Member Article

North East ‘must focus on connectivity’

The Independent Economic Review (IER) published by the North East Local Enterprise Partnership (NELEP) advocates the need for the improvement in accessibility to, within and from the region to help improve our attractiveness and competitiveness.

In a well-worn phrase in the property industry, attractiveness is focussed in three words – location, location, location.

Research by the RICS some years ago (Transport Development Areas, Guide to Good Practice) highlighted the increase in the value of land that encouraged higher density of development around transport nodes.

The general message is that whether in macro or micro policy, development of individual sites needs to be accessible and the better the transport facilities the more attractive the location of the site.

This was echoed in two ways in the IER. First, the NELEP area is characterised by a large number of contaminated ex-industrial sites, these require expensive remediation before they might be suitable for alternative uses.

In contrast, the weak private sector demand in the North East implies low rental values and a subsequent lack of private sector investment in new or redeveloped sites. There has been a lot of public sector support but with weak values this was not strongly supported by the private sector. While this has helped go keep rents low, and create employment, it has been low value added. This is being offset to some degree by the new Enterprise Zones created to attract higher value added activities.

A market change is needed if we are to strengthen the activities of the private sector. But there is limited scope to do so through policy intervention. The LEP’s draft European Funding application seeks to establish a loan fund but until we increase values, the impact of the fund is more a medium to long-term support.

In submissions to the LEP when they were developing the report, the two North East representative property groups Developing Consensus and G9 advocated, amongst other matters, the need to focus on improved road and rail connectivity and in particular the upgrade of the A1(M) with a priority of increasing capacity of the Newcastle Western By-pass and a full three lane motorway to the south.

This upgrade to the western by-pass is being proposed with government funds and CIL contributions from housing development but is only a half-way measure. The bottleneck is at Allerdene Bridge and needs a more radical approach, including limiting access and egress to fewer junctions, otherwise the traffic speed will be limited to 50 miles per hour and congestion will continue.

We will not see change whilst government insists that expenditure is limited to reducing congestion and avoids the main argument that real investment is needed to achieve economic growth. Thus development in the prime location of Team Valley and wider areas will continue to be frustrated, imposing a barrier to the supply of much-needed industrial space and much-needed jobs.

We need to reconsider the priority reasons for expenditure on infrastructure across the region.

This was posted in Bdaily's Members' News section by JK Property Consultants .