04Conclusions and policy recommendations
The Gatwick Diamond is a strong performer in the UK economy. It performs well above the national average on a range of different economic indicators, such as its levels of productivity, its share of high-skilled jobs, and its track record at attracting in foreign investment.
Even when comparing its performance to a number of comparators in the Greater South East, the Gatwick Diamond does well. Only the Thames Valley consistently outperforms the Gatwick Diamond, and this area is likely to be the Gatwick Diamond’s strongest competitor outside of London when it comes to attracting in investment in the future. The one exception has been the growth in knowledge-based services jobs, where the Diamond has had the slowest growth of all comparators since 1998.
Different parts of the Gatwick Diamond make different contributions towards this success. Crawley has the largest concentration of jobs, and this is driven by Manor Royal and Gatwick airport, which account for 12 per cent of jobs despite occupying only one per cent of land. Behind these two sites, a number of other areas also make important contributions to the Gatwick Diamond economy, both in terms of total number of jobs and the different activities they undertake.
Compared to the Thames Valley and South East Midlands Areas, a noticeable difference is the contribution that the city centres make in the respective areas. The city centres of both Reading and Milton Keynes account for the highest shares of jobs in their respective areas despite covering very small parts of the total land area. No urban centre within the Gatwick Diamond plays such a role to the same extent. So while the Diamond’s business parks play a big role in the success of the economy, its urban centres have the potential to help increase the number of job opportunities available to residents in the area.
The success of the Gatwick Diamond also brings with it pressures, as is the case in other successful economies. This report highlights two clearly – the pressures of Permitted Development Rights to convert commercial space into residential in areas where there is high demand for both, and costs on housing, driven both by the success of the Diamond and its close proximity to London and its appeal as somewhere to live for those looking to commute into the capital.
To sustain its success, the Gatwick Diamond will need to continue to attract in investment in high-skilled activities as it has in the past. This leads to three main policy recommendations:
1. Continue to expand the supply of office space in the areas where it is most needed
A key challenge for successful economies is to continue to supply the commercial space that companies looking to invest in the area will need. In the area’s most successful business parks more land will need to be given over to commercial development where required.
A particular challenge will be to improve the contribution that the very centres of the Diamond’s largest urban areas play in the wider economy. Wider work by Centre for Cities has shown that knowledge-based businesses are increasingly favouring dense locations because of the benefits that they provide to their businesses. While the urban centres of the Gatwick Diamond have not traditionally been large centres for office activities, improving their attractiveness as places to do business will make the Diamond more competitive at attracting in those businesses that are looking for a dense location.
Again, the provision of Grade A office space will be required to do this, underpinned by other investments in public realm and transport connections, as part of a strategy to improve the contribution that these areas make.
2. Continue to expand the housing offer
As well as jobs, workers also look for the right kind of space when they are looking to either remain in or move to a new area. The Gatwick Diamond’s dual role of both being a home for London workers as well as a strong economy in its own right has made it one of the least affordable places to buy a home in the country. This has knock-on implications for the ability of the area to attract and retain workers, which in turn will alter the appeal of the area to new business investment.
To counter this, the Gatwick Diamond needs to continue to make sure there is a supply of a range of new homes. While noting the planning constraints that the greenbelt creates, this will be important to help manage the affordability challenge that the area faces and make sure that it continues to remain an attractive place for businesses to invest, create jobs and grow the economy.
3. Improve transport connections into the Gatwick Diamond from the surrounding area
A key element of why businesses choose to locate in certain places comes down to whether they have access to the workers they need to recruit. The high-skilled workforce of the Gatwick Diamond is likely to be one of the main reasons why it has been so successful in recent years.
Good transport connections into the area surrounding the Gatwick Diamond increase the number of potential employees for a business. Combined with an expansion of the housing offer within the Diamond, improvement of transport connections should also be undertaken to expand the pool of workers who may look to find employment within the area.
This work contains statistical data from ONS which is Crown Copyright. The use of the ONS statistical data in this work does not imply the endorsement of the ONS in relation to the interpretation or analysis of the statistical data. This work uses research datasets which may not exactly reproduce National Statistics aggregates.