart Charts Chart Chart Chart Table Chart Table Table Table Table Map Table Chart Chart

No

Title Major redundancies in Coventry 2002-7 Projected trend growth of Coventrys economy 2006-2026 Top 20 developments by value 2000 - 2006 Estimated development investment & jobs created 2000-2006 Top 20 developments by value 2006 -2011 Estimated development investment & jobs created 2006 - 11 Top 10 developments by value 2011 -2016 Estimated development investment & jobs created 2006 - 16 Developments in the pipeline Estimated development investment & jobs in the pipeline projects Additional demand for jobs by 2026 Labour Market Changes 2006 2026 estimated number of jobs Structure of Coventrys Population 2006 -2026 Estimated age structure of Coventry's population Estimated 15 to 64 age group compared to the projected number Coventry 15 64 age group Population estimates to 2026 (Hollis) 2006 Population Projection Contribution to population change 2006 -11 Coventry 15 to 64 age group population projection 2007 -2031 Projected Structure of Coventry's Population 2016 Projected Structure of Coventry's population 2026 Projected age structure by age groups 2006, 2016 and 2026 Estimated Structure of Coventrys Population 2006 2016 Investment in Coventry Job Types Estimated occupational structure of new investment jobs in Coventry Occupational profile of Coventry's Labour Force 1981-2026 Annual Employment land Completions B1, B2 B8 Cultural Provision in Coventry & Cities Net new building space requirement 2006 -2026 Employment land projected requirements 2006 -2026 DTZ Report Employment Land requirements Quality of employment land in Coventry Employment estimates for 2016 and 2026 Employment by sector 2006 Employment by sector 2016 Employment by sector 2026

Page 61 62 64 64 65 66 67 67 68 68 70 70 75 75 75 75 77 77 78 78 79 79 79 80 80 82 84 85 87 89 89 90 97 98 98 98

1
1.1

. The Background
In the late nineteenth century, there was a wave of innovation which brought new products and industries into existence they were collectively known then as the 'new industries'. Coventry was caught up in that generational wave of change. The city was relatively free of the dominance of the nineteenth century industries of textiles and heavy engineering and was, somewhat, more open to new ideas. So it comes as no surprise that the UK car manufacturing industry started in the Coventry in 1896. By 1914, the city had developed significant companies engaged in car manufacturing, aircraft manufacture, armaments using new chemicals, electrical products telephones and radio. This revolution helped put Coventry at the forefront of the twentieth century economy and growth, which enabled the city just to grow for over fifty years. The population of Coventry grew from 69,978 in 1901 to 335,200 in 1970.1 This spectacular growth was achieved on the success of these new twentieth century industries creating jobs which attracted people to work and live in the city. In the 1950's some 23,000 people2 migrated into Coventry, which many, then, regarded as an exciting modern city at the forefront of change. However, even by the late 1950's, it was becoming apparent that the British economy and with it Coventry's, was becoming uncompetitive. This was demonstrated by trade imbalances and the frequent Sterling crises which eventually led to the 1967 devaluation. At the same time, UK protective duties and quotas3 on imports began to be lifted under GATT negotiations and after 1973 under the EEC. This hit at British companies profitability and growth. UK policy makers saw freer trade as a means of stimulating UK business into becoming more competitive. By the 1970's, there was no doubt that the United Kingdom economy was in crisis. This included Coventry's economy which was, by then, also in decline4. Coventry ceased to become an engine of growth and this was reflected by the fact more people began to leave the city than arrive. This is, partly but only partly, explained by affluent families moving into Kenilworth and the Warwickshire towns but 15,250 people moved out in the five years following the devaluation of Sterling in 19675 as against a net inflow in the previous five years. By 1976, Coventry's economy was clearly in trouble. The economic downturn in the city started in 1966 was being increasingly felt. The main finding is that total employment was on a rising trend until 1966 but has been declining more or less steadily since then. In the 15 years to 1966 employment rose from about 161,000 (Coventry Labour Exchange Area6) to about 211,000. During that time there were only three years in which unemployment fell. . In the nine years between 1966 and 1975, total employment fell by nearly 20,000 to some 192,000. There were 7 years of decline and only two of increase. Clearly the years 1966 and 1967 were a watershed for Coventry which brought to an end the post war boom in jobs. Economic Monitor 3. 1977 page 35 The City Council in the mid 1970's began to be concerned at the decline in economic prosperity and began to look towards developing an economic development policy. It is from this realisation that the City's economy faced major problems that this paper starts. It tracks through the resolution of the consequent collapse and the recovery of the city's economy and then looks at the consequences of growth over the next twenty years.

1.2

1.3

1.4

1.5

1.6

1 2

Taken from City of Coventry Annual Population Statement 1984 table A1. Population Statement 1984 implied migration flows 1951-1961. 3 Britain adopted protection in 1915 with the McKenna Duties and fully in 1931. 4 The Lord Mayor in 1968 called Roundtable discussions to review the position. 5 Population Statement 1984 table A1. 6 The Coventry Employment Exchange Area included Kenilworth, Meriden, Balsall Common, Corley, Berkswell, Bagington, Bubbenhall and Stoneleigh.

2
2.1

Coventry's changing economic structure 1976-2006

In 1976, the basic structure of the local economy had hardly changed in the previous thirty years. Aerospace had declined somewhat, coal gas production in Foleshill had ceased in the face of the arrival of natural gas but basically the city was a major manufacturing centre with nationally recognised companies. Manufacturing took 57% of employment and probably acted as a major customer for many other sectors, Coventry was in effect a manufacturing city. Car manufacturing accounted for 25% of jobs and aerospace a further 5%.7 The service sector was small and mostly met the immediate needs of the local economy of the time.8 However, as noted the local economy in common with the national economy in 1976 was giving cause for concern. For most of the twentieth century, manufacturing industry had been shielded by protective barriers.9 From the 1960's this protection was being eroded by the trade rounds under GATT and from 1973 from membership of the European Union. Exchange controls, which afforded also some protection, were abolished in 1980. These economic changes, long advocated by the business community, exposed the relative backwardness of UK manufacturing and this in turn was felt in Coventry. Even before the tariffs, quotas, quality controls etc were relaxed, foreign manufactured imports from the Far East, Germany and other centres penetrated the UK markets. Cars and motorcycles from abroad were seen as better designed, better engineered, much better in quality and, in cases, much cheaper despite the tariff duties. In many respects during the 1970's, many of these economic problems were widely recognised and, perhaps, were over-analysed but there was inertia in taking any real action. This was partly because the problems of restructuring were major, seemed very daunting and the economic malaise affected national finances, company profitability and prejudiced investors away from UK manufacturing, if not the UK economy.10 In 1976 the local economy was in a poor state of health. Rolls Royce was nationalised in 1972 and British Leyland in 1975. Alfred Herbert Machine Tools was taken over by the National Enterprise Board in 1978. Some 39,000 Coventry manufacturing jobs were in these three companies which had been nationalised to ward off bankruptcy.11 Despite being state owned, the companies, in common with many private sector concerns, continued to face financial difficulties. Uniquely, Rolls Royce did have the advantage of having a significant technological lead in its area which in the medium term helped transform the business and helped attract private capital and orders. Coventry in the mid 1970's was generally lagging behind in technology. There are many long dissertations as to why the UK economy and the UK motor industry declined. Tolliday (1988) put it bluntly.
Research & Strategy reclassified the three four digit SIC data to conform to the 2003 SIC classification but this does not solve the problem of engineering firms working in both sectors but only counted in one. 8 Services within manufacturing establishments such as Standard Triumph in Canley would be classified as manufacturing employment. The smallness of the sector tends to reflect household needs / and scale of expenditure. 9 The Mckenna duties of 1915 ended Britain's free trade regime of the nineteenth century. These wartime measures were reinforced in the 1920's and generalised in 1931. War damage amongst competitor nations also afforded the UK protection long after the cessation of hostilities. 10 Unfortunately this prejudice against manufacturing is evident today. 11 This was a result of (a) political expediency but (b) also an attempt to turn the British economy around. The Heath Wilson Callaghan governments practised a form picking winners. This policy has been echoed by the Chirac Presidency in France under the patriotisme conomique policy
7

2.2

2.3

2.4

2.5

2.6

Thus, while output trebled, output per man-year stayed roughly the same at 7 to 9 cars. The government inquiry at the time of the nationalisation in 1974-5 revealed the extent of this historical under investment. In 1972 British Leyland fixed assets per man amounted to only 920 compared with 2,657 at Ford, Dagenham and 3,160 at Ford Halewood. In Europe, the comparable figures were 3,632 for VW and 3,160 for Fiat and in the USA 4,346 for GM and 5,602 for Ford. this sort of labour intensive system did not yield important economies of scale because unit costs per car did not fall rapidly as volumes rose. Second .it considerably increased the requirements for managing complex production processes at the shop floor level. Steven Tolliday Competition and the Workplace in the British Automobile Industry 1945 1988 Business & Economic History Vol XVII Pp60-70 1988 2.7 One big problem faced by the city's car companies was their failure to automate the production lines. New machinery was inserted into or put alongside existing production lines but old working practices were maintained. This meant that any faster processing was stopped by demarcation rules and had to wait for other parts of the line to catch up. Management failed to seize the opportunity to reconstruct the production line as a whole and automate production and reduce over-manning. This would have required production outages, strikes and would have hit cash flow and might have risked being relocated under regional policy elsewhere in the country if a new building space was needed. By the 1970's the business structure of the city had become fixed. This is partly through national regional policy. In the City Development Plan Review in 1963 this was noted: Over the past five or six years several factory expansion schemes, notably in the motor industry, have been diverted by the Board of Trade from the city and its region and moreover other companies anticipating that application to develop in Coventry would be refused, have expanded elsewhere. No large company has entered the city since the war, except by acquiring an existing concern. It is probable that at least as much development has been directed from the [city] region as has been permitted the planning restraint reduces the attractiveness of the city to forward looking companies. Work in Coventry First Quinqunennial Review of the Development Plan 1963 Pp 9-10 2.9 This meant that Coventry was not benefiting from an evolving or churning economy in which major new entrants with new products and business strategies could influence change. Local firms were constrained by the likelihood of having plans refused in Coventry under the Industrial Development Certificate regulations. Local management, even managers who were seen as dynamic, were overwhelmed by the scale of the problems and were caught up in the stagnation and they failed to make the desired break through. Often, this has been blamed by the poor labour relations but all too frequently it was also through internecine management arguments12 that failed to forge a positive path.

2.8

12

This is documented in many books on the period and companies. See for example:

Employment by Economic Sector Utilities 1% in Coventry in 1976 Construction

Hotels /

3% Restaurants 1%

Distribution 12% Transport &

Comms 3%

Finance 2% Manufacturing
57% Other Services 2%

Business
Services 3%

Pub Admin Education 8% Health 3% Mining 1%

Agriculture 0%

Number of employees 165,900 reclassified to the SIC 2003

Number of employees 133,750 reclassified to the SIC 2003

Number of employees 128,659 reclassified to the SIC 2003 10

Number of employees 145,000 (est.) SIC 2003 2.10 The government's regional policy meant that older buildings had to be adapted / extended and smaller units away from the factory site had to be used as satellite plants reducing efficiencies. Headline location directions include the decision to build Ford's new plant at Halewood in Liverpool and Rootes new (ill-fated) plant at Linwood. Had this original plan gone through, Ryton would have been replaced which might have helped reduce costs and avoided the plant's closure in 2006. 2.11 There were few inward investors into Coventry. Partly because government policy encouraged new investment in the development areas.13 Coventry had very little new 'blood' in the economy. Axa relocated in 1973 and was probably the largest inward investor for over a decade. It was in the financial services sector and with 700 employees relatively small. 2.12 The crunch came between 1979-1983 when the liberalisation of the economy exposed British business and UK manufacturing in particular to international competition. There were no exchange rate controls, no or very low protective barriers, no government intervention, no major subsidies, etc. British industry was left to fend for itself. Manufacturing was badly hit and job losses meant JSA unemployment crept up to over 3 million. Coventry was at the forefront of this 'collapse.' 2.13 The charts above show the changing structure of the local economy measured by employee numbers. This is a dramatic change. In the space of thirty years, manufacturing has fallen from 57% to 13% of employment and many people have experienced or seen this decline and consider it as economic failure. However, the picture is far more complex than the headline decline in manufacturing. 2.14 As noted, the levels of productivity in 1976 were low and during the 1980's much changed. Labour productivity growth in manufacturing rose, generally, from around 1.5% a year to an average of 3.5% between 1985-2008. The service sector, which was, until the last ten years, much more protected by serving local area markets, saw little change in productivity growth despite technological developments. In the last ten years, service sector productivity has risen from around 1% to 2% per annum.
13

This was a successful policy which helped diversify S Wales and Merseyside.

11

2.15 This change in productivity growth meant that job losses in the 1980's were inevitable. Between 1976 and 1986 manufacturing industry in Coventry lost net some 52,000 jobs14 but there was probably little change in the level / value of output. At the same time, a generation of management was retired and business practices generally upgraded. Better quality, just in time deliveries, new technologies, abandonment of over-manning and demarcation rules as well as the adoption of new technologies in the workplace meant that manufacturing industry in the city became more internationally competitive. 2.16 As part of this change in business management styles, businesses began to outsource in-house activities. Company accounts, cleaning, catering, maintenance etc began to be 'outsourced' to the supply chain rather than kept in house. As time has progressed this outsourcing has grown in extent and in location. Coventry, in common with the rest of the UK, has seen a vertical disintegration in the structure of industrial organisation. This process has allowed innovation to take place in these 'input' services as well as helping to create a new sector which collectively has become known as 'business services.'15 2.17 The business service sector is broadly composed of traditional services such as real estate, outsourced services and new services developed through new technologies. Even amongst the traditional services, building / plant facilities management services, for example, have grown dramatically. The sector includes activities such as research and development, consultancy, software production and rapid prototyping of products. 2.18 In Coventry business services have led to a direct transfer of 6,000 10,000 jobs out of the manufacturing sector and into services. Overall, the sector has grown from some 4,000 in 1976 to 21,900 in 2006. Some companies have retained some/ all of their business services as part of their main business and remain statistically classified to the parent company's overall activity. Jaguar Whitley under Ford employed around 2,000 people engaged on R & D, a business service, but is still classified as car manufacturing. Jaguar Whitley has exported designs to other parts of the Ford Group including Ford Europe and Ford in N. America. Under Tata, it may be re-classified with exports going to India. In effect, the scale of business services in the Coventry economy is understated. 2.19 By 2006, the changes which started in the late 1970's, have transformed the city's economy. Some of the reverberations of those changes are still working their way through the economy but unlike perhaps in the late 1970's, the local economy is much better placed to deal with change.16 This is, partly, because of the changes that have already occurred. Coventry's economy is much more diversified, flexible and adaptive to changing circumstances than it was twenty or thirty years ago. It does not mean that the city's economy is immune from any downturn but it will be able to recover more quickly. Back in the late 1970's, Britain's and Coventry's economy was rigid and inflexible and this meant that Coventry had to not only catch up with the competition but also adapt to new economic conditions. What was not clearly foreseen was that the world was on the cusp of a technological revolution centred initially on electronics but later much more broadly and increasingly deeply based.

It is not easy to provide an estimate as to how many jobs were lost through productivity. At 1.5% pa with constant output some 15,000 jobs would have been lost over 10 years. At 3.5% productivity growth, the job losses would be 31,900. 15 Business services include 70. Real estate, 71. Renting of machinery etc, 72. Computer and related activities, 73 R & D and 74. Other business Services. (SIC two digit codes) 16 The closure of Peugeot Ryton in 2006/7 is an example. See Mackie (2008) The Work of the Peugeot Partnership and the closure of the Ryton Plant. CSWP Coventry.

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2.20 Coventry has in the space of about a generation transformed its economy. The change has been dramatic deep seated and very painful. It has been misunderstood by many Coventrians and by many commentators but as the chart shows Coventry does have a new economic base. This paper seeks to look at the processes of change in order to understand what has happened and, perhaps, more importantly identify the implications for the future and to predict future land requirements.

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3
3.1

Coventry's Population and Labour Market 1976 2008

For most of the twentieth century Coventry was a growing city but by the early 1970's growth had stopped. The reason was that the city was no longer offering the opportunities for would be migrants into the city.17 The city's economy had stagnated and the number of jobs in the city was falling. Places such as Milton Keynes, a new city, built to the highest standards of the time and with plenty of jobs offered a much better destination. Population of the city

3.2

The population of Coventry began to fall for the first time in over 100 years in the early 1970's. At the time, it was thought to be an aberration as the plans of the mid 1970's expected the population to continue growing towards 400,000.18 Instead, the population fell from 1976 through to the mid 1990's when economic recovery from the recession of the early 1980's helped staunch the out- migration from the city. This decline reflected the economic stagnation of the city. Workers moved out of Coventry to seek better jobs elsewhere in the country and beyond. A significant proportion moved to just over the boundary into Warwickshire or Solihull. This form of out- migration has been a longer-term phenomenon. What was new was the fact that people were leaving the Coventry area and moving to other cities. The people, who left, tended to be young adults in their 20's and 30's. Their departure from Coventry reduced the number of Coventrians in this age range. By leaving, this helped the city absorb job losses and reduce unemployment numbers during the 1980's. In 2006, the age profile of Coventry reflects still this out- migration and shows up, now, in the fewer numbers of people in their 50's, 60's and 70's than might be expected retiring. This means that Coventry has a younger population profile than nationally. It means, also, that the city will trail the nation in dealing with an aging population.19
Migrants tend to follow opportunities for economic betterment rather than environmental betterment. This is demonstrated by many studies on migration almost from the beginning. See Ravenstein (1888) The Laws of Migration and Stouffer (1940) 18 This figure was explicitly mentioned in the review of the West Midlands County Structure Plan 19 It does not mean that the city will escape the politics of the aging population as the '1960's generation' are very vocal.
17

3.3

3.4

14

3.5

This younger age profile stems from three factors: The larger outflow of people from the city during the late 1970's and early 1980's has reduced the number of people in older age groups In recent years, there has been a growth in the number of children born and consequently the increased natural rate of growth in the population The growth in the number of university/polytechnic students living in the city being some 35,000 in 2006. These numbers of students exaggerate the number of people aged 20-24 years giving Coventry a large permanent youthful age group which forms a valuable source for employers seeking to recruit graduates.20

3.6

The charts show that as a result of the higher level of out migration in the late 1970's and 1980's, the city's working population fell much more sharply than the total population numbers. Between 1973 and 1994, the15 to 64 age group in Coventry declined by 13.5% or by 29,800 people.21 The overall population decline over the same period was 9.5%. Two factors contributed to the recovery after 1994: the rise in student numbers as the universities expanded and, secondly, the recovery of the local economy. In 1993 the number of jobs in Coventry reached at 119,000, also, a low point22. By 2006, the 15 to 64 age group population recovered by 7.5% to 205,500, the highest number since 1985. Over the same time period, over 20,000 net new jobs had been created in the city. Helping this recovery in the city's 15 to 64 age group, population numbers has been the arrival of asylum seekers and refugees and from 2004 economic migrants from the A8 EU member states.23 Although these groups have a high turnover staying for relatively short periods some of the migrants have settled in the city and have started new businesses which have, in turn, created new jobs in the city. By 2006-2008, it is clear that the city's demographic position has changed from one of decline into one of established growth. The City's Labour Market

3.7

3.8

3.9

Between 1976 and 2006, Coventry's economy underwent massive changes and these were felt deeply by the local labour market. The city's economy has transformed out of the sclerotic stagnation that afflicted it in the 1970's through a deep slump and to recovery and growth.

3.10 Employment in the city had, already, been gently falling for ten years by 1976 and was of growing concern to the City Council and Chamber of Commerce.24 The local labour market was wracked by insecurity. The number of jobs in the city was declining. Most people knew change had to come or would come and were aware fully
See Team Pro Solutions (2007) A study of Graduate Retention in Coventry & Warwickshire. CSWP 21 Source: annual population estimates from ONS. Pre 1980 data is supplement by the City council's Annual Population Statements. 22 ABI estimate 23 The Applicant states that joined the EU in 2004. 24 From 1968 special meetings of the 'Great and Good' in the city were held from time to time to discuss the city's economy and what could be done.
20

15

that the British economy was in serious trouble. The threat of job losses hung over the city.25 The city started to see net out-migration from the early 1970's with many skilled people moving to better jobs elsewhere. 3.11 Employment dropped from 175,600 in 1966 to 165,900 in 197626. This was a marginal fall but demonstrated that Coventry faced a problem. Ten years later, in 1986/7 following the liberalisation of the economy, employment in the city had dropped to 133,700 a net fall of 32,200 jobs. These job losses reflect the relative backwardness/ lack of competitiveness of the city's economy. It was during the 1980's and 1990's period that many major plant closures took place with others transformed when, under the impact of new management cultures, change began to be felt. Workers in the 1980's had to adapt to: Higher levels of unemployment - the firm could close Stronger management approaches to the labour market issues Reduced trade union powers withdrawal of government from disputes Disappearance of industrial disputes Higher productivity growth and flexible working Greater gender ethnic equality in the work place New technology which undercut traditional skills New products

These conditions have continued up to the present and has helped the economy return to a globally competitive position. 3.12 There can be no doubt that for many individuals the transition was very uncomfortable. Within a few years, long standing companies and jobs disappeared. Once highly prized skills became redundant. In manufacturing CAD CAM Occupational Structure machinery and robots began to of Male Workers in Coventry make their appearance in the 1971 Census 10% Survey early 1980's.27 What was done Managers traditionally on the lathes, Unskilled 8% grinding or milling machines was 6% Profession increasingly replaced new 4% electronically controlled push Semi skilled Ass Prof. button machinery. New products operatives 5% such as plastics and carbon fibre 23% and replaced metal working. Admin & Electronic controls and secretarial instruments replaced mechanical 11% Sales & ones. Work by the new century services was very different from thirty 4% years earlier. Skilled trades 39% Occupational structure Sample covers 102,000 males not all in work. No data on 3.13 The changes led to a fall in the females was collected. The Census Classification has been number of jobs available and a reclassified where possible so that it can relate to later data
For example, the state owned British Leyland proposed the closure of the Standard Triumph works in 1977 with the loss of 6,600 jobs. Triumph Motorcycles ran into trouble in 1973 with the Meriden Co-operative surviving precariously. The aerospace industry in the city had sharply declined. 26 These figures are taken from the Annual Business Inquiry (and in previous formats) survey data. They are survey data and are subject to sampling errors. In the 1980's the survey was taken at irregular periods. 27 The government's SEFIS schemes gave grants to firms buying CAD / CAM machines
25

16

clear shift towards more skilled occupations. The charts below show that the proportion of jobs associated with skilled manufacturing fell sharply while more skilled posts gained a greater share. For males, the proportion of people in skilled trades fell from 39% in 1971 to 28% in 1991 and Operatives from 23% to 19%. Managers, professional, and associate professional workers increased their share from 17% in 1971 to 30% in 1991. People have, frequently suggested that the big structural changes have led to an increase in retail jobs and elementary posts while the number of retail jobs and unskilled jobs amongst males rose only very marginally. 51% of female workers were employed in Admin / Secretarial Personal Services and Sales compared to 16% for males. Women still faced in the 1990's significant barriers.

The Census count covered 68,266 male workers

The Census count covered 125,724 workers

The Survey estimated 79,800 male workers

The Survey estimated 143,700 workers

3.14 Over the twenty years 1971-1991, the proportion of male workers occupied in skilled trades in 1991 had fallen to 20% or just above half of the 1971 figure.. The share held by Operatives dropped to 14% or 40% lower than in 1971. These falls are seen by many to confirm the decline in the number of 'quality' jobs in the city. Both these falls occurred at a time when male employment rose by 17% that is more men were in employment. The proportion of male workers in managerial, professional and associate professional rose over the period to 30% in 1991 compared to only 17% in 1971 and continued rising to 36% in 2006. The proportion of men in sales has risen marginally to 5% since 1991but the proportion in elementary occupations has doubled to 14%.

17

3.15 Female workers data is contained in the annex and has generally been omitted for reasons of brevity.28 With no data for 1971, the longer term occupational changes faced by women cannot be easily identified at the city level. This is a pity as the economic position of women has changed dramatically in the period and the barriers faced by many women in the mid twentieth century have eased but have certainly not disappeared. In 2006, 45% of women are employed in Administrative & Secretarial, Personal Services and Sales activities compared to 14.5% of men. 3.16 This section has looked at the longer-term trends in the local economy and the evidence suggests that a growing proportion of the resident work force is being employed in managerial, professional and associate professional positions. This confirms the rise of business services and the knowledge based economy and the continued diversification of the local economy noted in section 2. These higher paid activities combined with administrative & secretarial jobs and skilled trades occupations accounted for 59% of the employed local labour force. This compares to 63% in 1991 though fewer people were employed (and 67% of men in 1971.) 3.17 These figures do not suggest that there has been a major general erosion of 'skilled' occupations in the city rather than there has been a change in the nature and type of the skilled occupations employed in the city. A factor which might account for the small marginal decline in the 'top' managerial occupational share of jobs might be the poor supply of 'executive housing in the city which is a factor leading to highly paid people moving into Warwickshire. However, the employment level in 2006-7 is significantly higher than in 1991 with 18,000 additional residents in work at 144,000 - the highest number of Coventry residents in work since the 1970's.29 Commuter flows 3.18 As a big city, Coventry has attracted in commuters from Warwickshire and beyond to work in its factories for many decades. Commuters make up a key element of the workforce with many senior employees commuting into Coventry from market towns and countryside areas. Highly paid work in Coventry has attracted many workers from Nuneaton & Bedworth and East Birmingham who have traditionally taken advantage of the commuter rail networks. The construction in the early 1970's of the A46 expressway to Warwick increased commuter traffic in and out of Warwick District. 3.19 The commuter flow in the early 1970's contributed net some 24,000 people to the city's 165,900 workforce or some 15%30. Some Net Excess of Jobs came from just over the city's boundary over working residents in Coventry while others came from as far as Net % of working Northampton and Wolverhampton taking Year Excess of Coventrians working advantage of the rail and road networks. Jobs in Coventry As job opportunities in the city declined, 1971 23,878 89 the net inflow, also, fell back. This 1981 19,600 86 masked the initial stages of economic 31 1991 16,300 80 decline during the 1970's. The decline in commuter numbers helped to keep 2001 16,250 88 unemployment levels lower than, perhaps, the underlying situation justified.

The paper is concerned with broad macro economic changes in the city but recognises equal opportunities for all is crucial to a successful economy. 29 Annual Population Survey September 2007 30 Chris Robinson Journey to Work Trends for Coventry Joint Data Team July 1997 Solihull. Data is based on the relevant Censuses. 31 Indeed many people felt that it was a good thing as it reduced congestion.

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3.20 The table shows that as the economy declined net in-commuting also fell. The 17% fall is made up by a number of complex factors. The number of jobs in the city fell reducing job opportunities while, at the same time, job opportunities for Coventrians grew considerably in South Warwickshire and in Solihull. This is shown by the fall up to 1991 in the proportion of Coventry resident workers who work in the city. The fall from 89% to 80% Coventrians living and working in the city represents some 7,000 net increase in the number of Coventrians commuting out of the city. 3.21 The 1990's saw a net rise of in-incommuting into the city reflecting the renewed economic strength of Coventry but it was met, also, an increase in out commuting. In 2001, 48,000 people commuted daily into Coventry to work and 31,750 Coventrians commuted out of the city leaving a balance of 16,250 net commuter inflow.32 Flows, in and out, have increased by some 6,000 in the ten years between the censuses leaving the net balance at the same level 16,250. 3.22 During the 1990's Coventry's economy underwent a turning point where economic activity in terms of employment changed from long-term decline into long-term growth. The number of commuters working in the city rose for the first time in many years, reflecting better job opportunities within Coventry. Local residents have, also, taken advantage of these new job opportunities, and proportionately more Coventrians are in work than at any time since the early1980's.33 The economic activity rate (people in work or actively looking for work) has risen and this has since 1991 led to a small increase in the number of Coventry residents living and working in the city. At the same time the flow of people commuting to work in or out of the city has grown in number in both direction but the net balance has remained stable.34 3.23 The local economy has permitted both the proportion of residents living and working in the city to rise as well as the absolute number of commuters in and out of the city to rise as well resulting in net commuting as part of the city's labour supply falling. Unemployment 3.24 Over the last thirty years or so Coventry's economy has undergone sweeping changes not only in levels of economic activity but also in outputs, production methods and business management. Major changes bring economic dislocation not in the sense of mismanagement but more as a result of leads and lags within the system. Unfortunately, economic changes lead to mismatches as to where people live and jobs being created. Coventry, like many manufacturing cities across the UK, felt the brunt of economic liberalisation of the late 1970's and early 1980's. In addition new technologies increased productivity and created new products. 3.25 Coventry and the West Midlands as a whole lost jobs whereas the South East, London and parts of the South West gained jobs. Coventrians, as noted above, moved out of the city in order to find work with many moving south. Unemployment35 and economic inactivity began to rise. Unemployment count figures show that unemployment in the city had been rising for some time before 1976 but that year marked a steep increase in numbers of people claiming benefit

32 33

See John Norton Coventry's daytime swell Research & Strategy Newsletter May 2004 Coventry Surprisingly many people feel that this is not the case - Coventry Telegraph letters 34 This might seem odd as a higher proportion of people live and work in the city but the economic activity rate has increased permitting higher absolute flows across the city's boundaries. 35 There are two generally used measures of unemployment - Claimant Counts for Unemployment benefits (eg Job Seekers Allowance/ Employment Support Allowance and the International Labour Office (ILO) definition the number of people looking for work in the last four weeks.

19

3.26 There are two issues in estimating the rate of claimant unemployment. The first is that with a significant out migration of working age resident's base line changes. This not only raises the rate but also may reduce claimant numbers. Secondly government's of all colours have, from time to time, encouraged claimants to move onto other forms of benefit reducing the count. The Chart shows the published figures and illustrates the impact of the changes has `had on the local economy. 3.27 In 1976 the Claimant Count rate was approximately 7.5% and rose well over 16% or some 28,900 in 1982 slowing falling to 14% in 1986. The true rate after allowing for migration, reduced net incommuting and people falling into economic inactivity through early retirement etc was probably nearer to 30%. By 1984 the number of jobs lost in the city came to over 41,000.36 The loss of these jobs was felt unevenly across the city and by the mid 1980's, Earlsdon, Stivichall and Wainbody were clearly fairing better than most of the city. 3.28 The maps show that from 1986 through to 2006 unemployment (even after allowing for eligibility changes which probably would reduce 1986 unemployment rates by 2-3% and 1996 rates by 1%), unemployment has fallen in all areas. However, those parts of the city which in 1984 had very high rates of unemployment and deprivation were designated as the inner city area and included Willenhall, Stoke Aldermoor, St Michaels, Foleshill, Longford and most of Henley ward. These areas along with Canley and Tile Hill remain as areas of above average unemployment 3.29 From the late 1980's a policy of spreading prosperity north was adopted. This included the first neighbourhood management initiative in Wood End, the strategy formed a key element of the Structural Funds Programme of 1993 1999. The development of the Ricoh Arena, Arena Retail
This is slightly less than Mackie Coventry's Evolving Economy 1975 2015. This is a result of further work being undertaken on relating Coventry Economic Area Statistic to the city boundary/
36

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Park, Prologis and the University Hospital all conform to the aim of attracting investment to the north of the city. Today, the Coventry and Nuneaton Regeneration Zone covers much of the areas with above average unemployment. 3.30 From 1985 the economy began to pick up growing strongly between 1985 to 1990 with some 11,700 jobs net being created. However, this speculative late 1980's boomlet collapsed into a renewed recession which probably hit London and the South East relatively harder than the industrial cities which had faced the brunt of the early 1980's slump. Coventry saw unemployment rise to 20,000 or some 11%. 3.31 From 1992, the UK and, perhaps, a year later for Coventry entered into the present long period of continuous expansion. Employment in 1993 fell to 119,100 jobs in the city some 46,000 lower than in 1976. Increased unemployment accounted for around 10,000 of the losses with many people falling into economic inactivity and this accounts for a further 9,000. Net in commuting declined by some 6,000. Some 45% of the decline in jobs was accounted for by the reduction in the size of the working age population with a significant number perhaps 15,000 people leaving the city to find work elsewhere.37 These figures are based on a simple model using net values which ignores leads and lags within the economic system so these results can only be regarded a guide to the underlying situation. 3.32 Since 1993, the number of jobs in the city has grown substantially despite the fact the since 2001 there have been major factory / office closures in the city with as many as 20,000 redundancies. In 2006, there were some 145,000 jobs 38 or some 26,000 more than in 1993. Unemployment fell by 13,000 equivalent to half the rise in the number of jobs. The increase in working age population accounts for another 12,000 people. Net Commuter and net migration flows have added very little to the city's labour force by 2006.39 3.33 Unemployment is not necessarily the mirror image of the state of the economy. Other factors such as migration, commuter and economic inactivity have a fairly elastic response to changing economic circumstances. The labour market responses to changing circumstances need not be consistent or even.

Economic Activity Rates 3.34 Over the last ten years or so, the local economy has increasingly employed unemployed people and economically inactive people. With the economic recovery of the city (and national economy), there has been more interest in moving to what has been traditionally called 'full employment.' This means not only is unemployment low but a high proportion of the working age population is in work. The government has set a target for economic activity rates in local areas at 80% with ILO unemployment as low as possible.

The major closures in Coventry over the last few years have seen a significant though small (around 2 3%) of Coventry based workers leave the city for work / positive destinations. This is at a time when job opportunities have been good unlike before 1993. 38 The ABI figures for 2006 say 139,500 jobs but investigations suggest that this is a sampling error as new jobs at Prologis Business Park, Ricoh Arena and the Arena retail Park amongst others have been excluded. 145,000 is a careful estimate linking in with the APS estimates and the Beta Model. 39 Migration flows despite the influx of A8 economic migrants and asylum seekers and refugees do not seem to be making a deep impact on numbers. See John Hollis Coventry Population: Estimates and Projections Greater London Authority October 2007.

37

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3.35 The charts show the position in 1991 and 2006. The 1991Census was in the middle of the recession of the early 1990's where as 2006 was in period of slower economic growth with JSA Count rising. Between the two dates, economic activity has increase by 4%. More significantly has been the rise in the employment rate the proportion of working age population in work- from 63% in 1991 to 72% in 2006. Claimant rate unemployment fell from 11% to 3.8% in 2006 and the ILO rate to 6%. 3.36 In 2007, the Annual Population Survey showed that 11,500 people who were not economically active wanted to work. Amongst the economically active population, the unemployment rate (those people who looked for work in the last four weeks) stood at

9,600 or 6.4%.40 A Full employment level of unemployment on this definition is 3% or 3,900 people lower. In effect in 2007, Coventry needed 15,400 additional jobs to equate to meet the existing demand for jobs. This would raise economic activity levels in the city to 84% some 6% of the working age population up on 2006 and 2007 levels. It is well above the government's economic activity target of 80% and is typical of many prosperous areas. To meet the demand for work from the economically inactive would go a long way in meeting the government targets on worklessness41 and the new Employment Support Allowance system will seek, more generally, to increase the numbers moving off benefit into work. Worklessness 3.37 In 2008 a new labour market performance indicator has been introduced as part of the new National Indicator SET: worklessness which includes people claiming out of work benefits Job Seekers' Allowance, Incapacity Benefit, Lone Parent benefit and other income related benefits. This new indicator forms part of the National Indicator Set for local authority performance indicators and for Coventry the Local Area Agreement indicator. 3.38 In the12 year period 1995 to 2005, the level of worklessness in Coventry fell by just under 30%, from 39,700 in August 1995 to 28,200 in August 2007 mainly as a result of the 8,200 fall in Job Seeker Allowance Claimant Count.42 The city had a workless rate at 14.5% in
This is distinct from the Job Seekers' Allowance Count which only measures people in receipt of benefit and stood at 4% 41 NIS performance indicator 151 and includes JSA, Incapacity, Disablement, Lone Parent and other income supported benefit claimants. 42 This is based on the 5% longitudinal survey of DWP Benefit Claimants which does not quite tie in with the 2007 definition
40

22

November 2007.43 In recent years worklessness levels in the city has remained much the same level. However, there are significant geographical concentrations of worklessness mainly in the priority neighbourhood areas of the city, many of which are identified as the 25% worst performing areas within the NIS 153 indicator. This indicator suggests that Coventry still has significant numbers of people who could work provided they have the opportunity. Paragraph 3.36 showed that 11,500 people who were economically inactive wanted to work. A further 3,900 people were registered on JSA benefit making some 15,400 people looking or wanting to work. 3.39 The government reform of the worklessness benefits system with the introduction of the Employment and Support Allowance for new claimants from October 2008 carries with it, the expectation that the claimants will seek to find work following their personal capability assessments. Remploy in Coventry is one of the leading organisations engaged in recruiting and finding job opportunities for disabled people. The further reduction of worklessness will involve the provision of facilities such as child care centres, training establishments and even specialist employment units.

43

This is NIS 152 a full analysis is available in Coventry Partnership (2008) pp 16 to 30.

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4
4.1

Business Organisation in the City

The Government from the mid 1960's sought to help British businesses by encouraging rationalisation with the hope that there would be economies of scale and productivity growth. This led to the formation of mega businesses which did not generate the expected benefits44 and by the 1970's many firms were operating with very low rates of return on capital employed and some major concerns faced bankruptcy. In Coventry, Rolls Royce in 1972, British Leyland in 1975 and Alfred Herbert Machine Tools in 1978 - all leading national companies had been nationalised. Unfortunately this meant just the continuation the problems faced by the firms when they were private sector. 45 Unfortunately, with the passage of time and failing memories, for many, the 1960's and 1970's are still seen by many as Coventry's heyday when the city symbolised the best of the post war era. But by the mid 1970's British and Coventry's manufacturing was in serious trouble. The city's economy was fragile but while many of the problems were correctly diagnosed there seemed little consensus on how to resolve the problem. Overall companies faced a range of deep seated problems which were not soluble by means of a quick fix: Low profits Low rates of return on capital employed Weak balance sheets- Poor equity Poor financial controls Lack of managerial capability Absent Chief Executives or CEO's involved in non company activities Low labour productivity of land, labour and capital Appalling labour relations Over manning and restrictive practices Poor business buildings Poor delivery times Poor quality output Lack of competitiveness especially abroad. Old fashioned technology and little R & D work Tendency for businesses to be 'milked' rather than re-investing profits

4.2

What this economic malaise meant was that Coventry had inefficient use of business assets. Land and buildings were often in a poor state of repair and much space was underutilised. Plant and machinery and stocks were also badly used wasting resources. In effect, the city's capital stock (buildings, plant and machinery) was old much of it had been badly managed / poorly maintained / had beenfully depreciated but not replaced. This meant that employee productivity was low. Coventry in the late 1970's was, as a consequence, highly exposed to an economic downturn. 4.3 Coventry firms in the mid 1970's were generally lagging behind in technology. There are many long dissertations as to why the UK economy and the UK motor industry declined. The first Economic Monitor produced by the City Council put it rather gently: The situation is a reflection of the national position but exaggerated as a result of the employment structure [car manufacturing] in the city and surrounding area. The main contributory factor is a low level of demand and hence output of motor vehicles and a high degree of penetration of the domestic market by foreign car manufacturers while British manufacturers have been less successful overseas. A low level of investment is evident and this partly explains the inability to stand up to foreign
44 45

Many studies have shown that the mergers were disappointing , for example, G Meeks (1977) Rolls Royce is perhaps unfairly grouped here with the other two companies.

24

competition, for, by investing more in modernisation of plant and machinery, our competitors, particularly the Japanese and German industries, are enabled to produce more efficiently and, therefore, more cheaply than the British motor industry. Economic Monitor Issue 1 Introduction summary of trends 14 October 1975 The Economic Monitor was started in 1975 simply to improve information on the local economy in the face of growing economic concerns over the future of the city's economy. 4.4 Much has been written about this time and need not be repeated here.46 Many Coventry business leaders spent more time in London playing politics rather than attending to their company affairs. This was noted in the Lord Mayors' Round Table conferences in both 1968 and 1979. The table below shows the Top 20 employers between 1976 and 2006. In 1976, the same names would have featured in the listings for the previous thirty years. Other than through amalgamations there was, as noted above in paragraph 2.9 above, no churn in businesses. There were few new business entrants and virtually no business moved into the city. Chrysler was potentially a new entrant bringing in new entrepreneurial experience but it failed and by 1979 it was happy to sell its UK operations for a pound. For employees, the monolithic companies appeared to offer them jobs for more or less their whole working lives. Children followed their parents into the same factory. Coventry had effectively ceased to have a dynamic economy though even as late as 1978, it was felt by many commentators that the local economy was fairly healthy but perhaps as, implied in the Economic Monitor, in need of some rationalisation and a lot of investment. There was much concern that the city's business leaders were heavily engaged on national issues rather than the local business. Their eye was, perhaps, on the wrong issues or even failed to grasp the nature of the problems faced by their businesses in Coventry. The basic conclusion (with the benefit of hindsight) was that the main industrial base of Coventry was not competitive and was not prepared for the increasing international competition coming out of ongoing GATT trade negotiations and later the European Economic Community. By the mid 1970's, these liberalisation measures had begun to bite and the Coventry's economy was feeling the pinch.

4.5

4.6

4.7

The collapse of the post-war business model.

4.8 Towards the end of the 1970's, it was recognised that the existing ways of managing the economy were not working. Big debates raged amongst economists as to the nature, cause and solution to the crisis47. Most agreed that the United Kingdom was the sick man of Europe and that the economic malaise was unsustainable. North Sea oil was seen as a lifeline but not a solution. The election of 1979 resolved the issue as the Thatcher government came to power committed to a strong monetarist laissez faire economic strategy The business conditions in 1980/1 were unknown to most bankers and business people. Banks adopted a risk averse position and managed business accounts fairly tightly which added to the toll of collapsed businesses. In line with the laissez faire approaches of the time, business support from the government was limited and was, of course, without the
For authoritative analyses, see the National Institute of Economic & Social Research reports and books on the post war economy. 47 Keynesian economists had various approaches as did monetarists. The tight demand management, hands on government using prices and wage controls had had a modicum of success success and some felt hat more controls were needed. Many thought he oil monies would allow the UK to trade out of the position.
46

4.9

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friendly state aids of the past. Government began to withdraw from state interventionism and privatise public assets / businesses. In 1980, unlike perhaps twenty years later, there was little private sector understanding of this changed policy approach and the business infrastructure was inadequate to deal with changed policy and the 'shock wave' that it had created. Firms were left to their own devices to resolve their own destinies with no lifeline help from the government. 4.10 In Coventry, as in many other cities, this was traumatic. The large firms began to downsize and close operations. British Leyland closed Morris Engines plant and Standard Triumph works and sold off smaller concerns. The government separated off Jaguar in 1982 in order to privatise the business which it did in 1984. Peugeot, which had bought Chrysler out in 1979, pursued the Chrysler operations but in the end had to close them down. By 1986 the Humber Avenue bus and engine works and the Whitley R&D station48 had closed. GEC pursued the System X telephone line but closed down TV and radio production in the city centre area new Japanese companies inward investing produced better sets at lower cost in South Wales. 4.11 By 1986, the business structure of Coventry had been greatly changed with employment amongst the 1976 Top 20 employers down by 43%. In addition, the hegemony of the major employers over the city had, also, broken down. Companies across the city had been forced to modernise in the face of imminent closure. The break up and eventual privatisation of British Leyland combined with the withdrawal of Austin Rover activities had a profound impact. Small component companies lost their regular markets and, even worse, the new car plant managements operated new managerial methods including in procurement which ended many friendly informal procurement procedures.

The changed Business Culture

4.12 In the 1980's, Coventry companies in step with many other places changed business culture. The 1980's was a sort of melting pot time of new business ideas and the obvious
The city Council thought of buying the site as the basis of what became the Westwood Business Park but independent Jaguar needed a research base and bought the site off Peugeot.
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need to meet the challenge of dramatic changes made it possible for adopt the new business strategies.49 This change has continued, evolved and grown up to the present time. The slump of the late 1970's early 1980's led to: A generation of management being retired New emphasis on business priorities Non mainstream activities are outsourced (to the business service sector) Total quality management in production & in supply chain companies Rationalisation of procurement and component suppliers Better Stock control and management Just in time logistics Better management of labour i.e. greater flexibility in the workplace Better management of industrial relations Adoption of new technology Higher productivity and performance management Better marketing

4.13 The Mayoral Conferences on the state of the economy in 1980/1 led to the recognition that new investment was needed in the city. This led in 1984 to the establishment of the University of Warwick Science Park, the expansion of the Council's Financial Assistance Scheme to Industry and the development of the new Seven Stars Trading Estate. The Council successfully applied in 1984 for UK Regional Selective Assistance, European Regional Structural Funds and UK Urban Programme Funding. In 1987, the Council started promoting the city in order to attract inward investment following Sun Hydraulics decision to locate in the new Seven Stars Trading estate in 1986. New businesses had different property requirements. 4.14 The changes made within companies and with new businesses moving into the city changed the business culture and has made local businesses much more dynamic and innovative. The change in attitudes and the provision of good sites and premises has led to Coventry being a significant attractor of inward investment. This has generated a churn with companies waxing and waning, opening and closing. This churning in business activity has helped keep the local economy competitive although it is not always a comfortable process for employees. 4.15 The change in business management styles and approach has been very far reaching. In comparison to 1976, Coventry businesses have at present: Stronger balance sheets Stronger and coherent management. Better performance management procedures Increased market competitiveness Wider market approach exporting and e-business Higher returns on capital Higher R & D levels and willingness to innovate

Part of this changed profile is that businesses tend not to be slow moving in response to market changes. New business start-ups, often, have relatively short time profiles. Product lines have shorter lifetimes so innovation is being built in business planning so that new products can enter production quickly as the old product begins to decline. Taste, technology and competition has shortened product life spans.

Many of these strategies had been hanging around for some time but had been resisted both by management and employees. This flux is what made the Thatcher years a business turning point.

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4.16 This means that business infrastructure life times have shortened. Depreciation times have shortened. Buildings have much shorter life expectations than a generation ago. A business that has fully depreciated its buildings or is near to an opt-out from a lease is vulnerable to closure as the balance sheet cost of closing is relatively low. Not to replace plant and machinery regularly is likely to lose out to competitors elsewhere. Technologies are changing rapidly.50 This process of shortened business activity lifespans leads to mergers / demergers, private equity takeovers etc. which only increases the rate of churn. It is generally felt that a good business will flourish in this climate which was certainly not the case under the monolithic business structure prior to 1980. 4.17 This new business climate is not easy but in 2008 for Coventry, it does seem to be producing a stronger economic position. It does mean, however, that businesses will close down or relocate to a favourable area at relatively short notice. In the 1960's and 1970's government policy was, like in France at the present, aimed at stabilising the business base perhaps regardless of the financial implications. Today the policy is much more laissez faire. Business will not be 'directed to go to an area unless it is in the business' interest. This means that local economies have to offer a comparative advantage in order to successfully maintain investment levels within its area. This is a complex issue. Key factors include staff availability, staff skills, business related infrastructure and business accommodation that meets with today's expectations.

The Restructuring of the City's business sector

4.18 The Top 20 employers in 2006 are far removed from those in 1976. Only six of the 1976 major employers made it through to 2006 and most of these were public bodies including the City Council. A factor that contributed to the disappearance of British Leyland, GPO, Courtaulds and Associated Engineering has been the demerging of activities into separate business streams. 4.19 Seven names on the 1997 listing failed to re-appear in 2006. This reflects the continuing churn in business activity which seems to be speeding up as time goes by. This may be a reflection of other processes affecting business activity including the deepening of the globalisation of the economy, the rise of the BRIC51 economies and their business investing the EU and USA, the rise of private equity investment, the various crises afflicting the global economy including the DOTCOM crash of 2001 which undermined GEC/Marconi or the sub prime crisis in 2007-9. Business churn with companies opening up / moving in, expanding / declining and closing / moving out is now part of economic life of Coventry. 4.20 Between 1981 and 2006 the number of VAT registered businesses rose from 4,285 to 6,530, a rise of 51% and 26% between 1994 and 200652 This reflects three trends: The diversification of the economy into new economic activities The growth of the SME sector The rationalisation / demerging of major companies The great monolithic concerns that dominated the economy in 1976 have gone into the private sector. This trend is developing within the public sector and has some way to go. Many micro and small businesses survive successfully on interstitial or niche markets. The loss of mega concerns reflects the restructuring of the economy. The new business sectors that began to be developed in the 1980's were started in waves and in a number of ways spin outs from major companies / universities, new start businesses by individuals or new start businesses with new products. It would be nave to suspect that
50 51

This can easily demonstrated by the changes in personal computers over the last five years. Brazil, Russia, India and China. 52 Source ONS NOMIS In 1994 the SIC base changed as did some minor definitions.

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the new technology products starting in the 1980's would immediately grow into mega corporations. New economic sectors take time to grow 4.21 The chart shows the growth in the number of VAT businesses between 1994 and 2006. The number of businesses engaged in Finance and business services has doubled compared to a 3% fall in the number of manufacturing concerns. This demonstrates the scale of economic restructuring that has taken place in a relatively short period of time. 4.22 The concentration of employment in workplace establishments has also declined. The Top 20 employer list shows that concentration employees in the top 20 companies has sharply declined from 77% to 35% of Coventry employment but his does not show the size of workplace unit. In 1974, the average size of a manufacturing establishment was 173 employees. This had dropped to 96 in 1982.53 By 2006, the figure had fallen to 43. This reflects the decline in the number of the major manufacturing units in the city and the rise of niche hi- tech manufacturing businesses such as RDM Engineering, Coventry Prototype Panels and HPL. These businesses still have considerable potential to grow further and, in time, this will begin to raise the overall average of employees per establishment. 4.23 In the Financial and Business Services sector, the average establishment size is smaller than in manufacturing at 22.5.54 This sector has a combination of large offices such as the E on, Axa and Barclays Bank. There are a large number of smaller offices engaged in a wide range of activities. Many of these activities did not exist a decade ago. Some businesses will grow into significant concerns while other will close.55
Figures Taken from Michael Healey & David Clarke Industrial Change in Coventry 1974 1982 Economic Monitor 4/83 December 1983 Coventry. 54 Calculated from the ABI data 55 Around 50% of new businesses fail in the first five years. The Small Business Service produces survival rates which show 52.7% of new VAT registered businesses are still trading after 5 years. See http://stats.berr.gov.uk/ed/survival/'Tables 11-15 Extended UK & ctry'!O1
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4.24 It is likely that as time passes some of the business services activities will slip back into manufacturing activity. This will depend heavily on exchange rate movements, investment flows and the comparative advantage in manufacturing in Coventry and the UK. There is some prima facie evidence that a new viable manufacturing sector based on hi technology products is already appearing as a new growth sector. It will be a few more years before this trend can be said to be a significant longer-term trend phenomenon.

Number and Average size of workplaces in Coventry 1986, 1996 & 2006. Number of workplaces No of employees 1986 Under 10 3,460 11 to 24 876 25 to 49 369 50 to 99 178 100 -199 94 200 - 499 53 Over 500 33 Total 5,063 Average size of workplaces All concerns 28 Concerns 10+ emp. 80
Source ONS NOMIS.

1996 6,681 814 411 188 99 77 25 8,295 16 72

86-05 % 2006 change 7,501 117 879 0 407 10 235 32 127 35 86 62 26 -21 9,261 83 16 75
-43 -6

Business Structure in 2008

4.25 Coventry's business base in 2008 is much more complex than thirty years ago. There are, now, more firms operating in a wider variety of sectors. Ownership patterns are also more complicated as new forms of business investor have appeared over the last twenty years: business angels, venture capital, private equity, social enterprises, franchises as well as new forms of floating shares on to the stock markets. These forms of investment simply did not exist to any great extent in 1976. State ownership has disappeared except in the form of qangos and government agencies. 4.26 A further factor, complicating business ownership patterns is that more firms are, now, foreign owned reflecting the opening up of the global economy. While in the past, a few major firms were foreign owned; they were relatively few in number. Today, foreign direct or indirect ownership and even directly owned branches are in every sector of the local economy with over 500 businesses operating in Coventry answering ultimately to foreign owners. This means, as does happen, that a local business could be taken over as part of a take over deal done abroad with little reference to the local management.56 4.27 Whatever the form of ownership, all businesses operate much more cogently and seek to optimise profitability. This is, perhaps, the biggest change since the 1970's and has helped make the economy more responsive to changing markets and business operations. What is much more apparent today is that the Coventry business sector is much more vigorous than in the past. 4.28 In 2008, Coventry employer base was very different from 1976 as can be seen in the following map. Ford `Jaguar and Peugeot are still significant employers even though Coventry car manufacturing operations in both companies had closed. Barclays Bank relocated head office / business operations functions to Westwood Business Park in 1990. Other new major companies have relocated including UYT, Eon, and Parcelforce. UYT has grown rapidly in the last five years supplying components to the UK based Japanese car manufactures. The two Universities have become major employers and have far reaching interactions with the local business community.

56

This has happened to a number of companies in the city but normally any significant takeover gets publicity and trade unions do pick up on this.

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4.29 The business structure has diversified and located in smaller establishments. The number of work establishments, i.e. individual offices and factory units, in the city has doubled since 1986 to 9,26157 4.30 The main contributing factor to the change has been the growth of micro and small businesses. At the same time the number of establishments employing over 1,000 has fallen. In 1986, eight workplaces including the Standard Triumph Works, Massey Ferguson, Morris Engines plant Rolls Royce etc employed over 2,000 people compared to only three in 2006 the University Hospital and the universities. The mega concerns shrunk or closed in the 1980's. Business employing between 100 and 500 people have also grown in importance. This reflects the inward investment and the success of some of the city's very small businesses. 4.31 Small businesses play a key role in that they are often at the front end of new product development or meet high value added niche markets needs. This helps in creating an innovative business climate, as against an academic one. The innovative activities of the small business is a marketable commodity the invention of product can be sold under licence to larger business operations to exploit. A number of the city's hi tech SME's have been very successful in doing this. Similarly, large operations can sub contract work to smaller concerns. The creative industries are dependent on this sub contract work as are many business services operations. 4.32 The 2006 is probably transitionary for as the city's new economic structure beds down firms will mature and grow. Other large concerns will move into the city to benefit from the city's comparative business advantages. Over the next twenty years it is very likely that the growth in larger firms will grow from continued inward investment and importantly successful local concerns. This has significant implications for the future structure of the economy, the commercial property market, skill requirements and local business supply chains.

ABI et al workplace estimates there is some small definitional and sampling variation in the figures

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4.33 In June 2008, Tata Motors took over formally Jaguar and Land Rover. The full implications of the future business strategy of the JLR group have not been rolled out at the time of writing. Needless to say that the takeover is seen to offer new opportunities for Jaguar Whitley and the growth of the Warwick Manufacturing Group at the University of Warwick. QCA, Severn Trent, Ericsson and Home Delivery Network have new premises under construction in the city centre and at Ansty and Ryton, it is likely that both Jaguar and Land Rover along with Tata will feature in the top 25 employer listings by 2011. The churning economy continues to flourish. 4.34 By 2026 Coventry's economy will have again been transformed but unlike the last twenty years or so the transformation will be through growth rather than decline. The last twenty years have demonstrated the importance that firms remain flexible and adapt to business conditions. In the twentieth century, Coventry allowed its industrial base to become ossified and the consequent failure to meet the challenge of change spelt the end of the large businesses that dominated the economy.

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5
5.1

Additional factors contributing to growth of Coventry

When the study of economic growth began in earnest in the 1950's, it was quickly recognised that in addition to capital and labour inputs, other factors, such as property availability, skills, environment etc., have a role in producing outputs and growth. Each contributing factor is often case specific and cannot be generalised though many people do make the mistake of generalising the particular to the whole economy. This paper has selected a few key factors that are commonly cited as being important.58 What is important to note is that each of these factors have a variable impact on different sectors of the economy and the whole economy from time to time. During the last thirty years, there has been a generational change in attitudes, business culture as well as technologies and its applications. Technology has had a huge impact on business activity and products. It was during the mid 1970's that what was to become a great wave began and this wave of technological change has fundamentally altered the economy. The change has been deep-seated and all embracing affecting nearly every aspect of business, work and lifestyles.. In many ways the new technologies of the last thirty years mirror a similar impact of technological change a hundred years ago when electricity, vehicles and planes, chemicals, telephones and radio entered everyday life. Few would have predicted in 1896 that the car industry would have become fifty years later Coventry's leading industry. The great wave of change started in the 1880's had however become exhausted a century later59 resulting in Coventry's economic growth slowing and becoming less competitive against other areas. This is partly because of the business culture was sclerotic and partly because of the lack competitive pressure stemming from import barriers and government intervention.

5.2

5.3

Productivity Growth
5.4 In effect, by the mid 1970's Coventry's local economy had reached a relatively fragile stability balance between the old ways of doing business and the huge changes needed to make the national / Coventry's economy competitive. Given the sweeping changes which have happened since 1980, there are still many people who look back with an element of nostalgia to those times, forgetting many of the issues and problems faced at the time. For Coventry, the longer the changes were delayed the harder it would be to deal with the breakdown in the economy The liberalisation of the economy between 1979 1983, unsettled the fragile equilibrium and plunged Coventry's economy into a sharp decline. Productivity rose sharply during the 1980's and has continued to grow at a higher level as labour market and business reforms took hold. Both in manufacturing and in the last 10 years or so in services, productivity growth nationally has doubled. Given constant output and the higher productivity growth, 21,000 jobs employment in Coventry's manufacturing industry would have been lost anyway as against an actual drop of 35,700. This is a measure by how much Coventry's manufacturing base was inefficient and uncompetitive. During the 1980's, many firms reported dramatic rises in productivity. These arose from the adoption of better management, lean supply lines boost productivity throughout the supply chain, dropping of restrictive labour practices and the adoption of new

5.5

5.6

Thereby committing the very error of generalising particular points. This follows he Schumpeterian long wave theories. See Mmtaz Kiklik Schumpeter, Innovation and Growth: Long Cycle Dynamics in post WWII American manufacturing industries. Ashgate Publishing. 2003.
59

58

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technologies.. Most engineering businesses in the city and in particular Agco, Jaguar Peugeot and Rolls Royce reported dramatic increases in plant productivity.60 5.7 During the 1980's, existing businesses were slow to change partly because their financial base remained weak and demand for UK products fell sharply as the economy opened up. Technological change did, as a result, lead directly to redundancies and jobs losses. The simple model employed in this analysis suggests some 40% of job losses were productivity related whilst contraction in markets accounted for the remainder61. It is difficult to assess the exact contribution to the rise of unemployment as by the late 1980's the economy and technology changes began to contribute to improved competitiveness and by 1993 growth. The University of Warwick from around 1980's began to make a significant impact on the real economy. The Warwick Manufacturing Group was set up in 1980 and was followed by the University of Warwick Science Park in 1984. Both have played a major role in improving the technological base of the city's economy. The University and the Science Park became a focus and an attractor of high technology companies to the area. Coventry University, especially Engineering and Arts and Design departments, have also played a key role in helping generate technological transfer and change.

5.8

Changed property needs

5.9 The rise of new technologies meant that business property needed to change. Many of the factories in Coventry were relatively old, often in poor repair and more importantly unable to accommodate the new technologies. In factories and warehouses pillars and eaves heights were a major problem62 while in offices and, even shops63, housing new electronic equipment created building design problems. The new technology demanded modern quality buildings rather than old-fashioned buildings built for another era.

5.10 With change speeding up and businesses facing evolving market demands, businesses employing new technology required new flexible building space. This has, as a result, tended to reduce the expected life of buildings so that in business, depreciation periods have dropped sharply. In addition, modern expectations of buildings include the expectation that a significant recycling of materials used in the construction of the building will in the future take place. It will be some time before this will be tested. 5.11 If employees with skills can now work anywhere in the European Union, if not in the World, employers have to offer their staff better working environment and state of the art equipment. If they do not, then, good staff will tend to drift away and be harder to replace. This need has, also, impacted on building design and combined with increased recycling and greenhouse gas emissions reductions, new building styles have changed markedly in the last twenty years. Building locations must have an element of prestige. Old buildings which have been refurbished such as Tower Court or Electric Wharf in Foleshill Coventry often lends prestige to a business but the revamped building has to be viable.64

In the late 1980's output per worker at Peugeot Ryton rose by 50% between 1986-1990 even after allowing for the different manufacturing mix. 61 This includes relocating plants out of the city e.g. Rover's relocation of production to Longbridge. 62 As well as the condition of the building one major machine tool manufacturer had to stop work when it rained as the roof leaked new electronic equipment had to be covered over. the business relocated after a few years. 63 Before the rise of sophisticated electronic tills, shops' biggest problem was to overcome the decimalisation of the currency in February 1971 which led many small shops to buy cash registers which calculated the change an adding machine. 64 Provided that restoration costs are relatively low or have a clear financial payback.

60

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5.12 As buildings have changed then the desired location of buildings has, also, changed. Modern businesses expect to have high profile business locations. Cheap and run down premises are all right, perhaps, for new start businesses with an understanding market but businesses selling hi tech products are expected to have a hi tech base. When the University of Warwick Science Park opened in 1984, it was seen as an unusual development as it was one of the first R & D parks in the country.65 The success of the Park led, quite quickly, to the recognition that the city would need to have business parks in the suburban area or edge of the city.66 In the mid 1980's, it was felt that Coventry should follow the pattern set along the M4 corridor and develop a quality business park. 5.13 Westwood Business Park was seen as a follow-on location for the growing businesses from the Science Park. Some companies did move but the Park proved to be a strong attractor of new investment with Barclays Bank, The Royal Institution of Chartered Surveyors, PowerGen and others occupying most of the park within a few years. This success led to the development of other business parks and innovation centres. The map gives a guide to the location of many of the hi-tech activities in the city. It is far from complete as hi tech concerns can and are located in nearly ever business area in the city. For example RDM Engineering is on the Bilton Industrial Estate (Humber Road), Geothermal Thermal International in Earlsdon and the Wilson Lane or Impact Electronics on the Hales Industrial Estate in Rowley's Green are examples of the many hi tech firms scattered on traditional industrial estates across the city 5.14 The original hi tech demand for a good working environment had by the early 1990's become a mainstream demand. The initial demand for parkland style environments has evolved and will continue to do so but the main conditions remain: flexibility, good working environments and an element of prestige.

Business Infrastructure
5.15 Mainstream businesses, many of which employ hi tech systems in their every day work, demand well designed buildings that are flexible in the sense that new layouts can be easily created. They are increasingly demanding additional business infrastructure arrangements. Modern technology has changed business needs as IT provides, now, a wide range of services to even the remotest of locations. However, inward investing companies with hi tech operations still seek the following:

The Barclays venture Centre was the first building on the site offering managed workspace to small businesses. The building has undergone two upgrades in its technology since it was built.. 66 Michael Healey & David Clark in Industry in the Inner and Outer areas of Coventry: Similar or Different? Economic Monitor May 1984 Coventry noted the start of this trend

65

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Skilled labour force Good transport infrastructure road / rail / air Financial support for SMEs plus public transport systems Access to training centres Good social facilities for staff and meetings Latest IT access technologies Links to HE institutions Latest IT security systems Prestigious / high profile location General security systems even in low Access to business networks & professional crime areas services These are not in any order of priority as individual businesses have their own specific requirements but these 10 requirements regularly are asked after.67 5.16 In the last 10 years or so, Coventry has been investing heavily in improving the city's 'offer.' The development of Coombe Abbey, Skydome, the Ricoh Arena, and extensions to the Belgrade Theatre, the revamp of the UW Arts Centre, Herbert Art Gallery and the Belgrade Plaza are all part of this raised expectations by businesses and their workers for quality lifestyle opportunities. These expectations include, also, a good retail offer as well paid staff will want to have at least the option of buying the best. Coventry has recognised this latter issue and the city centre investments are aimed to improve the city centre offer in general as well as for retailing. This, again, is a generational change that is likely to grow in importance in the future. 5.17 In much the same way, if world-class businesses operate in the city, it does mean that staff have to be highly skilled. Highly skilled people can work any where in the world and a location has to be able to meet their aspirations in housing, shopping, leisure demands. These demands are playing an important part in the development of cities in general and city rankings are increasingly taking account of these staff needs.68

New Products
5.18 Such has been the speed of the adoption of new technologies; many people fail to understand the nature or value of products produced by companies.69 This may be a result of the nature of the product some unknown technology or may be because the product itself is more or less intangible intellectual property. Other products are substitutes for products which depended on older technologies and the full nature of the product may not be readily understood. Many lower technology products are now imported where once they would have been produced in the city or region. Competitive pressures in these markets are very fierce and have low rates of added value implying real wages in comparison to the past. 5.19 In the early stages of the generational shift in technologies, small firms tend to dominate new product markets with larger firms following behind. This would appear to have been the case in Coventry where smaller concerns dominated the hi tech sector with the exception of GEC Marconi which had developed System X relatively early. Marconi had a national comparative advantage with System X until 1985 when BT also opted for Ericsson's system to run alongside the UK Marconi version. Marconi went off the rails in the DOT.COM speculative bubble. Small firms grow and develop some get taken over and their operation relocate whilst others fail and close. 5.20 The technology wave that started around 1980 has a long wave length and innovative new concepts are still being developed for the market. This means that, at present, the new technology businesses range from small micro businesses
Source Inward Investment Team Coventry City Council. Marconi made this point very forcibly in the 1990's 69 Schumpeter noted that new products are often developed in small firms as larger firms in their arrogance feel immune to radically new products that is until later in the day.
68 67

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perhaps one person to medium-sized concerns. After twenty years, the second wave is beginning to make itself felt with larger concerns taking an active part in R & D and product development. Jaguar Whitley with Gaydon nearby have grown into mature major R & D concerns. Ericsson's new R & D station at Ansty and Tata's proposal for a European Technical Centre are evidence of the growing maturity of the technological wave's impact in the Coventry area. 5.21 The two universities are key elements in maintaining Coventry's competitive edge in this highly competitive market. Hi tech businesses like the proximity to universities with strong reputations, both for the synergy and potential support. Both Universities, in order to compete and maintain their reputation, need to invest in the future. They need to be on or near the crest of the wave. For this reason both Coventry University and the University of Warwick have business plans allowing for considerable expansion in activities working with private sector. The University of Warwick plans to be within the Top 50 worldwide universities as against being amongst the Top 5 UK universities. Coventry University plans to be a highly regarded business facing university amongst the top 10 new universities in the UK. This will mean that new spin out companies will continue to emerge, perhaps in greater numbers, and the city will strengthen its growing hi tech status. 5.22 In 2008, Coventry's hi tech strengths are based in the automotive industry technologies and engineering (including civil), games and engineering software systems. The city is seen to have some strength in telecommunications, new materials, medical technology (but not drugs), prototyping, R & D and product testing. These sectors are still emerging and growing, it is far from certain whether Coventry and Warwickshire will maintain their relative strengths in these areas as competition from other areas is extremely fierce particularly where other areas have a strong 'pull' either through the emergence of a cluster or locational prestige.70 Coventry cannot afford to be complacent. 5.23 Thom and Donnelly (2005) noted that it took only 15 years for the automotive industry to start up in 1896 to becoming the principal industry of the city's economy buy 1911. It is quite clear that business service activities and the knowledge economy have begun to dominate the economic landscape of the city.

Economic Sectors
5.24 Coventry during the early part of the last century was dominated by the automotive, aerospace and communications equipment industries. In effect, these industries formed industrial districts / clusters / agglomerations which offered companies distinct locational advantages. These advantages gave firms within the areas, a competitive boost in the form of higher factor productivity as they had access to locally skilled labour, supply chains, technologies etc.71 Some economists have estimated a properly functioning agglomeration can benefit firms by boosting factor productivity as much as 3-8%.72 5.25 However when the Coventry economy began to falter this is not the case as the benefits that helped Coventry in the early years became an agglomeration of disbenefits leading to bad practices spreading across sectors. The local economy became frozen and unable to change. Agglomerations were seen to be a disadvantage to a broadly based mixed economy that had a flexible labour force and
70

Cambridge University is seen as a target location by many companies but only a few have broken through the planning barriers which aim to maintain the city's size. 71 Marshall, Alfred (1890) Principles of Economics Macmillan London identifies the benefits. 72 See for example Henderson, J. V. (2003): Marshalls scale economies, Journal of Urban Economics, 53(1), 1-28

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had innovative companies. This certainly was the model that helped pull Coventry out of the depths of the post 1979-83 recession73. 5.26 The creation of the European Single Market in 1992 followed by the foundation of the World Trade Organisation in 1994 at the end of the Uruguay Round of trade negotiations mean the start of the globalisation of the British economy. Globalisation means that areas with comparative advantages benefit while those without an advantage suffer initially though should not in the longer term. Globalisation means that clusters / agglomerations tend to have a comparative advantage and should do well. 5.27 This meant that clusters became a policy issue especially following the publication of Porter's book on the competitiveness of nations in 1998. Advantage West Midlands picked up this theme in its first economic strategy and clusters have formed a key element in the application of regional economic initiatives. However, as a policy instrument it is not possible to force the formation of clusters74 This constraint as been recognised but the fostering of clusters remains a central plank of the regional economic development work.

CSW Technology Corridor

5.28 In addition AWM has identified areas or corridors where there is a mix of intuitions and businesses which seem to offer some natural advantages for hi-tech firms to grow. Coventry Solihull and Warwickshire is one hi tech corridor. The corridor does not have precise boundaries but are more indicative as is shown in the map. The inner line shows the approximate core area while the outer line represents the outer fringe area but there remain key concerns, like MIRA, beyond this boundary that are recognised as part f the corridor. The eastern side of the hi tech corridor runs along the line of the Warwick Coventry Nuneaton corridor which has been identified in the Regional Spatial Strategy as a development corridor as shown in the second map. 5.29 Some key locations are marked on the map showing the strength of the area. In addition to these are the University of Warwick Science Park, Coventry University Technology Park, Warwick Manufacturing Group, Innovation Centres and Business Parks etc. In effect the sub region has developed over the last twenty years a very

This does not mean to say that attempts were made to boost existing sectoral clusters but the city's history in these sectors tended to put firms off locating to the city. 74 See Martin (Phillippe) Mayer(Thierry) & Mayneris (Florian) Natural Clusters: Why policies promoting agglomeration are unnecessary Paris School of Economics Webpaper July 2008 at http://www.voxeu.org/index.php?q=node/1354

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strong hi tech base which is globally connected with firms setting up establishments in the corridor and local firms exporting their products. 5.30 The Corridor has identified key sectors in which the area has some basic advantages on which to encourage further development: Niche automotive auto sports, alternative fuelled, new vehicles Biotechnology - a small but growing presence in the area Environment & Sustainability - an emerging sector in which there are local strengths ICT Serious games the area has developed a strong local base of games companies which are branching out into new areas such as ICT training. Advanced construction the Advanced Construction Technology centre is at Coventry University Medical technologies a new and emerging sector based on the UW Medical School and the new Universities Hospital an emerging sector

These sectors represent new sectors with growth potential for the Coventry Solihull and Warwickshire sub region. The aim of the Corridor initiative is to foster and accelerate business growth by improving the sector wide business environment75. Advantage West Midlands is likely to help in developing institutional growth, training and business park space. This will create jobs and demand property developments.76 5.31 In addition to the regional hi-tech corridors is the City Council's own target sectors aimed at meeting specific needs of the local economy. The eight identified sectors are: Public realm relocation following the Lyons Report on public sector relocation placing Coventry as prime location for government science and policy functions e.g. QCA at the Butts Retail and leisure - to meet the demand by residents to improve the city centre shopping and leisure offers which will be led by the Jerde Masterplan Office and professional development to strengthen the city's growing office business base evidenced by business park and city centre developments Creative and ICT fostering development in the fashion industry, ICT sector, media and sound, etc. Automotive technologies building on Coventry's existing university and business base. Coventry is one of Europe's few automotive locations offering a total transport technology solution. Medical Technologies The city's nascent medical technologies sector is building on the universities and local companies activity in the sector which has been boosted by the location of the Health Design and Technology Institute Aerospace - well established local businesses supplying parts to the global aircraft manufacturers (EADS and Boeing) are expected to double their turnover in the next 10 years provided that they continue being competitive. Environmental technologies - a growing sector not only concerned with climate change but also recycling, renewable energies urban space planning / infrastructure.

In addition to this sector development work77, the City Council plays a leading role in promoting investment and the subsequent planning of developments in the city. The
See TeamPro Solutions (2007) CSW Hi tec Corridor Baseline Study CSWP July 2007 Mooted at the time of writing has been the Advance Manufacturing Excellence Centre at Ansty which could over time employ 2,000 people 77 More information on sector work can be gained from the City Council's website: http://www.coventry.gov.uk/ccm/navigation/business/business-sectors/
76 75

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sector work has led and is expected to lead to further job and building works. The continuing growth plans of both the universities are predicated on working with businesses.

Environment and Sustainability

5.32 Coventry is an old city dating back into the myths of the dark ages, if not to Roman times and earlier78. The city has retained a large number of historic buildings even though many more have been lost through time. 5.33 This lost history is being pursued and preserved by the City Council 's Conservation and Archaeological team. In recent years the team has uncovered the first Coventry cathedral (St. Mary's), which was demolished in 1539. The restoration of the mediaeval heritage in Gosford Street is presently underway. The extension of The Herbert in 2008 and the Coventry Transport Museums in 2004 demonstrate that the city values its historical origins With plans to continue the policy of conservation and restoration, the city is conscious of the importance of its heritage from whatever time it originates. There are over 235 sites on the Council's list of special architectural or historic interest and 11 Scheduled (ancient) monuments79. This list includes some of the finer post war buildings including the Belgrade Theatre, the Coventry University Lanchester Gallery building and Coventry Rail Station. 5.34 The preservation and conservation of the city's historical
78

Source: Coventry City Council and DCLG Land use statistics includes countryside areas.

There is evidence of Palaeolithic settlement in the Coventry area. The Lunt Fort is evidence of Roman occupation. 79 Coventry City Council (2004) Statutory List of Buildings of Special Architectural or Historical Interest Coventry June 2004 published at http://www.invest-in-coventry.co.uk/ccm/cmsservice/download/asset/?asset_id=15770023 .

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assets does require investment and to be successful a viable use for the building / site if it is to continue to survive in a good state.80 This requires investment and a practical solution. The refurbishment of the Old Grammar School and the New Buildings in the city centre demonstrate what can be done. Electric Wharf is an example of a development preserving the city's heritage but with significant hi-tech employment use. 5.35 Of equal importance to conserving and restoring the city's long historical heritage is the widely recognised need to provide access to green open space. The Council's Greenspace Strategy81 recognises that the provision of green space contributes to a much wider well being agenda including: Social inclusion Healthy environments Life long learning Improving local neighbourhoods Safer communities Economic regeneration promoting independence Climate proofing where this involves carbon capture.

For business and employment, firms increasing expect to be located in prestige locations and this does lead to a demand for business parks with green open space. The University of Warwick Science Park in 1983 was the first employment area to adopt a quality well landscaped campus environment. Later business parks from Westwood in 1988 to the Whitley and Ansty Business Parks in 2008 have followed this example. A good workplace environment helps improve productivity. 5.36 On a broad definition, some 66% of area of the city is occupied by green open space including countryside and domestic gardens. This compares to 67% in the West Midlands Major urban areas. The ward chart above shows that St Michaels has the lowest area of open space at 33% just below Foleshill (40%) and Radford (50%). Bablake (88%), Holbrook (69.6%) and Earlsdon (68.7%) have the highest. Comparing Coventry across the country is difficult as many authorities have large areas of countryside within them and do not have, as does Coventry, boundaries tightly against their built up areas. 5.37 The city's Greenspace Strategy 2008 2018 identifies some 1,709.93 hectares of open green space (excluding gardens and open countryside) in the city. This excludes farmland located mostly in Bablake ward, much of which forms greenbelt land. This is equivalent to 5.56ha per 1,000 residents of the city. The area varies from 3.4ha per 1,000 population in the NE of the city to 8.3ha in the south area. 5.38 The city average is much the same as Oxford with its 5.75ha and much higher than Walsall (4.98ha) or Sandwell (4.42 ha). A simple comparison is difficult as Coventry is built up to its boundaries whereas other authorities have considerable countryside within their boundaries. This means that country estates such as Coombe Abbey (1,670ha) are located within rather than outside the authority's area. 5.39 The City's green space strategy is, at the time of writing, is being formulated82 and it re-iterates the continuing importance of green space and it will continue to play a key part in the city council's future growth policy. However, as with other uses, some flexibility in approach might be necessary to accommodate changing demands placed on the city generated by change.
Empty buildings such as the Old Grammar School tend to deteriorate. Coventry City Council ( 2008) Greenspace Strategy: A Draft report 2008-2018. Coventry City Council 2008 82 City Of Coventry (2001) Coventry Development Plan laid out standards for green open space.
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5.40 The City's Climate Change Strategy issued in March 200883 has as a goal for the city a 70% reduction in carbon dioxide emissions by 2050 with 2003 as the baseline. This strategy follows a long tradition in Coventry of adopting anti-pollution policies: In 1951 was the first city in the UK to have an operating smokeless zone; 84 In the 1990's the city's heavy vehicle fleet was amongst the first to fit particulate traps; From 1995, the city has promoted the use of electric vehicles85; The City's Incinerator provides district heating and generates up to 14MW per hour of electricity sufficient to power 20,000 homes; The Finham Sewage Works use of 1MW electricity is generated from biogas streamed from the microbic processes; Coventry is one of the lowest landfill rates in the England The University of Warwick is a leading player in the Birmingham Science City Hydrogen energy project Coventry University has produced the fuel cell microcab car; Geothermal International Ltd is a leading supplier of thermal pumps to heat buildings; Coventry in the first nine cities to join the Carbon Trading Councils scheme and made the first formal trading offer in carbon on 4th June 2008; Coventry was the first city to support automotive sector supplier companies to improve their environmental management. A partnership with Rover then Jaguar Land Rover has been in place since 1992 and has trained over 15,000 people. EU funding has supported projects with a combined value of over 78m; Coventry University is the first UK University of offer a degree in climate change; Coventry was amongst the first 30 cities to sign the Nottingham Declaration; Coventry has one of the lowest per capita carbon dioxide emission rates in the UK with 7.2 tonnes against a UK average of 7.9 tonnes and by 2010 the city is aiming at 6.3 tonnes; Per capita fuel consumption in Coventry is 0.37kg compared to 0.619kg nationally;86 Sends the least amount of waste to landfill of any city in the country; and, E.on is planning to build the largest photovoltaic array on its HQ building in Westwood Business Park.

The growth strategy for the city intends to build on this record and the Council intends to take a leadership role in developing measures to reduce the need for energy and maximise energy efficiency. It aims, also, to increase the supply of energy from renewable resources and to use fossil fuels more efficiently. With buildings being one of the greatest sources of greenhouse gas emissions, the Council is keen to improve on insulation and to see that buildings optimise their Energy Performance Certificate standards. The new national housing and BREEAM standards will go a long way in achieving this. 5.41 From January 2008, new build domestic, commercial and retail need to have its energy need to be partially provided from renewable sources (10%) and have recycling provision built into the design. In August 2008 the 'Delivering a More
83 84

Coventry City Council Climate Change Strategy for Coventry. Coventry September 2007 It was the 1952 smog which killed 4,000 people in London led to the 1956 Act. 85 This was from 1996 to 2000 in the EU Fifth Framework Programme with 8 other cities 86 Source BERR statistics.

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Sustainable City' Supplementary Planning Document was laid out for consultation the basis on which planning decisions would be based in delivering a more sustainable city. This demonstrates that the city is determined to have in place the required policy and decision framework to achieve a sustainable city. 5.42 Coventry is well placed to reduce greenhouse emissions as it is a compact city with good and improving public transport links. The structural changes have led to a net fall in energy demand while gross value added has continued to grow. With a more concerted policy of increased recycling and renewable energy generation combined with energy demand reductions through better insulation, more efficient low carbon vehicles etc, growth of the city is compatible with a growing population. 5.43 The policies seeking to reduce energy consumption and expanding recycling and renewable energy sources will imply more land will be needed. This could change patterns of land use in order to accommodate ground source heat pumps, renewable or alternative energy systems including combined heat and power (CHP) facilities. It is probable that by 2010, there will be a need to replace the Energy from Waste plant on the London Road in the city. 5.44 The environmental agenda will mean that new developments will be needed and consequently there will be demand for more space. Some of the developments such as better insulation, district heating systems or generation of renewable energy will be incorporated in new buildings but some will represent an additional development footprint.

City Centre
5.45 The City Architects' Department had considered the reconstruction of the city centre before WWII and had launched a vision of the City of Tomorrow in May 1940. It was this vision that formed the basis of Donald Gibson's plan which, later, formed the basis of the 1945 Future Coventry plan and exhibition. The whole approach sought to incorporate the best of mid century design based on the great early and mid twentieth century architectural visionaries.87 Basically these followed the principles of using: An ordered, aesthetic modernist approach Segmentation of uses Pedestrianisation Strong urban design Low rise

Later plans envisaged the city centre being primarily shopping and some offices with industry, the predominant employment sector being located in suburban industrial estates. Whilst these plans formed the framework for the reconstruction of Coventry, money and expediency compromised the plans. 5.46 By the late 1960's the post war style of Coventry was beginning to be seen as dull.88 The modernist approach employed in Coventry was rather conservative and repetitive in style. More or less from 1970, the design of the city centre began to lose its shine and by the end of the decade it was regarded as out of date. 5.47 In the 1970's new forms of retail distribution appeared which meant that parts of the precinct became dated or too small for many shops. Chain stores increasingly
87

See Hubbard, Phil; Faire, Lucy and Lilley, Keith Remembering Post War Reconstruction, Modernism and City planning in Coventry 1940-1962 online publication http://wwwstaff.lboro.ac.uk/~gypjh/history.html 88 Leslie Ginsberg in the Architectural review January 1969 quoted in Richardson ( )

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wanted more space for their outlets. By the 1970's, the viability of parts of the shopping precinct was already in question.89By the 1980's, the city centre was hit by the growth of out of town superstores and the shopping malls. Milton Keynes new city centre attracted shoppers away from the city. 5.48 The city did respond to the changes though the basic format of the precinct has remained. In the mid 1980's, the Co-op built a supermarket store on Queen Victoria Road. The West Orchards and Cathedral Lanes shopping malls were developed and opened in 1991. The greyness of the city centre was lifted by the remodelling of the Upper Precinct and the use of brick paving. 5.49 The regeneration of the city centre was hit by the development of out-of town shopping centres which although opposed by the City's Planning Department won approval on appeal. The Alvis Retail Park opened with Safeway in 1989 with B&Q and the other stores by 1991. The refurbishment of the Lower Precinct in 2002 and the opening of Primark and IKEA in 2007. 5.50 The developments did raise the shopping experience in the city centre but basic format of shops remained and remains much the same small to medium in size when major retailers want larger units.90 The rent levels in the city centre are, perhaps, high relative to individual shop turnover's but in comparison to other areas the investment yield on some of the smaller shops is low. 5.51 This apparent paradox is a result of two key factors. First the footfall in the city centre is relatively low. A key-contributing factor has been the restructuring of the local economy. The first map indicates the areas where thousands of jobs have been lost. Rolls Royce employed some 6,000 people GEC another 1,000 but both closed in the 1980's. Many small businesses scattered across the city centre closed or downsized. This meant that lunchtime trade fell sharply which in turn reduce the number of shop assistant jobs in the shops. This led to some 15,000 jobs being lost between 1976 and 1986.

89 90

The City Arcade (Sherbourne Walk) is one such area. This can be demonstrated by Boots relocating from Corporation Street into a larger shop (formerly Woolworth's) in Lower Precinct - a unit had been take by M & S as a second store before W Orchards was completed.

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5.52 New jobs have been created and the map shows the major developments. These include the new offices on Parkside BT and the LSC as well as the Coventry University Technology Park. There have been a significant retail and leisure developments across the city centre area including Central 6 Retail Park, Skydome and IKEA. City College when it is complete will attract a large number of people through the city centre. 5.53 In 2006 there were some 31,250 jobs in St Michael's ward compared to well over 35,000 in 1976. During the 1980's, the number of workers in the city centre fell to below 25,000. This fall in the city centre ward swell impacted on the retail offer. The impact of the 1980's recession hit retail spend in Coventry hard91 and it was not until the 1990's and economic recovery that the city began to improve but by then the shopping centre had fallen in the rankings. This lack of job retention has been a major issue in the city centre. The new office developments should help overcome this. 5.54 People have expectations over what towns and cities should offer, especially cities of Coventry's size. It is now recognised that Coventry has failed to impress many people living within its catchment area and this has deterred them from shopping in the city centre in preference to centres outside the city. In the last ten years, competition from Birmingham, Solihull and Leicester has, also, attracted people away from Coventry though new shops such as Primark and IKEA have brought more people into the centre92. 5.55 In the last ten years the growth of the city and the new jobs have bolstered the city centre shopping and the city has moved up the rankings but remains below where it should be for a city of Coventry's income. In effect, the city centre has been underperforming and this is has, also, held back the growth of the city's economy in terms of GVA per capita. Increasing footfall in the centre and, therefore, spend per square metre in the city centre will rise and this, in turn, would boost factor productivity leading to higher incomes. 5.56 This is the rationale for attracting major office users to the city centre. Severn Trent, the QCA and the Friargate development are key elements of this strategy. The Jerde master plan exercise in 2008 seeks to provide a framework that will lead to a more prosperous and fit for purpose central shopping area. The growth strategy for the city will, also, contribute to an increased footfall and help strengthen the centre's growing retail and leisure offer. 5.57 The city centre plays a key role in helping the city to grow. It has sites and development opportunities to accommodate a major growth in employment, housing
91

There is little statistical information to support this point but shop openings were generally low quality during the 1980's 92 Katie Copson (2008) argues that it is important to attract high prestige shops as much as popular stores

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and leisure. Combined with the growth of Coventry University, the growth of the city centre forms a key element of the growth of the city as a whole.

Lifestyles
5.58 Historic studies have shown that people move to areas where they can improve their life circumstances.93 If the push theory is relatively easily explained the question arises as to what factors contribute to people choosing to live in the 1.8+ million cities in the world. What are the pull factors? Inevitably, employment prospects are a key factor as, with the exception of people deciding to downsize and also reject modern lifestyles, most people want to improve their lifestyles usually by improving their income levels. 5.59 For Coventry, the vast majority (87%) of residents are satisfied with the quality of their housing arrangements and 85% are satisfied with their neighbourhood as a place to live and 81% believing that the quality of life in their neighbourhood has increased over the previous two years. Some 8% of the sample did feel that it was likely that they would have moved out of the city within the next four years.94 These results indicate that while there are issues95 to resolve most Coventry residents are generally satisfied with the city as a place to live. 5.60 It is clear from surveys that Coventry residents want to see the city's retail and leisure facilities develop further. Successive surveys of Coventrians since the early 1990's have demonstrated the demand for a better city centre in terms of shopping opportunities and entertainment.. This demand has led to considerable investment in the city's facilities such as Skydome, Priory Place and in Gosford Street. The development of the Ricoh Arena, the extension of the Herbert Gallery, the Transport Museum, and the second stage at the Belgrade Theatre is all part of this policy of improving the city's 'offer' as a place to live. However, current surveys of the city centre show an increasing interest in broadening out the entertainment and leisure facilities in the city centre.96 5.61 But these satisfaction ratings are only part of a well being analysis as well being is a complex concept.97 For migrants from the war torn parts of the World Coventry is a safe haven and for those from areas of high unemployment Coventry represents an opportunity. But for many people especially in the UK, Coventry is just another city that cannot be ranked with the iconic world cities such as London, New York, Los Angeles, Shanghai amongst others. There are cities whose names conjure up a strong positive image98 that confirms the saying that great cities attract ambitious people.99 5.62 Image does matter in attracting people to live and work in an area. In a global labour market, universities and major companies need a positive image for an area and lifestyles form part of that image. To remain a competitive city, Coventry has to invest in strengthening its market image and in the provision of social infrastructure. This means that further investment in leisure and cultural activities is a key part of ensuring the growth strategy for the city.
Ravenstein (1885 & 1889), Stouffer ((1940) are key papers and Kindleberger(1965) kicked off a moderndebate on migration flows and their economic impact. 94 The figures are from the Coventry Partnership Household Survey 2007 95 The issues include cleanliness of streets, potholes and pavements, facilities for young people , crime, congestion, etc 96 Frankova (2008) Katerina City Centre Survey 97 See Mackie(2006) Myles Improving the quality of life in Coventry PowerPoint presentation 98 In 2008 thee Work Foundation held a conference 99 Paul Graham uses this to open his essay on Cities and ambition New York June 2008 www.paulgraham.com/cities.html
93

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Image of Coventry

5.63 There was a time when Coventry meant all that was modern and exciting and was held up to be a beacon of the future. In those post war years when Coventry was rebuilt to the best designs of the mid twentieth century100 and the city Do you remember the good old days seemed to just boom year in and Before the ghost town? year out and for twenty years, We danced and sang, Coventry was seen as a signpost to And the music played inna de boomtown the future. Few cities can remain in such a spotlight for long if, as noted The Specials Ghost Town above, that like Coventry, the city June 1981 fails to evolve and meet the challenges of the changing fashions and times. 5.64 Times change. One generation's best in design becomes dated and the successor 'good design' tends to pour scorn on the last generation's standards. As the post war early Elizabethan style faded during the 1960's, Coventry's economy began, coincidently, also to fail. The image of the city soon deflated and was made worse by the many pictures of strikes and business failures. By 1981, The Specials sang Ghost Town, the words of which seemed to underline the decay of the West Midlands and Coventry economies. 5.65 By the mid 1980's, Coventry was generally seen in a poor light frequently thought of as belonging to the UK's 'rust belt' economy. In the space of less than twenty years, Coventry's had lost nearly all its positive perceptions. 101 It is, generally, much easier to lose a good image than it is to gain one. 5.66 In 1993 the Inward Investment Team, commissioned a survey on would be inward investor attitudes towards Coventry102. The city scored highly in terms of location, premises (mostly business park) and the help given. The Survey showed that Coventry did not have a clear identity as a place and the city centre was seen as drab and not very people friendly. As the shop window of the city this confirmed the need to invest in the city centre and to bring it up to standard103. 5.67 In order to improve the image of the city and the city centre the City Council embarked on a policy of changing the city centre has invested heavily into improving what the last section called the city 'offer.' The development of Cathedral Lanes and West Orchards Mall in 1991 was seen as a key step in meeting the changed requirements of stores needed by retail chains. The re-paving of the shopping precinct area in the mid 1990's aimed at taking out the 'greyness' of the precinct and the new bus station to improve public transport access. Since the mid 1990's, the city centre has seen major investments, many of which have won prestigious prizes for their design. Skydome, Lower Precinct, Priory Place, Millennium Place, the Whittle Arch, the Belgrade Theatre, Herbert Art Gallery, the University Campus and the development of city centre apartment living has helped improve the city centre
100 101

This town, is coming like a ghost town Why must the youth fight against themselves? Government leaving the youth on the shelf This place, is coming like a ghost town No job to be found in this country Can't go on no more The people getting angry

Many buildings built in the 1950's and 1960's have been listed. Fortunately, Coventry did not fall to the bottom of the image pit. 102 Darlington T, Greenwood P, Darlington C, & Bush B Research Study for Coventry Research Associates Stone Staffordshire June 1993 103 One respondent said Coventry has a difficult urban environment would not visit it on a Saturday night another said Clean up Coventry not the type of town you want to entertain people for business it is like downtown USA.

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image. There is much more planned for the centre Jerde Master Plan, Friargate, the Coventry University Campus and Swanswell. 5.68 In more recent residential surveys, younger people have a much more positive attitude towards the city than does the older generation. This is inevitably the result of the huge changes that have taken place over the last thirty years. 5.69 The city has taken a series of image building initiatives including: The establishment of a city centre management company The City Centre Business Improvement District Formation of Coventry First City Ambassadors Scheme Inward Investment Promotion - attendance at key events Business excellence Destination strategies - business and holiday

The initiatives have and are making impacts which in turn are helping develop business sectors in the city and is leading to new investment. 5.70 Fortunately investors and inward investors have today a more positive image of Coventry. But there remains a prejudice This has been the result of success development and relocation of business into the city. Coventry has developed a track record of working in partnership with investors in order to achieve desired investments and relocations. A number of reports and studies have rated Coventry highly. These include: The Lyons Review re Public sector relocation placed Coventry as prime location for government science and policy functions Growing Business Magazine placed Coventry third best business location Glasgow University in an analysis of European cities placed Coventry in the top 20 urban employment growth league table The government has identified Coventry as one of 20 UK growth points The UK Work Foundation has identified Coventry amongst growing private sector and increased economic performance cities

The city has won many plaudits for its recovery from the slump and in the way it has managed structural changes. This has helped strengthen the city's reputation as a place to invest and as a relocation destination 5.71 To continue improving the image of the city, Coventry has to invest further, not only by investing make it match people's expectations as to what a city like Coventry should be. Coventry has to improve the understanding by many people as to the change that has and is happening in the city.

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6
6.1

Commercial Property and Development

Much of Coventry is contrary to popular belief green city with 44% of the city's area open space and a further 22% in the form of gardens. The high proportion of green open space is due to the greenbelt land in Bablake and the green corridors associated with the rivers Sherbourne and Sowe. Perhaps what is surprising to many people is the relatively little land taken up by industry and nondomestic uses, some 5.2%. This is much the same as for Birmingham. Post war Coventry has been seen as a city of big suburban industrial estates surrounded by housing estates. . This was the pattern felt to be desirable by mid-twentieth century planners. Increasingly in this century with concerns over traffic congestion and climate change, city centres are seen to be more accessible for number of employment uses. Being a relatively old city, this spatial division concentrating industry into large industrial estates has been more of an aspiration as many part of the city have employment residential mix. Economic change has led to the business sites becoming vacant, often called 'windfall' sites as their availability cannot be planned. At a time of socio economic changes some of the windfall sites have been used for non business purposes. There are a variety of reasons why this may be so. For example: 'old and inner city' style business locations that are tucked into housing areas are seen to be less desirable by both businesses and residents. Many of these have been demolished when circumstances have permitted. From the 1980's new forms of business locations have appeared: business and retail parks and these have been developed in the city. Retail parks have tended, however, to be resisted as they could undermine the vitality of the city centre. 104 The following analysis takes a broad and relatively informal sweep of the changes that have taken place over the period since 1980. There has been a dramatic change in the built up area of the city with virtually every area of the city seeing some significant changes in the last ten years or so. The land use pattern statistics show that in recent years the green open space has been reduced marginally but most of the changed uses have involved brownfield or already used land. The City Council's Coventry Development Plan Monitoring Report shows that Coventry has over the last 10 years some 82% of office, industrial and warehouse (B1, B2 and B*) developments have been on brownfield land. Since 2000, well over 80% of housing has been on brownfield sites 105 Over the last thirty years, clear patterns of change have become apparent: The structure of the economy has changed radically. The levels of productivity and production systems have changed radically altering site / premises demand.

6.2

6.3

6.4

6.5

Some retail parks in the city only gained planning permission on appeal as planners were concerned about the impact on the city centre. 105 Coventry City Council (2007) Annual Monitoring report 2006 Coventry 2007 Table 5.4 and page 71 see also paragraph 6.17 below.

104

50

The number of businesses in the city is growing on average with VAT registered businesses growing by an average of 48.5 per 10,000 population per annum in the city. The government wants the growth rate of the number VAT businesses to accelerate. The average size of firms/work establishments has declined in manufacturing from 73 per workplace in 1986 to 23 and for offices has remained, despite the introduction of computers etc, much the same - 19 in 1986 and 20 in 2006. New technologies have led to changed building design and styles. These hi tech changes have become mainstream. Climate change has contributed to both demands for reduced building energy consumption and the new BREEAM regulations will make this compulsory106. Better working environments and more prestigious buildings are looked for. Buildings must be more flexible as change

Disinvestment in employment buildings and sites

6.6 These local trends reflect national ones and mean that business properties in the city have had to change keep being competitive with other areas and generally improve the benefits to business of relocating into the city. The commercial and industrial property base is a key factor that facilitates both economic growth and economic change. Ensuring the supply of marketable properties has been a key element in the city's economic recovery over the last twenty years. Fortunately, the changing property requirements have ensured the supply of brownfield development sites. In 1976 much of the city's business buildings were already old with many dating to the inter war period and the early post WWII years. Often firms in the city presented an old fashioned image which tended to confirm negative opinions of the city. The onset of the

6.7

106

Energy Performance Certificates, carbon trading prospects, etc are other factors

51

recession of 1979-83 led to many firms closing down operations in their older buildings and consolidating into their better properties. 6.8 Many of the older buildings were fully depreciated in financial terms and, often, had low historic cost values for both land and premises in company balance sheets.107 This means in business terms that the loss of the building would have only a nominal impact on a business's balance sheet in effect, closing the building and disposing of it reduced operational costs in terms of repairs and maintenance and did not affect the financial standing of the business. This is a warning sign for any work establishment which has been in a businesses ownership for a long time and / or is old and has as a result high maintenance costs is a candidate for closure, especially if the business needs a cash injection from the sale of an asset. The map covers most but not all of the sites that have or will come up for redevelopment. The areas highlighted in the above map covers the gross area of the sites that have been developed. Overall, Coventry has a very creditable record of re-using business land in its area. Between 1980 and 2008: 172,200m (17.2ha) per annum or 163,714m (16.3ha) per annum of B1, B2 or B8 land108 has been demolished. This is equivalent to 4.8million square metres / 482ha or 4.9% of the territory of the city has been redeveloped. Of this total some 458.4 ha were classified as B1, B2 or B8. Of this `Annex 3 lists the sites. As indicated in paragraph 6.4, demolished sites have not always been rebuilt to their original planning use as standards and requirements have changed. The figures include some 200,000m of employment land that has been extensively refurbished and includes the Foleshill Enterprise Park, the Westside Business Centre109 on Torrington Avenue and Lythalls Lane Industrial estate. The data includes sites that are known to be due for future development as building up a potential supply employment development land for future use is, as noted above, important for future growth and this does influence the property market in the present. The Regional Spatial Strategy Phase 2 Revision suggests that there should be a minimum reservoir of [employment] land available at all times. For Coventry this is suggested to be 82 ha.110 This contrasts to 48.5ha that was actually available in Coventry in April 2007. Most of the sites being released through the termination of economic activity on them had no immediate obvious future use as demand for the existing site and premises in their extant condition was very low. Many of the sites had old buildings on them which were in a poor condition and / or were no longer relevant to modern business needs. There are a host of reasons why there has no longer a future economic use for the buildings including: to big, too many pillars, too low eaves height, polluted etc. Companies might want to close a unit because it has declining output and the need to cut costs by concentrating output into fewer locations or as a result of a take over and the unit is surplus to the company needs. Selling off is in these cases is often a good option for a business. The Peugeot Ryton plant, which closed formally in January 2007, was decommissioned by the summer and was under demolition by the autumn with a start to build soon afterwards is unusual. Some sites take many years before they are in a position to be redeveloped. There are a variety of reasons for this. Legal obligations111 placed on
107

6.9

6.10

6.11

6.12

6.13

For many surviving firms the revaluation of assets notably land and buildings from 1960's values to late 108 Planning classes B1 = offices / light industrial; B2 = manufacturing and B8 = warehousing (storage & distribution) 109 This was the first post WWII factory to be built in the city 110 W Midlands Regional Assembly (2007) WM RSS Phase II Revision Employment Land Provision Background Paper Birmingham December 2007 Pp 32-34 111 These include debentures and other liens, original conditions of purchase etc.

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properties can delay any disposure. The British Leyland Standard Triumph works in Canley (now Coventry Business Park) was first mooted for closure in 1977 with production ending in 1981 leaving some head office functions remained there until 1993 despite having been sold to British Aerospace which transferred the site ownership to Arlington who started redevelopment soon afterwards. Much of the site was under utilised after 1981 but it suited business needs to retained it for over a decade. Similarly the Stoke plant at Humber Road saw production cease in 1986 leaving just headquarter and group functions on site, much of which, was used as storage until demolition started in 2006-7. It suited Peugeot's needs to retain the site for well over a decade. The planning authorities in Coventry has been keen to help companies to resolve early any planning issues in order to expedite the sale. 6.14 Nor is it always appropriate for planners to insist on a continuity of use as the local circumstances may not support this. Many sites might have inadequate infrastructure or have high development costs associated with them making a continued use uneconomic. In 1985, the Morris Engines Plant in Courthouse Green 15 ha of derelict factory space which had had the roofs removed to avoid property taxes. Demand for industrial property was very low in the early 1980's and demolition was seen as a solution. Housing and the then relatively new concepts of retail warehouse / superstore development seemed the only practical solution for the site which was an eyesore. New housing was built on Achilles Road and Portwinkle Avenue with Sainsbury's and a retail warehouse unit. Only some 3ha remained for industrial use and that failed to sell readily. The last 28 years have shown that it cannot be concluded that if a business closes, its premises or land upon which it stands will become quickly available. It may take several years even where all parties agree that it should be sold on. Quite often land ownership issues, pollution clean ups, over ambitious plans, lack of funding, etc delay the process. It took more than 30 years before the Foleshill Gasworks site was developed despite a number of proposals.112 The collapse of the local economy in the early 1980's led to some 300,000m of industrial space being on the market and perhaps a further 300,000m been left unused or under used.113 In the first half of the 1980's the commercial property market was very difficult and many agents knowing that a successful letting / sale was improbable just did not market the property knowing that there was little interest in the units.. In 1982, the City Council took the decision to invest in improving the business property offer of the city. The mayoral round table conferences on the economic crisis in 1980-82 took two key decisions to develop the Seven Stars Trading Park in 1983 and establish the development of the University of Warwick Science Park in 1984. This, as noted above, led in turn to the development of Westwood Business Park in 1988. Without these property developments, the city would have found it very difficult to attract and accommodate Itech in 1985 to a Science Park and Sun Hydraulics to Seven Stars in 1986. These two inward investing companies in 1984 and 1985 led to the Council's adopting and inward investment policy in 1987. Without Westwood Business Park. It is unlikely that Barclays Bank would have relocated departments to the city had there not been the Business Park.114

6.15

6.16

6.17

112 113

Details are contained in Mackie {2007] This 300,000m on the market is space advertised in the Industrial & Commercial Property Bulletin of 1982. The Economic Monitor in June 1989 shows a graph of the available industrial space falling from 2.5m sq ft to 250,000 in February 1989. The unused figures are estimates and include Standard Triumph. 114 The author headed up the Inward investment Team and can attest that Itech wanted only a Science Park site, Sun Hydraulics felt that only the Seven Stars site met its minimum criteria and Barclays bank wanted a business park location Westwood was the only one in the city in 1988-9 when negotiations took place.

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6.18 These were greenfield sites aimed at capturing strategic investments when there were no
brownfield sites available. There is at times a need to develop greenfield sites as brown field cannot always meet the needs of modern business. Businesses can be quite particular as to where they want to locate. This can be a result of location or proximity, size, access, image and so on. In recent years, new large-scale relocations have exceeded any speculative sites or developments undertaken by developers. Brownfield sites cannot always meet these demands but generally accounts for some 90% of B1,B2 B8 developments in the city.

Investment in the business estate

6.19 The City Council supported by European Regional Development Fund grants helped to demonstrate to the private sector that property development in the city was a viable option. The council took a pro-active lead and has worked in partnership with the private sector to regenerate the business infrastructure. From time to time, the Council has gained resources to offer business (property) improvement grants with the latest being in the Road Corridor Improvement Schemes such as in Gulson Road.115 The City Council has worked with developers to ensure that redevelopment can proceed. The private sector, once it became more confident about the city, has played a key role in promoting development of the city. There have been many private sector proposals even

6.20

though, naturally perhaps, the sector is more risk averse than the Council in developing new employment property types. 116 In recent years the Council, landowners and the developers have, often, formed partnerships in order to secure a successful development.
In the mid 1980's the Urban Programme/ERDF funded Industrial Improvement Grant Scheme helped manufacturing SME's to upgrade their premises. 116 The City Council took the risk of being first in many cases but each investment was supported where possible by grant finance from the UK or the EU had was generally phased within limited budgets. Westwood Business Park had several fall back options for alternative uses.
115

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6.21

The map shows the major employment developments that have taken place in and around the city since 1980 or more accurately since about 1983. Some of the sites included had, by 2006, benefited from planning approval with an expectation works would start within a year or so(for example Ansty) or work had actually started but not completed ( parts of Westwood Business Park and Prologis Business Park). On average between 1980 and 2008 some 357,000 m / 35.7ha per annum of employment generating space of which 243,930m / 24.4ha per annum were developed for B1, B2 B8 uses. Other uses include retail parks, the Ricoh Arena, Hotels, hospitals etc. The list of developments is in annex 4. Overall, 820,000m or 882ha of land of all types (as against building space) has been developed in the city with 683ha being used for B1, B2 and B8 uses. It is 70% more than employment land sites which have subjected to rebuilt over the same period (see paragraph 6.10)

Use of previously developed land

6.22 There are many reasons why there is not a one to one match between redundant employment and new employment developments. In the first place, as noted below, build and / or employment densities are lower today than in the past. In the 1980's, there was little commercial demand for the commercial development of large sites such as at the 15.4ha Courthouse Green site of Morris Engines. It was developed for super stores and housing. Some brown field sites were poorly located and would require major infrastructural investment to bring them up to modern business park location standards. Some, like Sterling Metals in Northey Road were surrounded by terraced houses and was, really, only suitable for redevelopment as housing given today's expectations by business and residents. Experience since 1980 shows that overall over the last 25 years or so new employment developments have been increasingly built on old employment sites such as the Standard Triumph woks or the Coventry Pit. As economic recovery has built up returns on development have improved and a much greater proportion of commercial developments are taking place now on brownfield land sites than in the 1980's.117 The standards for development are of a much higher standard than those of before the development. This reflects the major generational change that has occurred. Building footprints on sites have been much smaller in recent years with business parks averaging 40% of the site with car parks and green open space on the remainder. Building designs are now different and again reflecting modern requirements so that computers and new technologies and employee comfort can be taken into account. The chart shows the extent which brownfield land has been redeveloped for employment uses. These are estimates based on all economic uses which employ people and are based on the maps above. Brownfield land includes mostly sites which have been vacated by businesses. In some cases, other brown field sites have been developed. For example the Binley Business Park was the site of two old schools Binley Comprehensive and a primary school. The Centre 6 Retail Park was built on the old railway sidings. Greenfield land has accounted for just 25%. This includes Westwood Business Park, Coventry Walsgrave Triangle and Cross Point Business Parks all of which have played a key role in regenerating the city's economy. In recent years, as noted in the introduction to this section, the tighter planning of employment land of
117

6.23

6.24

The Foleshill Gasworks site is a case in point. Many attempts were made to try and develop the site before 2005 - see Mackie [2007] Foleshill Gasworks Site Arena Developments: Outputs and Outcomes. Coventry City Council 2007.

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office, industrial and warehouse (B1,B2 and B8) has taken only 18.2% greenfield land in the last 10 years.

Employee densities
6.25 The redevelopment of the sites around the city demonstrate the generational change that has taken place. The new developments have much lower build densities and employee densities than before. It is possible to calculate various densities from this information

Build and Employment densities on developments 1980- 2007

Site area
m

Building footprint Per m cent 201,000 133,692 142, 080 25,809 56,051 19,050 25,083 43% 30% 40% 17% 17% 32% 21%

Employment

Site M per employee 70.3 112.5 117.6 77.5 113.5 136.6 197.6

M of buildings per employee This survey 30.2 59.2 47.3 13.1 14.9 43.8 42.5fte

Coventry BPk in 1976 Coventry BPk in 2006 X 40 Industrial developments xx Binley Business Park (office) Westwood B. Park Gallagher Retail Park Arena Retail Park
x

468,000 448,500 355,160 153,130 340,000 59,430 116,600

6,658 3,987 3,020 1,975 3,750 435 1,487

Excludes two vacant plots Mission Foods expansion land and central site equal to some 19,500m of land . The social club site is excluded from both. Mixed use site XX Employment figures relate to only 142,080m of employment land and 40 industrial based companies, as employment data was not available for the remaining area. Fte = full time equivalents = 590 fte jobs. .

6.26

The table looks at the characteristics of some of the new developments.118 The Standard Triumph works in Canley does offer a comparator between the old and new styles of use. The old Rover factor covered just under a half square kilometre of land with a combined factory footprint space of 201,000m. There is no data as to the number of floors. Buildings covered, then, 43% of the site. The redeveloped Coventry Business Park is almost complete but has a significantly lower building footprint area at 30%. This means that space per worker is some 60% higher at 112.5m compared to the pre development days. The difference between the two is that modern business parks require landscaped open space and relatively more car parking spaces. Another difference between the Standard Triumph works and the Coventry Business Park is that site roads were enclosed within the company's domain whereas in the Business Park the roads are nearly all in the public realm. Office based business parks and retail parks did not exist, as they are understood today. When Westwood Business Park and the Alvis Retail Park were opened in 1987 (Westwood House) and 1989 (Safeway) respectively, the concept of office and retail parks were still novel nationally. Westwood has a building density of 17% and a site density of 113.5m per employee. The building footprint is equivalent to 14.9m per employee. This is a result of two factors: first that there are some call centre activities located on the park and these have high densities and secondly that some offices have employees who while based at he office are frequently off site. This is similar to Binley Business Park and the
118

6.27

The data has been taken from the Coventry City Council Planning Department site plans .

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built space areas are much smaller per employee than for industry. The office use does make this figure variable from office to office. 6.28 This reflects, also, industrial companies require more space for machines as well as more automated capital equipment (i.e. higher labour productivity and, therefore, fewer workers) relative to office-based activities. Some industrial businesses in the 40-business sample have, also, some warehousing capacity in addition to manufacture and only undertake assembly work. Retail Parks are visitor orientated and require large space for visitor parking and as a result require a much higher site area per employee. Their location and principal retail activities can make a big difference to the density of use. English Partnerships estimate t that food superstores have employee densities of 19m per employee compared to 20m in city centre stores (as low as 10m in small shops) and 90m in in large cash and carry stores.119 The Arena Retail Park has a building density of 21.5% of the site area with an estimated 1,475 employees equivalent to 590 full time equivalents.120 This gives a full time equivalent density of 240m for the site and 42.5m building footprint per employee. This is half way between the English Partnerships food superstore and the large DIY superstore. This can be explained as Tesco is the largest store on site employing 600 people with a building density of 20.7m per employee. Marks & Spencer and Borders have mezzanine floors which are not counted in the footprint area. The Gallagher Retail Park does not have a food supermarket but has similar building footprint employment density at 43.8m but a smaller site area to employee density at 136.6m. The Survey results compare favourably with those of English Partnerships. With the exception of the Retail Park analysis the Coventry figures fall within a reasonable margin. Generally, the differences can be explained by samples taken in the survey. Some will have higher densities than others depending on the work undertaken and the business position of the business. The Gallagher Retail Park employment density is just about half that of English Partnerships and can be explained by the number and type of units. The Orchard Retail Park has a relatively low density at an estimated 89m per employee in the three occupied stores. The density would have been around 95 to 100 m per employee had Courts been open.

6.29

6.30

6.31

Demand for large sites

6.32 Perhaps the most significant difference between 1970's and the post 1985 developments has been that mega companies ceased to dominate the local economy. Table by paragraph 4.30 above shows that the mega workplaces of old have disappeared with only the universities and hospital today able to match them in size. In the future, it is likely that large employers will return but unlike the 1970's they will be disciplined by the competitive
ArupEconomics+Planning (2001) Employment Densities: A Full Guide Final Report. English Partnerships & Regional development Agencies. Figures are in 120 English Partnerships uses for retail 2.5 instead of 2.0 part time workers = 1 full time equivalent..
119

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pressures in the global market. This means that all input factors (land, labour and capital) must demonstrate a positive return. By the mid 1990's, the economic restructuring of the economy was becoming much clearer with Business Services and the knowledge economy emerging as major employment sectors and this inevitably brought major demand changes to the commercial property market 6.33 The UK including Coventry has been successful in attracting large inward investment projects over the last thirty years. The City did pitch for a number of large-scale inward investment projects including bidding for Nissan and Toyota car plants.121 Coventry, for a city of its size, has done well to attract a number of mobile inward investments such as Barclays Bank and Severn Trent. There has been little demand for mega inward investment sites such as a car plant but here has been a strong demand for a range of good quality and relatively large sites both in the city centre and in business parks. In recent years, demand for two large scale inward investors employing the same number of people has varied from a large business park site of some 20ha to a relatively small city centre office site of up to 2ha.122 Inward investment demand is crucial to maintain the city's competitive position and there needs to be a range and choice of sites which can offer flexible land / premises opportunities. The relative tightness of the commercial property market over the years has hindered inward investment as appropriate sites, even those as little as one hectare, are not available or fail to meet the specifications laid down by the enquirer.123 There is a growing trend amongst large businesses to develop campus sites where a number of the business's departments can work in close proximity. A number of companies have established such campus sites and a European Centre of Excellence has mooted for Tata at Ansty. Marconi in its heyday also advanced plans for a campus location. Some companies wish, also, to co-exist together on sites where they can work together and enable them to network on common issues. Several niche automotive firms have suggested setting up a niche vehicle campus site of about 12 to 15ha perhaps with universities having a presence so as they can benefit from technology transfer. The businesses would be in competition with each other but work together on common problems or projects.

6.34

6.35

Changing employment land use patterns

6.36 As the maps by paragraph 6.8 and 6.21 show much of the city's employment land has been demolished and there has been even more rebuilding. There is a general perception that the city's business space has become dominated by retail developments. Several old and important factories in the city have been demolished in favour of retail developments, housing etc. the Alvis works on Holyhead Road, the Alfred Herbert factory (Gallagher Retail Park) and parts of the Morris Engines Plant (Sainsbury). The disappearance of these old giants serves to confirm decline in the minds of many people, especially to those people who worked used to work in them. This absence of well known firms is likely to be transitory as in time new businesses in the city will gain widespread recognition and familiarity. The perception that retail space has taken over is wrong. Even though retail space has grown by 10%, shops account for only 15.2% of business space in the city. One factor which has been taking place has been the closure of small shops as customers have moved to supermarkets. The Coventry Shopping Surveys have noted the impact of the new retail parks on the small shopping sector. To some extent, the decline, particularly amongst specialist shops has been a result of inadequate marketing, low internet
121

6.37

The city was turned down as in the 1980's it was seen to be the home of the troubled UK car industry. 122 Source City Council's inward Investment Team 123 Source Inward Investment enquires passed over as no property / site available

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presence and price competitiveness. A Parliamentary report warned that small corner shops could be a thing of the past by 2015. The impacts of retail parks have been attributed to the decline of small shops. While counter trends are appearing that would seem to boost small shop customer, a continuing decline in favour of the larger stores seems very probable. 6.38 Industry floor space has declined by 10% in line with regional and national trends. This decline can be attributed to the outsourcing by manufacturers much of their logistics operations. These operations may not be particularly near a factory as JCB uses Gefco at Prologis Business Park as a logistics facilitator. Logistics can involve several processes. Warehousing in the city has risen by 50% over the last 10 years compared to around 40% regionally and 25% nationally and accounts for 30.2% of business space in the city. Being at the centre of the English national transport hub, Coventry is under pressure to develop warehousing but with low employment densities (English Partnerships estimate over 80m per employee but the new style mega warehouses could be as low as 500m per employee124) this would quickly exhaust available employment land in the city. Coventry Planners for this reason have resisted large warehouse developments larger than 4,000m. The Regional Spatial Strategy sees DRIFT, Hams Hall and Birch Coppice as suitable for large distribution centres. Distribution networks are changing. The major automated warehouses over 100,000m are only a part of this change. There is a need, especially in a globalised economy for local distribution warehouses where products may be assembled near by on a just in time basis. The 20,000m Gefco warehouse on Prologis is the distribution centre for JCB parts which are sourced from a wide variety of locations and ship on a just in time basis to JCB. This is a key contributor to the production process of another plant. The nearby 28,800 m employs 640 people fill orders from shops in the chain. This picking reduces the density to 44m per employees. The Terex facility on Prologis is a combination of distribution and manufacturing. The 5,850m banana-ripening warehouse on Cross Point is a processing centre but has relatively few employees. Warehousing is no longer a simple matter of storage. Office space has grown by some 25% in the last ten years. This is more or less in line with regional and national rates of growth. Coventry has developed much office space in its business parks and relatively less in the city centre. In the last few years, Coventry city centre is seen as having the potential to more than double its office area over the next ten years or so. In the last 10 years, Coventry has expanded its business capacity in terms of floor space. These figures include developments just over the city's boundary such as Middlemarch Business Park and the Airpark which are closely tied to the city' economy. This is likely to be quite significant in the next few years as the redevelopment of Ansty and Ryton are completed. In all perhaps one million square metres of employment space is located just over the boundary but serving Coventry's labour market.
124

6.39

6.40

6.41

6.42

The Toys R Us Warehouse on Cross point has an employee density of 295m per employee (excluding truck drivers) .

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7
7.1

Investment

A key component of a growing economy is a stream of investment.125 The last section noted the major investment in property development over the last thirty years. Without these investments, Coventry would have failed to recover from the deep recession of 1979-1983, as inward-investing companies would not have found appropriate accommodation. The general change in technology, business practices and management, changed fashions, and growth of new industries made much of the redevelopment of the city a key necessity. Coventry is fortunate in that it started to promote investment early after the recession hit during the early 1980's. Other areas have, with hindsight started their redevelopments much later. Had this propriety redevelopment not happened, Coventry's recovery would have been constrained and that much weaker. In recent years, Coventry has attracted much interest from developers who have made major development proposals. These proposals are in line with the city's adoption of a growth strategy and, in particular, continuing to strengthen the city centre. This section considers the potential scale of the impact of these proposals whilst the following section considers the implications for the city in more detail.

7.2

Disinvestment
7.3 Businesses do disinvest in activities. This is distinct from depreciation which implies saving for replacement of existing assets. Disinvestment means, simply put, realising assets / capital and closing down an activity. The same business can use the proceeds of the investment to develop another activity elsewhere.126 This is part of the churn in economies which for Coventry by the 1960's had stalled. This was not always because senior managements did not want to disinvest assets but it was an ad hoc coalition of middle management, trade unions/strikes and sometimes government stopped the process.127 The depth of the early 1980's recession led not only to disinvestment but, also, extensive scrapping. Firms closed plants and machinery the map by paragraph 6.6 shows the scale of scraping/disinvestment that has taken place in the last thirty years. Even where firms did not vacate their premises, businesses sold off machinery and closed sections of their operations to save on lights, heating and business rates.128 New technology at that time meant buying in new electronic machinery which meant that the consequent sell offs included redundant machines which were often acquired very cheaply by new businesses offering one off machining / niche products. Some of these businesses were to become niche prototyping businesses in the late 1990's. The severe recession of the early 1980's set in train a series of economic reverberations in businesses which has made them both stronger than they were but, perhaps, more vulnerable in a global market. Each plant closure / disinvestment has ramifications later
Most growth models start with capital investment and labour supply/. The Solow model which underlies most growth models used only these factors. However more sophisticated studies feel that the residual (not explained by investment and labour) is important. This is a complex area but includes education, location, skills base, environment, transportation etc. However these factors may be area specific and have variable impacts both positive and negative. 126 Some capital theorist argue that capital is not transmutable but Coventry's experience is that in unsure times it can be. 127 In 1977 BL wanted to close the Standard Triumph works in Canley - this was met with fierce resistance and the closure plan was withdrawn. 128 The author met one Coventry businessman in 1987 who had intended to buy one lathe at an auction but such were the lots he bought 12 for what he expected to pay for one. New management in another firm closed off their management offices which also contained a suite of rooms for 'private parties.'
125

7.4

7.5

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on for both the company's remaining activities, its supply chain and its industrial sector within the city and the region. As employment falls, the level of spending in shops and at leisure activities also falls and more jobs are lost as places downsize or close. 7.6 Recovery might, as it has in a number of cases in the past, mean inadequate capacity, both in production and financial capacity to meet renewed demand from the upswing.129 This was the rationale for Jaguar and Land Rover to manufacture at Halewood and eventually close Brown's Lane which was too small and, mostly, fully depreciated which means had a nominal net value on the company's balance sheet. The big closures that took place in the 1980's are still having subtle implications for continuing managements today. Some six businesses have emerged out of the closure of Alfred Herbert machine Tools in 1982.The decision to demerge Courtaulds in the early 1990's generated some half dozen new business units some of whom are freed from the constraints of the old conglomerate while others still face problems. The original site of the company in Foleshill has been transformed into the Foleshill Enterprise Park and Paragon Park. In the twenty first century, business units face much stronger competition both within large company groups and from other competitors. Each business unit must generate positive returns on capital employed and win investment from the centre and they can only do this if their business unit's case and profitability is strong. If the same output can be gained elsewhere with a better return on capital employed then the local business unit is vulnerable to losing out on investment. Older plants are at a disadvantage as they often need more investment than newer ones to bring them up to standard. This was the approach for example that Peugeot took in justifying the closure of Ryton. Unfortunately for Coventry, a series of major plant closures since 2000 has led to a loss of over 14,000 jobs in the city. In addition, the relocation of the Agco HQ and National Grid, amongst others, into Warwickshire and Solihull will have caused some additional local jobs losses even though staff could have transferred with the business.

7.7

7.8

Major Redundancies 2002-7

Date 2002-6 2003 2004 2004 2004 2005-7 2005 2005 2005 2005 2006 2006 2006-7 2002-7 Business Marconi Agco NSK Jabil Allders Peugeot Ryton Co-op City Centre Jaguar Impact of MG LSC Adult Learning Insp. Rohm & Haas NTL Other small concerns TOTAL Activity Telecoms Tractors Steering columns Electronic circuits Department store Car manufacturing Retail Car manufacturing Car manufacturing Training Agency Education Electronics Telecoms All sectors Job losses 3,000 1,000 200 500 300 3,500 190 1,100 900 500 300 200 400 2,500 14,590 Cause Downsizing Transfer to France Transfer to UK Transfer to Hungary Chain closed Transfer to Solvakia Closure Transfer to UK Closures Downsizing Closure Transfer to Slovenia Merger

7.9

In addition to these disinvestments made by companies over the last five years, there has been the continuing impact of job losses arising from increased productivity. Paragraph 2.14 noted that annual labour productivity growth in the Coventry economy has nearly
129

This is called overtrading and was looked upon in the past as a danger signal by banks .

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doubled. This is equivalent to a net loss of 2,300 jobs a year.130 For individual firms, this is likely to be irregular and undertaken in stops and starts which may relate to parent company investment cycles and / or the trade cycle. A downturn brings out a bigger shake-out of jobs than during up turn when additional production is needed. Firms are increasingly using contract labour to even out demand swings. 7.10 Between 2002 and 2007 the local economy lost 14,600 jobs through plant disinvestments / closures and some 11,500 jobs through the growth of local businesses productivity. These job losses have been, fortunately, more than matched by investment projects that have taken place such as at Prologis Business Park, Ricoh Arena and Arena Retail Park and by locally expanding firms including Unipart Yachiyo, Mission Foods and NP Aerospace. This is one of the benefits of a 'churning' economy job losses in one firm are often matched by job gains elsewhere. This means that over the last five years despite the loss of 14,600 jobs through closures and 11,500 through productivity growth, the local economy expanded marginally with the number of jobs in the city. 7.11 This indicates that a churning in the economy need not be a negative thing as it was in the early 1980's there was only a stream bad news. Jobs can be created faster than they are lost. It is not always comfortable for the work force and ideally it is less disruptive to have firms settled in an area for a long time. However, for Coventry, the lack of competitiveness and business rigidities of the past had made deep changes inevitable and there has not been insufficient time since the big changes of the last twenty years or so ago to have worked themselves through the local economy. Further closures as well and an new generation of leading firms will emerge as the new local economy matures.

Trend growth Rates

7.12 Employment growth as measured by the ONS Annual Business Inquiry in Coventry since 2000 has been very slow as a result of the major restructuring of the economy noted above. It is the closure of the latter that has given many the impression that employment in Coventry has fallen over recent years. However, there have been areas of growth in the local economy including in parts manufacturing which has helped absorb the decline. The interaction of the declining and growth sectors has implications for growth.

Projected Trend Growth of Coventry's economy 2006 2026 Employment by sector

19992000 Average 35,017 2,826 27,922 7,380 22,273 20052006 Average 19,190 3,601 32,567 6,914 27,391 Compound growth rate -1.0%* 2.1% 1.3% -0.6% 1.8% 1.3% 1.0%* Projected Trend Values 2011 18,249 3,997 34,802 6,720 29,941 47,640 7,394 148,744 2016 17,355 4,436 37,190 6,532 32,729 50,810 7,396 156,448 2021 16,505 4,923 39,743 6,349 35,777 54,191 7,712 165,199 2026 15,696 5,464 42,471 6,171 39,108 57,797 8,045 174,751

Manufacturing Construction Distribution Transport & Comms Business Services

Public Admin Education Health 38,474 44,668 Other 8,264 7,094 TOTAL 142,154 141,424 * Compound growth rates altered see paragraph 7.11

7.13 If the underlying sector patterns of growth were just projected forward then there would be a positive net growth in jobs of some 18,900 or a growth of 13.3% in the number of jobs in
130

The figure is 2,900 gross with 600 jobs being created as a result of improved competitiveness and greater output, multiplier effects, capacity constraints elsewhere in the system, greater employee spend power etc.

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the city131. This rise includes a continuing sharp fall in manufacturing employment to 2026. 7.14 The decline in manufacturing is very unlikely to be repeated partly because the big plants have now closed and both the aerospace sector and parts of the automotive components sector are growing.132 If manufacturing is constrained to a 1% year fall and Severn Trent is factored into the others, the projected trend growth has the pattern shown in the table. This table looks at the actual past performance. The difference shows the possible gap between recent growth rates and the ones that can be expected as a result of the proposed investments. 7.15 This projected trend analysis picks up the growth of business services, education, health and distribution sectors. It indicates that some 33,327 net new jobs on current patterns of growth in the economy will be created by 2026. If only the last four years were taken then the growth pattern would be much faster with projections suggesting some 60,000 new jobs being created. This is a result of the business service sector having a faster growth rate in the last few years than the average since 2000. 7.16 These trend projections are interesting in that they point to what is the underlying success of Coventry in absorbing dramatic changes in a relatively very short period of time without unemployment rising sharply. Projections of trends depict a point of time and do not reflect the evolving patterns of investment and growth. In effect, the trend analysis is just a continuation of the past without taking into account future issues. 7.17 There have been various strategies identified and investment proposals made which do anticipate an evolving future for the city. These strategies and investment plans are likely to be a better predictor of the future. These investment strategies have a reasonably good track record having started in the late 1990's. Rather than relying on projections forward this analysis uses past and future investment plans / strategies which have already been identified. This does omit secondary and tertiary investment proposals in the later parts of the review period.

New investment 2000 to 2006 completed projects

7.18 .It has been realised for many years, that Coventry is in need of boosting its offer as a place to live as well as increasing the number of jobs available for the citizens. In the early 1990's the Unitary Development Plan expected twenty first century Coventry to look a good deal like the Coventry of 1990. However that will hide the considerable changes which, by then, will have taken place in the employment base of the city.133 This contrasts sharply with today's view that Coventry [and sub region] has to create its future in a very different world from that which its past successes were built134 This changed view is a result of the recognition Coventry has to continue to change. The Coventry Partnership's Sustainable Community Strategy notes that it wil be important to improve the image and the appeal of Coventry , boost pride in the city and transform the city centre.135 7.19 Amongst the key identified major development needs of the city are:

This analysis takes the raw ABI data as published. Research & Strategy has asked for the figures to be reviewed by ONS as some employment seems to have been omitted. 132 At the time of writing manufacturing industry has been expanding with new planning applications for more space. 133 Coventry City Council (1993) Unitary Development Plan Coventry 1993 page 7 paragraph 2.4. 134 Coventry City Council (2008) Innovative Coventry: A Strategy for Growth & Transformation. Draft Economic Development Strategy. Coventry March 2008 page 36 135 Coventry Partnership Coventry: the next 20 years The Coventry Sustainable Community Strategy. Coventry March 2008

131

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Improving the city centre as a whole as well as shopping provision Attracting more jobs into the city centre Create more jobs in the city as a whole to meet a growing working age population Improving the leisure facilities Improving the provision of arts and culture Spreading business investment to the north of the city Improving the quality of housing in the city Reducing house carbon emissions through energy savings reduced heat loss Improving the quality of education / health / services etc Improving the environment - cut greenhouse gases generally Improving public transport and reducing toxic emissions

In effect, the list reflects the generational change that has taken place. What was good and well designed in the mid twentieth century does not really fit in with the sharper social and business attitudes of today. People want a well-designed city which offers good lifestyle. Business wants a good return on capital employed. These are key considerations underlying much investment is now both private and public sector led in many spheres of life.

Top 20 Developments by Value 2000-2006

Development Arena Park Binley BP Casino Isle of Capri Coventry BP CU Technology Park Cyan park Daimler Green Earlplace BP Lower Precinct Manor Road Middlemarch Oak Farm Coventry University Parkside Priory Place Prologis BP Ricoh Arena Skydome University Hospital Un of Warwick Sub Total Other investments TOTAL Activity Retail Park Units Casino Units Business Pk B8 Bus Pk. Housing Business etc Retail Apartments Units Housing Educational Housing Housing B8 Bus. Pk Sports etc Leisure 1,200 bed Educational Cost m 85 45 36 60 30 25 40 30 42 30 75 45 20 25 40 75 118 40 450 100 1,451 256 1,707 New jobs 2,400 1,500 300 1,400 500 100 0 700 725 0 1,000 0 50 0 250 3,000 944 350 1,000 200 14,669 2,310 16,979

All Investment projects 1.7bn

7.20 In the period 2000 to 2006, some 1.7bn was invested in the city. This investment generated 14,700 jobs more jobs than were lost in redundancies during the period. Most of these inward-investing jobs are listed in the annex. Productivity jobs losses over the period were slightly lower than the average 2,300 as a result of the large-scale redundancies in the period. Altogether with the strong growth in the economy over the

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period a net increase of 5,000 jobs including those at Prologis Business Park and the Arena were created.136 7.21 Since the turn of the century, the nature of investment in the city has continued to evolve. There is substantially more private sector interest in investing in the city which is the result of economic restructuring and successful investments by the City Council and developers during the 1990's. The pace of developments in common with the rest of the UK has accelerated in the last few years and Coventry with its track record has benefited from this faster pace. Skydome, Lower Precinct, Coventry Business Park and others have all been successful and demonstrate the city's potential to would be developers and businesses for further investment. The strength of the local economy has made some limited speculative developments take place but the sub prime crisis in 2007137 has, generally, stopped this form of development nationally for some time.

Ongoing Investment 2006 20011

7.22 The investment stream, which started over ten years ago, is based on a broad front despite the impact of the financial crisis in 2007. It includes all aspects of life including homes, work, education, leisure, health, and environment. This is meeting the overall criterion to improve the Coventry as a place where people choose to live, learn and work and to meet the aspirations of the new century. This form of development has tightened along with the national economic situation but major job creating projects are continuing Severn Trent, QCA, Home Delivery Network, expansion at both universities, Belgrade Plaza etc. The credit crisis is more likely to slow developments rather than stop them. Top 20 Developments by Value 2006- 2011 Cost Development Activity m Ansty Business Pk 330 Bannerpark Housing 35 Blue Ribbon Bus Pk Business Pk 30 New schools Education 315 The Butts / Earlsdon Pk Offices 110 Severn Trent HQ Offices 36 Dominion Plaza Housing 84 CU Engineering Dept Education 80 Far Gosford Street Regeneration 22 Highfield Road Housing 25 Jaguar Whitley Business Pk 100 Belgrade Plaza Mixed 110 Paragon Park Mired 250 Peugeot HQ Mixed 30 IKEA Retail 36 Prologis Business Pk Extension 50 Ryton (in Rugby) B8 60 Stoke Aldermoor Improvements 25 City College Education 40 Tile Hill College site Housing 25 Sub Total 1,793 Other investments 116 TOTAL 1,907
136

New jobs 4,000 0 750 0 900 1,700 0 250 100 0 2,750 1,000 2,000 0 550 750 3,000 50 0 0 17,800 400 18,200

All projects 1.9bn

These latter jobs seem to have been omitted from the published ABI total in 2006. The author has notified the ONS about this omission 137 Unfortunately the US sub prime crisis has restricted credit but private sector moneys are still available albeit security and payback conditions have tightened.

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These projects are maintaining the pace of investment despite the tighter financial situation. 7.23 The investment under way or expected to start within the next few years to 2011 continues to reflect a balanced broad front approach with some 1.9bn expected to be invested by 2011. It involves the creation of new business parks, replacement of schools, hotels and leisure, houses, retail (some included in mixed) as well as the arts. Investment does not however respect administrative boundaries or sub regional inter-connections. It will go where it is best placed and much will be in areas just over the city's boundary particularly at Ansty. The annual rate at some 380m per annum of investment has increased over the 2000-6 period by some 33% per annum. 7.24 The high level of construction work generated by the investment will lead to construction jobs being created locally but the numbers are variable from project to project as builders often bring in workers, especially specialists. The anticipated 380m investment stream will probably involve some 200m construction work which will generate some 800 man year construction jobs138. This low number is because specialist teams work for a limited period on the site being replaced by the next specialist team as work progresses. At anyone time, for example, 100 to 120 people will be at work on each of the Belgrade Plaza, QCA or Severn Trent projects. Some of the jobs generated will be filled by local people.139 This explains, perhaps why construction employment growth is slow. 7.25 The table highlights the major investment projects that are underway the current list at the time of writing is in the annex. Some 10,700 new jobs can be identified from this investment stream. Despite the changed economic circumstances of the last year or so, there remains a good number of mobile investment projects140 that could locate in the city and the City Council along with developers are making the appropriate bids. The key factor in this investment is the continuing development of business parks and city centre sites which will attract firms into the area. 7.26 It is important to note that job creation is a key component of the investment accounting for some 38% of the total inward investment jobs expected between 2006 and 2026. This should create 15,900 new investment jobs in addition to the 13,500 new jobs being created by the already existing businesses in the city. 7.27 Housing and retail (may be mixed) forms a major stream of investment. This reflects the higher pace of house building that has occurred in the last seven years. The National Growth Point commits the city to a target of 9,000 dwellings will built between 2006 and 2016 with 90% being built on previously developed land. The Regional Spatial Strategy Phase II preferred option allocates a minimum of 33,500 additional homes to Coventry between 2006 and 2026. It is possible that some of these homes will be located in neighbouring Council area within the sub regional north south corridor, but at the time of writing this has yet to be resolved. It is possible that that this figure could be exceeded by the market or Secretary of State could increase the minimum number of new homes. This analysis includes a hypothetical additional 5,000 homes in order to illustrate the implications of exceeding the minimum target.

Investment between 2011 and 2016

7.28 Beyond 2011 details of the prospective investments are less certain though some have already committed considerable initial investment in terms of land assembly, funding, or bidding. Friargate, NDC, Canley, Rapid Transit and Swanswell are in this category. Each
This does not seek to stop people entering into construction work as there are work opportunities at various levels and not just big development projects. 139 The Construction Unit helps local people get jobs on building sites. 140 This means generally the proposers have expended time and money on the concept. They may not have sought planning approvals.
138

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Top 10 Developments by Value 2011 - 2016 Cost Development Activity m New jobs Friargate Offices 1,500 12,500 Bishop Street Offices 20 300 Browns Lane Business Pk 50 1,500 New Century Park Business Pk 25 1,000 NDC area Regeneration 350 200 Canley Regeneration 150 200 City Centre Shopping Retail 250 1,000 Swanswell Area Mixed 100 400 Rapid transit bus lines Transport 85 100 City centre housing Housing 50 0

All projects 3.1bn

2,580 17,200 Sub total Other Investments 500 9,510 3,100 26,710 TOTAL one could start before 2011. There is a lot of interest by potential end users. It is possible that completely new schemes could emerge out of, for example, the Jerde master planning exercise for the city centre. The shape of the future development of the city during the early 2010's has already been outlined.

7.29 The investment expected to take place between 2011 - 2016 comes to some 3.1bn equivalent to some 443m per annum which is substantially higher than in the 2005-2009 period. This bodes well for the continuing strengthening if the city's economy as once again much of the anticipated investment is related to business and employment growth. Much of investment depends on the changing socio economic needs, fashion and legislation so the table represents the minimum likely investment over the period. 7.30 The investment plans are mainly centred on business investment and housing. The largest development, Friargate could create as many as 14,000 new jobs though 12,500 is assumed on standard density grounds141. During these years key housing projects will be underway having recovered from the credit crunch of 2007 09. The master plan for the city centre by Jerde and the Swanswell development plans are expected to have been started. One key factor is that the investment stream is self re-enforcing in that one investment tends to lead to another. 7.31 The investment patterns so far discerned for 2011 2016 are likely to be added to as the present period runs forward. Not only will there be further major company relocations but there will also be associated investments such as supply chain companies including, perhaps, a need for additional infrastructure, housing and even retail. Generally, as people move with their businesses new jobs will be created providing services meeting the every day needs of the new residents. Generally, 25% to 30% of the increase in working age population will be employed in new jobs directly associated with their needs. 7.32 The implied new housing generated in this period is in the region of 7,500 to 8,700 dwellings over the six years 2011-2016.142 These figures only relate to large projects and omit windfall and infill sites and other such housing developments. This suggests that the National Growth Point target of 9,000 additional dwellings by 2016 will be easily achieved subject to market conditions.

Investments in the pipeline

141 142

See paragraph 8.48. This figure is from the National Growth Point Strategy.

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7.33 Investment projects are continuously being developed and there are some emerging schemes which are in the process of being developed but which have not yet been given a time profile. These include much of the Swanswell area, the area covered by the Jerde masterplan, housing where planning locations need to be formally identified, infrastructure works (including roads, car parks and some additional infrastructure for utilities) environmental and business developments. These are key development in which much time, planning and even money has been invested. 7.34 The value of these projects at present comes to 2.5bn. This excludes projects which are purely speculative and have, so far, no or very little substantial preparatory work.
Developments in the pipeline Cost Development City centre University Environment Offices Other TOTAL Activity Retail etc Education Waste, Parks Business Infrastructure Housing, etc m 750 250 50 300 1,140 2,490 New jobs 2,500 250 50 1,000 some 3,800

7.35 There is every probability that the developments noted in the table will work through over the next two or three years. Other projects will over time appear on this list as ideas come to the fore and be put on this list while those already on will move to the time dated list. 7.36 Beyond 2016 the investments are assumed to continue at the same rate as in the previous periods. However, the 2016 2026 period will not be rebuilding the city centre shopping areas so retail developments have been constrained to the RSS provision of 150,000m. 7.37 Overall the Regional Spatial Strategy Phase II Revision preferred options has a land provision for B1, B2 and B8 in the period of 2006 2026 of 328 ha with an office development of 250,000m. The Regional Spatial Strategy provision for retail between 2006 to 2026, is 150,000 m.

Impact on the labour market

7.38 All the investments identified above and the investment between 2016 2026 will further transform the city's economy. The investment jobs will attract new residents to the city and meet the RSS housing requirement. An economic slowdown will only slow or delay the process but the investment opportunities for growth will remain. This has been the pattern faced by the city since the mid 1980's. The key element is job creation for without these growth prospects will be very limited. 7.39 The investment flows which have been identified above form the basis on which to estimate the future creation of new jobs in the city. The investment flow represents an independent base and is distinct from the trend projections in the table by paragraph 7.11. There is an attenuation of proposed investment as time proceeds as few investors have even considered much beyond 2015. The investment stream falls to more to lower levels. Supply of new jobs

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7.40 The investment data above enables a prediction of the number of new jobs likely to be generated through the proposed new investments in Coventry. New jobs are a function of four factors: Jobs created + + = new investment jobs = exogenous decided by investors jobs generated by the economy = endogenous generated by local firms jobs loss through productivity growth in local concerns = endogenous jobs lost through structural change / disinvestment = mostly exogenous decided outside the city.

Jobs generated by growth in the rest of the economy are determined by the recent performance of the Coventry economy. 143 The loss of jobs through structural change is an estimate of the total redundancies as a result of plant / office closures in the period and is given in the table in paragraph 7.7. There are other redundancies from continuing businesses but these are included in the productivity jobs losses. The redundancies between 2000 and 2006 were unusually high at just under 2,500 per annum. 7.41 Obvious candidates for a further steam of large-scale disinvestments i.e. redundancies are not apparent in any sector144. This does not mean that none will occur but they are more likely to be sporadic over sectors and time. The calculations use 1,000 jobs will be lost through the closure of smaller companies but it could well be less. Economic downturn redundancies would lead to fewer jobs being created in existing workplaces and higher productivity job losses. 7.42 It is possible to determine the numbers of these job gains and losses between 2000 and 2006. The number of jobs in the city rose by 5,000. There were 14,500 redundancies. Using the productivity growth rates of labour productivity in paragraph 2.14 and the new jobs created by investment or 14, 700 jobs, it is possible to determine the number of jobs created by local firms over the period: 16,200. In fact local businesses generated more jobs than the inward investment stream and 4,200 more jobs than were lost through productivity growth. Had there not been an extra-ordinary increase in structural jobs losses as a result of closures, Coventry would have enjoyed a very strong growth in employment. Demand for new jobs 7.43 The Regional Spatial Strategy (RSS) Preferred Option indicates that 33,5000 additional homes should be provided in Coventry between 2006 and 2026. This, in itself, generates a demand for jobs which needs to be met by the local economy. The exact number of jobs arising from the new housing stock in the city will depend on the number of household occupants who want to work. The formula for the demand for jobs is given by: Demand for jobs = x + number of new households average number of workers per new household hidden households moving into new dwellings with occupants already in work present unemployed / workless

7.44 At the time of writing, consultants (NLP) are preparing additional evidence, on behalf of GOWM to inform the RSS Preferred Option. This is due to report in October 2008 and is
In 5 years jobs grew by 5,000 to 145,000 after 11,500 jobs lost through productivity and 14,500 by closures. This makes 31,000 jobs gained over 6 years giving an annual gross gain of over 6,000. Subtract productivity losses (2,300) and structural closures say 1,000, to get an average annual gain of 2,700 assuming average growth 144 Economic churn inevitably means closures but in 2008 there are no plants / offices which like Peugeot Ryton or Brown's Lane which had a continuing question mark over their future.
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expected to recommend further increases in housing provision across the West Midlands region as a whole. Coventry does not expect to receive, at this stage, an additional housing allocation over and above the 33,500. The city's allocation will not be finalised until after the RSS Phase II Public Examination which is due to sit from Spring 2009. The analysis includes a hypothetical additional 5,000 homes to illustrate the implications of any increase. 7.45 Given the uncertainties surrounding the eventual housing allocation for Coventry, and the RSS timetable being followed, it is sensible for this report to assume that 33,500 is a reasonable figure to use as a central figure with a further 5, 000 as an occasional guide to the implications of a potential increase in Additional Demand for Jobs the allocation. by 2026 Job demand Additional Workers 7.46 If it is assumed that the Regional Spatial Households per HH 33,500 38,500* Strategy will allocate 33,500 to 38,500 additional dwellings the table below New Households gives the range of demand for jobs given low 1.0 33,500 38,500 various levels of worker occupancy. medium 1.2 40,200 46,200 These housing figures yield a wide high 1.5 50,250 57,750 range in the potential demand for jobs * Hypothetical number to illustrate implications of ranging from 33,500 jobs to some an over run in house building 57,750 jobs. It is probable that a proportion of the new households will be, at present, hidden households and those wanting work will already have a job. This paper ignores this element and assumes that the new occupants of the new dwellings all represent a new demand for jobs. 7.47 In paragraph 3.36, it was noted that some 11,600 people who are presently economically inactive want to work and to reduce unemployment levels to full employment a further 3,800 need to find work. This means that in 2008 some 15,400 people want a job but are not in work. If all of those who have said they want to work were to be employed the economic activity rate in Coventry would be 83.9% - a little above Warwickshire's 2007 rate of 83.2%. This figure is consistent with reducing worklessness in the city mentioned in paragraphs 3.37- 8. In effect the economy needs to create 15,400 jobs to be at full employment. 7.48 These figures from the Annual Population Survey refer to working age residents of Coventry. In the last five years, pensioners have increasingly stayed in or have decided to return to work. In 2007 some 6,100 over retirement age people were engaged in work a 50% growth since 2002. This element is likely to increase as the raising of the pension age will keep people in work longer. It is also likely many people will want to stay Labour market Changes 2006 2026 Estimated number of new jobs Job Investment Structural Net Jobs Productivity growth in Jobs changes growth city created 2000 2006 Estimated 2006 -11 2011- 16 In pipeline After 2016 Total 2006 -26 Jobs lost 11,200 14,500 11,500 11,500 0 24,000 47,000 5,000 5,000 0 10,000 20,000 70 Jobs gained 16,000 14,700 13,500 13,500 0 28,000 55,000 26,710 18,850 3,800 37,700 87,060 Net 5,000 23,710 15,850 3,800 31,700 75,060

active or wish to boost their incomes by working longer. On past trends the rise is likely to be in the order of 4,000 to 6,000. 7.49 By 2026, the demand for jobs in Coventry can be calculated by adding the new household demand for jobs, finding work for those who already want a job and older people wanting to stay in work. On this basis the demand for additional jobs in the city is likely to be 52,900 (33,500 new householders, 15,400 wanting work and 4,000 over 65 year olds) equivalent to a rise of between 37% on the RSS allocation. If there should be an overrun of 5,000 homes as suggested in paragraph 7.27 then 79,150 jobs (57,750+15,400+6,000) would be demanded, equivalent to 55% growth on residents already in work in 2008. This is a significant rise but does compare to the 20,000 or 16% increase between 1995 and 2005. Labour market implications of growth 7.50 The table shows impact of the investment flows on jobs in the local economy between 2000 and 2026. Overall, it shows that on average growth rates that investment will create some 75,060 net new jobs after allowing for productivity, closures and the growth of local firms. This is 4,090 fewer than the maximum likely demand arising from the new housing if 38,500 new dwelling are built, existing demand for jobs and increased working amongst the older population. 7.51 This indicates that the present pattern of investment is fairly balanced being a mix of job creation and housing. If the identified scale and pattern investments go ahead then these will more than meet the rise in demand for jobs by people living in the new housing being built. Migration studies show that job opportunities especially amongst 20 40 year olds is a major driver of migration flows. Improving job opportunities in Coventry is likely to reduce the regular net outflow from the city and encourage people to move in. 7.52 The table shows that the new investment is expected to create 87,060 new jobs between 2006 and 2026. This is a high rate of development which is needed to maintain the city's competitive base and meet local demands for jobs. Local existing firms will generate some 55,000 jobs through their growth and this might put additional pressures on the availability employment premises. This growth is part of the general expansion of the local economy. Firms win orders and expand quite often with relatively little investment perhaps a new machine or an extra shift. In recent years, the aerospace sector in the city has increased employment using existing internal factory space with relatively small investments in plant and machinery145. 7.53 If local business growth is the positive side of economic churn then productivity growth implies job losses and some 47,000 jobs are likely to disappear over the 20 years as technology marches on. The structural changes which lost 14,500 jobs in the first five year period are likely to go on as businesses and sectors wax and wane. Paragraphs 2.14 and 5.4 note both the acceleration of productivity growth and its importance in competitive markets. In labour markets, productivity is felt by jobs disappearing. Often these are done discreetly by not replacing people who leave or within rationalisations / reorganisations of businesses. It is not always noticeable unlike closures arising from structural changes. These are often decisions made for business reasons and represent changing competition and the limitations on the establishment to meet that change. For example, the new car plants in Eastern/Central Europe are designed to have much higher output capacities and consequently labour productivity values which could not be matched by the smaller plants in Coventry. Eventually both Jaguar and Peugeot decided that gap was too wide and local productivity improvements could not close unit labour costs gap and closure was inevitable.
In recent weeks from the time of writing George Wilson Industries Ltd (gas meter manufacturing) created 100 jobs, HPL Ltd (prototyping) 100 jobs and a smaller scale PPL Marine (cables and equipment) 11new jobs.
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7.54 In effect, companies close plants to make big step changes in total factor productivity when the existing plant is old and in need of major investment. A new plant forms what is here identified as an investment project. Recent investments in Coventry have been part of this process of seeking to reform business practices and efficiencies146 7.55 For the city, if general productivity growth were to fall behind, then the economy risks losing competitiveness and this would have consequences as investment opportunities for both developers and inward investors would pall and other areas would attract the investment away from the city. Firms with less competitive plants would be inclined to disinvest. In effect the economic forces work together and are interdependent. If the investment stream were to lower, the economy would tend to under perform and would tend to present opportunities for developers and investing companies in which to invest.147 More importantly, failure to allow churn, investment and productivity growth would run the risk of returning in time to the 1970's economy. 7.56 The period from 2006 to 2026 is unlikely to be as smooth as the UK economy has been over the last fifteen years. The international financial crisis arising from US sub prime loans is likely to slow growth substantially. The housing markets have been hard hit in 2008 by the credit crunch. It is important to recognise that part of the crisis is the downturn in the economic cycle which will turn up again. The financial crisis will also pass. The lesson from this period as it was for Coventry in 1990 is to encourage continuing investment at time when growth prospects look poor. In effect the recession / slow growth is transitory and it is important that during these times investment continues and preparation is made for the upswing to come. How does this relate to existing growth trends 7.57 The analysis has looked at the proposed levels of investment between 2006 and 2026 an it does raise the question as to whether the level of new investment indicates a faster growth path than in recent years. The projected trend analysis in the table by paragraph 7.12 suggested that if present 2000 to 2006 trends were to continue after moderating the fall in manufacturing jobs, there would be 174,750 workplaces in the city. This up by 33,327 which compares to the net investment led growth of 75,060. 7.58 The trend analysis does not take into account the demand for jobs but only projects forward jobs patterns. The investment approach has within it 33,500 new houses and these new dwelling which form part of the Regional Spatial Strategy housing allocation will create jobs to service the needs of the growing population. The investment path 75,060 jobs take into account of the jobs demanded as a result of the growth in population. Typically some 30% of the demanded jobs arising from population growth (paragraph 7.47) or some 15,900 jobs will be generated to meet the needs of the new home owners i.e. teachers, doctors, nurses, shop assistants, et al. 7.59 The analysis has made no assumptions about commuter flows. This is primarily a result of the little evidence indicating that the balance of in commuters and out commuters has changed. It will not be until the 2011 Census this can be certain.148 Generally, it is probable that better job opportunities in Coventry will reduce out commuting and could encourage more in commuting. The size of this change is difficult to estimate. A rough estimate would be that there could be an additional net inflow of commuters of around 5,000 to 10,000 by 2026.
Severn Trent have made this very clear as to why they are relocating their HQ. Some cities such as Cambridge artificially restrict investment in their areas and this leads to tremendous pressures on the planning authorities. Investment tends to be located in a circle around the city. 148 See paragraph 3.21 The difference between workplace and resident employment in Annual Population Survey at 33,700 in 2007 does not match up with the census figures.
147 146

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Conclusion
7.60 The analysis in this section has been based on observed investment plans and patterns by businesses and would be investors and has related it to the housing requirement in the Regional Spatial Strategy. The section shows that: Coventry has been on a strong growth trend between 2000 and 2006 which projected forward would lead to an additional 35-37,000 new jobs in prospect by 2026 just on existing patterns of growth 200-2006. Investment plans over the next twenty years suggest that as many as 75,060 jobs net could be created as a result of the new investment The new housing requirement in the city and the attainment of full employment for Coventry would lead to an increased demand for jobs or people to fill the new jobs of between 52,900 and 79,150 new jobs depending on the number of workers in the new households. The present investment profile and the housing requirement match up even though they have been determined on separate criteria. However, despite this matching up, there are a number of practical issues which have a bearing on whether the plans on paper could be achieved.

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8
8.1

Do the growth figures add up?

The previous sections show that Coventry, in common with much of the UK economy is undergoing significant and deep-seated changes. The city has moved from being in decline and crisis to one of recovery and growth. During the last thirty years, the make up and business culture of the local economy has been transformed. This transformation is set to continue into the foreseeable future as there are still many changes to come. These changes are not only related to technological change but also to the continuing globalisation of the international economy149, the rise of new economies, new innovative business cultures and so on. This means that in looking forward to 2026, it is clear that it is very unlikely to be a simple projection of 2008. Nor can the issues of today remain the same in the future. Coventry has to remain dynamic, foster economic change and economic and business churn in order to ensure that the local economy remains competitive. That is the message from the above analysis of the period from 1976. 150 The last section looked at the paper plans for the future based on the announced investment plans and the Regional Spatial Strategy and found that there a reasonable coherence between the housing growth and investment poposals. However, there are a number of issues that need to be considered which frustrate the successful outcome of the paper strategies.

8.2

8.3

a. Population Growth between 2006 and 2026

The Hollis (2007) Report 8.4 BY 2007 there had been a considerable churn in the local population since the previous census in 2001 and this raised some debate on the impact of the demographic structure of the city. Coventry Partnership in 2007 commissioned a study by John Hollis151 on the population size and future projections of the city's population and this showed that the official estimates had over predicted the number of people in their twenties but underestimated those in their thirties. The study projected, also, population numbers forward to 2026 taking into account the Regional Spatial Strategy housing provision of an additional 33,500. This report is different from the simple population projection produced by the Government Actuary's Department in 2008 as unlike the Hollis Report the population projection, it is based on past trends and does not take into account additional housing requirement contained in the Regional Spatial Strategy for Coventry. The Hollis Report agreed with the population estimates for 2006. The forward looking analysis to 2026 took account of the future house building of 33,500 in Coventry and found that the population of the city in 2026 would be region of 351,900. This does depend, however , on the type of new houses built and who occupies them. This is some 8,200 net more than the population projection. The study found that by 2026 the working population of Coventry would have grown by 32,700 or some 16% by 2026. The new comers to Coventry will be young.152 This means that the age profile of Coventry's population will be different from that of the population projection. In addition, Hollis suggested that the ONS might be under recording
The Doha Round of trade negotiations promise major service sector trade reforms. There has been much talk of increased protection / changed exchange rates / stronger BRIC economies etc all imply structural change in the economy of UK. 151 John Hollis (2007) Coventry Population Estimates and Projections: A report to Coventry City Council Greater London Authority Data Management & Analysis Group London October 2007. 152 Migrants tend to be aged in their 20's and 30's.
150 149

8.5

8.6

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the number of people aged under 20 years and in their 30's but over estimating the numbers in their late 20's.153 Overall, Hollis estimated that the estimated the population was just 400 people more than that the annual estimate for 2006. 8.16 The 0 to14 age group in the Hollis analysis will grow between 2006 and 2026 by 7,433 to 63,900 or 18.6% of the population. This growth reflects those made by the ONS population projections. The growth in the number of nursery and school age children means that more places will have to be provided and this will in itself create a demand for jobs. 8.17 The 15 to 64 year old population is under the Hollis estimates expected to rise by 32,700 to 236,120 or 67.1% of the population. This growth equates to the additional 1 worker new additional dwelling in the table by paragraph 7.45. The rise is substantially more than in the ONS population projection which anticipates the 15 to 64 age group to grow to 221,600 people or 14,500 fewer. Hollis anticipates that the 15 to 64 age group will account for a larger proportion of the population whilst the ONS figures anticipates a small decline. Hollis assumed a lower birth rate than did the Actuary's estimates and a higher in net in-migration rate for the people expected to move into the city's new housing and this accounts for the difference. 8.18 The post 65 years age group share grows marginally by 0.1% or by 7,350. The over 80 years population is expected to fall by some 500 which is at odds with the Government Actuary's projection. The post 65 years group will not necessarily retire at 65. Since 2000 increasing numbers of older workers have remained in work after the official retirement age. In 2006, some 6,000 residents of the city aged over 65 years are in employment. This is 50% higher than ten years ago. It is expected that more people over 65 will want to remain in work. In this analysis, the number of people over 65 years who want to work is expected to rise by 66+% 2026 to 10,000. 8.19 Generally, there has been a net movement out of the city. The Hollis Report (2007) shows that there is a net outflow of some 2,000 residents a year. This number exceeds the net inflow of people from abroad. Typically, in-migrants into the city will be young154 and this will, even when economic migrants stay for the three months, impact on the demand for jobs in the city. Coventry is not, generally, perceived by older people as a retirement destination and older residents tend to move out of the city into Warwickshire and beyond. These trends suggest that young people are moving in and wanting jobs replacing older people moving out 8.20 Overall, the demand for jobs resulting from the Hollis analysis is expected to be in the region of 30,000 from the larger 15 to 64 age group after allowing for the increase in education and training requirements to 18 years.155 The unsatisfied demand for jobs in 2007 was 15,400 and a further 4,000 older people are likely to want jobs. On the Hollis projection and meeting residents needs a further 49,400 jobs are needed. If the mooted additional 5,000 dwellings were built, this demand for jobs would rise to 54,400. 8.21 The population growth implied by Hollis can be achieved just by encouraging more people resident in the city to stay rather than move out of commuting range of the city. This requires improving the city offer as a place to live, learn, work and enjoy life. The Hollis figures showed that there was a drop of 1,000 in the outflow between 2003-4 and 2005-6. This is not, of course, indicative of any immediate long-term changes in the migration patterns of the city.
153

These figures explain the differences between the 2006 pie diagrams in this and the last sub section. 154 This is clear from most studies on migration. Mackie (2005) page 17 looked at the migration flows based on NHS registrations. The vast majority of migrants were aged between 15 and 49. 155 This reflects the reduction in NEETS to 0 by 2026

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8.22 Coventry is set to grow as firms moving into the city will bring staff with them. Severn Trent and the QCA expect staff to relocate. The growth of the universities will also attract further academic staff into the city. This inflow is on top of any economic migration, which may occur. 8.23 One key factor affecting economic migration is the continual drift of UK citizens towards the south east of England. Government policy has sought to widen the catchment area for this drift away from London to growth areas: Milton Keynes and S Midlands, the M11 Corridor, Ashford in Kent and the Thames Gateway.156 The first one abuts the Coventry Solihull & Warwickshire sub region and the area's growth will probably spill over into the Coventry, Solihull and Warwickshire sub region. The sub regional local authorities are working, already, with Milton Keynes which is destined by 2026 to overtake Coventry in size. The proximity of Coventry Solihull & Warwickshire to the SE region less than one hour away from central London does make the sub region an attractive destination for both businesses as well as individuals.157 This would be enhanced if the city had a stop on the proposed new hi speed west coast rail line. Population Projection 2006 - 2031 8.33 Every two years, the Government Actuary Office projects the population ahead for the following twenty-five years. The latest period covers 2006 to 2031 and is past on population trends during the period 2002- 2006158. This is along the lines of the employment projections in paragraphs 9.13 below but uses a more detailed sophisticated actuarial approach to the analysis. `Population Projection '000s COVENTRY 8.34 The latest figures suggest that on present trends the 2006 306.6 population of the city will grow by 15% between 2006 and 2011 314.6 2031 giving a projected population of 353,300 compared to 2016 323.8 306,600 in 2006. This is substantially different from the last 2021 333.6 set of projections which covered the demographic patterns 2026 343.7 of 1999-2004. These earlier projections anticipated 2031 353.3 Coventry's population would grow to 310,900 by 2026. 8.35 The biggest single factor contributing to the change is the increase in the number of births in the city. The contributions to population change between 2006 and 2011 are shown in the chart. This is based on the projection data and reflects the pattern of change for the period up to 2026. It is the natural growth of the population of the city or more births than deaths which accounts for all the population growth. The internal UK and international migration flows more or less cancel each other out. 8.36 This pattern of population growth produces a different demographic pattern for the city. This is a result of building into the projection the high birth rates of recent years. This could only continue if the migration churn saw older people leaving the city and younger ones moving in.

The DCLG website has links to the sustainable growth areas. In effect Coventry is an intervening opportunity which will disrupt the drift. See Stouffer (1940) this theory has been supported in many subsequent studies. 158 Published on 12 June 2008 by ONS and can be found at http://www.gad.gov.uk/Demography_Data/Subnational_population_projections.asp
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8.37 The chart for population changes between 2006 2011 shows that it is the natural growth rate in the population (i.e. births over deaths) rather than migration flows that will chiefly contribute to the city's population growth. The average age of Coventry's population in 2006 was 37 years 17 weeks. On the projection basis, this expected to rise by some 32 weeks to 37years 49 weeks. This compares to the projected rise of 2 years 8 weeks in the English national average age to 41years 16 weeks. In effect, Coventry is projected to maintain its relative youthfulness. 8.38 This relative stability in the average age of the population of Coventry is a result of the outflow of people during the late 1970's and early 1980's.159 This has reduced the numbers of people in the city aged between 45 and 69 years of age so there are fewer people entering into retirement. This means, as is shown in the pie diagrams below that relative size of the 65-79 age group remains much the same over the next twenty years. It is the over 80 years old age group that increases its relative share which is different from the Hollis Reprot which expected a small decline in the over80 population. The difference is probably a result of The projections using later life expectancy data which imply a lter age of death . Overall, the projected population figures do not show the significant ageing of the population expected more generally across the country. The high number of births means that the proportion of children will rise by 1.2% to 19.3%. If these children are to stay in the city, they will need jobs when they leave full time education. 8.39 The relative growth in the number of children and the over 80 year olds means that the relative size of he city's labour force is projected to shrink marginally. However, in absolute terms the 15 to 64 age group in Coventry will grow by 16,100 to 221,600 and by even more in 2031 to 226,800. 8.40 This means that by the early 2030's on these projected figures, Coventry will need some 18,000 additional jobs to meet the growth in the working age population.160 In addition, it was noted in paragraph 7.42 that some 15,400 Coventry residents were looking for jobs in 2007 and a further 4,000 to 6,000 older people looking work beyond retirement age. This suggests that Coventry can expect to continue on its present 2000-2006 growth path for the next 25 years requiring some 37,400 to 39,400 additional jobs net arising from the growth in the working age population, increased older age working and meeting unsatisfied jobs needs of the working age population. The raising of the end of compulsory education leaving age is likely to have, only, a marginal negative impact as in November 2007 only 771 young people aged 16 to 18 year olds were not in education or employment. 161 8.41 The Government Actuary's population figures do not consider the additional housing stock growth of 33,500. Many of these dwelling will be taken up by the growth in the population as the number of first time buyers grow as the number of young adults grows. The growth of jobs and new housing will encourage people to relocate to the city. This factor is not incorporated into the population projection and if it were, it would account for some 50% or
Paragraphs 3.3 et seq. refers The figure is less as most 15 to 18 years olds will be in full time education / training but it is likely that relatively more women will be at work as they continue to catch up with men 161 CSWP Connexions statistic
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so of new dwellings. This would, as rough guide, add a further 16,750 people wanting jobs.162

8.47 The combined population projection and the Regional Spatial Strategy housing allocation suggests that some 52,900 to 79,150 new jobs are required. .

Will the labour force have the right skills?

8.48 Coventry has long prided it self in having a skilled labour force. In the last few years as Section 3 shows, the skills within the city's labour force have changed matching the changing structure of the local economy. These structural changes in the economy have not, over the years, devalued the city's skill base. It was pointed out in paragraph 3.16 that the share of the top four occupational strategies was 59% in 2006 compared to 63% in 1991.163 8.49 The investment streams, noted in section 7 above, have job figures attached to them. These new jobs arise out of inward investment flows. It is possible to categorise these job figures into broad job types. 64% of the new jobs being created are office based or in hi tech activities. There is significant evidence that Coventry's engineering tradition will be
This is almost impossible to estimate as it depends on a wide number of factors not least the fact not all new babies born up to 2026 will be at a house purchasing age in the time period 163 The small decline of 4% amongst Coventry residents may be fully accounted for by shifts in commuter patterns and by temporary shifts in the employment structure.
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re-enforced by many of the new types of businesses committed to investing in the city.164 One in five of the new jobs will be industrially based. This includes logistics as well as manufacturing. With lengthening supply chains, many logistics operations are broadening their activities to include local assembly, servicing and repairs. Terex Construction (Coventry) based in a 30,322m unit on the Prologis Business Park is a mixture of manufacturing, sales and distribution and is typical of this new logistics approach.

8.50 Manufacturing is likely to reappear in a significant way during the 2010's. There are two
reasons for this. As Coventry's hi tech sector continues to grow, there will be an increasing demand for prototype, demonstration and niche production. The city has, already, a good reputation in this area and, with strengthened local demand, new high value manufacturing supply chains will emerge. In addition, by the 2010's, the incentives to produce in cheap labour market areas will be on the wane165. Higher productivity and a better skilled labour will more than offset, for some manufacturing industries, low cost labour intensive production in the new industrial countries. 8.51 The figures relating to retail and leisure make provision for significant rescaling of the city centre area but will not be inclusive as it is possible additional future developments will be developed as the city grows. Retail growth is a function of the growth of real spending
Estimated occupational structure of new invetsment jobs in Coventry
Managers 14% Elementary 5% Plant ops 4% Sales etc 5% Personal Services 5% Skilled Trades 10% Clerical / admin 17% Assistant Professional 20% Professional 20%

power in the city and it is important to note that these sectors cannot grow relatively much larger unless Coventry grows further, attracts a higher footfall from its sub regional catchment area and / or become a tourist resort. 8.52 The number of new jobs alone whilst interesting, does not go into detail as to what occupations and skill requirement are needed for the future. The Leitch report noted: As the global economy restructures, the success of developed countries will depend on building a flexible economy with a highly skilled labour force which can respond quickly to change and which focuses on high value added sectors.Over the last 20 years or so, the proportion of jobs requiring high skills has increased substantially as technology and the global economy have changed. Technological change, often, leads to higher demand for skills . Where
164 165

This includes proposed company investments at Ansty. Recent labour shortages in Eastern Europe is limiting future new inward investment projects supplying W Europe. There is some evidence that Chinese and other Far Eastern markets , there are production difficulties and costs particularly wages are rising. Currency revaluation is also affecting competitiveness.

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establishments are undergoing high levels of technological change in their processes, skill needs are reported to have gone up a lot..166
Prosperity for all in the global economy Final Report December 2006 Paragraph 1.22-1.23

The Leitch Report conclusions and the earlier report by Sir John Egan167 echo what has been found to be the case in the evolving economy in Coventry. The City Region business plan also makes the point: This is especially pertinent in the Birmingham, Coventry and Black Country City region where there is projected to be a greater demand for higher level skills and a lower demand for people with no qualifications by 2015 there will be a 35% growth in jobs requiring Level 3 and 4 qualifications and a 40% reduction in the number of jobs requiring no qualifications.
City Strategy Business Plan June 2007. Birmingham, Coventry & Black Country City Region Paragraph 1.3.2 page 5

8.53 The CW Chamber of Commerce Quarterly Economic Surveys and the training agencies such as the CW Connexions continually report the need for more people with skills above level 2. Severn Trent new HQ office in Coventry will employ 1,700 people from 2009/10 of whom 69% of jobs will require skills at NVQ level 3 or higher. Only 1% of the jobs will be at NVQ level 1. 97.5% of the new 500 QCA jobs are at level three or above 52.5% at level 4 or 5. 96 % of the new Prodrive development at Fen End (1,000 jobs) will be at level 3 or above (89% at level 4 or 5). Some 55% of jobs at the Belgrade Plaza will be above NVQ level 3 (20% at Levels 4 or 5) even though many people in Coventry see this development wrongly as a low skilled development in the leisure sector.168 8.54 These four examples of skill requirements in new development in 2008 are not untypical of other major investment projects in the pipeline. The investment stream will, in effect, strengthen the occupational profile of jobs in the city. By comparison to the 1970's, the skills base of Coventry is already much higher than it was then. This trend will continue and intensify. The identified companies in the investment programme have a much higher skill requirement than the existing business base in the city. A significant number of office based and hi tech companies will be taking skill areas off the 'factory shop floor ' and into the office / studio as designers and developers. This is already evident in a significant number of companies. 8.55 This report's analysis is based on identified investment projects some time in the future. It is improbable on present trends that there will be relatively many jobs at the lower end of the occupational structure. Lower end occupations are likely to be transient and reflect short-term needs.169 Making some adjustment for this, the future occupational profile of Coventry's labour force will have a need for a further significant increase in skills. 8.56 The table shows the likely occupation structure based on the present investment forecasts for the city. The top three occupation levels are forecasted to grow by 22,000 jobs and account for 39.4% of the jobs in the city by 2016. This compares to 35.4% of jobs in 2006. In the early 2000's, factory closures reduced the number of managerial jobs in the city but
HM Treasury Prosperity for all in a global economy world class skills Final Report Lord Leitch December 2006 London 167 Office of Deputy Prime Minister The Egan Report Skills for Sustainable Communities Sir John Egan, London April 2004 168 The data was taken from the World of Work website. IKEA on these figures required 33% of jobs above level 3 but only 12% at level 4 or above. http://www.cwworldofwork.org.uk/CovAndWarwick.asp 169 These jobs are likely to be low paid service sector jobs cleaners et. However even here employers expect staff even in 2008 to have basic skills
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The Occupational Profile of Coventry Labour Force

Percent of Forecast171 all jobs in the city 2011 2016 2021 2026 1. Managers 11.2 11.6 12 12.5 2. Professional 13.7 14.5 15.1 16.0 3. Assist Professional 12.4 13.3 13.6 14.0 4. Clerical / admin 13.7 14.1 14.5 14.6 5. Skilled Trades 9.9 9.9 10.1 10.2 6. Personal Services 8.1 7.7 7.8 7.7 7. Sales etc 8.8 8.3 8 7.8 8. Plant operators 8.6 8.1 7.7 7.6 9. Elementary occ. 13.6 12.5 11.2 9.6 Total jobs 000s 170 186 201 218 Over a long time period the classifications change definition reflecting the changing standards. This analysis has tried to consolidate the data on the 2003 Classification but it has not been possible to estimate employment levels in the lower occupational codes (6 to 9) easily particularly in 1991 and 1996. This may be a result of employment levels being much lower in these years.

1981-2026 Censuses & Labour Force Surveys 1981 1991 1996 2001 2006 6.7 11.7 11.9 11.4 10.9 8.6 8.9 8.7 10.5 13.0 3.9 8.4 7.9 12.1 11.5 16.8 16.6 15.1 13.6 13.3 21.6 17 15.1 12.1 9.9 7.6 8.3 10.3 6.9 8.4 5.9 6.7 9.5 8.4 9.2 14.4 13.3 9.5 11.0 9.1 14.5 9.2 11.9 14.0 14.5 146 126 123 144 145

growth, new businesses and the continuing stream of inward investment is reversing this process. Beyond 2016 the relative growth is expected to continue growing as business sectors become more mature. By 2026, 42.5% or some 92,000 jobs will be within the three top occupational levels.170 8.57 Professional and assistant professional occupations in particular are expected to grow rapidly in the next decade as planned business investments are realised. The planned expansion of the universities, particularly the University of Warwick combined with the relocation of Severn Trent and QCA plus others will boost job numbers substantially by 2011. By 2016, some 27.8% of jobs will be at these levels and 30% by 2026. A very high proportion of these jobs, if not all, will require qualifications at or above NVQ level 4. 8.58 The skills at the lower end of the scale will increase in number but will fall as a proportion of total jobs. The bottom three occupational groups will grow by over 5,300 jobs to 2016 but will fall as a proportion of all jobs from 32.8% to 28.9%. This is despite some major investment in the city centre shopping area. By 2026, the proportion of jobs will fall to 25%. Even the simplest jobs are increasingly expecting employees to have gained NVQ level 2+ though many employers as many a third want NVQ level 3 qualifications.172 8.59 The question does arise can the city's labour force take this growth and the changing occupational structure needed by employers. Coventry's economy has been evolving rapidly since the 1980's as the nature of work has changed and will continue to do so in the period up to 2026. Coventry has little choice but to adapt and change with the evolving economic climate in respect to competitiveness, job types and skills. Globalisation is redefining national comparative advantages and, therefore, local economies. 8.60 Being a university city, Coventry is fortunate in having two universities which are experienced in helping businesses change. Both in business management and technology transfer the universities have a national and international reputation. The
These figures are much the same as predicted in Mackie (2005) Coventry's Evolving Economy 1975 2015 Research & Strategy Research paper No 25 Coventry. The paper used an alternative methodology to that used here. 171 The forecast levels of employment are derived from the investment net job growth totals (yellow column)in the table by paragraph 7.48 and the occupational structure derived from the types of investment proposed. 172 This is likely in retail IKEA in the World of Work website wanted this proportion.
170

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Coventry University's aim to become a business facing university amongst the top 10 'new' universities in the UK and the University of Warwick's ambition to be amongst the top 50 global universities means that the requisite expertise for business growth and development are readily available to the local business community. With over 6,500 students graduating every summer, the Universities have, also, the expertise to train people to meet specific job needs. Some employers have established close links with universities for research and training needs. This partnership working is expected to grow and underlines key sections of the business plans of both universities. 8.61 Between 2006 and 2026, the two universities would be able to meet the graduate numbers needed by the growth of the economy. This is, of course, nave as graduates will come into the city from all over and local graduates migrate out. Graduate retention is seen as a strategy to ease this process but it does indicate that the city has to maintain a strong image to attract and keep skilled workers as local graduates are free to work anywhere in the European Union if not the wider global economy. 8.62 The new jobs identified in the table by paragraph 7.47 will be located in both the city and areas just over the boundary in Bedworth, at Ansty, Ryton, Middlemarch and University of Warwick expansion area. This means that people living in the county will fill many new jobs created.173 Some companies relocating to Coventry will bring staff with them or people will be attracted to the vacant jobs in the city and will comute or relocate. This will increase the population of the city in the same way the city's population grew in the 1950's and early 1960's.

How can the investment be accommodated?

8.63 There seems little doubt that the growth in the number of jobs to 2026 identified from the investment profiles in the last section can be filled. The population growth figures show that over 50,000 jobs are likely to be demanded and many jobs from the investment will be located in Ansty, Ryton and in other business areas within a very short distance from the city boundary. Many of these jobs will, of course, be filled by people living in Warwickshire.174 8.64 The question arises as to whether there is sufficient employment land to absorb the growth in employment premises. Section 6 looked at the commercial property market over the last 20 years with some 8.2 square kilometres of employment land being developed for job creating purposes.175 Since 1993, the low point in employment, the number of jobs created has grown by some 25,000 net and has helped absorb the rise in the size of the workforce and reduce unemployment and economic inactivity. 8.65 The investment programme outlined in section 7 represents a growth of some 75,060 jobs net over 20 years with many being located in the city centre or the outer fringe areas of the city or just in Warwickshire. A key element of the growth strategy is to strengthen the city centre which has not made up the heavy job losses in the early 1980's.176 The question arises that given the extensive redevelopments that have already taken place and the scale of new job creation envisaged, can the city area accommodate all the new employment space implied by the growth strategy.

It will be more complex than this as people will crisis cross the boundary to get to work. The whole analysis assumes no change in net commuter flows between 2006- 2026. 174 At its peak employment some 65% of jobs at Peugeot Ryton were filled by Coventry residents 55% at he closure announcement 175 This is based on Coventry City Council Planning Department data . 176 GEC GPT - Marconi left the city centre in the 1980's, Rotherhams / Leigh Mills / and others closed in 1980-1, Rolls Royce Parkside downsized in the 1980's and relocated to Ansty in 1991. Altogether some 15,000 jobs left the central area reducing turnover in shops etc.

173

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8.66 During the period 2000 to 2006 some 205 ha of gross land or 34ha of land pa was developed as defined by the employment generating developments in sections 6. This is much greater than the Annual Monitoring Report produced by the City Council's Planning Department177 related to office (B1), industrial (B1/2) and warehousing (B8) land developments. The bar chart shows these recorded employment land completions over financial years since 1997. On average some 12.7ha of employment land is developed every year. The detail is shown in annex four. 8.67 This difference needs to be accounted for and broadly reflects the wider definition of employment use in this report against the B1, B2, and B8 classifications which normally frame employment studies. The analysis in this report has deliberately given Coventry a fuzzy border. Major developments in Middlemarch and parts of Prologis Business Park are actually in Warwickshire and account for some 29 hectares. This includes the Parcelforce development by Coventry Airport, the expansion of the University of Warwick south of Gibbet Hill Road, and some warehouses in Prologis Business Park where the city county boundary cuts across some units. In addition, there were 41ha of retail and leisure developments excluded from the employment land figures. These developments include the extension of the Gallagher Retail Park, the building of the Ricoh Arena, the re building of Asda in Brade Drive etc. 8.68 The past record reflects the underlying strategies of the Coventry Development Plan 1996 2011 and earlier Unitary Development Plans. These include the strengthening, diversification and consolidation of the economic base of the city and improving the access for all citizens to high quality services and the achievement and maintenance of the environment. The approach within the Coventry Development Plan which aimed broadly to meet the endogenous needs of the existing economic base of the city and encouraged the recycling of employment sites for continuing employment use. The churn of the economy is a vital part in maintaining a competitive and dynamic local economy. Recycling of employment is a key element of enabling the business churn to take place.178 Employment land and its re-use is, therefore a key resource, in meeting the needs employment growth as is indicated by the Regional Spatial Strategy housing requirement figures.

Sui generis demand for employment space

8.69 Sui generis developments uses include uses that really fall into a class of their own and include: Theatres Nightclubs Retail Warehouse Clubs (such as Costco) Amusement Arcades Launderettes Petrol Filling Stations Car Showrooms
177

Coventry City Council (1998) The Coventry Development Plan 1996-2011 Annual Monitoring Report 2006-7/ Development Plans Section. Coventry 2008. 178 This is noted in paragraph 2.9 and paragraphs 4.2 to 4.11

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This list contains a number of uses which form a vital part of developing a dynamic city. In Section 5 the city's offer to its residents and workers was seen to be an important element in securing growth. 179 8.70 In resident surveys, there is a regular demand from more theatres, leisure activities and caf bars. With new car manufacturers, such as Tata, entering the UK market and with the disposal of Jaguar, Land Rover and Aston Martin there is likely to be a need for more car show rooms. In addition the move towards alternative fuels will mean that car refuelling and servicing centres may in greater demand.

Cultural Provision in Cities 100,000 -400,000 population

No of cities Cinema seats Theatres Museums Public Libraries Cinema seats Theatres Museums Public Libraries 16 16 14 13 174 144 155 175 Rate per X Coventry Average Maximum Location residents UK cities 1,000 18.3 23.5 39.9 Belfast 100,000 1.3 1.8 5.5 Cambridge 100,000 2.0 3.4 7.3 Cambridge 100,000 5.9 7.5 10.9 Wrexham UK & mainland European cities 1,000 18.3 16.9 55.7 Geneva 100,000 1.3 2.7 42.8 Salzburg 100,000 2.0 3.8 16.8 Tartu 100,000 5.9 8.1 53.9 Coimbra

SOURCE: EU Urban Audit Regional DG - rates calculated for some X= number of residents used in t he rate calculation.

The Cultural Offer 8.71 Cultural facilities in a city are an important element for people living in an area. Coventry is very fortunate in having a wealth of cultural assets in and around the city area. There is a considerable debate as to the number and form that such cultural assets should take and there is no ready standard by which to compare cities. The table gives an indication of the existing density of cultural assets in UK and European cities but there is no consensus whether these average levels are optimal and can only serve as a guide. There is a wide dispersion in rates nor is it easy to make comparisons as under the Urban Audit definitions neither the Skydome Arena nor the Ricoh Arena would be counted even though they hold concerts and events. 8.72 It would appear that Coventry is just below the UK average and well below the European average except for cinema seats on cultural provision. Coventry is fortunate in that there is a wealth of choice in neighbouring authorities as well as in Birmingham and London. Although the city has relatively fewer libraries, Coventry does meet the government's criteria that 100% of residents should live within a specified distance from a library and the city is implementing a strategy to improve library services. The University of Warwick Arts Centre is the largest outside London. Coventry has some 25 regional theatres within easy reach. This choice outside the city does mean that cultural spend by residents is dissipated across a wider area. Arguments have been made for more provision but the operational funding of any new cultural venture has to be sound.

179

See paragraph 5.55 onwards.

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8.73 Over the last ten years, Coventry has invested heavily in developing its cultural assets. Developments include: Development of three Arena: Ricoh, Rugby Club and Skydome Expansion of the Coventry Transport Museum Refurbishment of the Belgrade Theatre and development of the second stage Expansion of the Herbert Art Gallery & Museum Refurbishment of the Warwick University Arts Centre Expansion of the library service and IT facilities Development of Coventry University Library Development of the Alan Higgs Centre Development of the Excel Sports Centre

Overall, over 300m has been invested in these arts and sports provision in the city. This has enabled major events to take place. 8.74 The growth in population will help strengthen the potential for cultural spend in the city. There has been a campaign to for a civic hall in the city centre. The theatre at the Butts is to be refurbished as part of the development of the old College building. The City Council and residents have worked together to gain funding to refurbish War Memorial Park. Other developments 8.75 There are a number of distribution outlets such as retail warehouse clubs, laundrettes and car show rooms which do not normally fit into the Planning Class A1 and tend to come under the sui generis category. In the next twenty years, there will be a number of applications that fit into this category. There are many planning factors which will determine whether each proposal will be acceptable. 8.76 During a period of changed marketing and with new service providers, it is likely that here will be over the next few decades a demand for the development of properties that come under sui generis. A modern functioning local economy will want to see new car showrooms selling Indian, Chinese and even Russian cars. There will be further developments in retail and service delivery which may well come under this planning area. 8.77 There are a number of possible developments which will generate new jobs and which are subject to European, national, regional and local planning polices or considerations. Many are within the standard planning classes or are considered as sui generis but may involve significant planning considerations180. These range from the future development of the airport, the development of a new low emission waste to energy incinerator with a recycling facilities, the development of new polyclinics and the TPCT centre, further major pieces of public art and so on. These projects will be considered on their merits as they arise. Future planning implications 8.78 However in looking forward land allocations will probably need to be made for the development of many of these sui generis and more general one off projects. Much work is being undertaken to be ready to meet the presently known projects. Many will be incorporated into the many investment plans noted in section 7. Some will raise real issuesand will be subject to much debate. Some will be granted permission. This means that there will be an impact on jobs created and land requirements as a result.

Net New Building space requirement

180

They may require master planning or may present precedents

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8.79 Every year and on average, businesses improve their productivity and competitiveness. This productivity relates to not only to workers and the plant / machinery / equipment in the work place but also to the land a premises. It is, however, almost impossible to calculate by how much a business has no longer any need for space arising out of productivity losses as against the need to increase space because of business growth.

Net new Building Space requirement 2006 2026

Net new jobs created EP Employment density* Building space requirement RSS Phase 2 revision 250,000

Square metres 2006 -16 2016-26 2006 -16 2016-26 Total B1 -- city centre 13,400 12,850 19 254,600 244,150 498,750 -- Business Park 11,420 10,800 22 251,240 237,600 488,840 B2 3,500 3,510 36 126,000 126,360 252,360 B8 1,750 1,760 50 87,500 88,000 175,500 Retail -- city centre 5,270 2,450 18 94,860 44,100 138,960 -- other 520 430 50 26,000 21,500 47,500 Leisure 3,700 3,700 36 133,200 133,200 266,400 Total 39,560 35,500 973,400 894,910 1,868,310 * Square metres per employee or the higher the number the lower the density

150,000

Land productivity gains are usually made when a firm relocates or undergoes a rationalisation. This is indicated in the table by paragraph 7.46 the jobs lost through structural changes. Much of the space closed in the early 1980's represented on average increased land productivity for al the sites still in use which, in turn, contributed to the high total factor productivity growth in many Coventry firms during the 1980's. 8.80 In effect, in looking at future employment land needs within an investment led growth scenario (as is being planned for the city) the net employment growth generated from the investment profile in section 7 will take into account the job gains and losses amongst the existing businesses, including those generated by structural changes.181 8.81 The net jobs expected to be created in paragraph 7.46 require nearly 1.9 million square metres of space to be built assuming that buildings released through economic churn in the economy are re-used. The employment density figures are derived from English Partnerships data and relates to the general description for each category.182 These figures are slightly more generous than those observed in paragraph 6.25. This is simply explained by the fact that the latter relates to the footprint of buildings and assumes a single story. The English Partnerships industrial employment density relates to warehousing and not manufacturing. 8.82 The figures in the above table estimate that Coventry will require at 988,060m. This is considerably more B1 space than is foreseen in the Regional Spatial Strategy. This reflects the scale of Friargate (c187,000m) and the likely pattern of development at Ansty (estimates suggest that developments could come to 150,000 m). The retail estimate is much in line with the RSS and reflects the redevelopment of the city centre. 8.83 The translation from building square metreage into site square metreage is less easy as with the need to improve economic returns on land and property, many new developments
181

The net property requirement will be part of the investment stream creating jobs. This analysis looks at the probable size of the investment stream to see if the planned investment profile wil meet the anticipated number of jobs. 182 Source: Arup Economics and Regional Planning English Partnerships and Regional Development Agencies. September 2001

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have higher building space per site square metre.183 In the city centre office development are likely to be multi storey. Even in Business Parks while many developments are two storey, it is possible for three or even four storey buildings to be erected in suburban business park areas.184 In Local Development Framework document Coventrys Future Core Strategy: The Options city centre office development is seen as an opportunity to provide more accessible job opportunities and a means of boosting spend in the city centre shops.185 New shopping and leisure developments are also mainly seen in the city centre. Build densities in city centres are much higher reflecting the higher economic rental values associated with city centre developments. 186 8.84 The practical evidence from recent developments and plans show that the density of developments vary considerably. The 15,794m2 Severn Trent building in St Johns Road, for example, relates to 0.65ha site giving a 2.43 m2 floor space per square metre of site. If all the new B1 space were built on this density there would be a need for some 406,600 m or 40.6ha of site pace would be required However, there is likely to be variety of office buildings with a range of storeys will be built. The 187,000m Friargate office complex will have on present plans, an average of around 4 to 6 floors and will have a relatively high building to site footprint. Theoretically, provided it met planning consent requirements, there is no reason why an office could not reach 20 storeys and this would reduce the site requirements. The new 14,778m Ericsson Research Centre at Ansty will be a combination of offices, research suites, an engineering centre and a biomass boiler system. The buildings have three storeys as against the business park usual two. The company has bought 4.54ha giving a site footprint of 32.5% although a later phased development could increase this substantially Site Requirements and Comparator Studies 8.85 The employment profile in table by paragraph 7.47 showing that some 75,060 new jobs are to be created by 2026 requires some 1.9million square metres of property space to be constructed. The table on the next page translates this floor space requirement into employment land needs. The site requirement for any development depends not only on the building floor space but also on the number of floors, the building footprint to site ratio and car parking requirements. In addition, there may be a need/requirement to have landscape green space. 8.86 Overall, some 2,677,774m or 267.78ha of land is required to meet the proposed investments This compares to 882ha between 1980 and 2008.187 In terms of B1, B2 and B8 land some 216ha will be needed with some 202.8Ha needed for B1, B2 an B8 developments outside the city centre. . The potential for specific sui generis developments have been left out as many will be incorporated into the investment developments on employment land or may not be located within the city boundary. 8.87 The Coventry, Solihull and Warwickshire sub region employed DTZ188 to investigate the employment land requirement for the sub region up to 2026. The analysis employed by the report was based on the five years or so before 2004 and therefore does take account of the higher population projections for the city produced in 2008. In order to provide a comprehensive analysis, DTZ used the Cambridge Econometrics model of 31 industrial sectors within the West Midlands as the applied to the sub region. The consultants took

183

See Mackie (2005) which showed that in parts of the city centre it would have been more economic for site owners to have put the land out to pasture. 184 E on building in Westwood Business Park and some Middlemarch Office buildings on Siskin Drive. Though generally in Coventry two or three storeys is the norm. 185 Paragraph 7.16 mentions one million square metres of office space creating some 50,000 jobs. 186 This reflects Ricardian or scarcity rental values not commercial rental values. 187 See paragraph 6.21 and for site densities 6.25 188 DTZ (2007) Coventry Solihull & Warwickshire Sub region Employment Land Study. Birmingham June 2007.

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the West Midlands growth rate as a surrogate which probably understates growth within the sub region which is generally seen as the engine of growth in the West Midlands.

Projected Employment Land Projections 2006 -2026

Building space requirement Square metres B1 -- city centre 254,600 -- Business Park 251,240 B2 126,000 B8 87,500 Retail -- city centre 94,860 -- other 26,000 Leisure 133,200 Total 973,400 of which: B1,B2 & B8 total*: 464,740 * Area outside city centre 244,150 237,600 126,360 88,000 498,750 488,840 252,360 175,500 0.65 0.17 0.40 0.40 0.65 0.32 0.50 6 3 1 1 2 1 2 65,282 492,627 315,000 218,750 62,603 465,882 315,900 220,000 127,885 958,510 630,900 438,750 2006 -16 2016-26 Total Building Footprint Average no. of floors Site Requirement 20062016 2016 2026 Total

44,100 138,960 21,500 47,500 133,200 266,400 894,910 1,868,310

72,969 33,923 106,892 81,250 67,188 148,438 133,200 133,200 266,400 1,379,079 1,298,695 2,677,774 1,026,377 1,001,782 2,028,160

451,960 916,700 1 hectare = 10,000square metres

8.88 DTZ used three growth variants projecting compound growth rates much as is done in paragraph 7.12 above, adjusting the growth to take account of growth clusters and a high growth path based on employment land uses. The report identified similar underlying sector growth patterns particularly in business services and the public sector including education. The report did note that it was heavily influenced by past trends and should not be relied therefore solely in forecasting medium to longer term land needs.189 This caveat reflects the rapidly changing nature of the local economy with the major closures in manufacturing and growth in business services. The third method, high growth,- took account of the RSS regional land requirements which acted as a surrogate for employment land demand. 8.89 The report gave three employment land needs for the period up to 2026. These estimates are based on different parameters than those used in this report because:

DTZ Report: Employment Land requirements

20006 -2026 Past trends* B1 A B1 bc B8 Total *1996-2005 78 78 110 266 Cambridge RSS Phase II mid point Econometrics Pref. Option 10 44.2 95.4 4 41 88.2 24 67 144.1 38 152 328

The DTZ used lower population projection estimates from 2003 This report uses 2008 projections The period used for analysis is dominated by the development of Prologis Business Park and probably skews the demand for distribution land Economic growth was slower in the city during the reference period because of [impending] factory and office closures190 It was before the city formally adopted a growth strategy

189 190

DTZ (2007) p paragraph 3 Peugeot was shedding D and C shifts, LSC rationalisation cost up to 250 jobs etc

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The strengthening of the desire for more city centre office developments which affects employment and site density analysis It was before the decision for Severn Trent, QCA, TSYS, Belgrade Plaza and other developments had been confirmed which has raised underlying trends since 2004.

8.90 The analysis used in this report uses the demand for employment land as identified in proposed investment projects as at spring 2008. The main difference between the two studies is time and the consequent improvement in growth in the city's economy. Since the DTZ analysis the changing structure of Coventry's economy has become more embedded and this by necessity impacts on economic forecasts.

8.91 Coventry has embarked on a growth path with an employment land requirement of
267.8ha (202ha of B1 B2 B8 outside the city centre) over the next twenty years and conforms to the present plans for the city. It is more or less in line with the development activity over the last 10 years indicated in the chart by paragraph 8.66 taking into account the higher employment densities in the city centre.

8.92 To this requirement, there is a need to ensure that there is sufficient reservoir of
employment land and developable land available. The Regional Spatial Strategy Phase II Preferred Option of some 82ha or the equivalent of fiver year supply with some minor adjustments. This report has acknowledged that Coventry has a fuzzy economic boundary and some of the employment land requirement for the city will be in Warwickshire.

Can the city area absorb this need for employment land?
8.93 This analysis has looked at Coventry employment land needs but recognises that the citys economic boundaries are wider than the city boundary. This fuzzy boundary includes employment land within about kilometre or so of the boundary and includes University of Warwick in Warwickshire, Middlemarch Business Park, Ryton, Ansty, Bayton

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Road Blackhorse Road Industrial Estates and Prologis Business Park in Bedworth. A significant proportion of people working in these areas live in the city. 8.94 Many of the employment areas in the city have the potential to increase their employment densities. The map below shows the quality of employment land.191 Many of the areas marked as average or below average have the potential for more intensive economic activities than at present. Much of this land might require refurbishment or redevelopment to achieve this. The better use of the employment land will help raise total factor productivity in the city and make further investment both by businesses and property developers more attractive. In effect, the pressure to improve the economic land use in the city, will help improve competitiveness. 8.95 The DTZ employment land survey identified some 80.1ha of potential employment land which could be added to the existing stock of employment land. The map identifies the current stock of employment land, not all of which is readily available fro development. Some like sites at Ansty and the former Peugeot site at Ryton look like being quickly developed. Some sites such as Accordis192 and Central City are suggestions which could increase the supply of employment land if the present buildings on them are redeveloped, assuming that the present owners are prepared to invest of sell the sites. 8.96 The map above identifies some potential sites and, for some, planning approval may be required for any change of use. The first map looks at the quality of the employment land in planning terms based on location, environmental quality, noise, maintenance etc. Out of the 405ha of B1 B2 and B8 land shown within Coventry's boundary, there are 11 sites with low scores total 23ha and the 19 below average scores have an area of 49.1ha. These existing employment sites are likely to offer lower rates of return on land, labour and capital. This means that the sites could offer opportunities for re development with a growth in employment as a result. The low quality employment areas are 8.97 The Universities are both planning to expand their research activities and work with businesses. The University of Warwick masterplan anticipates that some 4,000 new jobs will be created at the university. It is likely that Coventry University will grow following the development of the new 80m Engineering building. The growth is expected create over 1,000 new jobs by the 2020s. Universities Hospital in Walsgrave is planning to develop further services and consequential more jobs. In effect, most if not all the university expansion land has been identified. 8.98 The policy of boosting employment in the city centre is a key part of the growth strategy as for the city. The Friargate development by the mainline rail station anticipates around 187,000m of offices which comes to some 10,000 plus new jobs.193 The city centre has a number of office developments in the pipeline: Cheylesmore, Bishop Street and Belgrade Plaza would add some 18,000m accommodating 1,000 jobs. Other employment land potential has been suggested for a number of areas. Opportunities exist for further development on Middlemarch, Torrington Avenue and various sites near to the M6.

Are the Investment Plans realistic?

8.99 The fundamental question is whether the growth of the city will continue into the future. To do this, the city must have a consistent approach towards growth. A number of key strategies are in place which support the growth of the city. These include:
191

This was done as a planning exercise and 'quality designation' depends on a number of factors including noise, outside storage, landscaping, maintenance etc. The classification does not apply to particular units and 192 The owners have announced the closure of the plant. 193 Using English Partnership densities. The table in 7.27 would suggest some 12,500 new jobs which has been used in promotional background material.

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STRATEGIES IN COVENTRY SUPPORTING THE GROWTH OF THE NEIGHBOURHOODS Neighbourhood Charters Neighbourhood Employment & Skills Plans LOCAL Local Area Agreements Building Schools for the Future Employment Strategy Coventry Sustainable Community Strategy Local Development Framework Zone Implementation Plan (ZIP) Local Enterprise Growth Initiative (LEGI) Innovative Coventry - Economic Development Strategy Climate Change Strategy New Deal for Communities City Strategy Sub regional Economic Strategy Hi tech Corridor Strategy Visitor Economy 2005-9 Graduate Retention Strategy West Midlands Regional Spatial Strategy West Midlands Economic Strategy City Region approach Regional Sustainable Development Framework Regional Housing Strategy West Midlands Local Transport Plan

SUB REGIONAL

REGIONAL

The growth agenda is still relatively new and the new emerging strategies and policies are taking into account the full implications of growth. This paper is designed to help inform the various strategic and policy processes that are underway. 194 8.100 The Council has been promoting investment into the city since the early 1980's. Although, the Council has led on many schemes, it has nearly always been underlined by private investment sources which over time have become more confident in investing in the city. This is a result of the track record of redevelopment and growth of the local and even wider sub regional economy. The investment confirms the vitality of the local business community. 8.101 There have been a stream of major job creating projects which have attracted into the city new major employers. The Ricoh Arena and Arena Retail Park, Prologis Business Park and Electric Wharf are examples of these investments. The development at Ansty, The Butts, Ryton, Whitley and Belgrade Plaza amongst others will ensure that the job creating investments will continue. The continued provision of suitable employment sites or locations for development opportunities is important as would-be investors will look elsewhere should they feel that there is no room. It is not certain that they would continue to look in the West Midlands for an alternative as it all depends on basic investment returns.

194

Coventry Growth Point Coventry Prospectus Growth delivery Plan Coventry August 2007 has a discussion on the growth strategy in relation to The National Growth Point

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8.102 Annex 2 lists inward investors since the turn of the century. The number of jobs identified for 2000 to 2006 come to 13,495 plus other unrecorded developments at the University and CU Technology Park. This compares to the Investment total in the table by paragraph 7.19 of 14,700.195 The number of identified jobs created by firms since 2006 comes to 10,703 with perhaps as many as 8,000 jobs identified by potential employers are likely to be in the pipeline. This would suggest that two years into the present study period nearly 40% of jobs identified in the model have been realised with a further 30% in the pipeline. These job figures assume zero changes in commuting patterns and discount any job creation at Stoneliegh Business Park and the Prodrive development at Fen End near Kenilworth. 8.103 The number of jobs identified by the model based on investment intentions noted in section 7 seems to be mirrored by actual economic job growth.196 Again this confirms the trend growth in the economy needed to meet the growth in the housing requirement.

But what happens if there is a recession?

8.104 There is a real risk that the economy could enter a recession sometime in the future. If a recession were to come, investment in speculative projects will decline and perhaps will stop. There is some evidence that this is happening in 2008 with some projects stopping for the moment as a result of the international financial crisis which started in 2007197. This does not undermine the investment approach used in this analysis as new alternative investments will tend to take the place of any cancelled or postponed projects in the upswing.198 A good development opportunity will still be there after the recession. The recession and developing these new projects might delay the investment stream. 8.105 In 1990, Coventry faced a significant recession generated by the speculative boom of the late 1980's. Projects then underway continued: West Orchards, Cathedral Lanes, Middlemarch and Cross Point. Ford had taken over Jaguar in 1989 and this brought in new component supplier arrangements and investment. These projects helped reduce the impact of the recession creating new jobs. The local economy did contract, unemployment rose but when the national economic recovery came, Coventry attracted significant new investments in Coventry Business Park, Foleshill Enterprise Park and Parkside. The recovery helped put the city onto the present growth path with growing employment levels. It is important that downturn dramatic headlines do not get translated into negative policy stances. It is important that the city looks forward to recovery and invests where it is practical and economic to do so that when recovery comes, the upswing enthusiasm is quickly translated into investments. 8.106 Coventry is fortunate in that there are a number of major schemes underway including Severn Trent, QCA and Belgrade Plaza in the city centre These three projects, alone, mean that 256m is being invested to create 3,600 jobs in the period to 2010. . Ericsson at Ansty and the Home Delivery Network (Littlewoods) at Ryton are also under construction with completion due by 2010. Just over the city boundary, Prodrive is creating 1,000 new jobs in its new 250m state of the art F1 auto-sport facility due for completion in the next two years. Tata has announced 600 new jobs at Jaguar and the aerospace sector has a full and growing order book and is creating new jobs. 8.107 Recessions are often accompanied by significant numbers of mobile firms seeking to rationalise their operations in order to increase productivity and the return of capital
195

The Investment model looks a development projects such as Jaguar Whitley Business Park while the inward investment record looks actual figures by investing companies. 196 The figures are based on the Annual Business Inquiry which Research & Strategy believe that the ABI omits new jobs for a year or so. Representations have been made to the ONS. 197 This includes the apartment block on Friars Road, 198 Very few commentators expect a deep recession

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employed. The fact that investment is taking place in a city with new jobs being created means Coventry is an attractive location for this from of inward investment199 8.108 Coventry is well positioned to capture the upswing and if there is another slow growth / recession before 2026, it is likely that investment flows will slow until recovery comes. Unlike in 1976, it is unlikely that there would be a major collapse as the restructuring of the local economy noted in section two has strengthened the city's business base.

199

An anecdote. In 1990, a Japanese manufacturing company looking for a European base came to Coventry to look at Cross Point which was under construction. The Chairman visited Coventry and two other W Midlands sites. The noise, mud and activity at Cross Point, place Coventry as the UK No 1 site while the green field and clear brownfield sites were politely turned down. Although Spain won the factory, Coventry gained a key operations centre soon afterwards.

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.
9.1

Coventry in the 2020's

The last thirty years or so have seen massive changes in the local economy. Nearly all the economic norms of the 1970's have been overturned and the advanced technologies of those times seem now more appropriate to be put into museums.200 It is clear that Coventry has moved into the twenty first century but the future full shape of that economy is yet to be determined During the next 20 years, it is inevitable that Coventry's economy will change as change has now become embedded. The balance in the economy has moved away from the dominance of the automotive industry of the last century. Thom and Donnelly (1985) noted that the car industry took hold within fifteen years of car production in 1896 and dominated the citys economy from 1911. It is too early to know which particular products will dominate the local economy in the twenty first century as in 2008 the economy remains in a transitional state. In time, with hindsight it will be possible to say when the pivotal change took place. Between now and the 2020s, Coventry has to adapt further. In the last thirty years Coventry has faced many changes in its economic culture including: Change in business culture A revolution in management Rise of new companies Sweeping technological change New investment parameters Major rebuilding of business properties Rising economic churn rates The creation of a flexible labour force Major worker skill changes Development of new products many unknown 10 years ago. The whole agenda of economic / business cultural change which started twenty or so years ago, is still ongoing and there is as much change due to come than has already taken place in the last twenty years. The Regional Spatial Strategy housing requirement is just part of this continuing agenda.

9.2

9.3

Factors affecting the economy in the medium term

9.4 Since 1993, Coventry economy has been growing in terms of job creation. Growth since 2000 points, all else being equal, to significant growth to come. The investment programme outlined in section seven is a result of this growth and mirrors a continuation, in many respects, of the citys economy growth in the first seventy-five years of the last century. The analysis looking at the next twenty years has restrained from suggesting a lead industry simply because expected changes are just so dramatic. One factor alone is the development of consolidated technologies leading to the development of new products. These are already becoming apparent in the latest product concepts for example the integration of audio, visual, sensing and other technologies combined with innovative hardware / software derived from serious games, systems management and analysis, etc promise a wide range of new innovative products. Key issues such as climate change and environmental protection are, also, changing demand patterns and this will be reflected in product development. It would be rash to predict a particular product line.

9.5

Of course the Coventry Transport Museum has many examples of even later 'hi tech' cars from the past thirty years.

200

95

9.6

For Coventry in a time of economic flux and change, it means that the city has to invest and strengthen its knowledge economy base. This means more investment in training and the development of skills, the transfer of new technologies to businesses especially SMEs. This means that business has to continue to change in order to remain competitive. New business cultures and property requirements will be needed. Just as in the last twenty years, huge investment in business property development has taken place, more will be needed in the future. To resist this change means reducing the competitiveness of the citys economy and risk renewed decline. Competitiveness is about relative position of the city relative to other cities elsewhere in the UK, European Union and the World. Coventry has already embarked on investment programme aimed at keeping Coventry competitive. The development of the city centre, Whitley Business Park and the growth of the Universities are part of this by providing new premises and sites for new business operations either emerging from local companies or inward investors. There may well be a need for new Science Parks for the University of Warwick and Coventry University. Innovation will be a major feature in the next twenty years and the city has to be in a position to benefit from the jobs that will be created. Another factor, which is likely to affect Coventry in the 2020s, is increasing globalisation.201 More countries will have industrialised and be competitors. Foreign firms will want to establish bases in the UK and Europe. Coventry has done well in this area but this does depend on the image of the city, its competitiveness as a location for business and the availability of land / premises. Cities such as Coventry will continue to face increasing and fierce competition in maintaining their economic base as across the world, cities will operate in a much more open economy with few barriers to stop businesses, jobs and people moving in and out of areas. In the past, cities had some economic rationale or comparative advantage which gave then a raison d'tre. Unfortunately, technology has tended to supersede these local advantages which form now only a marginal benefit.

9.7

9.8

9.9

Likely pattern of growth to the 2020s

9.10 Looking forward more than a few years ahead does carry its dangers. One is that present day conditions and issues are projected forward when in reality other items will enter into the economic agenda. This is why this paper has used the investment model as a basis of analysis it is based on known economic relationships combined with the investment plans being developed by institutions, businesses, developers etc. Many of these plans have time profiles reaching well into the 2010s and beyond. The model suggests that the changing structure of the economy will see a continuation of past trends with business services being a growth leader. Business services include many knowledge based activities which are highly marketable. The Coventry University Engineering Arts & Design, Warwick Manufacturing Group and concept of the 130m Advanced Manufacturing Centre at Ansty demonstrate this. It is likely that the business services sector will start to broaden out and spread into other sectors including manufacturing. Cities have to generate positive returns for both investment and people if they do not, then both will move elsewhere. This is already very clear in many declining

9.11

9.12

201

Protection is illegal under WTO rules but even if it were adopted it would not ease the competitive pressure and might increase inward investment.

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regions of Europe and the 'rust belt' of the USA. With more cities of the Worlds 1.8 million cities entering into the global economy, there will be an increasing in competitive pressure but with stricter rules on the role of state aids.202 Economic prosperity and returns on investment will remain key factors but also individual pay and lifestyle will become increasingly a test of success. 9.13 For Coventry, this means that the city has to continue to evolve. In 2008, it is clear that the city is operating at a sub optimal level203 and, therefore, below its economic potential. At present key factors used to demonstrate this are: Poor choice of shopping An under performing city centre A number of failing suburbs including the New Deal for Communities area Continuing need for major economic restructuring Socio economic strains

The growth of population promises to help ease the difficulties faced in overcoming these deep-seated problems. Transformation through growth is a phrase used in the City Council's economic development strategy in order to demonstrate a strategy that is ambitious for the city setting out a goal of major transformational growth. 204

Employment Growth to 2026- Employment Estimates for 2016 and 2026

Estimated Output Growth in % Growth Coventry In 2026 (2006 = 100) 328 389 134 160 116 102 239 236 148 169 158 185 80 91 246 211 168 216 141 184 125 134 129 147 128 160 152 182

Sector Utilities Manufacturing Construction Distribution Retail Hotels & Catering Transport & Comms Finance Business Services Other Services Public Admin Education Health Total

2006* No 1,372 17,859 3,892 10,449 13,975 7,290 7,132 5,396 26,500 6,400 7,781 20,927 16,075 145,000

Employment 2016 2026 No No 3,949 4,500 18,731 24,000 3,645 4,500 17,213 25,000 20,149 20,750 9,113 11,500 5,063 5,700 9,113 13,300 37,969 44,500 7,594 9,000 8,100 9,750 25,313 27,000 20,250 20,500 186,200 220,100

The present desire for increased protection against the swift economic changes / other economies, does not exempt individual cities from this pressure as within national economies and despite protective barriers , competitive pressures will continue to make themselves felt as happened to Coventry in the 1950's through to 1980. 203 This is clear as many areas command negative Ricardian rents where significantly positive 'scarcity value' rents would be expected. 204 Coventry City Council (2008) Innovative Coventry: A Strategy for Growth & Transformation Coventry April 2008 Section 6 page 19

202

97

Number of employees 145,000 (est.) SIC 2003

Number of employees in 2016: 183,90 SIC 2003

Number of employees in 2026: 220,100 SIC 2003 98

9.14

The previous two sections have looked at the investment plans for the city and issues that could detract from their success. The future is uncertain and predicting what products will become the city's economic base is far from being certain but economic sectors are less certain to forecast. Therefore any prognostication of the future carries with it uncertainty. This analysis has looked at both trends and proposed investments as far into the future as is possible. Using the latter as a basis, it is possible to look forward to see the probable future structure of the city's economy in 2026. The table gives the likely patterns of employment and output in the city in 2016 and 2026. The 2006 figures use an adjusted Annual Business Inquiry as the base of the analysis.205 The analysis incorporates the relocation of Severn Trent into the city and predicts the annual growth rate of the city economy at 3.1%, above the national average rate of around 2.5%, the base of this analysis. This growth rate will be higher or lower depending on the national economic position. This growth rate reflects the changing composition of output and the growth in the city's population. The growth in population or horizontal growth is a first step towards the deepening of the economy in terms of per capita gross value added (GVA). Paragraph 8.XX noted that the city centre was underperforming in terms of total factor productivity. Higher economic activity would raise productivity206 and in turn raise per capita GVA. No estimate has been made as to the extent to which the resolution of the underperformance of the city centre and other parts of the city's economy could be add to economic growth has been made but it is certainly a positive factor contributing to the faster growth of the city. It is unlikely to impact on employment in reflected in the growth in labour productivity. The immediate impact of a growing population and higher real incomes will be an increase in retail employment. Contrary to common perceptions, retail employment tends to be a function of the volume of spend in an area and depends on employment in other sectors. Coventry like any other city does face competition from internet sales sites and from other centres. As this century progresses this is likely to slow growth in the retail sector. Business Services (estate agents, accountants, R & D, software and hardware, facilities management, etc) has been a major growth sector in the city having grown from 3% of employment in 1976 to 15% in 2006. The analysis predicts employment in this sector will grow by 18,000 by 2026 and that output will more than double between 2006 and 2026. This rather nebulous sector will begin to spread or vertically disintegrate into other economic sectors including manufacturing. It is very likely that the actual service products encompassed by Business Services sector will change as time goes by. The sector will remain as a key sector in the economy because as the economy continues to change, it acts as a catalyst to that change. It is likely that Business Service activities will spread into other sectors including manufacturing and will be advanced or highly specialist activities as well as providing niche products. The danger lies in Coventry becoming a centre for 'traditional' or out of date products with limited markets as perhaps it was in the 1970's. This would risk the city's competitiveness and the real incomes of employees. Mass manufacturing is likely to remain elsewhere outside the UK though this will depend on many factors including exchange rates, the products, transport costs

9.15

9.16

9.17

9.18

9.19

9.20
205

Research & Strategy has sought a review of the 2006 figures as they seem to be too low given other ONS statistics and Experian Business Database. 206 This is in line with Verdoorn's Law

99

and so on. Even with manufacturing taking place abroad, assembly and local manufacturing is likely to grow in the future. The relative success of key manufacturing sectors in the city since 2000 such as aerospace, new materials, food products, niche vehicles, precision engineering as well as some automotive component suppliers have been increasing production and are likely to do so in the future provided the product in which they are used are still in demand.207 The model expects the city's manufacturing output to increase by 60%. Growth will be mainly through productivity changes rather than employment growth which is predicted to rise by 26% in the period to 2026. 9.21 Education and Health services will remain important. The former has a key role to develop the knowledge base of the city. If the current business strategies of both universities are maintained then they will along with City College play a key role in developing Coventry's economy through product development and training new staff potential. Health will remain important, as by the end of the period, Coventry will have caught up with the rest of the country and will be facing a growing ageing over 65 population. New health practices will create jobs in the mainstream economy as medical technologies will form a important sector in producing products for the healthcare sector and in meeting the delivery of services to people who need them. By the mid 2020's, the changing economy of Coventry will begin to mature and recognisable key sectors will be very apparent. What is important is that this maturing process does not conflict with the continuation of new business formation and churn. It was during the mid twentieth century that Coventry's economy began to ossify as is noted in paragraph 2.8. This is a policy issue for the future but it is important that economic change remains embedded in the economy and that businesses are kept globally competitive.

9.22

Conclusion
9.23 Coventry is known as the phoenix city as through the centuries the city has had, from time to time, to overcome major socio economic collapses and build a new. The last thirty years or so has been one of those periods. Between the mid 1970s and today the economy has fundamentally changed. Many historic factories have been consigned to folklore whilst new business parks have replaced them. The business culture has been transformed as has working patterns. A wave of new technologies has radically altered ways of working and output with globalisation creating a new division of labour. Although in 2008 the economy is unrecognisable from the 1970's, there is still a long way to go before new economy settles down with new companies commanding same respect as those which have gone in much same way as the old ones did in the past. Technological change is intensifying and consolidating into a new mainstream which means major changes in working methods and practices and products are ahead. The growth agenda for Coventry has been the result of the major changes that have taken place in the local economy. Studies have in the past shown that, perhaps really realising it, the city has stopped declining, stabilised and then moved onto a growth path. This new growth path should start being more apparent as the wave of redundancies over the last five years recedes. Employment levels in Coventry will, as a result begin to rise sharply and begin to meet the aspirations of people looking for work in the city. The rise in new jobs since 2000 suggests that

9.24

9.25

At the time of writing, there were recent planning applications for a number of factory extensions including Mission Foods, Unipart Kautex and NP Aerospace which suggested some 350 new jobs.

207

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the present growth path will meet the gaps between the implications of building 33,500 additional dwellings in the city, the growth agenda and in its consequent investment plans. In fact without the increased house building the economy might run out of people working and living in the city. The consequential commuting increases would generate further congestion or further intrusions into the green belt surrounding the city. 9.26 This report has looked at the massive change that has occurred in Coventry over the last thirty years. Fro this analysis it has been possible to look at the implications for the future growth path of the city

101

EMPLOYMENT BY SECTOR (PER CENT) IN COVENTRY SINCE 1971

Hotels & restaurant s Education Construct ion Business Services Manufacturing Industry Finance Transport & Comms Mining* Utilities Agriculture Pub Admin Distribution Health

Annex ONE
Other Services TOTAL
174,704 173,797 181,790 178,161 174,572 168,864 168,007 164,679 137,845 132,745 142,337 145,172 126,865 119,092 123,391 128,657 131,976 130,982 139,418 143,832 140,477 144,071 147,068 139,570 140,842 142,590 139,689

1971 1972 1973 1974 1975 1976 1977 1978 1981 1984 1987 1989 1991 1993 1995 1996 1997 1998 1998 1999 2000 2001 2002 2003 2004 2005 2006

0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

1.0 0.7 0.6 0.6 0.7 0.7 0.7 0.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

63.0 61.6 61.0 61.0 59.3 57.4 57.1 56.9 46.6 45.9 42.8 35.9 33.1 24.0 26.3 24.5 24.3 25.8 24.2 26.2 23.1 21.8 20.2 18.0 16.2 14.4 12.8

0.7 0.7 0.6 0.6 0.7 1.1 1.1 1.1 1.3 1.9 2.2 1.7 1.8 1.5 2.1 2.0 1.9 2.0 1.6 2.0 1.6 0.8 0.7 0.8 0.6 1.0 1.0

Census of Employment Data 2.7 11.3 0.7 3.2 1.3 3.2 11.4 0.9 3.0 1.3 2.9 11.5 1.0 3.4 1.3 2.7 11.7 1.1 2.9 1.4 2.2 11.7 1.1 2.9 1.4 2.6 11.8 1.2 2.9 1.5 2.5 12.0 1.3 2.9 1.6 2.4 12.7 1.2 2.8 1.7 2.8 13.9 1.7 2.7 2.2 Census of Employment Data new format 2.9 14.6 3.9 3.4 2.4 2.8 15.9 3.4 3.4 2.4 3.3 15.6 3.7 4.0 2.4 2.6 18.9 4.5 4.1 3.6 Annual Employment Survey 2.5 14.8 4.1 4.4 3.5 2.2 14.1 4.1 4.0 3.9 2.6 14.5 3.7 4.8 4.2 2.1 14.0 3.8 4.8 4.4 2.6 14.2 3.8 5.9 4.3 Annual Business Inquiry 1.8 15.6 5.0 5.0 4.3 2.2 14.5 4.5 5.3 4.3 1.7 15.9 4.4 5.1 4.5 2.2 16.3 4.4 4.8 5.1 2.0 18.7 4.6 4.9 4.0 2.4 17.7 4.9 4.8 4.7 2.1 18.7 5.1 4.5 4.6 2.3 17.8 5.7 4.7 4.5 2.8 17.5 5.2 5.1 3.9

2.3 2.4 2.6 2.6 2.5 2.7 2.6 3.3 5.1 4.6 4.7 6.3 6.3 11.3 10.5 10.6 12.3 9.2 9.8 10.1 12.4 12.2 13.7 12.5 14.5 14.8 15.7

3.2 3.4 4.0 3.6 3.7 4.2 5.4 9.7 11.1 11.9 8.2 6.3 5.3 5.7 5.3 4.7 4.9 6.8 4.5 3.2 4.2 6.5 4.7 5.5 5.5 5.0 5.6

6.3 6.8 6.3 6.8 8.0 7.7 7.7 5.3 5.6 6.6 8.4 14.6 13.2 13.7 14.7 14.3 14.3 10.8 13.6 13.5 13.5 13.1 13.4 14.3 13.7 15.1 15.0

2.6 2.8 2.6 2.9 3.2 3.5 3.6 0.4 5.0 0.9 5.1 5.6 6.0 10.5 9.4 10.5 9.2 10.9 11.1 10.6 9.1 8.7 9.3 10.2 11.0 11.2 11.5

1.5 1.6 1.8 1.9 2.3 2.5 1.4 1.5 1.8 0.9 0.6 0.6 0.5 3.9 3.3 3.6 3.9 3.6 3.5 3.6 4.5 3.9 3.6 4.2 3.3 3.6 4.0

102

Important Notes relating to the Table on employment in Coventry 1971-2006

The table is produced from several sources and has been standardised on the SIC 2003 for the city of Coventry on its current boundaries. There were boundary changes in 1974 and 1994. It should be remembered that the population of the city changes and more jobs in the 1970's reflects the fact Coventry had a bigger population and attracted more in commuters than today. The data in the table is basically a sample and this generates a range of usual sampling errors firms failing to report, firms allocated elsewhere etc. Small changes should not be regarded as significant. Firms / business units can change their sector for example a design office in a major manufacturing pant could be relocated to its own office transferring the classification from manufacturing to business services. Some 6% or so of jobs have transferred sectors usually out of manufacturing to other sectors. The four sources shown in the table had different recording methodologies and this does lead to discontinuities. Between 1971 and 1981, the data was collected on a Coventry Travel to Work area and included Kenilworth, Ryton, Ansty, and parts of Bedworth. The percentages are based on the raw data as much as possible. The Total Employment figure in the last column has been adjusted between 1971 and 1981 and forms an estimate of the number of jobs in Coventry within its boundary. The travel to work figures for 1971 through to 1981 were:
1971 192,435 1972 191,490 1973 199,818 1974 196,037 1975 192,298 1976 186,351 1977 185,458 1978 172,891 1981 146,332

2006 Research & Strategy has reservations over the 2006 ABI outcome. It would appear that none of the jobs created at the Ricoh Arena and nearby Prologis Business Park between 2004 and 2006 some 2,800 have yet been counted. Research is underway investigating the 2006 return.

Mining - Coal mining in Coventry continued to 1996 employing between 800 and 1,600. Unfortunately, Coventry's miners were counted as part of the coalfield figure and allocated to Warwickshire.

There is a clear break between the Annual Employment Survey and the Annual Business Inquiry. It would appear that an error led to a cumulative under recording of jobs in the mid 1990's. There is some evidence that the Annual Business Inquiry since 1998 tends to take into account factory closures faster than new jobs created. 103

ANNEX TWO

Major Inward Investors

(employing more than 25 people) 2000 to 2006 Arena Retail Park Benford Binley Business Park companies British Red Cross BT Call centre Cahoot Bank Capita (Tower Court) Capita (Congestion Charge) Capita (Congestion Charge 2) Coop warehouse Coventry Airport Customs & Revenue Denso Earplace Companies EU matic Excel Bridgestone Excel Safeway G Max Network Systems Gallagher Retail Park expansion Halifax Cetelem Lower Precinct MacGregor Europe Ltd Mission Foods MPC Logistics NILSI Parcelforce Plasticraft Primark Ricoh Arena Strand Transport services TATA Terex Tesco Extra Tesco Warehouse TUI Village Hotel Visteon TOTAL Date 2005 2002 2005-6 2003 2002 2000 2000 2002 2005 2005 2004 2003 2001 2005 2003 2001 2001 2001 2003 2001 2002-3 2001 2005 2000 2003 2005 2006 2006 2005 2000 2004 2002 2006 2005 2005 2002 2004 Jobs 1,483 400 1,200 3 400 120 180 500 500 650 500 500 200 500 200 80 230 40 250 100 500 45 300 40 200 650 50 300 1,244 30 100 300 200 350 800 250 100 13,495 Activity Retail Mfg Offices Personal Services Offices Finance Business services Business services Business Services Transport & comms Public Admin Manufacturing Mixed Manufacturing Distribution Distribution Software Retail Finance Retail Distribution Manufacturing Distribution Health Services Transport & Comms Manufacturing Retail Leisure activities Transport R&D Manufacturing & Dist Retail Distribution Leisure activities Leisure activities Business services

Additional jobs have been created at University of Warwick Medical School and International Manufacturing Centre and at the Coventry University Technology Park expansions. 104

2007 - 2011 so far reported

Date

Jobs Activity Regional Office Leisure Retail Recruitment Financial services Mixed Mixed Leisure Business services etc Recycling R&D Distribution Distribution Retail Leisure Business services etc Distribution Logistics Manufacturing etc Education Distribution Mfg Education Hi-tech Hi-tech Textiles Business Services Utility Financial services Education estimated share

Barratt Homes 2007 78 Belgrade Plaza 2010 1,000 BMS Midlands 2007 40 Budget Insurance 2007 70 Cobalt centre Middlemarch 2008 100 Coventry University Innovation Village 2007 200 D.Sillito - Jam Jam Boomerang 2007 25 Dolcis Shoes HQ 2007 50 Edgetech 2007 30 Ericsson 2009 600 Gefco (JCB) 2007 150 Home Delivery Network 2009 1,100 IKEA 2007 450 Isle of Capri 2007 250 Jaguar Customer Relations 300 2007 300 Jane Norman Warehouse 2007 25 Kuehne & Nagel logistics Ltd 2007 35 Mission/U Kautex/Merecedes Bus 2009 350 Ofqwal 2009 200 Pierburg Pump Technology Ltd 2007 115 QCA 2009 650 QIA 2007 60 Riley Centre UWSP 2006 75 Sainsbury TU fashions 2008 250 Severn Trent 2009 1,700 TSYS (Nationwide) 2008 300 University of Warwick growth plan 2007-11 2,500 TOTAL 10,703

There are some 4,500 5,500 jobs identified for various projects in the Coventry area and which have yet to be announced Source: Inward Investment Team records and Research & Strategy Newsletters

105

ANNEX THREE

Major employment sites that have been redeveloped 1980-2006 Gross Areas
Site Standard Triumph Matrix Churchill Ingersol Nastech Massey Ferguson Agco Alvis Daimler works Courtaulds 256 (Paragon) Courtaulds Foleshill Enterprise Pk Morris Engine Plant Alfred Herbert Canal Road Dunlop (Swallow B Pk) Pit & Homefire Plant Little Heath IE Lythalls Lane IE Marlissa Drive Unipart Ebersprcher Central City IE New warehouse New Horizon Pk CW Hospital site Central depot City Engineers Barras Heath - Wholesale Mkt Highfield Rd Football Ground Leigh Mills Belgrade Plaza Rotherhams GEC (Skydome IKEA) Hippodrome Theatre Millennium View Land Gulson Hospital Parkside Triangle RR & Climax Parkside Techno Rolls Royce Peugeot Humber Works New Century Pk Binley BP ex schools Middlemarch N Siskin Drive Middlemarch = Cov Trading Est Peugeot Ryton Browns Lane Jaguar Walsgrave Hospital Henley BPk The Butts City College Listers Fletchampstead Hi 106 Gross Area Ha 47.2 3.3 3.2 33.4 8.3 17.1 19.5 4.9 20.6 7.5 4.2 2.8 55.0 5.0 2.6 3.4 4.1 7.0 0.2 5.2 3.1 3.0 2.6 1.0 3.9 0.3 0.2 2.1 5.7 13.9 27.8 16.0 18.0 8.6 16.2 36.5 34.0 13.1 4.1 3.0 0.6 Original site use Ha B1 B2 & B8 47.2 3.0 3.0 33.0 8.3 17.1 19.5 4.9 20.6 7.5 4.2 2.8 55.0 5.0 2.6 3.4 4.1 7.0 0.2

1.0 3.9

5.7 13.9 27.8 16.0 8.6 16.2 36.5 34.0 4.1

Tile Hill College Westside Business centre HM Land registry site Wickman Bennet whole site Fletchworth Gate BP Covpress Earlsdon Bus Centre Total

5.3 2.0 2.1 11.8 13.0 0.5 482.2

2.0 2.1 11.8 13.0 0.5 458.4

The site data is taken from Coventry Planning Department records and for those in Warwickshire reports on the developments etc of the land. The B1, B2 & B8 land shares are all from Planning Department records.

107

ANNEX FOUR Job creating developments 1980-2006

Employment Developments Seven Stars Trading Estate Access Bldg Access 3 BP (MJ3) Aldermans Green Alpha BP Alvis Retail Park Ansty Bus Park Asda Brade Avenue Autosports Brandon Rd AXA Buildings B& Q Brandon Rd Banner Park (employment land) Queens Road Belgrade Plaza Belgrade Theatre Binley BP Binley Industrial estate Bishopsgate Business Park Blue Ribbon Brewery Bldg Torrington Ave Brico extension Bus garage Butts College old bldgs Canal Rd Cannon Pak Shopping Cannon Pk unit Cash's Lane Cathedral Lanes Central City IE Centre Six Retail Park Challenge Close Cheylesmore offices Coombe Abbey Coombe Visitors centre Courthouse Green Sainsbury's Coventry Business Park Cross Point Business Park Coventry Walsgrave Triangle Earlplace Electric Wharf Fletchworth Gate Business Park Friars House & Sherbourne Ho Gala Bingo City Centre Gallagher Retail Park Greyfriars offices City Centre Hales Industrial Estate Halfords Henley Business Park Herbert Art Gallery Hills Street Holt House 108 Gross Area 23.2 0.9 24.0 22.0 2.0 8.3 40.0 4.5 0.8 0.3 3.2 33.0 1.4 1.1 0.3 18.0 17.0 1.7 3.3 0.5 0.4 1.5 1.0 1.5 1.3 0.5 1.7 0.7 7.0 4.1 0.8 0.4 1.3 0.5 15.0 47.2 56.0 21.0 4.0 1.3 1.0 0.9 0.4 6.2 0.3 5.0 0.5 4.1 0.7 0.2 0.1 New use B1 B2 B8 23.2 20.0 22.0 2.0 40.0 0.4 0.3 33.0

18.0 17.0 1.7 3.0 0.5 0.4 1.0 1.5 1.7 7.0 0.8 0.4 1.0 36.0 23.0 21.0 3.7 0.7 0.9 0.3 5.0 4.1 0.1

Employment Developments Homebase Fletchampstead Homebase Walsgrave Hornchurch Rd IE Jaguar Browns Lane Whitley Business Park Kings Chambers Queens Rd Kingswood Close Units Land Registry Torrington Avenue Law Courts City Centre Leicester Causeway Listers Little Heath Industrial Estate Lower Precinct Lythalls lane IE Magnet store Foleshill Manor Road Offices Meriden Office Park Middlemarch + Airpark Morrisons New Canal basin New Century Park New Warehouse Old Canal basin Orchard Retail Park Padstow Cl & Peugeot Warehouse Parkside Triangle Peugeot Humber HQ Peugeot Ryton Primark Priory Place Prologis QCA Bldgs Raglan Reed Street Units Ramada Hotel Ricoh Arena Ricoh leisure Arena retail Park Rolls Royce Ansty Rye Hill B Pk Birmingham Rd Short Street Units Skydome - IKEA Spon Street new mediaeval shops Stoneleigh Industrial estate Sutherland Ho Swallowgate Business Park TechnoPark & Ibis Hotels Tesco Dorchester rd TGI Friday & Holiday Inn The Chace Police Station Unipart Eberspraecher Yelverton Road new unit University Hospital Mental health University Hospital new bldg UWSP W Orchards Shopping Mall 109

Gross Area 1.6 1.0 0.6 34.0 37.0 0.2 2.5 3.0 1.4 0.5 1.3 5.0 1.7 2.6 1.0 0.1 3.7 68.9 3.9 0.6 16.0 1.1 0.3 3.2 12.0 5.8 8.0 39.0 0.4 0.8 44.0 0.5 0.8 0.3 9.0 5.0 19.0 30.0 1.0 0.2 4.4 0.2 3.6 1.3 2.8 7.0 3.4 1.3 2.1 3.9 0.8 2.4 14.0 29.0 1.4

New use B1 B2 B8 0.6 34.0 37.0 0.2 2.5 3.0

5.0 2.6 0.1 3.7 68.9 0.6 16.0 0.3 9.0 5.6 8.0 39.0 44.0 0.5 0.8

30.0 1.0 0.2 3.6 1.3 2.8 4.2

3.9 0.8 29.0

Employment Developments Warwick House Greyfriars Rd Westside Torrington Avenue Westwood BP Whitefurze Wickman BP Wicks store City centre Willenhall Shopping Centre Windmill Hotel complex excl golf Total

Gross Area 0.1 2.3 34 1.7 4.0 1.0 0.8 1.4 882.0

New use B1 B2 B8 0.1 2.3 27.0 1.7 4.0

683.0

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DISCLAIMER: The views expressed in this Research Paper aim to inform debate and do not necessarily represent the views of Coventry City Council. MAPS: All maps are with the kind permission of Ordnance Survey Coventry City Council Licence No 100026294. 114

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