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Sunderland City Council and South Tyneside Council
International Advanced Manufacturing Park
Area Action Plan
Commercial and Employment Technical Background Report
Updated February 2017
PSD11
Sunderland City Council and South
Tyneside Council
International Advanced Manufacturing Park Area Action Plan
Commercial and Employment Technical
Background Report
Updated February 2017
This report takes into account the particular instructions and requirements of our client.
It is not intended for and should not be relied upon by any third party and no responsibility is undertaken to any third party.
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Sunderland City Council and South Tyneside Council International Advanced Manufacturing Park Area Action Plan Commercial and Employment Technical Background Report
Updated February 2017
IAMP COMMERCIAL TBR CLEAN 05022017 - FIXED.DOCX
Contents
Page
Glossary i
1 Introduction 1
1.1 Overview 1
1.2 Introduction to the IAMP 1
1.3 Structure Of This Report 2
2 Evidence Base Review 3
2.1 Overview 3
2.2 Capturing the Growth in the Automotive Industry in the
North East 4
2.3 Development of an Enhanced Automotive Proposition for
Sunderland and South Tyneside 12
2.4 Land Availability in Sunderland and South Tyneside 18
2.5 IAMP Impacts Study (2015) 21
2.6 Summary 27
3 Key Issues 29
3.1 The Importance of IAMP to the UK and North East 29
3.2 UK Automotive Strategy 30
3.3 Building our Industrial Strategy Green Paper , 2017 31
3.4 Nissan 34
3.5 North East Advanced Manufacturing Employment 35
3.6 Opportunities for Advanced Manufacturing Growth 36
3.7 Market Opportunities 36
3.8 Demand 37
3.9 Locational Criteria 39
3.10 Implications for the AAP 41
3.11 Summary 42
4 Outcomes 43
4.1 Ability to Meet Existing and Projected Demand 43
4.2 Benefits 44
4.3 Economic Impact 44
4.4 Sustaining a Growing Economy 45
4.5 Impact on the Economy and Business 46
4.6 Conclusion 46
Appendices
Appendix A
Inward Investment Inquiries 2008 to 2016
Sunderland City Council and South Tyneside Council International Advanced Manufacturing Park Area Action Plan Commercial and Employment Technical Background Report
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Glossary
AAP Area Action Plan NMUK Nissan Manufacturing UK
BIS Department of Business, Innovation and Skills
NPPF National Planning Policy Framework
CIRIA Construction Industry Research and Information Association
NPS National Policy Statement
DBAP Durham Biodiversity Action Plan
NSIP Nationally Significant Infrastructure Project
DCO Development Consent Order
NWL Northumbrian Water Ltd
DEFRA Department of Environment, Food and Rural Affairs
PPG Planning Practice Guidance
DPD Development Plan Document
PwC Price Waterhouse Coopers
EZ Enterprise Zone R & D Research and Development
EU European Union SA Sustainability Appraisal
FRA Flood Risk Assessment SEA Strategic Environmental Assessment
FTE Full Time Equivalent SEP Strategic Economic Plan
IAMP International Advanced Manufacturing Park
SCC Sunderland City Council
GBSSO Green Belt and Site Selection Options Paper
SCI Statement of Community Involvement
GVA Gross Value Added SMMT Society of Motorway Manufacturers and Traders Limited
LDF Local Development Framework
STC South Tyneside Council
LHA Local Highways Authority SuDS Sustainable Drainage System
LPA Local Planning Authority UDP Unitary Development Plan
LVIA Landscape and Visual Impact Assessment
LWS Local Wildlife Site
MoU Memorandum of Understanding
NELEP North East Local Enterprise Partnership
Sunderland City Council and South Tyneside Council International Advanced Manufacturing Park Area Action Plan Commercial and Employment Technical Background Report
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1 Introduction
1.1 Overview
1. This is the Commercial and Employment Technical Background Report for the International Advanced Manufacturing Park (IAMP) Area Action Plan (AAP).
The aim of this report is to provide the technical evidence to inform the approach
and policies in the IAMP AAP.
2. This Report is one of a suite of Technical Background Reports which form part of the evidence base for the IAMP AAP. The evidence can be accessed using the
following links:
www.sunderland.gov.uk/iamp
www.southtyneside.gov.uk/localplan
1.2 Introduction to the IAMP
3. The International Advanced Manufacturing Park (IAMP) represents a unique opportunity for the automotive sector in the UK. Located next to Nissan UK’s
Sunderland plant, the UK's largest and most productive car manufacturing plant,
the IAMP will provide a bespoke, world class environment for the automotive
supply chain and related advanced manufacturers to innovate and thrive,
contributing significantly to the long-term economic success of the North East of
England and the national automotive sector.
4. The proposal is for a 260,000 sq m Gross Internal Area (GIA) development aimed primarily at the automotive, advanced manufacturing and related distribution
sectors. The IAMP will be located on land to the north of the existing Nissan car
manufacturing plant, to the west of the A19 and to the south of the A184. This
location benefits from its close proximity to Nissan and excellent transport links
with opportunities for integrated connectivity provided by the surrounding
Strategic Road Network, rail and port infrastructure.
5. Present since 1985, Nissan is a major employer in the North East and the Sunderland plant is a good example of a national and regional success in
manufacturing. Nissan has been the largest car plant in the UK for 14 years and
the largest exporter for 12 years. Overall production surpassed 500,000 vehicles
in 2013 and is set to expand further with the plant producing one third of UK car
output and over one third of exports. Nissan currently employs over 7,000 people
in the Sunderland plant underpinning over 20,000 supplier jobs in the wider North
East region.
6. Development of the IAMP will therefore underpin the continued success of the automotive and advanced manufacturing sectors in the United Kingdom and
North East of England.
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1.3 Structure Of This Report
7. The Paper is structured as follows:
• Section 2 sets out the evidence relevant to this background paper.
• Section 3 draws on the evidence to outline the issues that should be taken into
account in developing the approach and policy of the AAP.
• Section 4 advises on the potential elements that should be considered in
further progressing the IAMP proposal to delivery.
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2 Evidence Base Review
8. This section presents a summary of the key findings from the evidence review. The information and documents considered in this review are listed in section 2.1
below.
2.1 Overview
9. The rationale for the IAMP project has been considered though a number of documents, studies and strategies which are listed immediately below and
summarised in the following text. It has also been informed by the expert view of
RPJ Consulting Ltd.
10. None of the views expressed about Nissan (NMUK) or its suppliers represent their official positions, but are independent, informed estimates based on expert
research and analysis.
National
• Planning Horizons, Creating Economically Successful Places (2014), Royal
Town Planning Institute
• UK Automotive International Competitiveness Report (2015), Department for
Business, Innovation and Skills (BIS)/Automotive Council UK (SD24)
• Driving Success – a Strategy for the Growth and Sustainability in the UK
Automotive Sector (2013), The Automotive Council UK (SD26)
• Growing the Automotive Supply Chain, The Road Forward (2011), The
Automotive Council UK (SD23)
• Growing the Automotive Supply Chain, Assessing the Upstream Potential
(2014), The Automotive Council UK (SD26)
• Growing the Automotive Supply Chain, Local Vehicle Content Analysis
(2015), The Automotive Council UK
• The Opportunity Ahead: Growing the Automotive Supply Chain (2015), The
Automotive Council UK
• Low Carbon Automotive Propulsion Technologies, Advanced Propulsion
Centre and Automotive Council UK (2016)
• Motor Industry Facts (2016), The Society of Motor Manufacturers and Traders
Limited (SMMT)
• SMMT 2016 UK Automotive Industry Sustainability Report, 17th Edition
2015 Data
• Building our Industrial Strategy Green Paper, January 2017, HM Government
Regional
• The North East Independent Economic Review, Summary of the Expert Paper
and Evidence Base (2012), various (SD40)
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• The North East Independent Economic Review Report (2013), North East
LEP (SD38)
• Strategic Economic Plan for the North East (2014), North East LEP
• Strategic Economic Plan Evidence Base (2016), North East LEP
• Strategic Economic Plan Progress Review 2014 to 2016 (2016), North East
LEP (SD39)
Local
• Sunderland and South Tyneside Strategic Employment Study (2013),
Pricewaterhouse Coopers LLP (SD28)
• IAMP Schedule of Floorspace and Employment (2014), Sunderland City
Council and South Tyneside Council (SD29)
• Sunderland City Deal (2014), Sunderland City Council and South Tyneside
Council (SD41)
• South Tyneside Employment Land Review (2014), Nathaniel Lichfield &
Partners (NLP) –and update in Local Plan topic paper (2016). (SD31)
• Sunderland Employment Land Review (2016), NLP (SD30)
• IAMP Impacts Study, Employment Land Topic Paper (2015), Arup (SD8)
• IAMP Impacts Study, Displacement Topic Paper (2015), Arup (SD9)
• IAMP Impact Paper Update 2016: Displacement, Arup (SD11)
• IAMP Impacts Study, Skills Topic Paper (2015), Arup (SD6)
• IAMP Impact Paper Update 2016, Skills, Arup (SD12)
2.2 Capturing the Growth in the Automotive Industry in the North East
11. This section sets out the national automotive strategy and how the North East Region is placed to respond to the opportunities identified.
2.2.1 Planning Horizons, Creating Economically Successful Places (2014)
12. This paper, one in a series commissioned in the Royal Town Planning Institute’s Centenary year to consider the challenges facing twenty-first century societies,
examines how we can achieve sustainable economic growth in a fast moving
globalised world.
13. It states that “in an increasing globalised world, the geographic concentration of people and businesses is driven by ‘agglomeration economies’ - put simply, by
the benefits of being near to others. Clusters provide companies with a
competitive advantage, enabling them to improve productivity.”
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14. These linked themes of clusters, competitive advantage and improved productivity are central to how the UK Automotive industry has responded to the last global
recession and emerged as a strong, competitive and growing industry.
2.2.2 UK Automotive International Competitiveness Report (2015) (SD24)
15. This report states that future years will see further change in the nature of the manufacturing industry with a growth in advanced, highly-flexible manufacturing
with increasing interconnectedness and the ability to customise to individual
customer need.
2.2.3 Driving Success – a Strategy for the Growth and Sustainability in the UK Automotive Sector (2013)
(SD26)
16. This strategy states that Britain is the fourth largest vehicle producer in Europe, making 1.58 million vehicles in 2012. Every 20 seconds a car, van, bus or truck
rolls off a UK production line. Over 80% of these are exported to more than 100
countries.
17. The strategy focuses on the challenge to maintain this momentum to secure the long term future of the sector by growing the UK share of the value chain and by
getting ahead of the game in research and development (R&D) on ultra-low
emission vehicles. The strategy therefore sets out how this might be achieved over
the next 20 to 30 years.
18. The strategy notes that the Annual Business Survey data (ONS) revealed that in 2011 the UK automotive industry directly accounted for a total of 129,000 jobs in
the UK. Of these jobs, 63,000 were employed by the vehicle and engine makers
directly, with the remainder in the immediate supply chain. This shows that the
immediate supply chain at that time accounted for just over half the total
automotive industry employment.
19. The strategy also sets out that supply chains are often more complex than they may seem. Vehicle makers rely on suppliers to provide often quite substantial
assemblies that are put into vehicles on the production line, so there are at times
up to three tiers of ‘supply chain’ that then deliver to the car manufacturing plant.
20. To illustrate this point, the strategy states that the direct impact of vehicle making on UK manufacturing employment is estimated to be three supply chain jobs for
one vehicle/engine maker job. In addition BIS estimate that total UK
manufacturing employment in the automotive supply chain is estimated to be
between 150,000 and 200,000 jobs, with many of these jobs classified outside the
automotive sector itself, in sectors such as metals, plastics, rubber and glass.
21. The strategy notes that there is a pervasive market trend for increased customer choice driving higher product complexity. This requires leaner and more flexible
supply chains, close to the vehicle/engine manufacturing plant. This is becoming
more important for all manufacturers and particularly for premium manufacturers
in the UK. The Strategy highlights that the Government’s response to this has
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been to designate additional Enterprise Zones, several of which have an
automotive focus with the ambition to strengthen clusters and enhance local
supply chains. The strategy includes the case study of the North East Enterprise
zone, described as follows:
22. “As the UK’s first designated Low Carbon Economic Area, the North East is pioneering the adoption of electric vehicles and low carbon vehicle technologies.
The location of the North East Enterprise Zone (EZ) sites next to Nissan in
Sunderland reflects this ambition and the LEP's commitment to grow the
automotive sector, the supply chain and R & D. These sites have secured £50
million of public/private investment to date. Vantec, part of the Hitachi group,
was the first company to locate on the EZ and since early 2013 its 39,000 square
metre logistics plant has been serving growth at the Nissan car plant. Gateshead
College is expanding onto the EZ investing further in R & D and training in
automotive low carbon technologies.”
23. This strategy has led to a targeted focus in growing the UK based supply chain contribution to the automotive industry as the reports by the Automotive Council
UK demonstrate below.
2.2.4 Growing the Automotive Supply Chain (2011 -2015) (SD23)
24. This series of Reports published by the Automotive Council UK set out the rationale for recent achievements in focusing on growing the UK share of the
supply chain activity.
25. The Road Forward (2011) highlights that in 2011, about 80% of all component types required for vehicle assembly operations can be produced by UK suppliers.
It states that the supply chain is crucial to the automotive industry, representing
about 40% of the retail price of a passenger car. In other words, vehicle
manufacturers buy in about 60-75% of the value from the component supply
chain. The cost of materials and parts is around six times the cost of final vehicle
assembly. It is estimated that every job in vehicle assembly supports 7.5 elsewhere
in the economy, with the process of making the parts somewhat more labour
intensive than final assembly, much of which is heavily automated. The report
states that ‘Proximity’ was identified as the key competitive advantage of UK
suppliers: “in operational terms, proximity allows for (1) lower logistics cost, a
better support for UK-built vehicles, (2) the responsive configuration of parts, as
well as (3) for more flexibility to adjust to volume and product mix fluctuations.
In strategic terms proximity also acts as (4), a general proxy for risk reduction to
the supply chain, as well as (5), a hedge against currency fluctuations.”
26. Assessing the Upstream Sourcing Potential (2014) highlights that the UK is the second largest producer of premium cars in the world after Germany, with over 40
companies making vehicles here. Output, productivity and employment are rising
and it is expected by 2017 that the UK will be producing two million vehicles per
year. This report highlights that there is a willingness in the automotive sector to
purchase more from the UK, but currently there is considered to be a lack of
suitable suppliers (of the components required) with the necessary capacity
and/or technical capability. There are also a large number of small suppliers in
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the UK supply chain, so there is an opportunity to help them grow to compete
with overseas suppliers.
27. The Opportunity Ahead (2015) notes that as UK vehicle makers add new models and expand their output, the opportunity for supply chain investment
grows. The report identifies that sales from UK suppliers to UK vehicle makers
have grown by 19% through 2014. The report also notes that the appetite for local
sourcing remains strong, bringing the benefits of responsiveness and reduced
logistics costs. The report also highlights that being able to source more
components in the UK will help boost the case for further UK investment by the
vehicle companies, just as investment by the vehicle companies in the UK boosts
the investment case for suppliers. Over the coming years, UK vehicle output will
increase, and it is expected that growth will come particularly from higher value
vehicles in premium and luxury segments. This will generate increased demand
for premium commodities including higher levels of equipment, more technology
features, and premium materials and finishes.
28. Local Vehicle Content Analysis (2015) states that the amount of value sourced by UK car manufacturers from the UK tier-1 suppliers has increased from 36% in
2011 to 41% in 2015. In addition absolute passenger car production grew by 16%
in that same period. The report states that being able to grow the local sourcing
content from UK suppliers is a key performance metric of the UK auto industry as
the majority of the economic value added is generated in the parts supply chain.
29. Low Carbon Automotive Propulsion Technologies, Advanced Propulsion Centre and Automotive Council UK (2016): This recent study seeks to highlight
the capabilities of and opportunities for the UK automotive industry to further
develop low carbon vehicle technologies. It highlights the research and innovation
already in progress by Nissan in Sunderland, including the Zero Emissions Centre
of Excellence and the production of lithium-ion battery cells and packs for the all-
electric LEAF. The report considers that this provides a good platform for
attracting other companies and related supply chain seeking to make use of this
technology.
2.2.5 Society of Motor Manufacturers and Traders
30. SMMT Motor Industry Facts (2016): The Society of Motor Manufacturers and Trader (SMMT) represents more than 650 automotive companies in the UK. Their
2016 report notes that Landmark Investments in 2015 included £137 million for
the production of the new Juke and an extra-large press line at Nissan’s
Sunderland facility and 300 new jobs for the production of the Infiniti Q30 and
QX30 at the Sunderland Plant. In 2015, Nissan produced the most cars of all UK
based manufacturers, driven by the popularity of the Qashqai and Juke models.
31. The report also notes that 41% is the average UK content in British Built cars, which is up from 36% in 2011.
32. SMMT 2016 UK Automotive Industry Sustainability Report, 17th Edition 2015 Data: This Report states that over the past six years the UK automotive
sector has undergone significant growth, emerging from the recession to become
one of the most efficient and productive manufacturing industries in Europe. 2015
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was the sixth successive year of growth with production volumes up 5.2%. The
report notes that the Nissan plant in Sunderland is the largest plant in the history
of the UK car industry.
33. The Report highlights that the automotive supply chain is essential to the current and future success of the industry. There are 78,000 people employed in the UK
automotive supply chain creating £4.3bn of added value. Whilst 80% of
components in a car can be made in the UK, the average UK content in British
built cars is 41%. There is therefore estimated to be £4bn of unfulfilled
opportunities for domestic Tier 1 suppliers.
2.2.6 The North East Independent Economic Review: Summary of Evidence (2012) (SD40)
34. The NELEP with the support of central Government commissioned a critical review of the North East economy, led by Lord Adonis, to identify opportunities
and barriers to boosting employment and productivity. The North East
Independent Economic Reviewi concluded that the region has the potential to be
an International Leader in Trade and a leading location for (Re-) Investment.
35. In particular, the summary of evidence report states that: “Advanced manufacturing, pharmaceuticals, energy/low carbon and environmental industries
are particularly important sectors for NELEP: they offer innovative, highly
productive and world-class activities. Many of NELEP’s successful businesses
hold a prominent position in international market places, with exports for goods
such as machinery and transport holding up relatively well. These are strong
foundations on which the economy can build”.
36. The summary of evidence report also considers the Innovation opportunities for the North East are related to the Energy, Transportation and Aging and Vitality
sectors. In terms of Transportation, the review states: “The North East leads in the
automotive sector and the related supply chain as well as in its application of
electronic vehicles and other low carbon technologies. The region is also the
location of major corporate centres of some of Europe’s leading transport
operators and is a leader in the application of light rail”.
37. The summary of evidence report includes an overview of land and premises in the NELEP area and notes that South Tyneside does not have a large supply of
employment land in comparison to the other local authority areas and there is a
concern across the NELEP area that existing land and premises may not be in the
right place or of the right quality to attract higher value added activities. The
Review recommends increasing the supply of market friendly sites.
38. The summary of evidence report includes an analysis of the Manufacturing and Low Carbon Sectors. It notes that the automotive industry introduces supply chain
companies through creating industrial clusters. In terms of Nissan, the report
considers that the associated supply chain is worth close to £1bn. It also notes that
the North East’s main opportunities relate to the development of electric vehicles
and other low carbon vehicles technology such as hydrogen and the offshore wind
turbine market. It states that the North East is “the only area in Europe with such
a comprehensive sector geared up to the development of low carbon vehicles
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comprising of manufacturers, battery development, R&D, skills and training as
well as a leading supply chain”.
2.2.7 The North East Independent Economic Review (2013)
39. Drawing on the evidence received in the independent review, this document sets out the strategic interventions to be implemented over the next five years to
stimulate both productivity and employment growth.
40. The Review highlights the importance of delivering the IAMP project to ensure industrial and production businesses in the automotive and advanced
manufacturing sectors can locate and expand in the North East. As such, the
IAMP is a critical element of the LEP’s Strategic Economic Plan.
41. The North East region’s economic strategy is set out in the NELEP’s Strategic Economic Plan. Key aspects of the regional economic context are summarised as
follows:
• Employment growth figures are positive and 79% of jobs in the area are now
provided by the private sector (up from 72% in 2009), the area still suffers
from a shortage of private sector jobs to provide a balanced and sustainable
economy;
• The need for more and better jobs is fundamental to the Strategic Economic
Plan. The ambition is that at least 60% of the jobs created over the next ten
years will be high skilled and higher paid private sector jobs;
• There remains a significant gap between the area’s skills base and its GVA per
capita than that of other areas. It is therefore critical that the momentum of
recent years is built upon and the gap continues to be closed;
• The North East is already one of the leading exporting areas of the UK, with
over 1,500 companies exporting goods. In the first quarter of 2015 it was one
of only two regions in England to achieve a positive balance of trade in goods;
and
• The North East was also one of only three regions which experienced an
increase in annual export value between 2011 and 2012, while all others
decreased. This follows strong levels of growth over a number of years.
Between 2013 and 2015, the total export value increased by £0.2bn, or 11%
(compared to the national average of -6%), reflecting strong growth in the
value of EU and particularly non EU bound exportsii.
42. The review also notes that Nissan decided to locate in the area to take advantage of the access to markets by locating the plant on a site at the junction of the A19
and A1231 trunk roads which is only five miles from the Port of Tyne, allowing
efficient domestic and global supply of materials and distribution of products.
2.2.8 North East LEP: Strategic Economic Plan (2014)
43. The North East LEP Strategic Economic Plan (SEP) was submitted to Government in March 2014. At the centre of its growth ambitions the SEP seeks
to:
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• Decrease the gap between the Region and national average on GVA;
• Increase the private sector employment density;
• Improve business density; and
• Increase the employment rate of the Region.
44. It provides the synergy between the NELEP’s aims, agreed City Deals (Sunderland / South Tyneside and Newcastle) and the NELEP Investment Fund.
The headline target in the SEP is to achieve, by 2024, at a minimum a halving of
the gap between the North East and the national average (excluding London) in
terms of GVA, private sector employment density, business density, employment
rate, and unemployment rate.
45. The SEP outlines three high level strategic outcomes to achieve this goal, which are:
• Innovative, enterprising and creative businesses;
• Skilled and inclusive communities that are great places to live; and
• Infrastructure that serves and connects.
46. Underpinning these strategic outcomes is an imperative to deliver improvements to the assets in the Region which can give competitive advantage to the regional
economy by ensuring connectivity to key national, European and international
markets. The SEP recognises the importance of the manufacturing base in the
North East, particularly advanced and marine engineering. It also identifies the
following growth sectors which will have a positive impact on the economy over
the course of the plan:
• Business services;
• New economy including cultural, creative and media industries;
• Low carbon and renewable sectors;
• Tourism; and
• Logistics.
47. The SEP identifies that in order to facilitate job growth, the NELEP needs to undertake a range of initiatives including the “Proposed International Advanced
Manufacturing Park in Sunderland and South Tyneside”.
48. To achieve the 100,000 jobs target by 2024, the SEP reports that it is expected that one of the major growth sectors will be Low Carbon: “Low carbon, including
renewable technologies, has the potential to deliver significant new investment
and jobs. The area aspires to become Europe’s premier location for low carbon,
sustainable, private sector-led jobs and growth. There is potential to secure
greater competitive and commercial advantage from the transition to a low
carbon economy - through new investments in offshore wind, electric vehicles,
micro-generation and drawing upon renowned scientific research and innovation
strength in a range of low carbon technologies.”
49. Two of the six strategic themes to the report are: “Economic assets and infrastructure: developing the places for business to invest and people to live,
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developing new opportunities with towns and cities, coast and country, and
heritage assets; and transport and digital connectivity: This serves and connects
people and businesses, letting people move around for both work and leisure, and
connecting the North East to the national and international economy.”
50. The SEP outlines that in order to maximise growth in the North East’s economy strategies, plans and programmes will focus appropriate enabling investment
towards the key employment locations along the A1, the A19, the River Wear, the
River Tyne and the coast. These are:
• The urban cores of Newcastle, Gateshead, Sunderland and Durham;
• The North East Enterprise Zone;
• The International Advanced Manufacturing Park in Sunderland and South
Tyneside;
• The two largest industrial estates in the area (Team Valley Trading Estate and
Aycliffe Business Park), the business and industrial estates near the northern
entrance to the Tyne Tunnel, and key employment locations along our main
transport corridors; and
• Newcastle International Airport Business Park.
51. In relation to highways and digital connectivity the SEP states that “…The North East Local Transport Board has prioritised transport interventions for the
devolved local major transport schemes and agreed to support six schemes
totalling £31.5m…”. These schemes include “…the South Shields Transport Hub,
the Sunderland Low Carbon Zone…”.
52. Under ‘Manufacturing renaissance’ the SEP identifies advance manufacturing and low carbon as particularly important sectors for the NELEP area, and identifies
amongst other locations the key location on the A19, in “…providing current and
future opportunities, especially through the North East Enterprise Zone to provide
the necessary physical economic infrastructure to support the growth of these
related sectors.”
53. The highways priorities for the IAMP include the Sunderland Low Carbon Zone Improvements to the A19/A1231 and A19 /A1290 junctions, internal road links,
pedestrian, cycling and public transport facilities. The scheme aims to enhance the
capacity of the network to accommodate projected employment growth of the
entire zone bounded by the A1231, A19, A1290 and Leamside Line, including
Nissan, North East Enterprise Zone and other proposed developments.
54. Future priorities that will enhance the infrastructure for the IAMP area include the Sunderland Strategic Transport Corridor (Low Carbon Zone to City Centre to
Port) phase 3 (New Wear Bridge to City Centre). This provision of a major new
transport link supports the development of a number of key sites in the River
Wear corridor, the regeneration of Sunderland Urban Core – City Centre and the
regeneration of the Port of Sunderland. The scheme supports the introduction of
the new Wear crossing announced as part of the City Deal.iii
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2.2.9 North East Strategic Economic Plan Progress Review, March 2014 - March 2016
55. This document is intended to inform the SEP refresh, due to be published in December 2016, and provides an update on delivery against the original
document.
56. In terms of finance and investment, the progress review notes that Infrastructure Investment has been agreed to support delivery of Enterprise Zone sites (25ha of
the second phase ultra-low carbon vehicle EZ will be located on the IAMP site).
57. Passenger vehicle manufacturing was identified as one of four ‘smart specialism areas of economic strength’ in the 2014 SEP. This progress review highlights that
significant foreign inward investments of strategic national importance including
Nissan and Hitachi represent opportunities for supply chain innovation (including
low carbon vehicle delivery), business growth and inward investment.
2.2.10 North East Strategic Economic Plan, Evidence Base, May 2016
58. This report provides an updated economic profile for the North East. It states that in the North East LEP area, manufacturing outperforms the UK average; 14.6% of
its GVA is generated by manufacturing compared to 10.3% nationally. This is
also linked to the types of high value-added manufacturing that many north east
companies are involved in.
59. This report also notes that the value of goods exported by the region’s firms has grown more quickly than the value of national exports. The export of road
vehicles (parts, accessories and fully assembled vehicles) accounts for 40% of all
exports from the North East Region.
60. The report highlights the success of the north east in attracting Foreign Direct Investment (FDI). In 2012/13 the North East LEP secured the third highest
number of FDI projects into England.
2.3 Development of an Enhanced Automotive Proposition for Sunderland and South Tyneside
61. This section traces the development of the proposition for additional land in Sunderland and South Tyneside as an opportunity for the North East to capitalise
on the growth in the automotive and related supply chain industry.
2.3.1 The Sunderland & South Tyneside Strategic Employment Study (2013) (SD28)
62. In 2013 Sunderland City Council and South Tyneside Council commissioned Pricewaterhouse Coopers LLP (PWC) to identify potential market demand for
strategic employment sites within the two local authority areas and more widely
across the North East. The purpose of the ‘Strategic Employment Study’ was to
support the Councils in their preparation of a City Deal bid which would build on
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the success of the North East Enterprise Zone by being attractive to national and
international investment. The study highlighted that there has been significant
investment in the UK automotive sector and advanced manufacturing sectors in
recent years and that this investment trend is likely to continue.
63. The document summarises that the current Enterprise Zone around the Nissan plant has proved attractive to the market and there were at the time more
live/active enquiries for sites than there was remaining land available. This
highlighted the benefits of the location for investment in the automotive and
advanced manufacturing sectors in particular.
64. The study assessed future trends across high growth industries in the North East focusing the study on automotive, advanced manufacturing/engineering,
distribution and offshore renewable sectors. Three alternative growth scenarios
were modelled using production and sales forecasts to identify potential
floorspace demand in the period up to 2033, these are summarised below.
65. Very optimistic - a large scale growth scenario requiring an advanced manufacturing park of around 300 hectares (ha)
• Automotive: step increase in production at Nissan facility and associated
supply chain (particularly Electric Vehicle production) due to increased
demand from overseas markets;
• Advanced Manufacturing: market entry of two average sized chemical
companies and expansion of a chemicals company already in situ. Plus small
advanced manufacturing companies entering the market every three years.
Development of a new university facility to support R&D and training needs
for the automotive and advanced manufacturing sectors; and
• Distribution: market entry of a large scale retail distributer and additional
smaller scale retailer or manufacturer.
66. Moderate - scope for significant growth requiring an advanced manufacturing park of around 140 – 150ha
• Automotive: steady increase production in the North East focused on the
existing Nissan operations and supported by a number of supply chain moves
incentivised by the availability of an appropriate development zone;
• Advanced manufacturing: market entry of two average sized chemicals
companies and expansion of a chemicals company already in situ. Plus small
advanced manufacturing companies entering the market every three years; and
• Distribution: staggered market entry of three smaller retailers or
manufacturers who are attracted by the infrastructure and facilities offered.
67. Pessimistic - assuming a long period of on-going recession for the North East combined with structural changes to the automotive industry and re-location of
production away from the region
• Automotive: marginal decline in North East production resulting from supply
moving to under-utilised plants in Europe;
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• Advanced manufacturing: market entry of an average scale chemicals provider
to support production of batteries for electric cars; and
• Distribution: no growth assumed.
68. The forecast of ‘moderate view’ demand identified the requirement for an Advanced Manufacturing Park as:
• 569,000 sq m Gross Internal Area (GIA) with a total land requirement for
approximately 150ha;
• Comprising 105.5ha for the automotive sector, 13.4ha for the advanced
manufacturing sector; and 23.5ha for the distribution sector; and
• To provide approximately 9,000 jobs with delivery over 20 years from 2013 –
2033.
69. The analysis concluded that the moderate growth scenario was the most likely and that if additional land was not provided then new investment and job growth
would be lost from the region.
70. The moderate scenario was viewed as the most achievable and was used to inform the Sunderland City Deal submission, approved by Government in 2014.
71. In summary, the Strategic Employment study highlighted three key components of market need for the IAMP:
• Strong demand from companies in the automotive, advanced
manufacturing, distribution and logistics sectors. The study estimated that
future demand in these sectors under a moderate set of assumptions is likely to
be around 150ha over the next 20 years. The assumptions behind this level of
growth are as follows:
• Automotive assembly growth will continue to be strong worldwide;
• Investment in the UK will continue, as the UK is seen as a stable
economic environment with benefits of being outside the Eurozone, low
Corporation Tax and high productivity;
• The trend towards near-shoring of suppliers close to Original Equipment
Manufacturers (OEM) will continue, and the proposal provides a strong
basis by which the “£3bn opportunity“ highlighted in the Government’s
Automotive Strategy can be achieved; and
• Strong demand from non-automotive advanced manufacturing,
distribution and logistics.
• Requirement for various enabling “infrastructure” factors to be in place
for the main scenario to be realised particularly in relation to available land,
energy infrastructure and access transport networks to and from the site; and
• Lack of current Brownfield sites available to meet the above demand. The
report states that evidence from Sunderland City Council regarding recent
investor enquiries that could not be met strongly suggests that the current land
supply for large scale industrial development is insufficient to meet market
demand. This is largely attributable to the lack of suitably large sites capable
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of being developed, and a lack of good quality units to meet the demands of
new or expanding businesses wishing to locate in the area.
72. For the North East economy to prosper in these industries and to help secure the major opportunities forecast in terms of manufacturing growth, the region needs
to develop an IAMP. The development of an IAMP adjacent to the existing
automotive cluster around Nissan would offer the best location in the region to
capture growth opportunities and provide significantly more land for development
thereby delivering a major increase in manufacturing capacity for the region.
2.3.2 Sunderland City Deal (2014) (SD41)
73. The bid to Government for a City Deal was made by Sunderland City Council and South Tyneside Council. Both councils worked closely with the NELEP. The
Government confirmed the Sunderland City Deal in Partnership with South
Tyneside in March 2014.
74. The development of the IAMP is central to the North East Strategic Economic Plan and the Sunderland and South Tyneside City Deal. It will accommodate the
increasing demand for manufacturing land in the North East and expand UK
manufacturing.
75. The City Deal agreed with Government anticipates and lays the foundations for funding for an IAMP on the following scale:
• Creation of over 5,200 new jobs by 2026/27;
• 500 new jobs being created every year from 2018;
• Approximately 260,000 sq m of developable floorspace over a 100ha site; and
• 100ha to be developed with the potential for a further 30ha “or so” beyond
that.
2.3.3 IAMP Schedule of Floorspace and Employment (2014) (SD29)
76. Submitted with the City Deal was a floorspace schedule which provided an overview of projected floorspace and employment for IAMP.
77. The full gross employment estimates provided as part of the schedule of floorspace provide a breakdown of the employment impact by floorspace type and
phase.
Table 1: Summary of Gross Employment Estimates, IAMP (numbers of jobs)
Offices B2/B8 Total
Phase 1 335 919 1,254
Phase 2 665 1,823 2,488
Phase 3 397 1,089 1,486
1,397 3,831 5,228
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78. The floorspace schedule included the following notes:
• The timing/phasing, floorspace and employment numbers are drawn from a
PWC Financial Model dated 13 May 2014.
• There is no allowance for land uses other than B1, B2 and B8.
• The commercial demand/need for other land uses – such as a hotel, restaurants
etc., should be explored as part of the master planning process.
2.3.4 2016 Updated Opinion on Automotive Sector Demand
79. Sunderland City Council and South Tyneside Council asked RPJ Consulting to provide a more in-depth and up-to-date analysis of the likely demand from the UK
Automotive Sector, the outcome of which is reflected within this report.
80. RPJ Consulting conducted:
• Interviews with the author of the 2013 PWC Report to understand the
evidence used to generate the demand forecast scenarios;
• Confidential face-to-face interviews directly with the most senior UK
Management of a number of Automotive OEMs and Tier 1 Automotive
suppliers; and
• An analysis of the broader international and UK automotive trends in demand,
technology and policy.
81. RPJ Consulting concluded that:
National Outlook
• Worldwide Automotive demand will continue to grow strongly (3.5-4.5%
CAGR1) for the next 20 years or more;
• European Automotive demand will rise only modestly, but a strong, stable
replacement market is assured, albeit characterised by a shift away from ICE
engines vehicles to electrification;
• Myriad new ownership models, particularly in large densely populated cities,
will emerge driven by digital economy enablers such as ride share, car share
and pay-per-use schemes. These will accelerate as autonomous control
technologies are proven and become more widely deployed, but are not
expected to reduce the demand for new vehicles appreciably and the consumer
desire for more personalisation will drive a large ownership market;
• UK vehicle production has continued to grow and is forecast to grow further
despite the EU referendum result, assuming a trade deal can be struck with the
EU, based on the underlying competitiveness of vehicle assembly. The vast
majority of production is exported; and
1 Compound Annual Growth Rate
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• UK Government policy is forecast to be highly supportive of the automotive
sector, based on the scale of jobs protected and created, growth prospects, the
importance of the sector for R&D and the export value contribution.
Regional Outlook
82. Growth in automotive manufacturing activity in the North East depends primarily on Nissan and their plans.
• Nissan now plans to source the next generation Qashqai in 2018 and an
additional model, named as the X-Trail, in Sunderland from 2019. This has re-
classified the Nissan Sunderland plant as a super-plant, expanding production
further from 525,000 to around 600,000 units p.a. in the next five years;
• In response to greater demand for customisation of final vehicle build
specifications by customers, they are likely to accompany this growth by
undertaking a major revision to their manufacturing systems which will drive
the need for significantly shorter supply chains. This trend is now reinforced
by the exchange rate effect since the EU membership referendum result which
is working in concert with the increased competitiveness of local sourcing.
This will increase Nissan Manufacturing UK’s (NMUK) desire to move
production sources, especially Tier 1, from overseas to within a very short
distance of the Final assembly plant to facilitate “Just in Time” in-sequence
deliveries at attractive economic cost;
• An increase in locally assembled content of 20-30% may be required over a
long term period to facilitate this;
• NMUK is participating in closer cooperation with Renault as part of the
Alliance. While this represents a threat to some business, it also represents an
opportunity for growth to the incumbent NMUK supply base through winning
Renault business, especially with the improved cost competitiveness of the UK.
This advantage is mitigated strongly by the risk of tariffs being imposed, which
would make sourcing to the EU from the UK less attractive.
• Research with local Tier 1 Suppliers indicates that over 50% of them are
planning expansion of their facilities in the Sunderland region. This is without
them being explicitly aware of the potential further localisation which we
speculate could increase its demand yet further. Key drivers are: landlocked
operations prevent further increase in capacity; and organic growth over 30
years has left some Tier 1 companies in multiple sites which are not optimised
for logistics or for lean overheads. In summary, NMUK needs to grow the
local supply base within a less than 10 minute drive from their assembly plant
and cannot presently do so due to land availability constraints.
83. The Tier 1 supply base is constrained for growth by land availability, and further opportunities to improve competitiveness and volume will be denied without more
land becoming available in the local area. In the absence of growth potential, the
status quo will not be sustainable, as the automotive sector in the North East and
in fact the UK will not be in an optimum position to win future assembly
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competitions with other automotive plants abroad, and over the longer term this
will lead to reductions in assembly volume and jobs.
2.4 Land Availability in Sunderland and South Tyneside
This section summarises the studies undertaken by Sunderland and South
Tyneside in relation to their current employment land supply and their future
employment land requirements.
2.4.1 Sunderland Employment Land Review (2016) (SD36)
84. The Sunderland Employment Land Review (ELR) was updated in March 2016. The industrial market was viewed as particularly strong in Sunderland, supported
by growth in the automotive and advanced manufacturing and offshore
engineering sectors. Key geographical concentrations of industrial activity include
the area surrounding the Nissan Motor Manufacturing plant, industrial estates
within Washington, Sunderland Enterprise Park, the Port of Sunderland and sites
surrounding the City Centre.
85. Stakeholders interviewed for the ELR included representatives of the North East Automotive Alliance, the Federation of Small Businesses, North East Chamber of
Commerce, Sunderland BID, Sunderland City Council, North East LEP, Nissan,
Port of Sunderland and local and national property agents. A full list of
stakeholders is appended to the study.
86. The Industrial market was considered by stakeholders interviewed for the ELR to be strong in Sunderland and supported by growth in the automotive and advanced
manufacturing and offshore engineering sectors. Opportunities for future growth
identified by stakeholders included Nissan’s recent investment in the Infiniti
model production and subsequent supply chain, opportunities to develop
distribution services around the Port of Sunderland and capitalising on the
development of light industrial R&D activity across the Local Authority.
87. A lack of modern, efficient industrial space for medium and larger occupiers was identified by stakeholders as a key barrier to further growth. Sunderland City
Council’s investment team suggested that the limited supply of medium and large
scale industrial land had already led to a loss in investment opportunities. The
IAMP was considered to present a strong opportunity for large scale investment.
88. The ELR includes an analysis of the availability of industrial premises across the whole local authority area. There are 188 premises on the market equating to
270,736 sq m, with 17 units between 2,000 and 5,000 sq m in size and only eight
units over 5,000 sq m in size.
89. The ELR also highlights that between 2000 and 2014 (inclusive) 120.53ha of Use Class B employment land was developed in Sunderland and 76% of this was for
industrial uses.
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90. At March 2016 there were a total 79 general employment sites available with a combined gross site area of 145.96ha in Sunderland. However, only 56 sites
totalling 51.73ha were considered to be immediately available.
91. In terms of considering the future need for employment land, the ELR considers a number of baseline and policy on scenarios, including a scenario which models
the impact of IAMP, building on the success of the Enterprise Zone, to provide
employment land in addition to general employment land requirements. This
scenario estimates that the IAMP development could create an additional 2,035
Use Class B jobs in Sunderland to 2033, driven by the manufacturing sector (the
figure excludes the direct jobs to be created at the IAMP site). The report
considers that 60% of the IAMP supply chain job impacts will be observed in the
manufacturing sector.
92. In terms of future recommendations, the report identifies the amount of land Sunderland should allocate to 2033 for general employment uses, not including
the IAMP proposition. This is:
• 15ha for B1(a)/ B1|(b) (Office) uses;
• 35 to 45ha of B1(c)/B2 (manufacturing) uses; and
• 45-55ha for B8 (warehousing and distribution) uses.
93. In considering the current supply of employment land and future demand, the study recommends de-allocating 14 existing sites (totalling 26.39ha) in areas
where there is an oversupply or low market demand. These sites are
predominantly in Sunderland South and the Former Coalfield. Only two sites are
proposed to be de-allocated in Sunderland North and Washington (one has
planning permission for an alternative use and the other is heavily wooded) as the
report states that the supply of land is particularly tight in these locations. In
particular, the report highlights that currently the supply of employment land in
Washington is insufficient to meet estimated demand in the area.
94. The ELR report is very clear that in recommending de-allocation of employment land this is not considered to undermine in any way the case being made in
relation to IAMP. This is because “the sites that are identified for removal from
the supply fail to align with the specific occupier requirements to which IAMP is
intended to respond. As such, there is no reasonable prospect of the sites being
appropriate – either individually or collectively – as realistic alternatives to
IAMP”. This is by virtue of scale and location.
95. In terms of scale, recent automotive developments since 2010 onwards have needed larger sites as follows:
• BAE Systems, Wear West (6.69ha);
• Rolls Royce, Wear West site (11.43ha);
• Vantec, Nissan Turbine site (8.38ha); and
• Vantec Phase 2, Hill Farm Estate (9.58ha).
96. In terms of location and the IAMP proposition, the ELR states that “It is clear that the development must be located on the edge of the conurbation and in close
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proximity to both the strategic road network and the automotive cluster around
Nissan in order to meet anticipated occupier requirements.”
97. The majority of land identified for de-allocation is located in Sunderland South and the Former Coalfield area and would be therefore incompatible with IAMP in
terms of scale and location. It is estimated that more land is required in the
Washington area, which has traditionally been the focus of demand in Sunderland.
98. There may be an opportunity for the emerging IAMP proposals to help meet this need.
2.4.2 South Tyneside Employment Land Review (2014) and Economic Growth and Employment Topic Paper (2015)
(SD31)
99. South Tyneside updated their Employment Land Review in 2014. The most significant change from the 2011 review was the opportunity to consider the
IAMP proposal. In addition the position was further updated by the Development
Plan Topic Paper on Economic Growth and Employment. The key messages
emerging from these studies are outlined below.
• South Tyneside has a limited stock of readily available employment land. At
December 2015 there were 19 general employment sites providing a gross
area of 46.17ha of available land. Sixteen of the sites were less than 5ha in
size. One site was just over 10ha. Some of this land (13.84ha) may be lost of
housing development in the future and only a limited amount of the general
employment land is readily available for development. There is likely to be a
shortfall of around 34ha by 2036;
• The strongest industrial locations are on the southern periphery of the
conurbation where there is easy access to the strategic highway network. In
comparing the ratio of enquiries for industrial premises to actual take up,
(between 2011 and 2014), there is a higher number of enquiries for units over
929 sq m and relatively few units of this size in South Tyneside;
• The manufacturing sector is experiencing an uplift in demand for medium to
large B2/B8 accommodation. The Council should consider allocating
additional employment land to meet this requirement;
• The available employment land is too fragmented or in the ‘wrong’ locations
to meet the needs of occupiers that would seek to be located as part of the
IAMP and Nissan supply chains;
• The IAMP scheme is projected to generate around 2,500 jobs in South
Tyneside predominantly in the advanced and automotive engineering sectors,
with some potential for related large-scale distribution. It is anticipated that
over 2,000 jobs will be created in manufacturing with c. 400 within the
distribution sector. It is considered that land provided in relation to IAMP is
based on a more regional, national and international basis than for the (South
Tyneside) local economy; and
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• Approximately 45ha to 50ha of general employment land should be planned
for over the 15 year plan period and an additional requirement of c. 45ha
should be identified specifically for the IAMP opportunity.
2.5 IAMP Impacts Study (2015)
100. In 2014 the Councils commissioned four “topic papers” (Housing, Skills, Employment Land and Displacement) to undertake some initial research into the
potential wider impacts of IAMP on both Sunderland, South Tyneside and
adjoining local authority areas. The high level papers have provided contextual
information for the AAP and (with the exception of the Employment Land Topic
Paper) were refreshed in Autumn 2016. The relevant issues from these papers
are outlined below.
2.5.1 IAMP Impacts Study - Topic Paper: Displacement (2015) (SD9) and Update 2016 (SD11)
101. The primary objective of this Paper was to assess any potential displacement effects on other economic locations within the NELEP area. The report examined
the following aspects:
• The potential for relocation of existing jobs from established locations across
the NELEP area; and
• The potential for the supply chain and multiplier effects of the IAMP to
generate demand for sites and space in Sunderland, South Tyneside and
neighbouring areas.
102. It was recognised that the central expectation of future demand is above the quantum of proposed space at the IAMP (raising gross impacts from 5,228 to
around 9,000 jobs). If this demand comes to fruition then there could be additional
jobs which will need to be accommodated.
103. The results of the assessment are summarised in the following table.
Table 2: Summary of net employment impacts - NELEP areaiv
Central case Worse case
Jobs Factor Jobs Factor
Gross benefits 5,228 5,228
Leakage 261 5% 261 5%
after leakage 4,967 4,967
Displacement 745 15% 1,490 30%
after displacement 4,222 3,477
Multiplier effects 7,008 2.66 5,771 2.66
Net benefits 11,230 9,248
104. The assessment indicates that the project has the potential to generate 11,230 net additional jobs in the NELEP area under the central case.
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105. The 2016 update to this paper also considered the potential non B-class uses that may complement the core floorspace proposition. It was estimated that non B-
class uses (primarily located on ‘The Hub’) will generate the order of 323 gross
FTE jobs. These jobs are additional to the 5,228 gross jobs associated with the
core floorspace proposition.
Table 3: Additional Analysis: Net Employment Impacts for Non B-Class uses in the ‘Hub’ - NELEP area
Central
Jobs Factor
Gross benefits 323
Leakage 16 5%
after leakage 307
Displacement 77 25%
after displacement 230
Multiplier effects 129 1.56
Net benefits 359
106. Together the results indicate that the IAMP has the potential to generate up to 11,589 net additional jobs in the NELEP area under the central case (comprising
11,230 in B-Class floorspace and 359 in non B-class uses).
107. In terms of displacement, locations that could be particularly vulnerable to automotive supply-chain company movements to IAMP include the Washington
area and Pennywell. Whilst a number of firms with strong relationships to Nissan
are currently located in these areas, in some cases the space they are occupying is
dated or near the end of its life, with limited opportunity for re-provision or
expansion in that location.
108. However, overall, the scale of displacement in the automotive sector is likely to be limited as the majority of other major existing and planned employment locations
do not have an automotive focus. The following factors were identified as
important in determining the level of displacement:
• The realisation of the Strategic Business Case work findings which indicate
that the majority of site occupiers are likely to be inward investors or
indigenous companies that might locate, or remain located, outside of the UK
in the absence of the IAMP;
• That the IAMP is complementary to the existing UK automotive offer and
given the profile of Nissan’s global supply chain base will attract significant
inward investor interest;
• The generation of additional demand for supply-chain activity in the area and
potentially new incoming firms not currently represented in the area as a
consequence of Nissan diversifying into new electric vehicle production; and
• The balance in occupiers between the automotive sector and broader advanced
manufacturing and distribution sectors.
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109. The paper stated that it is important to distinguish between the occupiers in the automotive sector and occupiers in the broader advanced manufacturing sector.
Whilst the evidence suggests that displacement of automotive related activity is
likely to be limited, there is greater potential for displacement of broader
advanced manufacturing firms. Other key existing and planned employment
locations are also seeking to attract firms within this sector.
110. However, it was emphasised that there may be positive aspects to the relocation of firms. Potential in-movers may currently be in sub-optimal premises or locations
and would benefit from moving to the IAMP. Relocation is often accompanied by
re-investment in plant and machinery and so a degree of modernisation is likely to
occur with beneficial knock-on effects for productivity in the longer-term. The
potential for displacement needs to be considered in the context of the potential for
offset by the generation of demand for sites and space in Sunderland, South
Tyneside and neighbouring areas as a result of multiplier effects.
111. In summary it was concluded that the IAMP project will generate significant multiplier effects, both through the supply-chain (indirect effects) and spending of
incomes (induced effects). Together these effects may enable the IAMP to generate
the following benefits to the wider area:
• Attraction of greater inward investment;
• Increased market opportunities for Small and Medium-sized Enterprises
(SMEs);
• Increased leverage of innovation potential;
• Support greater demand for city centre retail space and services;
• Additional employment opportunities for workers with lower skills; and
• Support growth of the Port of Tyne.
2.5.2 IAMP Impacts Study - Topic Paper: Employment Land (2015) (SD8)
112. This paper examined the issues around the impact of IAMP on existing and proposed strategic employment sites.
113. The primary objective of this paper was to examine the local development plans and economic development strategies of the neighbouring authorities of Durham,
Gateshead, Newcastle, Northumberland and North Tyneside. Consideration
was also given to potential interaction of IAMP with the Tees Valley area.
114. The topic paper made the following key conclusions:
• The IAMP forms part of the Combined Authority and NELEP economic
strategy to create economic growth and jobs in the region. This strategy was
formulated to build on the sectoral strengths of the region. It is also an aim of
the Sunderland Economic Master Plan to build on the automotive and low
carbon sectors;
• Nissan has attracted a large supply chain. As there has been no discernible
plan to make provision for that supply chain, over the 25 years or so of
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production, some suppliers are located close to the manufacturing plant, others
further away;
• Making land and accommodation available adjacent to Nissan for the
automotive and low carbon sectors will be attractive to both new, as well as
existing, suppliers. However, this carries the risk that some suppliers that are
already located in the region will consider the feasibility of relocating. Those
factors that make such relocation attractive are the usual three locational
factors of proximity to market, labour and materials;
• Those investors considering relocation might wish to do so because the
present accommodation is sub-optimal, or in a location that is less attractive
than that of the IAMP due to access. Such relocation is often accompanied by
re-investment in plant and machinery and to some degree modernisation and
increased productivity. However, making the decision to relocate will also
have regard to the retention through relocation of the skilled people already
employed, as well as the costs, the quality and adequacy of the existing
accommodation. These factors could outweigh the advantages of relocating to
IAMP; and
• The scale of displacement effects across local authorities will vary depending
upon the nature of activity supported and local markets. A high level
assessment of the likely distribution of displacement effects across the seven
local authorities comprising the NELEP area and the Tees Valley was
undertaken which concluded that the greatest pull is likely to be from
relatively local locations in Sunderland and South Tyneside.
2.5.3 IAMP Impact Study - Topic Paper: Skills (2015) (SD6) and Update 2016 (SD12)
115. The purpose of this paper was to examine the likely skills implications of the IAMP at its completion in 2027. The 2015 Paper examined the range of skills
likely to comprise the ‘core’ IAMP activities providing 5,228 Full Time
Equivalents (FTEs) (i.e. manufacturing and directly associated activities
hereinafter referred to as ‘core’ activities). The 2016 Update also examined a
further 323 FTEs that would be created within the ‘Hub’ comprising of a series of
ancillary activities supporting the needs of the workforce. The IAMP as a
completed development in 2027 would, therefore, be expected to create 5,551
FTEs.
116. The paper established that “advanced manufacturing” involves a fundamental change in the processes used to produce a wide variety of goods based on an
ability to manipulate materials and achieve process efficiencies through
automation and a reduction of waste. Process efficiencies are removing the need
for less skilled labour e.g. system automation/robotics raising the proportion of
higher level skills within the workforce supporting productive activity.
117. Collectively, these skills tend to be found among occupational groups like managers, professionals and associate professionals where there tends to be a
greater preponderance of formal higher, degree level qualifications. This element
of the workforce tends to be referred to as “knowledge workers”. Knowledge
workers are expected to be an important element in the IAMP core workforce with
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an estimated 37% of the core 5,228 jobs attributable to this kind of work. It was
noted that the knowledge worker share of the IAMP core workforce is strongly
dependent upon the 81% share of the total development taken by automotive
industries. Variations in the mix will have the potential to change the outcome.
118. The paper also considered the possible distribution of workers within the North East region based on primary data collected from Nissan and two supplier
companies as to where their workers live and their occupation. A distribution of
IAMP workers was generated based on the assumption that future workers will
want to live in places where people who do similar types of work currently live.
This was based on the concept that what people do infers common characteristics
concerning their general lifestyle that encourage a desire to associate. No
allowance has however been factored in to say whether this is either desirable or
feasible from a policy perspective.
119. The table below shows the expected distribution of the IAMP core workforce based on an average of the results from analysing the Nissan and supplier
company’s workforce data.
Table 4: Summary of net employment impacts - NELEP area Distribution of IAMP Core Workforce
Usual residence
IAMP
Predicted
Knowledge Workers
IAMP
Predicted Rest of
Workers
IAMP Predicted
County Durham 29% 25% 26%
Darlington 1% 1% 1%
Gateshead 8% 10% 10%
Hartlepool 5% 2% 3%
Middlesbrough 0% 0% 0%
Newcastle upon Tyne 4% 4% 4%
North Tyneside 6% 4% 5%
Northumberland 5% 3% 3%
Redcar and Cleveland 0% 0% 0%
South Tyneside 9% 12% 11%
Stockton-On-Tees 2% 1% 1%
Sunderland 31% 38% 36%
120. The results set out above show that 83% of the core workforce predicted for IAMP might reasonably be expected to be drawn from the four local authorities
closest to the development using the average recorded across the three companies
reviewed.
121. The table below shows the expected distribution of the IAMP Hub workforce. In the absence of any primary survey data from companies’ representative of the hub
activities, it has been necessary to revert to Census of Population 2011 data on the
origin/destination for journey to work. This data is reported for all workers
irrespective of occupation characteristics.
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Usual residence Hub (Number of workers)
Hub %
County Durham 68 21.0%
Darlington 2 0.6%
Gateshead 30 9.2%
Hartlepool 4 1.1%
Middlesbrough 1 0.4%
Newcastle upon Tyne 14 4.4%
North Tyneside 13 4.2%
Northumberland 10 3.1%
Redcar and Cleveland 1 0.4%
South Tyneside 34 10.7%
Stockton-On-Tees 4 1.1%
Sunderland 142 43.8%
Total 323 100%
122. This distribution suggests that nearly 85% of the total hub workforce will be drawn from within the four local authorities closest to the IAMP – Sunderland,
Gateshead, South Tyneside and County Durham.
123. The predicted distribution showed that certain areas within the North East are better placed to attract future IAMP workers than others based on the current
residential distribution of workers involved in activities likely to predominate in
the IAMP. Certain areas like County Durham are better placed to offer the village
and market town environments attractive to knowledge workers. Sunderland and
South Tyneside appear to have a weaker offer in this respect.
124. This distribution of workforce does not however offer any insight into the policy or physical capacities of those settlements to absorb additional households (e.g.
could a village in County Durham absorb additional people without additional
physical infrastructure and services). As such the modelling methodology was
policy neutral.
125. Equally, the analysis did not cover the degree to which the workforce for IAMP will consist of new workers relative to existing workers changing jobs. A
proportion of IAMP workers will come from existing workers changing jobs or
new cohorts of workers coming into the workforce for the first time. These
workers must be assumed to already be housed. The jobs vacated by these
workers will create opportunities for secondary moves from existing jobs and
entry level positions. These second/third round effects will however be dispersed
across the North East and might be dealt with by adjusting commuting behaviour
rather than moving house.
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2.6 Summary
126. The topic paper made the following key conclusions:
• In an increasing globalised world, the geographic concentration of people and
businesses is driven by ‘agglomeration economies’. Clusters provide
companies with a competitive advantage, enabling them to improve
productivity. Similarly the automotive industry considers that future growth
requires flexible manufacturing with increasing interconnectedness and the
ability to customise to individual customer need;
• The UK automotive industry is growing, especially in the production of
premium and low carbon vehicles. In order to maximise value capture, there
has been a targeted focus in supporting and growing opportunities in the local
supply chain, to secure more supply chain activities in the UK;
• The immediate supply chain can account for just over half of the total
automotive industry employment. There are also several tiers to the supply
chain;
• ‘Proximity’ was identified as the key competitive advantage of UK suppliers
as it allows for lower logistics cost, a better support for UK-built vehicles, the
responsive configuration of parts, as well as for more flexibility to adjust to
volume and product mix fluctuations. In strategic terms, proximity also acts as
a general proxy for risk reduction in the supply chain, as well as a hedge
against currency fluctuations;
• In addition, there is a pervasive market trend for increased customer choice
driving higher product complexity. This requires leaner and more flexible
supply chains, close to the vehicle/engine manufacturing plant. This is
becoming more important for all manufacturers and particularly for premium
manufacturers in the UK;
• The North East has a strong and growing automotive and related low carbon
cluster, including significant supply chain activities which is of national
significance and located on the Sunderland - South Tyneside border;
• In terms of Nissan, the North East Independent Economic Review (Summary
of Evidence) considered that that the associated supply chain was worth close
to £1bn. It also notes that the North East’s main opportunities relate to the
development of electric vehicles and other low carbon vehicles technology
such as hydrogen and the offshore wind turbine market;
• The Strategic Needs Study which informed the City Deal identified a demand
for 150ha of employment land over the next 20 years (moderate scenario) to
support the growth of the automotive industry and related supply chain
activities;
• The 2016 update on the Automotive Sector Demand shows that the absence
of growth potential the status quo will not be sustainable as the automotive
sector in the North East and in fact the UK will not be in an optimum position
to win future assembly competitions with other automotive plants abroad;
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• The North East Independent Economic Review (Summary of Evidence)
highlighted a shortage of employment land in South Tyneside and in particular
‘market friendly sites’;
• The Sunderland Employment Land review highlighted a shortage of available
employment land in the north of the local authority area and highlighted that
automotive and advanced manufacturing plants developed since 2010 in the
area required sites between 5 and 12ha in size;
• The South Tyneside ELRs highlighted the need (and shortage) of land to the
south of the conurbation. This location was attractive due to the ease of the
strategic transport network and port connectivity;
• The existing enterprise zone around the Nissan Plant has proven to be
successful, but has only three plots of between 6ha and 15ha currently
available for development;
• There is therefore currently a shortage of quality employment land and
premises of the right scale and in the right location to best maximise the
opportunity; and
• In terms of potential displacement impacts of the IAMP proposition,
displacement of automotive related activity is likely to be limited and the
IAMP project will generate significant multiplier effects, both through the
supply-chain (indirect effects) and spending of incomes (induced effects).
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3 Key Issues
127. This section draws on the evidence provided in section 2 to set out issues that should be taken into account in developing the approach and policy of the AAP.
128. This is structured around the following headings:
• The Importance of IAMP to the North East and UK;
• The Northern Powerhouse;
• Automotive Strategy;
• Nissan;
• North East Manufacturing Employment;
• Opportunities for Manufacturing Growth;
• Market opportunities;
• Demand; and
• Locational criteria.
3.1 The Importance of IAMP to the UK and North East
129. The development of the IAMP has the potential to underpin the continued success of the automotive and advanced manufacturing sectors in the UK and North East.
130. The North East Automotive Alliancev recently outlined the benefits and importance of the automotive sector to the UK.vi
• To date the sector has generated sales of over £7bn, exporting £5.1bn and a
trade surplus of £2.6bn;
• The sector directly employs 26,000 people and impacts on a further 141,000
jobs;
• Nissan Manufacturing UK in Sunderland accounts for one third of all UK car
production;
• The sector exports to more than 130 markets; and
• In the region there is a cluster of 25 ‘Tier one’ automotive suppliers
employing over 7,000 people.
131. The importance of the automotive sector and advanced manufacturing sectors and their future potential for growth in the North East (particularly in Sunderland and
South Tyneside) is evidenced through the City Deal agreement which seeks to
boost advanced manufacturing centred on the automotive sector, significantly
increasing opportunities for enterprise and employment in the North East and
outputs that support GDP.
132. The North East of England is recognised internationallyvii as a centre for the automotive industry due to the presence of Nissan which has been in the region
since 1985. This has led to the expansion of an ‘automotive cluster’ centred on the
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Nissan plant north of Sunderland, with the nearby location of manufacturers
linked to the Nissan supply chain.
133. Nissan is a major employer in the North East and has been the largest car plant in the UK for 14 years and the largest exporter for 12 years. Overall production
surpassed 500,000 vehicles in 2013 and is set to expand further, with the vast
majority of these manufactured for export. Sunderland's current trajectory will
take it through the 600,000 cars a year barrier and is on track to become one of the
world's largest car plant complexes.
134. The IAMP project is therefore of national and international significance given its importance to growing the automotive and advanced manufacturing sectors in the
UK and its potential to deliver real value to the performance of a City Region at
the northern most extent of the Northern Powerhouse initiative. The project
focuses on the key challenge of rebalancing the wider North East economy and
setting it on a new self-sustaining economic growth path. This rebalancing will
involve securing the major opportunity presented by manufacturing growth based
upon the successful automotive cluster and other advanced manufacturing and
cascading the additional wealth generated throughout the wider economy through
a revitalised city centre economy, based upon central business district growth.
135. Nissan UK is critical to the UK automotive industry nationally and regionally. NMUK is the largest vehicle manufacturer in the UK and is gradually
consolidating its position within Nissan worldwide, being the European centre for
Electric car production, including battery packs, and for the premium Infiniti
brand2.
136. The recent decision to invest further in Sunderland by Nissan with the replacement Qashqai and the additional X-Trail model reinforces the growth
imperative and without the ability to expand, local suppliers will miss out on
growth potential and job creation opportunities, as well as the ability to anchor
Nissan even more firmly to the area over the longer term.
137. The viability of the UK supply base also depends upon Nissan and Jaguar Land Rover above all. These companies depend upon late material sequencing to build
complex products with unique build combination varieties in the millions. This is
only possible with key suppliers located very close to the final assembly plants,
which puts a premium on the availability of development land nearby as remote
sites do not offer the same advantages3.
138. It is therefore critical to the future of Automotive manufacturing in the UK that the land at IAMP is made available to support these clear trends and secure the
long term growth prospects for NMUK and the wider industry4.
3.2 UK Automotive Strategy
139. The IAMP supports the Government’s Automotive Strategyviii, which commits Government and Industry to working together, through the new Automotive
2 Expert Opinion of RPJ Consulting, 2016 3 Expert Opinion of RPJ Consulting, 2016 4 Expert Opinion of RPJ Consulting, 2016
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Investment Organisation, to improve the image of the UK as a location for Inward
Investment.
140. The UK Automotive Strategy sets out actions for growth and vision for the sector and seeks to ensure that the UK is well placed to benefit from investment in
production and in critically important research and development activity. It seeks
to provide a focus for strengthening the domestic supply chain and ensuring
people with the right skills are available to support a growing and nationally
important industry. At present the domestic supply chain is considered to be
relatively weak and has been identified as a key challenge and opportunity for the
sector. Addressing this is dependent on a stronger automotive supply chain in the
UK. UK suppliers could take a much bigger share of the market with £3bn of
opportunities identified by the Automotive Council UK.
141. IAMP, providing space for investment and the expansion of companies operating in the automotive sector and in close proximity to Nissan, will be a significant
attractor for companies both in the UK and elsewhere in the world. By providing
land and skilled employees to allow expansion, the IAMP will support UK
suppliers to access these opportunities. In summary, the IAMP and the synergy it
will have with the Nissan production facilities will enable the project to:
• Continue to be a key element of the automotive sector making a large and
increasing economic contribution to employment and prosperity in the UK;
• Contribute to the UK playing a decisive role in developing and manufacturing
low and ultra-low emission vehicles and technologies; and
• Support the further development in the UK of a highly skilled workforce and a
strong supply chain.
3.3 Building our Industrial Strategy Green Paper , 2017
142. The ‘Building our Industrial Strategy’ Green Paper was published for consultation in January 2017; it sets out a vision to improve living standards and economic
growth by increasing productivity and driving growth across the whole country.
The Green Paper recognises that economic growth is founded on building on
existing strengths and areas of excellence, closing the gap between the UK’s most
productive companies and places, and making the UK one of the most competitive
places in the world to start a business.
143. The Green Paper is focussed on 10 pillars of ‘Driving Growth across the whole country’. Delivering IAMP will be critical to the achieving a number of these key
interventions, including: Develop Skills; Support Businesses to Start and Grow;
Encourage Trade and Investment; Cultivate World-leading Sectors and Creating
the right institutions to bring together sectors and places. The extent to which
IAMP could support these objectives is set out below.
“Encouraging Trade and Investment” and “Cultivate World-leading
Sectors”
144. The Industrial Strategy recognises that the UK has built a global reputation for automotive sectors. IAMP will enhance this reputation through the following:
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• The North East Independent Economic Review concluded that the region has
the potential to be an “International leader in Trade and a leading location
for (re) investment” and that the IAMP will help make this a reality;
• Delivery of IAMP will attract greater inward investment. This would be across
all tiers of the automotive supply chain with associated benefits to local
employment and income;
• IAMP will increase market opportunities for SMEs. This includes the potential
for Nissan and other UK based vehicle production centres to increase their UK
sourcing of components; and
• IAMP could leverage innovation potential. This includes the development of
low-carbon vehicles as part of Nissan’s future investment offers the
opportunity for the area to capitalise and build upon this knowledge. The
IAMP will result in a significant scaling up of business activity and the
potential for universities, spin-outs and SMEs to undertake R&D to capture
the related commercial opportunities arising.
145. IAMP will increase the size of the current automotive cluster in the region by an amount equivalent to Nissan’s current employment levels and therefore help
secure the future of the region by generating growth and jobs.
146. IAMP seek to reduce trading costs by supporting growth of the Port of Tyne and the Port of Sunderland, through the contribution of activity through increased
exports.
“Creating the right institutions to bring together sectors and places”
147. The Industrial Strategy sets out the importance of maximising the benefit that anchor companies can bring to an area. IAMP will seek to create a spatial cluster
of innovation: bringing together advanced manufacturing and supply chain
companies.
148. IAMP will strengthen the existing comparative advantage of the North as a place to do business by increasing the size of current automotive cluster in the region by
an amount equivalent to Nissan’s current employment levels and therefore help
secure the future of the region by generating growth and jobs.
149. IAMP will support more business-to-business trade in the region so that the impact of further manufacturing growth is cascaded throughout the economy. The
local economy is currently too reliant on a small number of large private
employers.
150. IAMP will allow the region to substantially increase the size of the current automotive cluster in the region and secure further investment in the city centre
through attracting jobs and spending power.
“Develop Skills” and “Support Businesses to Start and Grow”
151. The Industrial Strategy recognises that there is a need to reduce the skills gaps across specific sectors, by providing employment opportunities for workers with
lower skills.
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152. IAMP would help build on the success of Nissan through the creation of 5,200 new jobs and support the development of market opportunities for SME’s.
Development will also generate significant economic multiplier effects, both
through the supply-chain (indirect effects) and spending of incomes (induced
effects).
153. Provision of employment opportunities for workers with lower skills through ‘consumer-led’ job creation. This means that the employment opportunities
associated with the project could extend beyond those in higher skilled
occupations on the IAMP site to opportunities with lower skills entry off-site.
154. The Northern Powerhouseix seeks to rebalance and grow the UK economy by devolving political power and economic activity to the north of England. The
Government is committing £13bn of investment to transport in the north of
England; backing major new science, technology and culture projects; and
agreeing to devolve significant powers over transport, housing, health and
planning.
155. Projects such as IAMP are critical to the success of the Government’s Northern Powerhouse strategy. In particular, innovation clusters such as that proposed for
the automotive sector around IAMP and Nissan will provide a step-change in
creating the Powerhouse.
156. IAMP, as a nationally significant project in its own right, in tandem with the support it will provide for the continued success of Nissan in the UK, will be a
key contributor to the Government progressing the Northern Powerhouse strategy.
The key objectives of the Northern Powerhouse and how they relate to IAMP are
summarised below.
157. Stimulating business investment and innovation by supporting economies of scale and new ways of working.
• The North East Independent Economic Review concluded that the region has
the potential to be an “International leader in Trade and a leading location
for (re) investment” and that the IAMP will help make this a reality;
• Attraction of greater inward investment. This would be across all tiers of the
automotive supply chain with associated benefits to local employment and
income;
• Increased market opportunities for SMEs. This includes the potential for
Nissan and other UK based vehicle production centres to increase their UK
sourcing of components; and
• Increased leverage of innovation potential. This includes the development of
low-carbon vehicles as part of Nissan’s future investment offers the
opportunity for the area to capitalise and build upon this knowledge. The
IAMP will result in a significant scaling up of business activity and the
potential for universities, spin-outs and SMEs to undertake R&D to capture
the related commercial opportunities arising.
158. Achieve agglomeration economies by bringing firms and their employees closer to other businesses and partners
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• More business-to-business trade in the region so that the impact of further
manufacturing growth is cascaded throughout the economy. The local
economy is currently too reliant on a small number of large private employers.
159. Enabling firms to access a larger labour supply and providing wider employment opportunities for workers and those seeking work.
• IAMP would help build on the success of Nissan through the creation of 5,200
new jobs; and
• Provision of employment opportunities for workers with lower skills through
‘consumer-led’ job creation. This means that the employment opportunities
associated with the project could extend beyond those in higher skilled
occupations on the IAMP site to opportunities with lower skills entry off-site.
Increase competitiveness through access to new and larger markets with the
benefits of increased labour market specialisation.
• IAMP will allow the region to substantially increase the size of the current
automotive cluster in the region and secure further investment in the city
centre through attracting jobs and spending power.
Reduce trading costs and use more efficient logistics networks.
• IAMP will support growth of the Port of Tyne and the Port of Sunderland,
through the contribution of activity through increased exports.
Strengthen the existing comparative advantages of the North as a place to do
business.
• IAMP will increase the size of the current automotive cluster in the region by
an amount equivalent to Nissan’s current employment levels and therefore
help secure the future of the region by generating growth and jobs; and
• The IAMP project will also generate significant economic multiplier effects,
both through the supply-chain (indirect effects) and spending of incomes
(induced effects).
3.4 Nissan
160. Nissan is a major employer in the North East and the Sunderland plant is a good example of a national and regional success in manufacturing. Having been
secured with Government support in 1985 the plant has become Nissan’s most
highly regarded European plant with a reputation for high productivity and
adaptability. Nissan currently employs circa 7,000 people on the site.
161. Nissan has been the largest car plant in the UK for 14 years and the largest exporter for 12 years. Overall production surpassed 500,000 vehicles in 2013 and
is set to expand further, with the vast majority of these manufactured for export.
Sunderland's current trajectory will take it through the 600,000 cars a year barrier
and is on track to become one of the world's largest car plant complexes.x
162. Sunderland produces one third of UK car output and 35.7% of exports. 81% of production (343,000 units) was exported in 2013, also a UK record. All of
Sunderland’s production consists of fully built-up vehicles whereas other UK
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plants have hit high production numbers in the past through assembling “kits”. At
present the plant is increasing its production with a 25,000m increase in
floorspace and a move to a three shift, 24hr production pattern (increasing from
two shifts). The plant is also diversifying into new luxury and electric vehicle
production.
163. In recent years, an increasing number of Nissan’s suppliers have located not only in the North East, but on the factory site, while remaining independent businesses.
Nissan’s supply chain has also seen significant growth recently in response to
securing the production of new models (particularly the LEAF and the lnfiniti).
164. The Nissan production processes require certain supply activities to be located as close to the plant as possible. The local job multiples generated by the vehicle
firms is illustrated by the 7,000 jobs in Sunderland's Nissan plant underpinning
over 20,000 supplier jobs in the wider North East region.xi
165. NMUK is likely to be part of a fundamental change in the Manufacturing system at Nissan worldwide, designed to accommodate the prolific increase in buildable
variety within the manufacturing system rather than add-ons in the dealerships5.
166. This will transform the supply chain, shortening supply lines and simplifying logistic chains, with a consequent increase in local value-added in the supply base.
Close proximity is crucial in yielding the optimal benefits6.
167. Failure to provide practical support for this shift, and the land it requires, will make it increasingly difficult for NMUK to continue to win competition from
overseas plants for programs, considered critical to the livelihood of any plant7.
3.5 North East Advanced Manufacturing Employment
168. The North East is one of the leading manufacturing and export regions within the UK. In both 2011 and 2012 the North East was the only region in England to
record a trade surplus of goods and the value of its exports has been increasing.
The independent economic review, commissioned by the NELEP, concluded that
the region has the potential to significantly expand this existing strength.
169. The Strategic Economic Plan sets a vision of more and better jobs for the region; it focuses on the potential for the region to trade and export more; it underlines the
importance of increasing GVA and enterprise; and it sees a boost in private sector
employment as the key to rebalancing the North East’s economy.
170. The North East Independent Economic Review (SD38) states that advanced manufacturing, pharmaceuticals, energy/low carbon and environmental industries
are particularly important sectors for NELEP as they offer innovative, highly
productive and world-class activities. Many of NELEP’s successful businesses
hold a prominent position in international market places, with exports for goods
such as machinery and transport holding up relatively well. These are strong
5 Expert Opinion of RPJ Consulting, 2016 6 Expert Opinion of RPJ Consulting, 2016 7 Expert Opinion of RPJ Consulting, 2016
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foundations on which the economy can build. Advanced manufacturing is also
particularly noted in the Strategic Economic Plan as being particularly important
as the sector offers the potential to build on its established innovative, highly
productive and world-class activities.
171. Currently, manufacturing is located largely in out of town business and industrial parks, creating key employment locations along economic growth corridors which
support the growth of the manufacturing sector. There are particular clusters and
corridors emerging, specifically around passenger vehicle manufacture, renewable
energy, oil and gas and process industries. The area needs to retain the
international competitiveness of its manufacturing jobs, which still account for a
large proportion of better paid private sector jobs, and grow the higher value
service sector jobs linked to business services and the new economy.
172. IAMP will act as a key part of the investment needed to respond to this need.
3.6 Opportunities for Advanced Manufacturing Growth
173. The North East has experienced strong success in advanced manufacturing with a key part of this success being focused on the area close to Nissan. The area was
designated as a Low Carbon Economic Area in 2010 in recognition of the area’s
importance in the production of Electric Vehicles and the first development in the
new round of UK Enterprise Zone sites, with the Vantec’s £22.5m, 40,000 sq m
development on Turbine Business Park.
174. Across the UK there is strong growth in the automotive sector, both in vehicle production and in supply chain activity. BIS’s Automotive Strategyxii estimated
that supply chain production worth £3bn could be brought within the UK. In
Sunderland there has been substantial demand for manufacturing land, with
annual growth of 6ha per year. The Sunderland Enterprise Zone (EZ), adjacent to
the Nissan plant, was the first of the new generation of EZs to attract investment
with a 40,500 sq m logistics facility (a second Vantec building) providing supply
support to Nissan and other local manufacturers.
175. The Strategic Employment Studyxiii identified that automotive demand will continue to grow and more land will be required to sustain this growth.
176. IAMP will act as a key part of the investment needed to respond to this demand.
3.7 Market Opportunities
177. The Strategic Employment Study recommended the majority of demand (around 75%) would originate from the automotive sector, supported by demand from
advanced manufacturing, distribution and offshore renewables. BIS’s automotive
strategy estimates that supply chain production worth £3bn to 4bn could be
brought within the UK.
178. At present the Nissan plant is increasing its production with a 25,000 sq m increase in floorspace and a move to a three shift, 24hr production pattern
(increasing from two shifts). The plant is also diversifying into new luxury and
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electric vehicle production. The plant currently assembles the Qashqai, Juke, Note
and Leaf models. The Infiniti model was introduced in late 2015, and the new
Juke model planned for 2017.xiv
179. The Nissan production processes require certain supply activities to be located as close to the plant as possible. In recent years, an increasing number of Nissan’s
suppliers have located not only in the North East, but on the factory site, while
remaining independent businesses. The opportunities that are presented from this
are already starting to materialise with the location and successful take-up of the
Low Carbon Enterprise Zone, located close to the Nissan site. The Enterprise
Zone includes a 40,500 sq m logistics facility providing supply support to Nissan
and other local manufacturers.
180. Nissan’s supply chain has seen significant growth recently in response to securing the production of new models (particularly the LEAF and the lnfiniti). According
to information provided by SCC and STC there is the potential for further growth
in ‘Tier 1’ and 'Tier 2’ suppliers located in the North East from the relocation of
suppliers from outside the region. Currently Nissan sources around £0.67bn worth
of components annually from outside the North East. Those suppliers that locate
in the North East are not just dependent on Nissan, evidence shows suppliers are
also securing contracts with other automotive manufacturers from outside the
region. The recent inquiry via the BIS Automotive Investment Unit for an alloy
wheel plant in the UK is a good example. It could have supplied both Nissan and
Jaguar Land Rover, but space was not available to build the plant and the
opportunity has been missed for now, until the land shortage can be addressed.
181. Therefore, the IAMP will act as a key part of the investment needed to respond to these market opportunities.
3.8 Demand
182. Demand for large scale employment sites for manufacturing and distribution uses is not limited to growth from Nissan. Since the Strategic Employment Study the
Councils have been monitoring demand from businesses whose requirements
would be met by the development of the IAMP. This is an on-going process with
business requirements informing the master planning and process in terms of site
requirements. A review of enquiries made to the Councils shows demand for large
floor plate developments over 2,000 sq m or sites greater than 1ha amount to a
total property requirement of 152,500 sq m with a total land requirement of
171ha.
183. As set out in the City Deal submission (2014) (SD41), in the last two years Sunderland has secured 71 investment and growth projects worth over £530m
and created 3,786 new jobs. Much of this new investment has been within the
manufacturing sector. This has included:
• French vehicle parts maker SNOP UK choosing to locate its first UK
manufacturing facility in Sunderland, creating 130 jobs;
• Calsonic Kansei announcing an investment of £15.3m to expand its product
range, creating more than 140 jobs;
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• The Lear Corporation opened its first UK foam manufacturing plant, bringing
300 jobs to Sunderland in its first three years;
• Interplas Coatings NE announced expansion of its 3,252 sq m premises –
growing from a single employee to 30 staff in less than a year; and
• Vantec announcing a further 81 jobs created in addition to the 230 jobs the
company is creating by 2015 as part of its £22.5 million investment in a new
40,500 sq m development.
184. An assessmentxv of the potential impacts of the IAMP project concluded that in terms of existing employment land supply:
• Much of the land available is of small scale and fragmented and does not meet
the criteria necessary to create the economic benefits of IAMP;
• The available employment land is considered to be too fragmented or in the
wrong location to meet the needs of occupiers that would seek to be co-
located as part of the IAMP development and Nissan supply chain;
• In addition, the largest areas of available employment land in Sunderland and
South Tyneside are around the Ports and are retained for expansion and
strategic port related development, or for residential development; and
• The Councils also require land for other employment developments and the
current provision provides some of the land required for the development and
expansion for new and existing businesses.
185. Currently, there is a shortage of suitable sites available to meet this projected demand. Evidence from the Councils regarding recent investor enquiries,
including those that could not be met, is that the current land supply for large scale
industrial development is insufficient to meet market demand. This is largely
attributable to the lack of suitably large sites capable of being developed, and a
lack of good quality units to meet the demands of new or expanding businesses
wishing to locate in the area.
186. To illustrate this point, enquiries to the Councils between 2008 and June 20168 are included at Appendix A and summarised below:
• 60 Investment Inquiries were recorded for automotive and manufacturing
related end users, of which;
• 12 sought a space requirement of greater than 50,000 sq m;
• 16 sought a space requirement for between 20,000 sq m and 50,000 sq m;
• 18 sought a space requirement for between 5,000 sq m and 20,000 sq m;
• 10 sought a space requirement of less than 5,000 sq m; and
• In four instances the space requirement was not known. IAMP will
therefore assist in meeting this demand.
8 Up to June 2015 for South Tyneside Council
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3.9 Locational Criteria
187. Taking account of market and locational requirements the Strategic Employment Study (2013) (SD28) identified key criteria relating to the future needs of the
automotive, manufacturing and distribution sectors seeking to locate in the North
East. This was also summarised in the City Deal submission:
188. “The combination of size, proximity to existing industry, transport links and availability makes these sites the most suitable for investment according to the
demand study and needs analysis carried out by the consultant team.”
(Sunderland City Deal, March 2014).
189. An outline of how IAMP responds to the following key issues is set out below:
• Site size (including ability to accommodate large scale floor plates);
• Adjacency to industry (to support the trend of near shoring and close
proximity of supply chains);
• Transport links; and
• Site availability.
Site Size
190. The moderate scenario set out in the Strategic Employment Study (August 2013) (SD28) forecasts demand for around 150ha from the automotive, advanced
manufacturing and distribution sectors. Based on a review of enquiries it was
concluded that these sectors require accommodation on large scale floor plates
ranging from 9,000 to 37,000 sq mxvi, depending on the nature of operations.
191. The typical size of specific Tier 1 supplier site requirements ranges from 15,000 to over 30,000 sq m, and the history of the area shows that further expandability is
an important requirement. A majority of NMUK Tier one suppliers are actively
seeking or planning expansion and are in need of more land to facilitate that
expansion9.
192. In order to meet forecast demand and provide an attractive location to the target sectors, IAMP needs to be of sufficient scale to enable development to meet these
requirements. Therefore the overall site is required to be between approximately
100ha and 150ha.
Adjacency
193. Adjacency is an important factor when considering the appropriate location of an Advanced Manufacturing Park to meet the needs of the automotive sector. The
Strategic Employment Study (2013) (SD28) states: “The trend towards near-
shoring of suppliers close to OEM’s [Original Equipment Manufacturer] will
continue.”
194. The location of Nissan’s supply chain is also reflected on in the IAMP Impacts Study Employment Land Topic Paper (SD8): “Nissan has attracted a large supply
chain. Because there has been no discernable plan to make provision for that
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supply chain, over the 25 years or so of production, some suppliers are located
close to the manufacturing plant, others at a longer distance.”
195. Nissan has a complex supply-chain with goods sourced from around the UK and continental Europe including France, Spain, Italy and Germany. The supplier
network also extends outside Europe to Japan, China, Mexico, India, Thailand and
the USA. The move towards ‘near shoring’ of suppliers shows there are
significant opportunities to attract suppliers from overseas as opposed to
displacing existing companies from elsewhere.
196. The Strategic Employment Study (SD28) also supports the view that adjacency is critical for the automotive sector. It considers development of an IAMP in close
proximity to the existing automotive cluster around Nissan as the optimal location
in the region to capture growth opportunities and provide significantly more land
for development, delivering a major increase in manufacturing capacity for the
region.
Transport links
197. Businesses locating on the IAMP need to be able to easily access a skilled workforce, have strong links to supply chain and be able to transport goods to
national and international markets. The North East offers good transport links
from the Ports of Tyne and Sunderland, Newcastle Airport, the freight rail
network and road network including the A1M and A19.
198. For IAMP to be an attractive location it needs to have good accessibility to the strategic road network, as well as being able to access the rail network, ports and
airport. The Strategic Employment Study states:
199. “Many of the manufacturing companies which are likely to locate to the site will produce goods mainly for the international market. Consequently they will require
good road and rail access in order to distribute their goods. They will also
require links to the local port and national rail network.”
200. The North East Independent Review (SD38) commented on the impact and importance of coordinating development with key investment principles
including concluding that there is compelling evidence that transport investment
will make the maximum impact on productivity, job creation and GVA where it:
• Improves the North East’s strategic connectivity; and
• Improves access from all parts of the North East to the priority locations for
economic growth.
201. It was stated that in relation to improving access from all parts of the North East transport has a key role to play in lifting GVA to deliver the maximum available
agglomeration effects in the regional labour market; or in other words, to
maximise the pool of talent that can access the priority locations for economic
growth.
202. Therefore, good accessibility by road across the whole LEP area, including a fast and reliable journey time to the area’s airport and ports, is required in order to
support economic growth. The priority locations for the growth in advanced
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manufacturing in the North East is stated as being Ultra Low Carbon Vehicles
Enterprise Zone in Sunderland.
203. Accordingly, aligning infrastructure investment on the strategic road network with investment priorities (such as that proposed at Testos and the Downhill Lane
junction by Highways England which is adjacent to the IAMP site) was seen as a
key aspect of the strategy for the North East.
Site Availability
204. Current land uses and site availability need to be considered when assessing potential locations for IAMP. The IAMP Impacts Study Employment Land Topic
Paper (2015) (SD8) identifies the land currently available for development in
Sunderland and South Tyneside. It states: “The amount and character of land for
employment development is essential for the growth of the economy but it must
match the needs of the business that it seeks to support.” The topic paper
confirms: “Making land and accommodation available adjacent to Nissan for the
automotive and low carbon sectors will be attractive to both new as well as
existing suppliers.”
205. The availability of land adjacent to the existing NMUK and Tier 1 supply base is critical to achieve the vision of the prolific model variety integrated into the just-
in-time logistics chain. In-line sequenced production requires the exact
specification to be broadcast right up the supply chain and components and sub-
assemblies scheduled for delivery in the right sequence with no delays or gaps.
Global benchmarking suggests that this is best done by having the sub-assemblies
adjacent or even inside the final assembly plant. The majority of Tier 1 suppliers
are therefore focussed on achieving as close proximity as possible to the existing
Sunderland NMUK plant10.
3.10 Implications for the AAP
206. On the basis of the key issues outlined above it is recommended that the following policies are established within the AAP to ensure that IAMP best satisfies the
commercial requirements.
207. Firstly, it is recommended that AAP includes a policy which defines the principal acceptable uses for the IAMP as those uses directly related to the automotive and
advanced manufacturing sectors for production, supply chain and distribution
activities. This will ensure that the AAP develops a strategic focus that meets the
demand for growth of the automotive and advanced manufacturing sectors.
208. Secondly, it is recommended that the AAP includes a policy which requires comprehensive development designed and orientated to relate well to the existing
employment area and established infrastructure. Proposals should maximise the
interface with Nissan and ensure the effective movement between the two sites.
By providing the appropriate space in close proximity to Nissan and other key
infrastructure would attract investment and companies to the area and strengthen
the domestic supply chain,
10 Expert Opinion of RPJ Consulting, 2016
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209. Thirdly, a design code should be established to set out design parameters applicable to the IAMP AAP area to include massing, siting and scale appropriate
to the requirements prescribed by the principles uses. This will assist in ensuring
the site is attractive to future occupiers and flexible enough to accommodate a
range of businesses.
3.11 Summary
210. In summary:
• The development of the IAMP has the potential to underpin the continued
success of the automotive and advanced manufacturing sectors in the UK and
North East;
• Nissan is a major employer in the North East and has been the largest car plant
in the UK for 14 years and the largest exporter for 12 years. Overall
production surpassed 500,000 vehicles in 2013 and is set to expand further,
with the vast majority of these manufactured for export;
• The Nissan plant is also diversifying into new luxury and electric vehicle
production. The plant currently assembles the Qashqai, Juke, Note and Leaf
models and the Infiniti model was introduced in late 2015. The expansion of
the plant to produce the replacement Qashqai and an additional X-Trail model
are key indicators of the growth potential in the region in this sector;
• The Nissan production processes require certain supply activities to be located
as close to the plant as possible. In recent years, an increasing number of
Nissan’s suppliers have located not only in the North East, but on the factory
site, while remaining independent businesses;
• Clusters provide companies with a competitive advantage, enabling them to
improve productivity. In addition, automotive manufacturers are starting to
respond to increased customer choice which requires leaner and more flexible
supply chains, close to the vehicle/engine manufacturing plant;
• The typical size of Tier 1 suppliers site requirement ranges from 15,000 to
over 30,000 sq m and future expandability is important in choosing a location;
• Currently, there is a shortage of suitable sites available to meet the growth in
the supply chain and other advanced manufacturing activities (such as low
carbon technologies) in clusters in proximity to the existing automotive
industry; and
• The development of the IAMP can provide market friendly land of scale and
in a location which benefits from close proximity to a labour force, the
strategic road network and the Port of Tyne and Port of Sunderland.
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4 Outcomes
211. This section advises on the potential elements that should be considered in further progressing the IAMP proposal to delivery. In particular it summarises the key
outcomes aimed to be reflected in the AAP and implementation of the project.
212. These are presented under the following headings:
• Ability to meet existing and projected demand;
• Benefits;
• Economic Impact;
• Sustaining a Growing Economy; and
• Impact on the Economy and Business.
4.1 Ability to Meet Existing and Projected Demand
213. In support of the City Deal submission a schedule of floorspace was prepared:
Phase 1:
• Total floorspace - 62,700 sq m (offices 5,700 sq m, B2/B8 57,000 sq m )
• Total jobs – 1,255 (offices 335 jobs, B2/B8 920 jobs)
Phase 2:
• Total floorspace - 124,300 sq m (offices 11,300 sq m, B2/B8 113,000 sq m)
• Total jobs - 2,487 (offices 665 jobs, B2/B8 1,822 jobs)
Phase 3:
• Total floorspace - 74,250 sq m (offices 6,750 sq m, B2/B8 67,500 sq m)
• Total jobs - 1,486 (offices 397 jobs, B2/B8 1,089 jobs)
214. Demand is considered to be strong for large floor plate developments, many of which are projects linked to growth of the automotive sector. There are currently
significant levels of enquiries, however, the lack of large sites immediately
available has meant that some projects have been unable to progress.
215. There is an imbalance between the location of available land and market demand. In the main, deliverable sites are too small and in the wrong location which acts as
a constraint to economic growth. Overall there is also a shortage of large units
that are readily available for manufacturing or related distribution uses.
216. In the absence of the IAMP the Councils will be unable to meet the demand for suitably attractive manufacturing sites close to the existing Nissan plant.
217. IAMP will respond to this demand by providing large sites close to the road and port infrastructure. IAMP is capable of accommodating large floor plate
manufacturing and related distribution uses which are currently in short supply in
the area.
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4.2 Benefits
218. IAMP represents a major opportunity to accommodate the increasing demand in the region and will help grow the UK automotive and advanced manufacturing
industry, bringing a number of strategic economic advantages to both the UK and
the North East.
219. In order to support the delivery of the IAMP, the Councils and NELEP are committed to ensuring that the anticipated manufacturing growth is
complemented by a broadening and diversification of the wider economy,
ensuring that more of the wealth generated by manufacturing is retained within
the area. Due to the proximity to key transport links it is expected that the
enterprise and employment opportunities created will have an impact across the
NELEP region. These benefits include:
• It will allow the region to substantially increase the size of the current
automotive cluster and attract jobs and additional spending power;
• The IAMP will also help make the NELEP ambition of ‘More and Better
Jobs’ a reality. In the first quarter of 2015 it was one of only two regions in
England to achieve a positive balance of trade in goods;
• IAMP will also increase the size of the current automotive cluster in
Sunderland by an amount equivalent to Nissan’s current employment levels
and therefore help secure the future of the region by generating growth and
jobs;
• The North East Independent Economic Review (2013) concluded that the
region has the potential to be an International leader in Trade and a leading
location for (Re) Investment and that the IAMP will help make this a reality;
and
• The IAMP would therefore help rebalance the North East economy and set it
on a new self-sustaining growth path.
4.3 Economic Impact
220. The Strategic Employment Study (SD28) provides estimates of the gross economic impact of the IAMP. The full gross employment estimates provided as
part of the schedule of floorspace identify a breakdown of the employment
impact by floorspace type and phase and have been used as the basis for an
estimate of the net additional impact which was set out in Section 2 in relation to
the IAMP Impact Paper Update 2016 on Displacement (SD11).
221. The analysis showed that the IAMP will also generate significant economic multiplier effects, both through the supply-chain (indirect effects) and spending of
incomes (induced effects). Together these effects are predicted to enable the
IAMP to generate the following benefits to the wider area:
• 11,589 net additional jobs (core and hub) in the NELEP area under the central
case;
• Attraction of greater inward investment - across all tiers of the automotive
supply chain with associated benefits to local employment and income;
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• Increased market opportunities for SMEs – including from the potential for
Nissan and other UK based vehicle production centres to increase their UK
sourcing of components;
• Increased leverage of innovation potential – the development of low-carbon
vehicles as part of Nissan’s future investment offers the opportunity for the
area to capitalise and build upon this knowledge. The IAMP will result in a
significant scaling up of business activity and the potential for universities,
spin-outs and SMEs to undertake R&D to capture the related commercial
opportunities arising;
• Support of greater demand for city centre retail and services (‘consumer-led’
jobs) – supporting the increased demand that will assist development of a new
Central Business District delivering an estimated 3,700 new city centre jobs
by 2031 based on Sunderland City Council estimates;
• Provision of employment opportunities for workers with lower skills through
‘consumer-led’ job creation, meaning that the employment opportunities
associated with the project will extend beyond those in higher skilled
occupations on the IAMP site to opportunities with lower skills entry off-site,
for example in city centre retail and office occupations. This will assist in
addressing the needs of the current unemployed in the area; and
• Support of growth of the Port of Tyne and Port of Sunderland – through the
contribution of activity to increased exports.
4.4 Sustaining a Growing Economy
222. The NELEPs Strategic Economic Plan considers the development of IAMP to be a key driver of the North East regional policy. In order to maximise growth in the
North East’s economy, strategies, plans and programmes will focus appropriate
enabling investment towards the key employment locations, including the IAMP.
223. Accordingly both the Independent Economic Review and the Strategic Economic Plan identify that the IAMP is a key project in ensuring industrial and production
businesses can locate and expand in the North East. The Strategic Economic Plan
commits that in order to maximise growth in the North East’s economy, strategies,
plans and programmes will focus appropriate enabling investment towards the key
employment locations, including the IAMP.
224. In order to accommodate projected demand in the automotive and advanced manufacturing sectors the Strategic Employment Study (SD28) concluded that
further land is required. The combination of size, adjacency to industry, in
particular the Nissan plant and its supply chain, transport links and availability
makes the proposed IAMP site the most suitable for investment according to the
demand study and needs analysis carried out by PWC.
225. In summary, the IAMP would allow the UK and the North East region to capture the anticipated substantial growth in advanced manufacturing and will provide
more land to significantly increase the region’s manufacturing capacity.
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4.5 Impact on the Economy and Business
226. As outlined above, there is a shortage of suitable sites available to meet this projected demand. Evidence from Sunderland and South Tyneside Councils
regarding recent investor enquiries is that the current land supply for large scale
industrial development is insufficient to meet market demand. This is largely
attributable to the lack of suitable large sites capable of being developed, and a
lack of good quality units to meet the demands of new or expanding businesses
wishing to locate in the area.
227. The IAMP Strategic Business Case outlines that once existing site capacity at Nissan has been reached it is assumed no further investment will take place in the
region. It is also assumed the Nissan plant will continue to operate as it does now
but will not benefit from any agglomeration or cluster impacts that would have
occurred from the development of the IAMP.
228. Consequently under this view future demand would be static, or, according to the Strategic Employment Study (SD28), could even fall by around 49ha due to wider
competitive pressures in the automotive sector and a redistribution of current
production to plants elsewhere in Europe with grossly under utilised capacity. Re‐
shoring of supply chain activity to Sunderland and South Tyneside would be less
likely to occur. This is likely to result in a negative scenario for NMUK:
• The status quo will not be maintained – the automotive sector in the North
East will not be able to continue to operate as existing as it will be unable to
implement necessary manufacturing system changes to remain competitive;
and
• This would in the longer term result in Nissan production declining with the
redistribution of models to other plants in the Renault Nissan Group with
spare capacity and a consequent reduction in employment and revenues11.
4.6 Conclusion
229. Demand for land for advanced manufacturing is considered to be strong and further land is required. The region has already had some strong successes in
advanced manufacturing and many of these have been focused on the area close to
the Nissan site, with the designation of the area as a Low Carbon Economic Area
in 2010 in recognition of the area’s importance in the production of Electric
Vehicles and the first development on the new round of UK Enterprise Zone sites,
with the Vantec’s £22.5m, 40,000 sq m development on Turbine Business Park.
230. Nissan’s supply chain has also seen significant growth recently in response to securing the production of new models (particularly the LEAF and the Infiniti).
The Nissan production processes require certain supply activities to be located as
close to the plant as possible. Overall production is expected to surpass 600,000
units per year in the near future.
231. The recent announcement of the production of the replacement Qashqai and the additional X-Trail will have a positive effect on the related supply chain activities,
11 Expert Opinion of RPJ Consulting, 2016
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some of which may seek to relocate closer to the Nissan plant and expand
production.
232. Demand is strong for large floor plate developments, many of which are projects linked to growth of the automotive sector. However, the lack of large sites
immediately available has meant that some projects have been turned away.
233. Sunderland City Council and the NELEP are progressing the rapid development of the Enterprise Zone 3 and adjacent land at Hillthorn Farm (together totalling
26ha). Yet whilst this offers additional land, even this is expected to fill up
quickly. The IAMP proposal provides a secure land supply for when the EZ sites
are occupied.
234. Further land is required for development, with the most appropriate site considered to be the IAMP site. The combination of size, adjacency to industry, in
particular the Nissan plant and its supply chain, transport links and availability
makes the site the most suitable.
235. On the basis of the above, the following key conclusions are made:
• The IAMP represents a nationally significant development which will help
deliver the Government's objectives for the UK economy;
• The IAMP represents a major opportunity to accommodate the increasing
demand in the region and will help grow the UK automotive and advanced
manufacturing industries, bringing a number of strategic economic advantages
to both the UK and the North East allowing the region to substantially
increase the size of the current automotive cluster in the region;
• The IAMP will increase the size of the current automotive cluster in
Sunderland by an amount equivalent to Nissan’s current employment levels
and therefore help secure the future of the region by generating growth and
jobs;
• The North East Independent Economic Review concluded that the region has
the potential to be an International Leader in Trade and a leading location for
Investment. The IAMP will help make this a reality;
• More business-to-business trade in the city so that the impact of further
manufacturing growth is cascaded throughout the economy. The Sunderland
economy is currently too reliant on a small number of large private employers;
and
• The IAMP is a key part of the Sunderland City Deal which seeks to rebalance
the Wearside economy and set it on a new self-sustaining growth path.
Appendix A
Inward Investment Inquiries
2008 to 2016
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Page A1
A1 Inward Investment Inquiries 2008-2016
Date Company Origin Business activity Nature of
project
Space
requirement
Comment
2008 Industrial
battery
manufacturer
Battery
Manufacture
Relocation 18,600m2 Company was
located in
inefficient
position in
urban area. It
wanted to
relocate due to
the strategic
access of the
Turbine Park.
2008 BAE Systems Arms
Manufacture
Relocation 31,600m2 Relocating
from inefficient
premises.
2009 Rolls Royce Car / aero-
engine
Manufacture
Relocation 30,000m2 Relocating
from inefficient
premises. Chose
Radial 64 site
due to its
capacity to
accommodate
both Rolls
Royce’s
requirements
and a key
supplier.
2010-
2011
Nissan
component
supplier
Car Component
Manufacture
Consolidation 32,500m2 Wanting to
consolidate two
existing
premises onto
one site.
Leases issues
within an
existing
property
prevented the
deal
completing.
Invested in
North of Nissan
site.
2012 Nissan
component
supplier
Car component
Manufacture
Relocation 23,200m2 Requirement to
relocate closer
to Nissan. No
land available
to
accommodate
its requirement.
expanded its
2012 Fulfilment
centre
Packing
warehouse
Relocation 23,200m2 Favoured
Washington due
to its strategic
location but the
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Page A2
Date Company Origin Business activity Nature of
project
Space
requirement
Comment
only large site
available had
already been
committed.
2012 Advanced
engineering
company
Engineering Relocation 37,000m2 Specifically
wanted to be in
the area due to
the availability
of engineering
skills. No
suitable land
available in the
area to
accommodate
the requirement.
2012 Vantec Automotive
Logistics Centre
Relocation 39,000m2 To facilitate its
business with
Nissan and
other OEMS in
the region.
Vantec paid
£330,000 per
acre which was
driven by
severe lack of
other viable
options.
2013 Japanese
automotive
logistics
company
Automotive
Logistics Centre
Relocation 18,500m2 Approached
Barmston who
are currently
working with
the City
Council to
accelerate the
release of
Enterprise Zone
land West of
Nissan.
2013 German
automotive
components
supplier
Automotive
Components
Supplier
Relocation 9,300m2 Approached
Barmston who
are currently
working with
the City
Council to
accelerate the
release of
Enterprise Zone
land West of
Nissan.
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Page A3
Date Company Origin Business activity Nature of
project
Space
requirement
Comment
2013 Japanese
automotive
components
supplier
Automotive
Components
Supplier
Relocation 9,300m2 Approached
Barmston who
are currently
working with
the City
Council to
accelerate the
release of
Enterprise Zone
land West of
Nissan.
2013-
2015
Unknown North East Logistics Expansion 4,600m2 Creation of a
new warehouse
on the
company’s
Washington site
to
accommodate
business
currently
undertaken in
another
warehouse in
the City.
2013-
2015
Unknown tbc Supplier New facility 9,300m2 New occupier
lined-up for a
unit in
Washington
(tied to the
above project).
2013-
2015
Unknown North
America
Supplier New facility 8,300m2 Depends on
terms of
contract from
Nissan.
Potential
occupier for
Hillthorn Farm
Enterprise Zone
site.
2013-
2015
Nissan Japan OEM Expansion 6,800m2 Planning
application
submitted for a
new pressing
facility.
2013-
2015
Nissan Japan OEM Expansion Tbc Requirement for
a new paint shop
by 2018 to meet
EU regulations.
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Page A4
Date Company Origin Business activity Nature of
project
Space
requirement
Comment
2013-
2015
Nissan Japan OEM New facility Tbc 'Super Supplier'
concept, bringing
together
purchasing from
Nissan
(Sunderland and
Barcelona) and
Renault to secure
major suppliers.
Possibility for
IAMP Phase 1
Site.
2013-
2015
Unknown Japan Supplier Relocation 28,000m2 Potential
relocation from a
plant located
elsewhere in the
region to a single
'super site' close
to Nissan.
Hillthorn Farm
EZ site and
IAMP (Phase 1)
are possibilities.
2013-
2015
Unknown tbc Supplier New facility Tbc Alloy wheel
manufacturer,
currently looking
at Sunderland
(competition
from Wales,
which has an
Objective 1 site).
2013-
2015
Connor
Solutions
Local Electronics
Manufacture
Expansion 1,850m2 Expansion of
plant at Rainton
Bridge.
Planning
approval now
granted.
2013-
2015
Unknown Local Packaging Expansion 2,600m2 Rationalisation
within the group
is likely to favour
the Washington
site. Looking to
occupy adjacent
vacant unit.
2013-
2015
Unknown Germany Advanced
Engineering
Expansion 60,000m2 Seeking to
acquire a vacant
site adjacent to
its plant in the
City.
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Page A5
Date Company Origin Business activity Nature of
project
Space
requirement
Comment
2013-
2015
Unknown North East Steel Fabrication Relocation 2,200m2 Likely relocation
from elsewhere
in the region to
Stephenson
Industrial Estate.
2013-
2015
Unknown Tbc Tbc New facility 4,000m2 Knight Frank has
a client that will
take the former
Coop warehouse
at Stephenson if
it can have
additional yard
space.
2013-
2015
Unknown Local Packaging Relocation 4,800m2 Relocating /
expanding
(current site on
the fringe of the
City is going for
housing).
Looking at
former Remploy
premises on
Pallion.
2013-
2015
Unknown Local Door Manufacture Expansion /
relocation 4,600m2 Requirement for
a new, purpose
built factory to
supply doors to
RSLs. Would like
to develop on
Hillthorn Farm
EZ site.
2013-
2015
Unknown UK Advanced
Engineering
Expansion 9,300m2 Identified need
for a spares /
aftermarket
facility adjacent
to the company’s
Washington
plant.
2014 Unknown UAE Oil/Gas pipes and
valves
Unknown 7,000m2
2014 Unknown Germany Offshore Wind Unknown 37,000m2
2014 Unknown Unknown Tyre Manufacturer Unknown 60,000m2
2014 Unknown Spain Manufacturing Unknown Unknown Rail access
requirement
2014 Unknown Ireland Tyre Recycling Unknown 10,000m2
2014 Unknown Unknown Vaccine
Manufacture
Unknown 60,000m2
2014 Unknown Unknown Solar PV
Manufacture
Unknown 55,000m2
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Page A6
Date Company Origin Business activity Nature of
project
Space
requirement
Comment
2014 Unknown UK Automotive
Manufacture
Unknown 161,800m2 –
242,800m2
2014 Unknown Czech
Republic
Automotive
Manufacture
Unknown 400,000m2
2014 Unknown Turkey Engineering
Manufacturer
Unknown 2,500m2 and
2,000m2
expansion land
i North East Independent Economic Review Report (April 2013), commissioned by the North East Local Enterprise
Partnership. (SD38) ii ONS (2015) UK Regional Trade Statistics Release, https://www.uktradeinfo.com/Statistics/RTS/Pages/default.aspx. iii http://nelep.co.uk/wp-content/uploads/2015/02/NE-Economic-Review-Evidence-Base-Summary.pdf iv Source: Arup analysis using PwC gross employment estimates. v North East Automotive Alliance Members include: Nissan Motor Manufacturing UK, Nifco UK, Zero Carbon
Futures UK, SNOP, Mecaplast, Drive2Business, Unipres, Elring Klinger, Lear Corporation, Calsonic Kansei Europe,
Komatsu, Gestamp, TRW Automotive, Hyperdrive, Sevcon, R-Tek, RTC North, Sunderland City Council, Johnson
Controls, Ford Components, Institute of Supply Chain Management, Middlesbrough College, Northumbria
University. vi North East Automotive Alliance, “An industry-led cluster group supporting the economic sustainable growth of the
automotive sector in the North East of England” (June 2015). vii The Motor Industry in the UK: A Cool Shower of Reality (2014), Prof D Garel Rhys CBE Cardiff University
Business School - Commissioned by MAKE it Sunderland. viii Driving success: UK automotive strategy for growth and sustainability (2013), Department for Business,
Innovation & Skills. (SD26) ix Driving success: UK automotive strategy for growth and sustainability (2013), Department for Business, Innovation
& Skills. (SD26) x The Motor Industry in the UK: A Cool Shower of Reality (2014), Prof D Garel Rhys CBE Cardiff University
Business School - Commissioned by MAKE it Sunderland. xi The Motor Industry in the UK: A Cool Shower of Reality (2014), Prof D Garel Rhys CBE Cardiff University
Business School - Commissioned by MAKE it Sunderland. xii Driving success: UK automotive strategy for growth and sustainability (2013), Department for Business, Innovation
& Skills. (SD26) xiii Sunderland & South Tyneside Strategic Employment Study (2013), PricewaterhouseCoopers (PwC). (SD28) xiv http://www.sunderlandecho.com/news/business/nissan-juke-decision-a-massive-vote-of- confidence-in-sunderland-1-
7443662. xv IAMP: Impact Analyses Topic Papers (2015), Arup. xvi Strategic Employment Study (PWC, August 2013). (SD28)
