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Homes and jobs delivered via Land Deal

By Thom Kennedy | Telford | Business | Published:

The claim that Telford is the fastest-growing town in the West Midlands is borne out by the development sites sprinkled across the borough.

In every part of Telford & Wrekin there are houses appearing, cracks that made Telford a geographically disparate being filled with homes and businesses.

But why is it happening? What is driving the sudden influx of development in Telford?

On a tour of some of the key development sites in the borough Katherine Kynaston, Telford & Wrekin Council's business development and planning manager, points to the deal agreed with the Homes and Communities Agency last year giving the authority the right to sell government-owned land itself.

"Before the Land Deal the Homes and Communities Agency had large employment and residential land holdings which they had since the outset of Telford," she said. "But every time the land was sold the receipts went back to the Treasury.

"The HCA is a national organisation with a local presence and they are marketing sites alongside those from across the UK.

"They are acknowledging that the local authority had a broader understanding of the opportunities.

"Our approach was around being able to deliver sites to market quicker, and to get a higher land value because we understand the borough, the connections and interests."

The Land Deal was signed in March last year, and gave the authority control over a number of HCA sites which could be brought to market more quickly.

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The deal lets the council sell the land for above the agency's expected price, using its understanding of the local area, with the excess divided between the authority and the HCA.

In 2016-17, the first year of the land deal has delivered 277 homes and 400 jobs, the council says. The second year of the 10-year programme is set to return the same again.

The gleaming symbol of Telford's recent rebirth has appeared in recent weeks on the eastern edge of town.

The new Magna factory, which will be home to about 300 workers delivering structural components for Jaguar Land Rover under the name of the Canadian giant's subsidiary Cosma Castings, has taken shape quickly.

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"This goes down as one of the largest inward investments into the West Midlands in the last 10 years," said James Dunn, the council's service delivery manager for regeneration and investment.

"We were working with them for three and a half to four years to bring them to Telford, and had strong competition from sites in South Wales and the East Midlands."

But he said it was another new factory that is appearing near to Magna – plastic parts manufacturer Polytec – that demonstrates the effect of the Land Deal.

"Polytec reflects what the Land Deal has done, and highlights the benefits in terms of supporting inward investment," Mr Dunn added.

"They had been in discussions with a private sector developer in Worcestershire for some months trying to do a deal.

"They were struggling to do it but had a contract and need to be onsite by April in order to complete by the end of this year in order to meet that order.

"Because there was planning on the site and we were already dealing with the ecology constraints so the site was available immediately.

"As part of the land deal we are spending money up front to bring forward sites – whether it's planning applications, infrastructure, marketing."

To help support the sites the council borrowed £50 million – a deal which has received criticism from opponents because of the debt it leverages on the authority.

That has been used for numerous purposes, including building electricity substations on T54, allowing bigger companies like Magna and Polytec to the move to the site which would not otherwise have the power supply necessary to support businesses of their scale – both will be running huge machinery, and Magna's site is quite unlike any other factories in Shropsirie in terms of sheer scale.

The idea is that by enticing these businesses to Telford, the cost of borrowing will be more than offset by the benefits those companies bring in business rates and the associated spending by their employees.

Elsewhere we see developments of homes which are being built on sites which had stood unoccupied for a long time.

Frome Way was bought by developer Keepmoat to build 79 homes – 52 of which are being sold on the open market – having been "stalled" for three or four years.

Similarly, nearby in Daisy Bank, also on the edge of Donnington Wood needed work before a developer would come in.

That included filling and capping old mine shafts, which are a regular issue which can hinder development in a borough which used to be home to a lot of coal mines.

Now Lioncourt is building 40 properties on the site.

With the private housing market still hanging onto a period of quickfire growth, though, should the council need to be incentivising developers to build homes in Telford?

"This is a narrative approach," said council leader Shaun Davies. "The reason we are building houses in Telford is because we want people to come and live and work here.

"We don't want to be a commuter town, there is a whole agenda around people living here and working here.

"We are an economic powerhouse in terms of this locality – we are the beating heart of the Shropshire economy. People from Shropshire and Mid Wales work in Telford.

"When businesses invest they look at the area as a whole. That even links to the pride campaign for our roads and footpaths. It's a full programme to ensure we are attractive to businesses."

Moving north in the town there are more signs of life as development goes on.

Rosewood Pet Products, based in Broseley, is set to create 60 jobs in Telford when it opens a new distribution at Hortonwood West, a site which has been brought to market following public investment in the surrounding land.

Another company is earmarked for the property next door, with another 15 jobs on the way when that currently-unnamed occupier makes the leap to the new premises next month.

Airport furniture specialist Baker Bellfield on Stafford Park is also soon to begin work on a new building on Hortonwood West, beside the council's solar farm.

That site has also been supported by the Marches LEP, allowing new access roads to be built to allow the buildings which are appearing on the site to be built.

Investments from the public sector will ultimately reap rewards by enticing private sector companies to invest too, Ms Kynaston added – and just two businesses which are moving to Hortonwood West have spent £7.5 million between them in coming to the site.

"We have seen in excess of £7 million worth of land sales in 12 months," Ms Kynaston added.

"We anticipate another £17 million worth in the next 12 months and event allowing for some of the reinvestment we are looking at £1 million worth of profit share.

"When you put infrastructure in the value of the land will go up. The government are foregoing the increase to some of the land's value with this agreement, but they are getting back delivery and acceleration of some of these projects."

Thom Kennedy

By Thom Kennedy
Business Editor - @tkennedy_star

Shropshire Star Business Editor

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