Logistics is a sector which is creating new jobs at a time when, because of the Covid-crisis, a lot of businesses are struggling and laying off staff. Yet this growth is being challenged and the Government needs to listen and take action.
There are two key problems. The planning system isn’t agile enough to respond to rapidly changing demands and outdated perceptions about the economic benefits of the industry are hampering decision making.
Logistics plays a hugely important economic role. It doesn’t just support online shopping – which has seen a huge surge in demand since the start of the pandemic – it is also key to putting food on supermarket shelves and medicines and equipment in hospitals and healthcare facilities.
Tritax Symmetry and many others involved in the sector have been lobbying hard to get greater recognition within the planning system to ensure enough land is allocated and help speed up delivery of logistics space.
There was hope that the Government’s White Paper on planning, launched in the Summer, would focus more on economy and employment which would help support logistics and the delivery of commercial space. But, once again, the focus was on housing delivery and boosting the number of new homes.
“It’s massively frustrating that it hasn’t really looked at the employment and the economic recovery at all. It assumes that building houses and the construction sector that supports it is the answer to all the problems,” says Tritax Symmetry’s Planning Director Jonathan Dawes.
Logistics is one of the few sectors to have generated employment growth since the start of the pandemic. DHL and Amazon are just two companies which are creating thousands of new jobs to meet rising demand.
However, the planning system creates uncertainty about the future delivery of land and space. Over the Summer the Government decided to call in four planning applications for distribution units in the North West including one of Tritax’s schemes.
“The four developments would create in the region of 5.3m sq ft of space, which will be thousands and thousands of jobs that could be coming forward in the next year or two but that’s now going to be on hold,” says Matt Claxton, Planning Director, Tritax Symmetry.
With rising demand can occupiers who need this space afford to wait that long and if not, where do the jobs go?
“The call-in also seems to fly in the face of the Government’s plans to ‘level-up’ the country’s economy,” adds Claxton.
Logistics problems also stem from misconceptions about the type of jobs it supports. When people think of distribution, they associate it with low-skilled work which only pays the minimum wage.
The reality is the industry relies on a wide range of skills. It is a complex and increasingly tech-driven industry and average wages are nearly 30% higher than the national average.
Opinions at a local level are starting to change. Some local enterprise partnerships such as Leicester and Leicestershire LEP and South East Midlands LEP have been vocal about the important role logistics plays in their local economies and the need to ensure the sector is supported.
And while the Government is focused on housing, it has yet to join the dots between housing and employment.
“If you have these large housing numbers to deliver you have to find land and that’s in competition with land for employment space. And, if you’re increasing residential numbers you should be bringing in jobs alongside that and matching jobs to homes,” says Sinead Turnbull, Planning Director, Tritax Symmetry.
New homes also generate demand for last-mile logistics which also require land and space.
In the Spring, a Department for Transport position statement called for last-mile delivery to be recognised as a more significant element of the national infrastructure, which is encouraging but the Government needs to go further.
Before the White Paper launch, Tritax Symmetry called for a ministerial statement to elevate the need to plan for logistics as part of overall spatial planning but this hasn’t happened.
Zonal planning is mentioned in the white paper but there is little detail at this stage to gauge whether the idea would genuinely support the development of logistics space.
The White Paper’s housing-led focus also means that any detail about infrastructure planning and funding beyond what is required for residential development is missing. What is needed is a holistic approach to infrastructure which factors in logistics demand.
Consultation on the White Paper finishes at the end of October with lobbying continuing in the hope that employment generation – and logistics – will get more recognition and support within the planning system. More voices such as the LEP’s joining the campaign helps to elevate the cause.
It seems like a no-brainer that an industry which is a pillar to the economy and able to support jobs growth when it desperately needed is helped to deliver that growth.