Effects of economic slowdown to be short-lived - but more needs to be done to communicate the benefits of regeneration

01/01/2009

Research published by Thomson Snell & Passmore, reveals that businesses operating in the Thames Gateway area believe that the effects of the economic downturn will be short-lived but that more needs to be done to communicate the positive benefits of the Thames Gateway Regeneration to ensure its success.

The survey of 20 in-depth interviews with leading businesses, organisations and stakeholders operating in the Thames Gateway revisits similar research undertaken by Thomson Snell & Passmore in 2006 and gauges how opinion has changed over that time.

The research reveals the critical success factors of a consultative and partnership approach between all stakeholders and that, as with Canary Wharf, getting the infrastructure right is paramount. Also considered critical is the need for sustainable development and continued investment. 

Awareness of the project has improved dramatically and those with a better understanding are already planning for the impact the regeneration will have on their business. Completion of various projects is already encouraging positive feedback, with half of those interviewed being more positive about the regeneration project than in 2006. However 40% of respondents are less positive which is mainly due to pace of its delivery, the complexity of the planning process, the perceived lack of coordination between the various bodies involved and the suitability of the surrounding infrastructure framework. 

The vast majority of respondents felt that the effect of the economic downturn would slow development in the region, especially in the next year to 18 months. The only glimmer of hope is where government funded development (where funds are already in place) will continue, although concerns were raised about how Private Finance Initiative investment might be adversely affected. 45% of respondents felt that the speed of delivery of the project had been too slow, while 40% believed it to be about right. 

Commenting on the findings of the latest research Kamal Aggarwal, Partner and Head of the Thames Gateway office of Thomson Snell & Passmore, said: 

“The effects of the economic downturn on the wider economy have been well documented and are a natural concern in relation to the Thames Gateway Regeneration. However the effect of a slowdown itself should not only be seen as a negative - it provides an opportunity to reflect on what has been achieved so far, to consider whether the quality and design has been what we should expect, to engage with all stakeholders and to agree on our priorities going forward.” 

The main issues discussed in the research and the responses obtained can be summarised as follows: 

1. Awareness of the project – knowledge of the project has increased over the last three years amongst three quarters of those interviewed, with this increased awareness having been driven by seminars and workshops delivered by local authorities, development bodies and local businesses.
2. Critical success factors – two critical factors to the success of the project are: that there must be a consultative and partnership approach with all the bodies involved; and that getting the infrastructure right is paramount.
3. Inward investment: an overwhelming 85% of respondents believed that the opening of Ebbsfleet International train station would be good for Kent with the majority of respondents suggesting that the financial and service sector and global businesses with links to the continent might be attracted to the area.
4. The skills gap: 50% of respondents have issues or concerns with the long term availability of skilled labour. Semi-skilled labour is, by contrast, not an issue for most. This is a shift in views since the previous study where a skills shortage affecting all levels was raised as one of the biggest challenges. It is likely that this has been influenced by the greater role now played by the University of Kent and various other higher education organisations in the region.
5. Legislation a burden – 75% of respondents' businesses are at least negatively affected by either UK or European legislation and 50% are affected negatively by both. The huge increase in health and safety legislation and the perceived emergence of ‘claims culture' were cited as major concerns of business.

75% of respondents now agree that the project is social imperative, up form 60% in 2006. This is most likely due to a better understanding that the project is not just about housing but also about jobs, infrastructure and recreational activities. 

Kamal, added: 

“There is no doubt that the Thames Gateway is already an attractive business location and a magnet for future inward investment and growth. This latest research shows that, moving forward, there is a great deal more that needs to be done by both public and private sector alike to ensure that the aspirations of the regeneration project are kept on track. Regeneration is not just about places but about people too and it is therefore necessary that all levels of skills are catered for in employment, education, housing and recreational facilities. Delivery in all these areas will be vital if the project is to be considered a success.” 

“We would encourage both local and central Government to keep the supply of money for infrastructure projects flowing and to bring forward planned investments. The Thames Gateway represents an enormous opportunity to invest in the future of the South East economy and provided that public sector support is maintained over what is likely to be a difficult couple of years, we believe the long term prospects for the project remain extremely positive.”