Oxfordshire Strategic Economic Plan

Oxfordshire Strategic Economic Plan:
The Role of Oxford
Introduction
1.
Oxfordshire’s Strategic Economic Plan (SEP) has been developed by the Local Enterprise
Partnership (LEP) in partnership with the business community, academic institutions and
the Local Authorities. Whilst the SEP goes some way to setting out the long term vision
and ambitions for economic growth in the county it fell short on prioritising how this
growth could be effectively delivered. In an attempt to be ‘even-handed’ to both the range
of stakeholders interested in economic growth and the geographic diversity of Oxfordshire
the SEP does not set clear priorities for investment. Consequently it underplays role of the
City – putting growth potential in Bicester and Didcot on an equal footing with that of
Oxford.
2.
Oxford City has the greatest potential to deliver local and national growth of any English
City. This potential has not been fully recognised by local partners. The Oxfordshire and
Oxford City Deal1 - which set the framework for the SEP - is built around the concept of a
Knowledge Spine connecting Bicester, Oxford and Science Vale . However, as the Oxford
Innovation Engine Report2 states “it does not place sufficient emphasis on the crucial
economic role of Oxford”. The report goes on to note that the outstanding science and
technology based assets and credentials have contributed hugely to the local and national
economy over the last 50 years, and have to potential to contribute even more in future.
3.
Critical to realising economic growth in Oxfordshire is driving forward the City elements of
the Strategic Economic Plan that bring together employment, housing and transport needs
around key economic opportunities. The city’s strategic infrastructure is also vital to the
wider regional economy.
The Role of the City
4. The Strategic Economic Plans’ Investment schedule does not explicitly recognise the unique
role the City plays in the economic potential of the County. Oxford is a national economic
asset, a globally recognised brand and essential to the future of the regional and UK
economy. The City contributes £4.7bn to the UK economy and has an output (GVA) per
1
Oxford and Oxfordshire City Deal: approved Feb 2013
Oxfordshire innovation Engine 2013, SQW on behalf of, Oxford University and Science Oxford with support from
the Local Enterprise Partnership
2
head of £30,800 - 50% higher than the national average and one of the highest of any
location in England. It is the engine of Oxfordshire’s economy with the highest levels of
business growth and employment. Over 1/3 of all economic activity in the LEP area takes
place within the City, it is a major destination for tourists and the academic reputation of
the Universities is unparalleled. Over one third of Oxford’s workforce is drawn from outside
the city with some 50,000 people commuting3 in to the City every day and a further 25,000
commuting to work outside the City. The future economic prosperity County as a whole is
dependent on a thriving and successful City
5. Oxford has demonstrated high levels of increased business performance over the past
decade. Oxford is now the home to more high growth SME’s than almost any other City in
the UK4. Most of the employment growth in the county between 2001 and 2011 was in the
City where employment grew at an average of 2% per annum.
6. However, the future prosperity of the City is not a given. Oxford is an historical city tightly
constrained by administrative boundaries, floodplains, heritage assets and outdated
transport networks. Consequently, there is little development space in the City and what
space there is challenging. The most obvious impact of this has been in the housing market
where the success of the city has seen demand for housing far outstrip supply and prices
have risen dramatically. Oxford in now the least affordable housing location in England.
This significantly reduces the ability of firms to attract the right people. Alongside this
increased commuting is putting added pressure on our infrastructure not just on the arterial
routes bringing people to Oxford but he networks that move them around the City. .
Independent analysis5 identifies that the Oxford City Region’s economic output could have
been around £0.5bn higher with the right growth policies and investment. Looking forward,
with the appropriate investment and policy framework, output could increase by over £1bn
within a decade. .
Opportunities and Constraints
7. Oxford is a diverse and dynamic City. But its economic success based on the innovative
nature of institutions anchored in the city: the university, hospitals and employers such as
Unipart and BMW, will only continue if barriers to growth are removed. Over the next 20
years employment is forecast to grow by around 25,000 jobs but there are considerable
3
Annual population Survey 2011
Centre for Cities Small Business Outlook 2014
5
Oxfordshire innovation Engine 2013, SQW on behalf of, Oxford University and Science Oxford with support from
the Local Enterprise Partnership
2
4
Oxfordshire SEP: Oxford
barriers to realising this growth that require public sector intervention. Investment is
needed now to put in place the infrastructure that will allow this growth and unlock
significant investment in the development of major sites in the City. In the short term there
are number of project that could progress quickly with the right policy and funding support
from central government.
Employment Space
8. Despite the buoyancy of the oxford economy there are significant barriers to private sector
investment. Initially there is a lack of land in the City and what land there is has significant
development issues which drive up costs and bring down yields. Where development is
happing it is on brownfield sites often involving demolition and decontamination or
substantial refurbishment which again drive up costs. When these direct development
costs are couple with the necessary S106 contributions required to improve or protect the
public realm and overcome the significant transport constraints these developments
become unviable. Sites with specific challenges include:

Northern Gateway: The development will provide an essential location for
knowledge based investment in the city. The scheme will provide for up to 4,500
new jobs in the knowledge sector, £1.3bn GVA over the next decade, 500 new
homes and supporting services and infrastructure. The scheme is a partnership
between the private sector, Kier, and St John’s College, the University of Oxford,
and the City and County Councils.
The delivery of this site will require significant improvements to the transport
infrastructure, including investment in the A40 and A34, road layouts in the area
mean there will need to be significant junction and access improvements; to
facilitate strong links with the city centre improved public transport links (including
cycle pats, and bus lanes will be required as well as improvements to the nearby
park and ride facilities In addition development of the site requires enhanced
drainage works to prevent flooding and the relocation of gas pipelines which cross
the site.

3
Oxford West End (City Centre) - Oxpens: The Oxpens site represents one of the
most significant development opportunities within Oxford city centre. Located in
the Oxford West End, close to the Railway Station, the University and the Westgate
Shopping Centre the site has potential to make a valuable contribution to the
economy of the City through the delivery of new housing (for market sale and
affordable housing), flexible office space, a hotel, local facilities and public open
space. The Master planning of the site is now being taken forward to create a
mixed-use development to include additional research and development uses.
Development of this site also allows the creation of a vital direct link between new
housing and innovation space in the West End and a large existing employment site
(Osney Mead). The bridge will also link Osney Mead to proposed new bus services
on and near Oxpens Road and the Train station, making the Osney Mead
employment site far more accessible by public transport from all parts of the city.
Improved connectivity to Osney Mead will allow the redevelopment of this site.
However, the Oxpens site is not easy to develop. The site is in fragmented
ownership, part of it lies in the flood plan, a large area is covenanted as a Field In
trust, and previous rail uses have left issues of contamination and site remediation.
9. The provision of an adequate supply of suitable employment space does not just rely on
new provision. The City council is keen to protect key employment sites within the city and
has applied to the Secretary of State for the introduction of an Article 4 Direction to prevent
the conversion office accommodation to residential use in a selected number of key sites.
4
Oxfordshire SEP: Oxford
Transport
10. As a global destination connectivity is critical to the continued success of the Oxford
economy. It is essential to people can get into the City and move around efficiently. Much
of the transport network in the City is no longer fit for purpose. Constrained by a historic
city layout and past investment that has not adequate planned for the future significant
investment is now needed to create a world class transport infrastructure that befits a
world class City. Limited development in the city and the scale of investment needed
means that developer contribution and local funds will not support the level of
modernisation required.

Oxford Station Interchange and Gateway Development: The City Council is working
in partnership with Network Rail to develop a wider master plan for the Oxford
Station area that makes provision for future growth on the railway, achieves
transformational change in the passenger environment, vastly improved passenger
experience as well as commercial, office, retail space and a new hotel. Along with
multimodal interchange facilities at this primary gateway to Oxfordshire, this work
will ensure that the new station and surrounding development forms an
inspirational entry point to the city and presents a world class image to investors
and visitors.
Whilst there will be commercial elements to the station redevelopment it will not
be financially viable for the private sector or train operating companies to fund the
quality and scale of development that is required to create a world class gateway to
the City.

5
Wider Transport Improvements: The compact nature of the City’s boundary means
that without effective communications it is difficult to maximise the benefits of
businesses working together and moving people and goods around the City.
Negative externalities associated with congestion, pollution and conflicts between
road users is likely to worsen as the economy grows. These issues could be
exacerbated in the short to medium term due to the high volume of development
work and associated construction traffic taking place in the City. The County
Council has developed a number of schemes that would improve transport in the
City which should be implemented quickly
Housing
11. In Oxford the housing market is overheating because of the lack of available housing land.
Overcrowding in Oxford is above the regional and national averages, and the City is now
widely recognised as the least affordable place in England. Lack of available housing land
within the City’s boundaries prohibits the city from growing and forces house prices up.
Oxford is tightly constrained in terms of flood risk and the historic built environment, which
means that it is difficult for the City to meet its housing need. Therefore in order to fulfil
Oxford’s housing needs as confirmed in the recently published in the Oxfordshire Strategic
Housing Market Assessment, the Oxfordshire local authorities will need to consider a
strategic review of the Green Belt policy around the City, which currently limits its
expansion.
12. The delivery of an adequate supply of homes to meet a range of needs is a major challenge
for Oxford. The housing requirements of the City can only be delivered through sustainable
urban extensions. In order to increase the provision of affordable housing it is essential that
the cap on the Housing Revenue Account for the City Council is lifted.
Moving Forward
13. The development of the Oxfordshire Strategic economic Plan has helped develop a shared
narrative for the economic future of Oxfordshire. Combining the Strategic Plan process with
‘bidding’ for local Growth fund has worked less well. In the scramble to get projects
included in the SEP in the first year of the local growth Fund the existing pipeline of activity
has not been given sufficient attention.
14. The City Council has been working with a range of partners for a number of years to
develop a pipeline of projects that could come forward if the conditions were right. In some
case the projects have already progressed (such as Oxford City College and the Westgate
Centre). In other case the conditions are still not quite right. In most case this is due to
project viability gap which the Local Growth Deal could help close. In some cases it is due to
the sequencing of projects where confirmation of transport or public realm improvements
is required to give the developer confidence to proceed with substantial investment.
15. In order to move projects through the pipeline it would be helpful if:

6
A clear understanding of the timetable and process for bidding into the Local Growth
Fund in future rounds was issued.
Oxfordshire SEP: Oxford

Firmer guidance on the types of projects that would be supported was provided
particularly the balance between transport projects and other capital developments
were given

The City Council had a seat at the negotiating table for future rounds of the Local
Growth funding.
City Centre Development Pipeline
7
8

Download Report