Business Hub 4, Ground Floor North, Marischal College
To / Garfield Prentice, Team Leader (South Area), Development Management
Ross McMahon, Planner (South Area), Development Management
From / Jamie Coventry
Email / / Date / 24 March 2017
Tel. / 01224 522491 / Our Ref.
Fax. / Your Ref. / 170021/DPP
APPLICATION REF. 170021/DPP – PROPOSED ABERDEEN FC STADIUM AND TRAINING FACILITY AT WEST KINGSFORD
Socio-Economic Impact Assessment Analysis:
Source: EKOS Economic and Social Development. Proposed Aberdeen FC Stadium and Training Facility at Kingsford.Socio-Economic Impact Assessment. January 2017.
1.The report states the development will generate 30 net additional jobs with salaries of £0.3 million and GVA of £0.3 million per annum locally (table 1). The net impact at an Aberdeen level has been estimated in the report to be 20 net additional operational jobs, with 420 net construction jobs generated in the short term (table 1).
GVA claims cannot be scrutinised since the data and methodology for these estimates is not presented. The method of calculating the GVA impact needs to be presented. The net impact of the development does not constitute substantial growth or employment opportunity at an Aberdeen level. The benefits to the Kingsford area are additionally not considered compelling in terms of economic benefit. The net benefits to Kingsford of 30 FTE jobs and £1.1 million GVA are presented, yet this actually only represents 20 FTE jobs to Aberdeen.
2.The report provides a range of estimates around GVA and employment, however not enough detail regarding these assumptions is presented.
More detail to calculate the net economic impact of the proposal is needed. The assumptions regarding trade divergence and multipliers are not available within the report. For instance, local spend already occurs at the existing site, which leads to net economic benefit assumptions being questionable. Further, assumptions regarding trade divergence and employment used to calculate the net economic impact at a city-wide level need to be clarified.
It would also be useful additional spend assumptions be explained with greater clarity within the report and not as a totality.
3.It isn’t clear if the area level economic impact is attributed to only the new auxiliary sites in the development or existing ones.
4.The consultation notes that access to Aberdeen Football Club accounts and data, specifically turnover and employment, were used to calculate economic impact. It is not possible to an alternative calculation of economic impact without access to this information. In order to ascertain the validity of the economic impact claims for GVA added, detailed information on the current turnover, projected additional turnover, assumed GVA and direct on-site and off-site employment for the club would be required.
5.The report forecasts that over a 25 year period that net GVA to Aberdeen City from the Kingsford development would amount to £108 million. Without access to the methodology used in these calculations, it is not possible to come to agreement with this assessment. There are clear benefits from the construction phase of the project, but net off-site benefits to the city are marginal.
6.The population estimates used for the report are outdated. The latest population estimates, based on 2014, are available and included within this report (table 3). The report projects the future population of the Kingsford area to be between 19.901 and 23,484 by 2037, representing an increase of between 9% and 28% (p.6). The 2014 forecasts suggests the population of the area by 2039 will be in the range of 19,562 and 21,489, representing between a 7% and 17% increase.
However, these estimates were produced before the UK decision to leave the EU and the impact oil the decline in the North East Economy as a result of the Oil & Gas sector downturn. It might be the case that the population estimates that underlie these forecasts are optimistic and a more cautious assumption could be used or sensitivity analysis be conducted.
The population increase in the Kingsford area is the result of large scale housing developments being constructed. House prices and sales have substantially decreased since the downturn in the Oil & Gas industry, which makes make the population profile produced in the document highly inaccurate in the current climate.
7.“Total employment in Kingsford has increased substantially in recent years, +58% since 2009, compared to +6% at the Aberdeen City and Shire level, and +1% at the Aberdeen City and Scottish levels.” (p.6).
The following comments relate to the statement above:
There are a number of minor inaccuracies within the employment levels presented in the report (specific confusion regarding 2014 and 2015 BRES employment data). It is assumed that these exist because of boundary reconfiguration between 2001 and 2011 datazones, although a typo appears in the sector employment analysis, which causes confusion regarding if the report is talking about 2014 and 2015 employment (p.8). Employment level fluctuations within the Kingsford area may be substantial considering the impact of the downturn in the Oil & Gas industry. This table has been reproduced using the latest data below (tables 5 & 6).
Although data for employment change in the Kingsford area indicates substantial area increases, particularly in Mining, Quarrying & Utilities and Professional, Scientific & Technical industries, the downturn in the Oil & Gas industry, which is the primary reason for Aberdeen’s specialisations within these sectors, has led to substantial job losses and restructuring. Rather than growth, this could be asset rationalisation and the consolidation of business sites. Kingsford may have gained 2,500 Mining, Quarrying and Utilities jobs between 2014 and 2015, but at a regional level, Aberdeen City lost 2,000 jobs within these sectors within the same period (table 6).
The majority of employment in the Kingsford area exists within two datazones (15,000 of 16,400), of which one data zone has an employment level of 9,000 (table 5). This area includes the Prime Four business park, which demonstrates the reason for employment increases in the area. Taken over a 5 year period, these do not appear substantial (table 8). Using different geographical units (2001 intermediate zones), were time series data is more reliable, demonstrates that an employment decline has taken place in the area (table 8).
According to Scottish Government PACE Redundancies data, more than 20,000 people have been made redundant in Aberdeen City and Aberdeenshire between 2014 and 2016, with over half directly employed within Mining, Quarrying and Utilities industries.
The claim that the site represents net economic and employment growth likely describes a different phenomenon within the regional Oil & Gas industry. This point is further demonstrated by Professional, Scientific and Technical industries in Kingsford increasing employment by 500 whilst the City economy lost 2,000 of these jobs during the same period.
There has been a substantial increase in the number of registered businesses within the Kingsford area, but this business base increase can again be attributed to the location of new business parks, at a time when the number of businesses in Aberdeen has not increased in line with this trend (table 7).
8.“Since 2005, unemployment in Aberdeen City and Aberdeen City and Shire has remained below the national average almost consistently. Unemployment in recent years has shown signs of returning to pre-recession levels.” (p.11).
The following comments relate to the statement above:
Unemployment rates for both Aberdeen City and the Kingsford area have both been understated within the Socio-economic impact assessment. The current unemployment rate and the claimant count rate for the areas is presented in chart 1. Aberdeen City unemployment is now level with the Scottish national average.
Unemployment within the Kingsford area remains lower than the Aberdeen and Aberdeenshire level, although unemployment in Kingsford has demonstrated a substantial increase in line with the region since December 2014 (chart 2). Although still low, the relative increase is substantial. The current site in Aberdeen is located in an area of higher unemployment and surrounding areas of deprivation, so the argument does not follow that this development represents a net employment opportunity for Aberdeen City residents as is presented within the report (p.33).
The impact assessment states that “the development will increase employment in the local area offering a range of flexible employment opportunities” (p.33). The level of employment of 20 new jobs created does not represent a substantial employment-generating opportunity from the development and there is no guarantee that this will elevate prescribed unemployment within the local area.
The net benefit to employment and elevating unemployment from the development comes almost exclusively from the construction phase of the project. It is the case that the construction jobs created will not be for the benefit of the residence-based population, although it is the case that large economic benefits to the area would be created from the temporal location of the construction project.
Jamie Coventry
Economic Advisor (Economic Development)
Appendices:
Table 1: Kingsford & Aberdeen Net Impact Summary
EKOS Economic and Social Development.Proposed Aberdeen FC Stadium and Training Facility at Kingsford.Socio-Economic Impact Assessment.
Table 2: National Records of Scotland 2014-Based Population Projections:
2014 / 2039 / % changeAberdeen City / Children / 33,511 / 40,012 / 19%
Working Age / 161,147 / 186,447 / 16%
Pensionable Age / 34,262 / 41,286 / 21%
Total / 228,920 / 267,963 / 17%
Aberdeen City & Shire / Children / 82,180 / 95,641 / 16%
Working Age / 327,218 / 379,920 / 16%
Pensionable Age / 80,052 / 103,194 / 29%
Total / 489,450 / 579,850 / 18%
Scotland / Children / 911,041 / 923,796 / 1%
Working Age / 3,468,109 / 3,537,471 / 2%
Pensionable Age / 968,450 / 1,242,521 / 28%
Total / 5,347,600 / 5,701,476 / 7%
Source: National Records of Scotland. 2014-Based Sub-National Population Projections.
Table 3: Revised Projected Population Increases of the Kingsford Area:
Aberdeen City / Aberdeen City & Shire / ScotlandRate of change / 17.1% / 18.5% / 6.6%
Uplift in Kingsford population / 3,138 / 3,395 / 1,211
Potential new population / 21,489 / 21,746 / 19,562
Source: National Records of Scotland. 2014-Based Sub-National Population Projections.
Table 4: Kingsford On-site Net Impact Sensitivity Analysis:
EKOS Economic and Social Development.Proposed Aberdeen FC Stadium and Training Facility at Kingsford.Socio-Economic Impact Assessment.
Table 5: Total Employment in the Kingsford Area, 2015.
Employment by Workplace 2015: Kingsford (2011 Scottish datazone) / TotalS01006732 : Kingswells - 01 / 4,000
S01006733 : Kingswells - 02 / 50
S01006734 : Kingswells - 03 / 300
S01006735 : Kingswells - 04 / 50
S01006736 : Kingswells - 05 / 75
S01006737 : Kingswells - 06 / 100
S01006929 : Westhill North and South - 01 / 100
S01006930 : Westhill North and South - 02 / 75
S01006931 : Westhill North and South - 03 / 1,000
S01006932 : Westhill North and South - 04 / 100
S01006933 : Westhill North and South - 05 / 25
S01006934 : Westhill North and South - 06 / 150
S01006935 : Westhill Central - 01 / 20
S01006936 : Westhill Central - 02 / 400
S01006937 : Westhill Central - 03 / 100
S01006938 : Westhill Central - 04 / 50
S01006939 : Westhill Central - 05 / 50
S01006940 : Westhill Central - 06 / 500
S01006941 : Garlogie and Elrick - 01 / 9,000
S01006942 : Garlogie and Elrick - 02 / 100
S01006943 : Garlogie and Elrick - 03 / 40
S01006944 : Garlogie and Elrick - 04 / 75
S01006945 : Garlogie and Elrick - 05 / 40
Total Employment / 16,400
Source: ONS Business Register and Employment Survey 2015.
Table 6: Employment Changes in the Kingsford Area, 2014-2015.
Total Employment and % change between 2014 and 2015Sector / Kingsford / Aberdeen
2015 Total / % change / 2015 Total / % change
Agriculture, forestry & fishing / 0 / -100.0% / 50 / -50.0%
Mining, quarrying & utilities / 6,000 / 71.4% / 27,000 / -7.4%
Manufacturing / 600 / -25.0% / 11,000 / -18.2%
Construction / 1,250 / 0.0% / 6,000 / -16.7%
Motor trades / 45 / 0.0% / 3,000 / 0.0%
Wholesale / 400 / 33.3% / 5,000 / 0.0%
Retail / 450 / -10.0% / 13,000 / -7.7%
Transport & storage / 200 / -55.6% / 9,000 / 11.1%
Accom. & food services / 600 / 50.0% / 13,000 / 0.0%
Information & communication / 350 / 16.7% / 3,500 / 0.0%
Financial & insurance / 125 / 0.0% / 1,500 / 0.0%
Property / 50 / 42.9% / 2,000 / 0.0%
Professional, scientific & technical / 4,500 / 12.5% / 25,000 / -8.0%
Business admin & support / 700 / 0.0% / 14,000 / -7.1%
Public admin & defence / 10 / 0.0% / 8,000 / 0.0%
Education / 450 / -10.0% / 10,000 / -10.0%
Health / 600 / 0.0% / 25,000 / -4.0%
Arts, entertainment & other / 300 / 20.0% / 5,000 / 0.0%
Column Total / 16,630 / 20.8% / 181,000 / -6.1%
Source: ONS Business Register and Employment Survey.
Table 7: Business Units located within the Kingsford Area, 2012-2015
Businesses by Industry Sector: Kingsford, 20162012 / 2013 / 2014 / 2015 / 2016
1 : Agriculture, forestry & fishing (A) / 35 / 35 / 40 / 40 / 30
2 : Mining, quarrying & utilities (B,D & E) / 10 / 20 / 10 / 15 / 20
3 : Manufacturing (C) / 25 / 25 / 30 / 30 / 35
4 : Construction (F) / 60 / 60 / 55 / 65 / 60
5 : Motor trades (Part G) / 10 / 10 / 10 / 10 / 10
6 : Wholesale (Part G) / 25 / 20 / 25 / 25 / 25
7 : Retail (Part G) / 20 / 25 / 25 / 25 / 25
8 : Transport & storage (inc postal) (H) / 30 / 30 / 25 / 35 / 30
9 : Accommodation & food services (I) / 25 / 30 / 30 / 35 / 40
10 : Information & communication (J) / 45 / 50 / 50 / 55 / 65
11 : Financial & insurance (K) / 20 / 15 / 15 / 10 / 15
12 : Property (L) / 10 / 10 / 15 / 10 / 10
13 : Professional, scientific & technical (M) / 375 / 410 / 460 / 480 / 470
14 : Business administration & support services (N) / 55 / 55 / 70 / 75 / 80
15 : Public administration & defence (O) / 0 / 0 / 0 / 0 / 0
16 : Education (P) / 20 / 20 / 20 / 10 / 20
17 : Health (Q) / 30 / 30 / 30 / 35 / 35
18 : Arts, entertainment, recr & other (R,S,T & U) / 40 / 35 / 40 / 45 / 40
Column Total / 840 / 880 / 960 / 1,005 / 1,020
Source: ONS UK Business Counts 2016.
Table 8: Employment Change by 2001 Intermediate Zone within the Kingsford Area, 2012-2015
Employment by 2011 Intermediate Zone - Kingsford2011 / 2012 / 2013 / 2014 / 2015
Kingswells / 1,250 / 1,500 / 2,000 / 2,250 / 4,500
Garlogie and Elrick / 1,250 / 1,250 / 1,000 / 1,000 / 9,000
Westhill Central / 11,000 / 11,000 / 8,000 / 6,000 / 1,250
Westhill North and South / 3,000 / 3,500 / 4,000 / 4,500 / 1,250
Total / 16,500 / 17,250 / 15,000 / 13,750 / 16,000
Source: ONS Business Register and Employment Survey.
Chart 1: Revised Model-based Estimates of Unemployment: Aberdeen City, Shire & Scotland
Source: ONS Annual Population Survey: Model-based Estimates of Unemployment.
Chart 2: Revised Claimant Count Unemployment in Kingsford and Aberdeen, 2013-2016
Source: ONS Claimant Count.
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