Bidwells slams its own economic growth forecast for the Ox-Cam Arc
In a spectacular U-turn, property developer Bidwells dramatically reduced its own economic growth forecast for the Ox-Cam Arc by up to 75% in speeches delivered by three of Bidwells’ key personnel at the annual Ox-Cam Arc Built Environment Networking Conference held in Milton Keynes on 20th October 2022.
Bidwells and Blackstock Consulting published their Radical Capital report in March 2022
Bidwells’ battlebus, heading to where all such buses go to lie (surely ‘die’?…Ed.)
In March 2022, at the time when the then Secretary of State for Levelling up, Housing and Communities, Michael Gove, had declared the Ox-Cam Arc all but ‘flushed away’ in favour of proper levelling up across the entire country, Bidwells, partnering with Blackstock Consulting, put together a 168-page Radical Capital report in support of the Ox-Cam Arc, with contributions from ‘60 leading thinkers from across academia, business, real estate and the knowledge economy’ and a foreword from Oxford’s Regius Professor of Medicine, Sir John Bell, FRS. The Report claimed that the Arc’s economic performance - the Gross Value Added or GVA - could be increased from £115 billion currently to £235 billion by 2030, that is, a more than doubling in the space of only eight years.
This astonishing growth forecast was based on Bidwells’ own ‘unpublished research’; research which, despite repeated requests from Stop the Arc, it would not reveal on the grounds of commercial confidentiality. Bidwells did, however, reveal its back-of-envelope calculations to the Financial Times which duly reported them on 4th March. Together with many of the contributors to Radical Capital, Bidwells also wrote to the Chancellor with a plea to reverse Secretary of State Gove’s decisions about the Arc.
With such a glittering economic prize, put forward by such a powerful lobbying group, how could the Government possibly resist resurrecting the Ox-Cam Arc?
Now, however, it turns out that the prize isn’t as glittering as Bidwells and Blackstock reckoned only a few short months ago.
The annual Built Environment Networking (BEN) Ox-Cam Arc conference was held on October 20th 2022
Up first in the Milton Keynes conference on the 20th October 2022 was Matthew Allen, Bidwells’ Director of Business Marketing and Development and a key contributor to the Radical Capital report, who said in a welcoming speech that the Arc’s GVA could be increased by £50 billion by 2030.
Half-way through the day’s sessions Bidwells’ Richard Todd, Project Management Regional Office Partner, Oxford, said that the Arc was currently contributing 7% to England’s economic output (hardly surprising; the Arc contains 6.8% of England’s population) and that developing it could add £30 billion to its GVA by 2030. Mr Todd was reading from a prepared script at the time, so we imagine these figures are correct.
Finally, in the wrapping up session of the day, Bidwells’ Chris Pattison, Deputy Head of Planning, repeated Matthew Allen’s figure of an increase in Ox-Cam Arc GVA of £50 billion by 2030.
Stop the Arc was struck by how very much lower these growth forecasts are – increases of £30 billion to £50 billion – compared with the Radical Capital’s earlier figure of a £120 billion increase over the same period of time. Where had these new figures come from, and why the screeching U-turn now?
The National Infrastructure Commission’s (NIC’s) Partnering for Prosperity document that had originally launched the current iteration of Ox-Cam Arc plans in 2017 talked about one million more houses, 1.1 million more jobs and an increase in economic output of the Ox-Cam Arc of £163 billion by 2050.
The National Infrastructure Commission (NIC) first produced this Partnering for Prosperity report that effectively launched the Ox-Cam Arc in 2017.
Partnering for Prosperity’s economic forecasts for the Ox-Cam Arc were based on those of commissioned research carried out by Cambridge Econometrics. In the highest, ‘transformational’ growth scenario imagined by Cambridge Econometrics, the Arc’s GVA increased from £90 billion in 2014 to £253 billion in 2050, a difference of £163 billion, the figure mentioned above. If the Arc followed this growth trajectory, its GVA should be £114 billion in 2022 (close to Bidwells’ £115 billion estimate in Radical Capital) and £143 billion in 2030, an increase of £29 billion over that eight-year period. This is similar to Bidwells’ Richard Todd’s figure of a £30 billion increase given at the Milton Keynes meeting in October 2022.
It thus appears that Radical Capital is not so radical after all; it’s simply following the Partnering for Prosperity forecasts. Bidwells now needs to revise its growth predictions drastically, down to those of the earlier document. We hope that all those who signed the letter to the Chancellor quoting Bidwells’ and Blackstock’s grossly inflated prediction of the Arc’s economic potential in the Radical Capital report will issue a formal retraction to the current Chancellor and to all journals, including the Financial Times, that were recruited to publicise it.
But it doesn’t stop there. Because even Cambridge Econometrics’ forecast involved a lot of wishful thinking.
Economic growth can be achieved in number of ways; you can increase the number of workers, you can increase the economic output per worker, or you can re-arrange the ways in which those workers interact, achieving what is called an agglomeration effect. Or, of course, you can combine any or all of these three factors. Stop the Arc has shown that 33.4% of the NIC’s predicted increase in Arc GVA is due to an assumed increase in the workforce, 57.4% arises from an assumed increase in the productivity per worker and only 9.2% is due to an agglomeration effect. Anywhere in the country can increase its workforce and expect an increase in overall GVA. Anywhere in the country can make the same assumption about the increase in worker productivity (a 75% increase between 2014 and 2050). There is nothing special or location-specific about either assumption. And the agglomeration effect was later dismissed by Cambridge Econometrics itself (in a study of the economics of Cambridgeshire) as not operating over any economic scale larger than a UK town or city. So, no amount of increased movement across the Arc, whether by the cancelled Expressway or by the faltering East West Railway, will achieve any economic benefit or (non-existent) agglomeration effect that could not be achieved by the same level of development anywhere else in the country.
This 2020 Report explains how levelling up can produce a greater increase in national GVA than all Ox-Cam Arc plans
A 2020 Centre for Cities report concluded that if the cities of the North and Midlands ‘levelled up’ to those of the South, the UK economy would be £183 billion — or 9 per cent — larger. That’s £20 billion more than the transformational growth scenario would produce in the Arc by 2050 with all the disruption that a million extra houses, jobs, congestion and pollution would create across the Arc’s five counties.
Extra jobs in the Arc would necessarily mean people moving from elsewhere in the country into the already over-crowded and economically over-heated South-East. Levelling up involves none of these problems; it involves investing where people already have houses and need jobs. It involves taking the jobs to the workers rather than the other way round.
One million more houses for the Arc, some, or none?
That one million house figure originally proposed for the Arc represents a 65% increase in the total number of houses across the Arc’s five counties by 2050 and was comprehensively rejected by the public in both the Government’s first (and so far only) Arc Spatial Framework consultation, the results of which were delivered to the Department for Levelling Up in Spring 2022 but have yet to be made public, and in Stop the Arc’s own survey involving far more on-line responses than the official one. Such housing numbers were recognised as being ‘poisonous’ to the electorate, and the Government simply stopped talking about them. But Bidwells and others didn’t stop talking about the Partnering for Prosperity’s 1.1 million extra jobs across the Arc – jobs that require the lion’s share (three quarters) of those one million houses, the balance going to London commuters; nor did they stop talking about the glittering economic benefits. But if you supercharge jobs across the Arc you have to supercharge the number of houses as well for all those extra workers. Imagining extra jobs without all those extra houses is a bit like Alice imagining a grin without the Cheshire cat. It can only happen in fiction.
But, it seems, it can also happen in the minds of Bidwells’ partners.
In the November 2021 BEN Ox-Cam Arc meeting, Bidwell’s Head of Planning, Mike Derbyshire, tried to play down any notion of supercharging housing across the Arc. “We don’t mean supercharging the Arc” he said. “We don’t mean supercharging out an overheated city, building a million homes in the countryside…..”. Yet, at the same time, a promotional video from Bidwells, anticipating the Radical Capital report, talked precisely of just that – supercharging the Ox-Cam Arc. And, when it finally appeared, each section of the Radical Capital report ended with Policy Recommendations and instructions on how to Supercharge, Advance and Grow Arc ambitions.
How do you not need to supercharge the Arc housing numbers if you supercharge everything else about the Arc, the jobs and economic performance?
Just which bit of ‘supercharging’ are we not understanding here?
Much was said in the Ox-Cam Arc meeting in October about the need for Arc supporters to ‘create a narrative’ and to involve local communities in all Arc plans. Yet, five years’ on from Partnering for Prosperity no effort has ever been made to involve any of the almost four million people who live in the Arc at present in any key discussion or decisions about the Arc. Not a single meeting has ever been held by any Government Department or Ministry, Minister, Regional or Local Authority with any Arc community to explain what the Ox-Cam Arc will mean for them. There is a yawning democratic deficit in all Arc plans to date.
You might think that the annual Built Environment Networking Ox-Cam Arc meeting would be the ideal place where developers would want to hear the views of the communities they are so keen to develop. Stop the Arc thought so too, since it has done more than any other campaigning group to explain the implications of the Arc to the people who live within it, and to hear their views. It has met with people. It has given talks to communities across the Arc, both in person at fairs, fetes and Village Hall meetings and – during Covid – remotely over Zoom. It has listened to people’s many concerns about the Arc. So, in both 2021 and 2022 Stop the Arc offered just such a talk to the organisers of the Ox-Cam Arc conference in Milton Keynes. It wanted to tell the meeting delegates what the public thinks about Arc plans - but was turned down on both occasions. What were the meeting organisers afraid of? Bidwells has 400 staff working on the Ox-Cam Arc alone. Stop the Arc is run by a few unpaid volunteers who care deeply about the communities and countryside in which they live and have absolutely no profit-seeking agenda.
Don’t those without a voice deserve to be heard by those who currently are not listening?
Five years into this project, the Arc is still being done to all the current Arc residents, and not with them. It is well past the time this should change.
The map above shows the distribution of some of the more than 5,000 Stop the Arc subscribers.