Committee: Cabinet Date: 22 October 2012...2012/10/22 · MMB contract extension (Dec 2012) 132,000...

Committee: Cabinet Date: 22 October 2012 Agenda item: 9 Wards: All

Subject: Merton’s Economic Development Strategy (EDS) Refresh Lead officer: Paul McGarry, Future Merton Manager Lead member: Cllr Andrew Judge, Cabinet Member for Environmental Sustainability and Regeneration Key decision reference number: 1183 Contact officer: Sara Williams, Programme Manager for Regeneration, Investment and Renewal Recommendations: A. That Cabinet agree the proposed economic development activity in the Economic Development Strategy Refresh (EDS) 2012-2015. B. That Cabinet approve the virement of £1,053,475 for 2012/13 from specific grants and earmarked reserves to fund the proposed activity. (Future year budgets will be submitted for cabinet approval as part of the process of setting the overall Council budget)

1. PURPOSE OF REPORT AND EXECUTIVE SUMMARY 1.1 On 15 March 2010, the Cabinet approved the Economic Development

Strategy - A New Future: An Economic Development Prospectus for Merton. This was followed by Cabinet approval on 18 July 2011 of the 2011-2014 Economic Development Programme (EDP).

1.2 This report identifies why there has been a need to carry out a revised study of the economy of Merton due to the prevailing economic climate. It presents the programme of proposed economic activity for 2012-2015 and the costs associated to the delivery of the programme (Appendix A to this document).

2. DETAILS

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2.1 The 2010 EDS set out a 20 year plan based on data from 2008. Due to the recession it was felt necessary to review our position using more up to date data reflecting the changing local economy from 2008 on Merton’s economy. The findings are shown in the Economic Narrative (Appendix B), which accompanies the EDS Refresh. (Appendix C)

2.2 The evidence, which formed the basis of the 2010 EDS (EDS) and programme was based on Merton’s Local Economic Assessment completed in 2009 relating to economic data from 2007 (the latest data at that time). Therefore, the key information underpinning the 2010 EDS and a number of projects in the Economic Development Programme (EDP) were out-of date and did not reflect the current local social economic circumstance.

2.3 Some of the key new evidence that has shaped the direction of the refreshed EDS includes:

• The lack of new job growth in the borough for nearly a decade despite an average London job increase of 4.1%.

• The forecast of between 4,000 and 8,000 jobs to be created within the next 10 years.1

• The jobs and business opportunities presented by future physical development and investments in the borough as identified in Merton’s emerging Growth Strategy.

• Recognised weakness in the borough’s business base, relating low business start-up and survival rates; over-representation of micro business (a vast majority employing less than 4 staff) and fewer medium size and large companies in the local economy as well as lower business turnover compared to the rest of London.

• The marked increase in local unemployment, particularly youth unemployment and increased number of young people ‘Not in Employment, Education or Training’ (NEET’s)

• The continuing economic divide between the more affluent west and poorer east of the borough and the need to address this widening divide.

1 The GLA projection anticipates an additional 4,000 jobs between 2011 and 2021, whilst the Oxford Economics projects forecasts an additional 8000 jobs between 2010 and 2020

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• The changes in funding for employment, skill and business support infrastructure through the Governments austerity measures, including Government and Council funding cuts; closure of major funding and business support agencies, particularly the London Development Agency (LDA) and Business Link has meant funding is no longer available for some of the projects planned.

2.4 Regardless of the downturn in the economy the Council have still successfully delivered much of the planned activity of the 2011 EDP programme and emerging Regeneration Delivery Plan, including:

• Wimbledon Town Centre Management and the establishment of the LoveWimbledon Business Improvement District (BID) along with DestinationWimbledon in time for the Olympics programme.

• Raynes Park Enhancement Plan and award winning housing around Mitcham.

• Investing in our existing businesses by supporting Merton Business Awards and other initiatives such as business improvement grants.

• Support for small businesses delivered through the “Merton Mean Business” programme.

• Town Centre and Sector Business Forums delivered on a quarterly basis.

• Successfully being awarded Mayor’s funding including £714,000 from the Mayor’s Outer London Fund programme to support regeneration in Mitcham and a further £2,700,000 earmarked for Colliers Wood as part of the Mayor’s Regeneration Fund.

2.5 The refreshed strategy still carries through the original four objectives in the 2010 EDS but recognises that unemployment is another component that should be addressed and so includes a fifth objective:

“The need to support residents to access employment, skills and training”

2.6 The Purpose of the EDS Refresh

The EDS Refresh delivers a short-term action plan of activity up to 2015. It sets out six “components for growth” and includes an action plan with

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delivery timetable and anticipated outcomes (found in the Summary of Actions).

2.6.1 It is hoped that the revised document will refresh and update the 2010 EDS, providing a basis for determining priorities and a programme of actions to tackle the current economic challenges facing the borough and to maximise jobs, business and investment opportunities.

2.6.2 The EDS Refresh sets out the policy foundations for the Council’s expenditure on economic development to 2015.

2.6.3 It has been prepared in alignment with the Council’s Regeneration Delivery Plan and Local Development Framework. The proposal is to combine the EDS Refresh and the Regeneration Delivery Plan and refer to the new documents as Merton’s Growth Strategy.

2.6.4 It also includes forecast job growth in light of the impact of the recession and an action plan on how to maximise the 4,000 to 8,000 jobs forecast to be created in the borough within the next 10 years.

2.6.5 The EDS Refresh can be ready to be published at the end of October 2012, subject to Cabinet approval.

2.7 The EDS refresh identifies six ‘Components for Growth’:

2.7.1 Retaining existing companies

This recognises the importance of retaining established medium and large

companies in the Borough. It outlines the key actions required by the Council and its partners to support the retention of businesses and hence jobs and other economic benefits provided by these companies.

2.7.2 Inward investment The report highlights the importance of inward investment and the actions required by the Council and its partners to attract inward investors (both UK and foreign companies) to the borough in alignment with the proposals in the Regeneration Delivery Plan, in particular locations suitable for quality retail, office and headquarters. In addition, it recommends how the Council should work with site owners and developers to do this.

2.7.3 Support for new business and established small businesses

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The refresh focuses on the provision of high quality support for new business start-ups (including those wanting to be self employed) as well as existing small businesses leading to increased business survival & growth, and the creation of new jobs. The strategy proposes a revised business support service to be run for a minimum of three years (2013-2015). It also carries forward the Business Loan Fund outlined in the 2011 programme but has been revised and includes a supplementary Finance Readiness Support Programme.

2.7.4 Town centre initiatives and Business Improvement Districts (BIDs)

The council is building up a track record in supporting town centre initiatives and Business Improvement Districts (BIDs). The retail sector is extremely important to the Merton economy. It is a major source of jobs with combined retail and wholesale sector accounting for 18.1% of total employment in the borough, compared to 12.8% in London as a whole. It is also important for the council to understand the changes in retail, leisure and entertainment and town centre activity. The refresh demonstrates the need and identifies actions for the council to work proactively in enabling retailers and other businesses in each town centre to improve the management of their centre, attract new quality retailers and to secure investments in new developments.

2.7.5 Additional sector support

In addition to working with large/high growth companies the refresh recommends that the council will work with partners to provide support with sectors that demonstrate high levels of employment and growth potential.

It also recognises the strength of the creative and cultural cluster in Merton and the need to encourage much stronger business to business collaborations, embedding the principles of design and creative offers in economic activity.

2.7.6 Reducing unemployment

This element of the refresh identifies how Merton should draw together the various activities within the council and its partners including JobCentre Plus/Department of Work and Pensions, Merton Adult Education and the Skills Funding Agency to reduce unemployment and consider a Skills and Training Strategy to align employer demand with supply. Youth unemployment is recognised as a key action to address.

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3. ALTERNATIVE OPTIONS 3.1 None for the purposes of this report. 4. CONSULTATION UNDERTAKEN OR PROPOSED 4.4 None for the purposes of this report 5. TIMETABLE 5.1 The Refresh will be ready for publication at the end of October-November

2012, subject to Cabinet approval. The proposals can be delivered within the three-year programme of activity as identified in the Summary of Actions Table of the EDS Refresh document.

6. FINANCIAL, RESOURCE AND PROPERTY IMPLICATIONS 6.1 Appendix A sets out the estimated costs anticipated in delivering all of the

proposals in the EDS Refresh. 6.2 It is proposed that reserves are used to fund the Economic Development

Programme. This would be made up of Environment and Regeneration reserves, Partnerships reserves, Apprenticeships reserves, remaining LABGI, Merton Business Investment Funds and eligible s.106.

6.3 Cabinet are asked to approve the virement of £1,053,475 for 2012/13 from

these sources of funding. Future year budgets will be submitted for cabinet approval as part of the process of setting the overall Council budget.

7. LEGAL AND STATUTORY IMPLICATIONS 7.1 None for the purposes of this report. 8. HUMAN RIGHTS, EQUALITIES AND COMMUNITY COHESION

IMPLICATIONS

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8.1 Successfully tackling worklessness through job growth and skills development will directly contribute to more cohesive communities.

9. CRIME AND DISORDER IMPLICATIONS 9.1 Improving economic prosperity will positively contribute to reducing crime

and disorder. We will need to carefully manage development in the borough in order to ensure that as far as possible crime is designed out.

10. RISK MANAGEMENT AND HEALTH AND SAFETY IMPLICATIONS 10.1 None for the purposes of this report. 11. APPENDICES – the following documents are to be published with

this report and form part of the report 11.1 Appendix A - Merton’s Proposed EDS Refresh spend for 2012 –2015 11.2 Appendix B - Draft Economic Narrative – September 2012 11.3 Appendix C - Draft Economic Development Strategy Refresh – October

2012

12. BACKGROUND PAPERS 11.4 12.1 None

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Appendix B

LONDON BOROUGH OF MERTONEconomic Narrative

September 2012

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CONTENTS

Foreword – Our Economic Story......................................................................................... 1

Executive Summary ........................................................................................................... 2

1. Introduction and Context................................................................................................... 5

Introduction............................................................................................................................... 5

Broad Economic Context ........................................................................................................... 5

2. Employment in Merton...................................................................................................... 8

3. Businesses in Merton....................................................................................................... 12

4. Sectoral Analysis.............................................................................................................. 17

5. Merton: Skills, Employment & Workforce ........................................................................ 21

6. Living in Merton............................................................................................................... 30

The Geographic Divide within Merton .................................................................................... 31

7. Employment land and commercial property .................................................................... 32

8. Appendices ...................................................................................................................... 34

Notes on Statistics ................................................................................................................... 34

Definition of Sectors ................................................................................................................ 37

Location Quotient Analysis...................................................................................................... 40

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FOREWORD – OUR ECONOMIC STORY

Like many other places in the UK and worldwide, Merton has felt the effects of the global economic recession and slowdown. We face urgent and pressing challenges to support our residents, particularly our young people, and our businesses to succeed in these difficult circumstances.

Although the overall economic outlook remains uncertain, we believe that by preparing for growth now, Merton can take full advantage of new economic opportunities as and when they arise. We are therefore developing a new Economic Development Strategy, to guide the borough in delivering our ambitious vision for a new future.

To inform the new strategy we have prepared this economic narrative for Merton. The Economic Narrative tells Merton’s economic story. It examines the current trends facing the borough in terms of employment, businesses, our workforce, and our places and communities.

The Economic Narrative reminds us that Merton is a strong and successful borough. We have a highly skilled workforce, well connected town centres and a high quality of living. Our residents earn relatively high salaries on average and are more likely to work in highly skilled occupations.

However, the Economic Narrative also reminds us that the borough continues to face economic challenges in terms of creating new jobs, and supporting our residents and businesses to fulfil their potential. It reminds us that we need to continue to work with the most vulnerable of our residents, including our young people and those who are long‐term unemployed.

Most importantly it reminds us that the borough is a collection of diverse local places and communities. Not all parts of the borough have experienced the same level of economic success. This will need to change if Merton is to achieve its vision of a prosperous and sustainable borough.

We believe that through understanding our borough’s economy better and working with businesses and residents, we can overcome the challenges of the current economic climate and prepare for long term and sustainable growth. We hope that you will support us in helping make this vision a reality.

[Insert Signature]

[Insert name]

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EXECUTIVE SUMMARY

Broad Economic Context

As with other parts of the country, Merton faces challenges arising from continuing economic weakness. Continued uncertainty regarding national and international economic prospects means that, more than ever, local places need to create their own economic destiny. Some sectors, such as business and professional services, are likely to continue to grow. Others, including the public sector and manufacturing will see a decline in employment. Retail employment will grow slower than the pre‐recession rate due to changing retail trends and the rise of online shopping.

Employment in Merton

Relative to the rest of London, Merton has relatively low numbers of jobs. Moreover, the number of jobs in the borough has remained almost static between 2003 and 2010, such that by 2013 Merton will have experienced a ‘lost decade’ without employment growth. The jobs that Merton does have do not match the sectors which are projected to generate employment growth over the next ten to twenty years. Compared with the rest of London, Merton is too reliant on retail, manufacturing and construction employment and does not have enough employment within business and professional services.

Businesses in Merton

Merton’s relatively low level of jobs reflects a business base, which is smaller and more vulnerable than that of London as a whole. Merton has fewer businesses relative to its population and these businesses tend to employ fewer people than the London average and achieve lower levels of turnover. Merton firms are also subject to larger levels of ‘churn’ than in London as a whole, with high rates of business ‘births’ matched by a high rate of business ‘deaths.’

Merton has relatively few large and medium sized firms. The low number of large firms means that that there is relatively little in the way of developed sectoral ‘clusters’ within the borough. Instead there are pockets of high value activity focussed around specific firms. Going forward, it will be important to work with the larger firms in the borough and firms with growth potential in order to ensure that these firms can continue to expand within Merton.

Merton’s Workforce

Whilst Merton’s employment and business base could be considered a weakness, the borough has an undoubted strength in the high proportion of its residents with higher level qualifications. Average wage levels earned by Merton residents are higher than the equivalent London average and reflect the higher skilled occupations which many Merton residents work in.

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Unemployment in Merton

As a result of high average skill levels, Merton residents are less likely to be unemployed than other London residents. However, the recession has led to two trends, which are a cause for concern. Firstly, the proportion of residents who are economically inactive has risen significantly whilst the trend across London and England has been relatively flat. Secondly, the claimant count amongst young people has risen and, whilst this has not risen as high as in London as a whole, more work is needed to fully understand the extent to which young people in Merton are being excluded from the labour market due to economic conditions.

Divided Merton

Other strengths of the borough are that it is generally a very safe place, with good transport connections and relatively low levels of deprivation and crime. This has been reflected in relatively high average house prices compared to London as a whole. However, the aggregate picture masks a significant divide between the west and the east of the borough. The west is a prominent employment location, with better transport connections, a more highly skilled population, and consequent low levels of crime and deprivation.

In contrast the east of the borough has poorer transport links, fewer numbers of jobs, a less highly skilled resident population and higher – though not high – levels of crime and deprivation. Whilst the east of the borough is not struggling in the same way that more seriously deprived parts of London are, the differences between the two halves of the borough are still jarring and suggest a need for economic strategy to focus on supporting opportunities for residents across the borough. In doing so, there is a need to recognise the role which differential quality of transport connections play in determining areas of economic strength in the borough.

One final dimension of the borough’s economic geography is the location, quantity and quality of its employment space. Merton does not have enough office space of sufficient quality to accommodate demand from large companies. The borough has lost employment space over the past decade and faces a significant challenge in terms of identifying and bringing forward sites for development or redevelopment. How this challenge is addressed will have a major bearing on how the west / east divide is exacerbated or ameliorated over the coming years.

Conclusion

Merton has many economic strengths, including a well‐educated resident population, high average wage levels which can support local retail and leisure, an internationally recognised sporting venue and competition, and excellent transport links. Nonetheless, the poor employment growth record of the past decade shows that these strengths on their own will not bring additional employment to Merton.

The Council, in partnership with businesses, developers and other stakeholders, will need to ensure that support is given to businesses to enable them to locate and grow in

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Merton and that the infrastructure within the borough is conducive to this goal. By retaining high value employment within the borough, Merton can also begin to help struggling areas of the borough through providing new employment opportunities and through promoting local business connections.

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1. INTRODUCTION AND CONTEXT

Introduction

1.1. This economic narrative sets out the state of Merton’s economy as of mid‐2012. It is intended to supplement the statistical information in LB Merton’s Economic Development Strategy entitled ‘A New Future.1’ Much of the data in A New Future was taken from LB Merton’s Local Economic Assessment produced in 20092. This means that many of the statistics themselves are from 2007, and therefore do not give a complete picture of the local economy in the light of the recession and subsequent slow recovery.

being prepared to update A New Future in light of the changed economic conditions.


ell. At the end of 2011, the UK again entered recession, albeit less severe than in 2008.

istic in projecting growth of 0.8% in 20124, but this is still very low by historic standards.

economic recovery. There also remains the possibility that the ongoing and unresolved

1.2. This economic narrative uses up‐to‐date statistics to provide a complete understanding of Merton’s economy as it stands today. It will support a revised Economic Development Strategy, which is

1.3. Following the recession in many of the advanced economies in 2008 and 2009, the path of international and domestic economic recovery remains uncertain. 2010 saw an improvement in economic performance but this was undermined by a stalling of economic growth in 2011 which has not only been felt in advanced economies but has also had a knock‐on effect on the performance of emerging economies as w

1.4. Current projections suggest that the remainder of 2012 will be a period of slow economic growth for the global and UK economies. The IMF has projected that UK growth in 2012 will be just 0.2%3, which represents a significant reduction on earlier forecasts for the year. The Office for Budgetary Responsibility (OBR) is more optim

1.5. Already it is estimated that the current period of economic weakness in the UK has been longer than the Great Depression and national output remains below its 2008 peak5. Whilst mainstream forecasts suggest that growth will recover in 2013, there remains considerable uncertainty about longterm growth prospects and the length of the

1 LB Merton (2010) A New Future: An Economic Prospectus for Merton 2 Regeneris Consulting on behalf of LB Merton (2009) Merton Local Economic Assessment

3 IMF (2012) World Economic Outlook Update, July 2012

4 OBR (2012) Economic and Fiscal Outlook – March 2012 5 NIESR (2012) Estimates of Monthly GDP – January 2012

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Eurozone crisis could deteriorate dramatically, which would undoubtedly have profoundly negative consequences for the global economy.

1.6. The impact of the economic depression in the UK has been to further exacerbate existing regional and local disparities, with successful areas suffering less than areas that were already struggling prior to the recession6. The recession has accelerated existing long term trends in the retail sector7, leading to increasing high street vacancies in secondary or tertiary locations8. Equally worrying has been the significant rise in youth unemployment, which is at its highest level since the mid‐1980s9.

1.7. Prior to the recession, London had enjoyed a long period of economic expansion following the 1990s recession. This expansion saw a dramatic increase in financial and business services, professional services and the public sector, offsetting employment losses in the manufacturing sector.

1.8. The latest indicators for London suggest that whilst unemployment has risen during the recession, it has not risen to the same extent as in England as a whole10. Likewise, London’s growth in 2012 is expected to be 1.2% ‐ low by historic standards but much better than the rest of the UK11. London is arguably in a much stronger position than the rest of the UK, having a larger pool of highly skilled workers that will help support economic recovery and being a key location for business. London will also get a boost following the Olympics and it’s associated developments.

1.9. However, London is not immune from the risks present in the rest of the economy. London is likely to lose somewhere in the region of 50,000 – 100,000 public sector jobs12. The impact that the 50% tax rate and new regulations will have on investment in the capital, particularly in the finance sector, also remains to be seen.

1.10. The most recent projections for London’s economic growth are the GLA employment projections produced in late 201113 and the Oxford Economics projections produced in August 201014. The GLA projections anticipate employment growth of 245,000 between

6 Centre for Cities (2012) Cities Outlook 2012

7 For example BIS (2011) Understanding High Street Performance states that ‘the retail floorspace of town centres has fallen from 310 million sq ft in 2000 to 283 million sq ft in 2009, a decline of 27 million sq ft or 9% in just nine years’ and that ‘high street footfall (excluding Central London) has fallen by 10.4% over the past three years.’

8 BIS (2011) Understanding High Street Performance 9 ONS (2012) Labour Market Statistics: January 2012

10 GLA Economics (2012) London’s Economy Today – Issue 113: January 2012

11 GLA Economics (2012) London’s Economic Outlook – Spring 2012

12 The latest estimates for public sector job losses are that 710,000 public sector job losses will occur due to the government’s spending (OBR (2011) Economic and Fiscal Outlook: November 2011). Assuming that these cuts hit all regions equally then this would imply 90,000 public sector job cuts in London, though clearly it is conceivable that public sector job losses could be more or less than this figure depending on how cuts are managed in practice.

13 GLA (2009) Working Paper 51: Employment projections for London by sector and trend‐based projections by borough

14 Oxford Economics (2010) Destinations 2020: Employment Projections across sectors and occupations in London

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2010 and 2020, whilst the Oxford Economics projections anticipate employment growth of 536,000 between 2010 and 2020.

1.11. It is important to note the main trends which both projections agree on:

• The fundamental importance of services as a source of employment growth in London, which are expected to account for the vast majority of net employment growth over the next decade;

• Business services will continue to be considerably more important in terms of net job creation compared to financial services, and the latter may even see a decline in employment according to the GLA. This doesn't mean that the financial services sector will be unimportant, but it does mean that financial services is unlikely to be a significant source of direct employment growth;

• Retail will be relatively less important as a source of employment growth than it has been in the past;

• Manufacturing will continue its historic decline, shedding an additional 40,000 – 50,000 jobs over the next decade;

• Public administration jobs will also decline over the next decade in response to reduction in the number of public sector jobs and, in some cases, relocation of some jobs to other parts of the country.

1.12. With regards to employment growth in Merton, the GLA projection anticipates an additional 4,000 jobs between 2011 and 2021, whilst the Oxford Economics projection forecasts an additional 8,000 jobs between 2010 and 202015.

1.13. The different methodologies used in each projection are instructive in explaining why there is such a significant difference between these two forecasts. The GLA projection is based on historic trends, whilst the Oxford Economics projection is based on projected demand. Therefore, the key message for Merton from these two projections is that there is potential for growth if historic supply constraints in the borough can be overcome.

15 Please note that these projections should be compared with the measure of total jobs in the borough rather than the BRES figures used below. Please see appendix one for a full discussion of the differences between these two figures.

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2. EMPLOYMENT IN MERTON16

2.1. The most recent employment statistics show that Merton has 69,800 jobs, equivalent to 33 jobs per 100 residents17. Merton therefore has slightly fewer jobs per resident that the Outer London average (35 jobs per 100 residents) and significantly fewer jobs than the London (55) and England (46) averages. Merton’s employment market accounts for 1.6% of total employment in London.

2.2. The majority of employment in Merton is concentrated in the North East of the borough. The nine wards of Village, Wimbledon Park, Raynes Park, Hillside, Trinity, Dundonald, Abbey, Merton Park and Colliers Wood accounted for 48,400 jobs, or 69% of total employment. Within this area, employment is especially concentrated around Wimbledon tube station, with the four wards of Hillside, Trinity, Dundonald and Abbey accounting for 29,200 jobs, or 42% of total borough employment.

16 Please note: two distinct measures of employment are used in this section, these being the number of employees and total employment as defined in the ONS Business Register and Employment Survey. Please see appendix one for a full discussion of the data used in this section and the implications.

17 ONS (2011) Business Register and Employment Survey and ONS (2011) Mid‐Year Population Estimates

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Employment by Ward (2010)18

Historic Trends in Employment

2.3. Between 2003 and 2010, the number of employees in Merton was almost unchanged, with the overall number of jobs declining slightly from 65,779 to 65,662. In contrast, over the same period London saw a 4.1% increase in the number of jobs and England saw a 2.1% increase. If employment in Merton had increased by the same proportion as London, an additional 2,700 jobs would have been created.

2.4. This overall picture masks important employment trends within sectors in the borough. Manufacturing, construction and retail and wholesale employment have all declined over the period, whilst business services, public sector and hotel and restaurant employment have all increased.

2.5. The discontinuities in employment data19 make it difficult to quantify these changes precisely but it seems reasonable to state that the borough has lost perhaps 3,200 manufacturing jobs, 1,900 retail and wholesale jobs, and 1,100 construction jobs. By the same token, the available data points to an additional 4,000 business services jobs, 2,100 hotel and restaurant jobs and 1,000 public sector jobs.

Sectoral Composition

2.6. Compared to London, a larger proportion of Merton’s jobs are in the wholesale and retail trades, manufacturing and construction. Wholesale and retail employment accounted for 18.1% of total employment in Merton in 2010, compared to 12.8% in

18 ONS (2011) Business Register and Employment Survey

19 See appendix one

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London as a whole. Retail on its own accounted for some 9,100 jobs, or 13% of total employment, compared to 9.1% across London as a whole and 11.1% in England.

Employment by Sector (2010)20

Merton London England

Sector Number

% of total

% of total

% of total

Finance, IT and Business & Professional Services 20,470 29.3% 40.6% 25.2%

Wholesale and Retail 12,603 18.1% 12.8% 16.4%

Health & Education 12,343 17.7% 16.9% 21.6%

Accommodation & Food Service Activities 5,781 8.3% 7.1% 6.6%

Construction 3,825 5.5% 3.5% 4.8%

Transportation and storage 3,557 5.1% 5.0% 4.6%

Other Service Activities 3,225 4.6% 2.7% 2.2%

Manufacturing 3,010 4.3% 2.7% 8.6%

Arts, Entertainment and Recreation 2,195 3.1% 2.7% 2.5%

Public Administraton 2,142 3.1% 5.4% 5.2%

Primary Industries and Utilities 668 1.0% 0.6% 2.5%

Total 69,819

20 ONS (2011) Business Register and Employment Survey

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2.7. Manufacturing in Merton accounted for 4.3% of total employment, less than the English average of 8.6% but still higher than the London average of 2.7%. Construction employment in Merton accounted for 5.5%, higher than the average in either London (3.5%) or England (4.8%).

2.8. Conversely, finance, IT and business and professional services accounted for a smaller proportion of employment in Merton, being just 29.3% of total employment compared to 40.6% across London as a whole. However, this was still higher than the England average of 25.2%.

2.9. Merton also had lower levels of public sector employment compared to London and England. Public sector employment – here defined as public administration, health and education ‐ was 20.8% of total employment in Merton compared to 22.3% in London and 26.8% in England. Whilst the proportion of employment in education and health sectors was higher than the London average, the proportion of employment in public administration was lower. Clearly, not all of education and health employment is in the public sector, so it is likely that the overall level of public sector employment is less than 20.7%, though this would be equally applicable for London and England as a whole.

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3. BUSINESSES IN MERTON

3.1. As of 2011, there are 7,420 businesses in Merton. This is equivalent to 35.5 businesses per 1,000 residents, which is lower than the London average (42.7) but higher than the average for England as a whole (34.1)21.

3.2. As illustrated below, between 2004 and 2010 the number of active businesses22 in Merton increased by 12.9%, faster than the equivalent increase in London (12.3%) and England (6.2%) over the same period23. Merton saw a slight decline in the number of active businesses between 2009 and 2010 in contrast to London, which saw a slight increase, but this was significantly better than the performance across England as a whole.

3.3. The graph below illustrates that between 2004 and 2010, Merton had a relatively high start‐up rate compared to London and England. On average start‐ups comprised 14.9% of all active businesses in Merton over the period 2004 to 2010 compared to 13.8% in London and 11.7% in England.

21 ONS (2011) UK Business: Activity, Size and Location ‐ 2011

22 Active businesses are firms that are ‘active’ at any point in a given year – i.e. the total number of firms including those that have started up or closed down during the year. See the appendix for further details.

23 ONS (2011) Business Demography

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3.4. Merton’s firms tend to be younger than in London or England. In 2011, 39.1% of Merton firms were less than three years old, compared with 35.6% in London and 28.6% in England24. In part this reflects higher levels of business churn in Merton compared to other areas. Over the period 2004 to 2010, the number of firms that were started‐up or wound‐down in Merton accounted for an average of 27.8% of the total business base, compared to 26.2% in London and 22.7% in England25.

3.5. It is common practice to define large companies as those employing 250 or more employees. Companies employing fewer than 250 employees are therefore classed as small and medium sized enterprises (SMEs). Because SMEs make up the vast majority of the business base, it is common to divide SMEs in to medium, small and micro businesses. Medium sized businesses are defined as employing between 50 and 249 employees. Small businesses are defined as employing between five and 49 employees. Micro businesses are defined as employing between zero (i.e. a sole trader) and four employees.

3.6. One last point of note is that when we talk about companies in terms of business size, we are talking about the employment within Merton, not the overall level of company employment. Many large national employers with thousands of staff across the UK only count as medium‐sized or small businesses within Merton due to the number of staff they have in the borough.

3.7. In general, Merton has fewer large businesses than other parts of London or England. Large companies make up just 0.3% of Merton’s business base, less than the relevant

24 Ibid

25 Ibid

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London (0.5%) or England (0.4%) rate26. Conversely, 81.5% of Merton businesses employ four or fewer employees, compared to 78.2% of London businesses and 76.2% of England businesses27.

Business Stock by Size (2011)28


Number

% of total

% of total

% of total

Micro Businesses (0 – 4 employees 6,115 81.5% 78.2% 76.2%

Small Businesses (5 – 49 employees) 1,190 15.9% 19.6% 21.8%

Medium Businesses (50 – 249 employees) 178 2.4% 1.7% 1.6%

Large Businesses (250+ employees) 24 0.3% 0.5% 0.4%

3.8. Merton’s businesses also tend to have lower turnover levels on average than companies in London or England. In 2011, 74.5% of Merton firms had a turnover of less than £250,000 per year, a significantly higher proportion compared with London (68.9%) or England (70.5%)29. At the other end of the scale, only 8.6% of Merton firms have a turnover of more than £1 million, significantly lower than London (11.2%) or England (9.5%)30.

Key Employers in Merton31

3.9. There are 28 organisations in Merton, which employ more than 250 people. Together, these large organisations employ more than 17,700 people, equivalent to 25.4% of total employment. However, of these employers, several of them are large public sector employers. For example, Merton Council is the largest employer in the borough by a large margin, with more than 5,000 employees. The Metropolitan Police, NHS Sutton & Merton, Wandsworth PCT and London Underground are also large public organisations operating in the borough.

26 Ibid

27 Ibid 28 Note that all data is from ONS (2011) UK Business: Activity, Size and Location – 2011 with the exception of business numbers for Merton for medium and large size businesses. The latter figures are derived from the confidential data from the ONS Inter‐Departmental Business Register (IDBR) as these are considered to be more accurate. As a result, the total number of businesses does not sum to 7,420. Please see appendix for a fuller discussion of the relationship between IDBR and UK Business datasets.

29 Ibid

30 Ibid 31 Except where noted, the information in this section is based on confidential data from the ONS Inter‐Departmental Business Register (IDBR). For 2011, the IDBR provides detailed data on 5,950 of the 7,420 firms in the borough.

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Large Employers in Merton (2011)32

Employer Sector / Type of Employer Approximate Employment

London Borough of Merton Public Sector 5,400

Tescos Supermarket 900

Sainsburys Supermarket 900

Metropolitan Police Police 800

London General Transport Services Transport 800

The Sunlight Service Group Laundry Services 800

NHS Sutton and Merton Public Health 700

Interserve FM Ltd Building Management / Support Services

500

South West Trains Ltd Rail 500

Wandsworth PCT Public Health 500

Lidl Supermarket (Head office) 500

Post Office Postal Service 400

Marks & Spencer Supermarket / Retail 400

Careers Development Group Ltd Charity 400

London Underground Public Transport 400

Aspen Healthcare Ltd Private Healthcare 400

Julius Rutherford & Co. Ltd Cleaning Services 300

Fluid Options UK Ltd Cleaning Services 300

Kings College School Private Education 300

Morrisons Supermarket 300

South Thames College Further Education College 300

Domestic & General Group Ltd Insurance 300

Royal Bank of Scotland Bank 300

Chartered Institute of Personnel Training & Development 300

Prestige Services London Ltd Cleaning Services 300

Capsticks Solicitors LLP Legal Services 300

32 Data in this table is from ONS (2012) IDBR. Data for companies has been rounded to the nearest 100 employees for confidentiality. Although efforts have been taken to verify the accuracy of these figures, it is possible that they may overstate the amount of employment by a given organisation, as some employees may be registered at locations in Merton whilst actually working elsewhere.

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Approximate Employer Sector / Type of Employer

Employment

Olympic (South) Ltd Coaches / Minibus hire 300

Reed Specialist Recruitment Ltd Recruitment Services 300 – check?

3.10. Once public organisations are taken out, there are 20 large private organisations operating in the borough employing nearly 9,000 people. Therefore it is clear that Merton has a relatively small pool of large private‐sector companies. The single largest private employers in the borough are Tesco and Sainsbury’s supermarkets, which employ approximately 900 and 850 employees respectively.

3.11. In addition, Merton has 178 medium sized organisations (employing between 50 and 250 people). Unlike large organisations, the vast majority of these are private firms. Medium sized organisations collectively employ 17,700 people, or approximately 25% of total employment.

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4. SECTORAL ANALYSIS33

4.1. The following analysis looks at individual sectors in depth, aiming to build an understanding of the size of individual sectors and the key businesses in each sector.

Business, Financial and Professional Services34

4.2. There are over 2,250 registered firms working in business, financial and professional services sectors within Merton. Over a thousand of these firms are sole traders, and the vast majority (97%) of firms in these sectors employ fewer than ten people. 205 firms in these sectors employ more than ten people and there are eight large companies employing more than 250 people.

4.3. Of these eight large firms, three are described as SIC 81210, ‘general cleaning of buildings.’ Of the remaining five large firms, one is a building services provider, one is an insurance company, one is a bank (RBS), one is a solicitors (Capsticks) and one is a recruitment firm (Reed).

4.4. Of these eight firms, five of them operate from just one location in Merton. It is also worth noting that whilst Lidl is a head office occupier in the borough, their contribution to the borough’s employment has been classified as retail employment (see below).

Manufacturing35

4.5. There are 267 registered manufacturing firms in 2011. None of these firms are classified as large, though two firms have more than 100 employees. The largest manufacturing employer in the borough in employment terms is Carclo Technical Plastics, based on the Willow Lane Industrial Estate. The second largest is Anglo Australian Patisserie, a bread products manufacturer located in the north of the borough.

4.6. The low level of employment and small number of companies makes it difficult to talk about sectoral ‘clusters’. Nonetheless, there are some small scale industrial concentrations which are worth noting. There is a small group of firms with expertise in the manufacture of plastics. As well as Carclo, there are smaller firms such as Plastico Ltd, DS Smith Plastics Ltd (who manufacture plastic valves and taps) and Manuplastics Ltd.

4.7. There are also a large number of very small printing firms, the largest of which are WF Aldridge & Co. and Printwell Ltd, both located in Mitcham. Together these two firms

33 Note: all employment figures in this section for sectors are from ONS BRES and are for 2010. All approximate employment figures in this section for businesses are from ONS IDBR and are for 2011. Fuller discussion of the use of data is in the appendix.

34 See appendix for definition

35 Please note that the definition of manufacturing used here differs slightly from that referenced above in the ONS figures. The definition of manufacturing used here excludes certain repair and maintenance activities.

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employ approximately 100 people and overall the printing and binding sectors employ approximately 500 people. Even amongst the larger manufacturing firms, most are located on one site within the borough.

Retail

4.8. There are 524 retail firms in Merton. Whilst the majority (77%) of these firms employ fewer than ten people, there are also a number of larger firms in the retail sector. In particular, there are five retail firms operating in the borough with more than 250 employees. These five are all supermarkets, namely: Tesco, Sainsburys, Lidl, Marks & Spencer, and WM Morrison. In the case of Lidl, the employment within the borough is office employment rather than retail employment such that this skews the employment figures somewhat.

4.9. Aside from the large employers there are 23 retailers with between 50 and 250 employees. These include Dixons, Boots, Debenhams, Next, the Co‐operative Group, Oddbins, Halfords and Greggs.

Construction

4.10. There are 614 registered construction firms in Merton as of 2011. Whilst none of these firms is classified as large, two companies have more than 200 employees and a third employs over 150 employees. Only 50 firms employ ten or more staff. There do not appear to be any significant concentrations of employment in any of the construction sub‐sectors, with employment spread reasonably equally between construction, engineering and building installation.

4.11. The largest two firms in the sector are Concrete Repairs Ltd, based in the Willow Lane Industrial Park, and Saipem UK Ltd based in West Barnes. These two companies employ approximately 460 individuals and both are civil engineering firms. None of the larger construction firms appear to be indigenous to the borough.

Transport and Logistics36

4.12. There are 93 recorded transport and logistics employers in Merton. The largest of these is London General Transport Services, a private bus contracting firm based predominantly in Colliers Wood employing nearly 800 people. Unsurprisingly, South West Trains and London Underground are also key employers, with total employment between them of nearly 900 staff. The other large firm in the area is Olympic (South) Ltd, based on the Weir Road Industrial Estate, which provides transportation services to the public sector and employs approximately 260 people.

36 Please note that the definition of transport and logistics used here differs from the above ONS definition of transport and storage as it excludes postal activities.

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4.13. In contrast to public transportation, there are no large freight or warehousing firms in the borough. The two largest firms in this area are Morrison Utility Services and Home Delivery Network, both of which are based on the Willow Lane Industrial Estate (though Morrison also have a smaller location in the north of the borough) and both of whom employ between 80 – 90 people.

Hotels, Restaurants and Leisure37

4.14. There are 257 hotel, restaurant and leisure firms operating in Merton, none of which employ more than 250 people in the borough. There are 74 firms employing ten or more staff. The largest firms in this sector are pub chains Mitchell & Butler’s and Young’s, employing approximately 150 to 160 people each. Three other firms employ more than 100 employees each, these being Virgin Active, Punch Pub Company and YMCA London South West.

Media, Creative and Cultural Industries38

4.15. Media, creative and cultural industries employ approximately 2,000 people in Merton. This is equivalent to 2.9% of total employment, higher than the equivalent proportion in England (2.4%) but lower than the average for London as a whole (5.2%).

4.16. Within the larger umbrella of media, creative and cultural industries, there are a number of more specific sub‐sectors:

• Publishing: 385 jobs

• Computer software development and publishing: 550 jobs

• Architecture and design: 400 jobs

• Arts & Heritage: 430 jobs

• Media and photography: 240 jobs

4.17. The above does not include the Wimbledon College of Arts, which though an educational body is clearly an important actor in the local creative economy. Adding this in would give a further 200 jobs.

4.18. There are 237 firms in the media, creative and cultural sectors. None of these firms employ more than 250 people, though the largest employer, Square Enix, is very close to this with approximately 240 staff. The other significant employer is Trader Publishing Ltd, a newspaper publishing firm based in Wimbledon. In total there are only 21 firms in the borough employing ten or more people.



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4.19. Whilst it is difficult to talk of clusters due to the small number of firms and the low levels of average employment, aside from Square Enix there are another four smaller firms in the software design and publishing industries which employ approximately 100 people between them. There is also a large number of very small firms which employs perhaps another 100 people or so, though this includes a number of sole traders.

Low Carbon Sectors

4.20. The main barrier to understanding the low carbon sectors using traditional data analysis techniques is that most low carbon activities do not have distinct classifications under the Standard Industrial Classification (SIC). For example, low carbon energy generation falls under SIC 35110, ‘production of electricity’, the same category that more polluting forms of energy generation would be included in.

4.21. Another related problem is that many firms that are not predominantly ‘green’ may produce goods / services that are low carbon. Clearly this kind of activity is an important part of the green economy, however using existing methods it is very difficult to quantify.

4.22. Therefore it is important to recognise that to properly understand the extent of the low carbon sector it will be necessary to do a survey of existing commercial activity to identify where non‐green companies offer green activities. Only when this mapping exercise has been carried out will there be a clear picture of low carbon commercial activity in Merton.

4.23. As an initial exercise, companies which are easily identifiable as low carbon have been quantified using detailed business data39. This suggests that there are approximately 400 jobs in the low carbon sector as of 2011. The vast majority of such employment is in the recycling sectors, accounting for approximately 290 jobs. The largest low carbon business operating in the borough is metal recycling firm Veolia, which employs over 120 staff at its site near Raynes Park rail station.

39 See footnote 29 and appendix for further information.

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5. MERTON: SKILLS, EMPLOYMENT & WORKFORCE

5.1. As of 2012 Merton has a population of 199,700 people40 an increase of 6.6% on 2001 census. Of this, 69.8% of the population is between 16 and 64, higher than the equivalent proportions in London (68.9%) and England (64.8%)41.

Resident Skills

5.2. Merton has a very highly skilled workforce. ONS estimates that in 2010, 50% of Merton residents aged 16 – 64 held degree level qualifications or higher, much higher than the equivalent level in London (41.9%) or England (31.3%)42. Conversely, individuals with no qualifications make up just 6.1% of the workforce, a significantly lower rate than either London (9.9%) or England (11.1%)43. As a result, 41.5% of the Merton workforce is employed in either managerial or professional occupations, compared to 36% across London as a whole and 29.2% in England44.

5.3. It is important to note that there is a significant geographic divide in terms of skills. The most detailed geographic level at which skills data is available is at parliamentary constituency level, of which there are two in Merton: Wimbledon and Mitcham & Morden. The Wimbledon constituency covers the areas of Wimbledon and Raynes Park, whilst the Mitcham & Morden constituency covers the areas of Morden, Mitcham and Colliers Wood45. As per the map below, this roughly corresponds to the west and east, respectively, of the borough.

40 ONS (2012) Census 2011

41 ONS (2011) Annual Population Survey 42 ONS (2011) Annual Population Survey

43 Ibid

44 ONS (2011) Annual Population Survey – data is for the year ending June 2011.

45 For reference, the wards in the Wimbledon constituency are: Abbey, Cannon Hill, Dundonald, Hillside, Merton Park, Raynes Park, Trinity, Village, West Barnes, Wimbledon Park. The wards in the Mitcham & Morden constituency are: Colliers Wood, Cricket Green, Figge’s Marsh, Graveney, Lavender Fields, Longthornton, Lower Morden, Pollards Hill, Ravensbury, St. Helier.

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Map of Merton Parliamentary Constituencies

5.4. Individuals in the Wimbledon constituency (the west of the borough) have significantly higher average levels of skills than individuals in the Mitcham & Morden constituency (the east of the borough). 62.8% of working age residents in Wimbledon have degree level skills or better compared to just 36.2% of working age residents in Mitcham & Morden.

5.5. Conversely, only 2.6% of working age residents in Wimbledon report having ‘no skills’ compared to 9.9% of the working age population in Mitcham & Morden. Despite the geographic divide, it is important to remember that even in Mitcham & Morden the proportion of working age residents with degree level skills, whilst lower than the London average, remains higher than the average for England as whole. Therefore, whilst recognising that there are skills challenges in the east of the borough, the overall picture of skills in the borough is very positive.

Commuting and Earnings

5.6. The impact of high skill levels in the borough, coupled with close proximity to Central London, is that Merton has a relatively low proportion of people who live in the borough who also work in the borough. Only 27% of people who live in the borough work in the

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borough as well46. Even by London standards this rate is extremely low and reflects the significance of commuting to the borough’s labour market.

5.7. High levels of commuting are reflected in the differential between the average salaries earned by those who live in the borough, compared with those who work in the borough. The median annual salary of borough residents is £33,241, higher than both the London (£31,935) and England (£26,615) averages47. In comparison, the median annual salary of people who are employed in Merton is £28,197, suggesting that work in the borough on average is relatively lower value in comparison to the London average and reinforcing the idea that many skilled Merton residents commute to other parts of London in search of better paid employment48.

Employment, Unemployment and Economic Inactivity

5.8. The latest data on the employment rate for Merton residents puts this at 70.9%, higher than either London as a whole (68.1%) or England (70.3%)49. More employed people in Merton work full time compared to either the London or England averages50. At 7.3% of the working age population, unemployment is lower than both the average for London as a whole (9.2%) and the average for England (7.8%)51. Economic inactivity ‐ the proportion of working age residents who are not actively seeking work ‐ is also lower in Merton than either the London or England averages52.

5.9. As with other parts of London, Merton has seen falling employment since the recession, with consequent rises in unemployment and economic inactivity. The biggest shift relative to the London average has been the significant increase in the proportion of working age residents who are economically inactive. The graph below illustrates that between 2007 / 2008 and 2011, the proportion of economically inactive residents increased from 16.9% to 22.5%, whilst the equivalent proportion across London and England remained relatively stable.

46 ONS (2010) A study of commuting patterns in Great Britain based on the Annual Population Survey 2008 47 ONS (2011) Annual Survey of Hours and Earnings

48 ONS (2011) Annual Survey of Hours and Earnings

49 ONS (2011) Annual Population Survey

50 Ibid

51 ONS (2012) Model Based Estimates of Unemployment – Please note that the unemployment rate shown here is higher than the JSA claimant rate discussed below. This is because not all unemployed people will claim JSA and because the unemployment rate is calculated as a percentage of the economically active working age population, whereas the JSA claimant rate is calculated as a proportion of the working age population. See the appendix for additional details.

52 ONS (2011) Annual Population Survey.

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5.10. This illustrates that the recession has caused many people to leave the labour market entirely, an observation, which is supported by the declining proportion of economically inactive people who state that they are looking for a job, which in Merton has fallen from approximately 25% in 2007 / 2008 to 18% in 201153. In comparison, over the same period the proportion of economically inactive people stating that they want a job fell slightly in London (from approximately 26.5% to 24.5%) and rose slightly in England (from approximately 22.5% to 24%).

5.11. The map below illustrates the proportion of the adult population (15‐64)54 in receipt of job seekers allowance (JSA) benefits. The map illustrates a clear east‐west divide in the unemployment rate, with unemployment getting progressively worse the further east in the borough. The map also illustrates that unemployment is especially high in the wards around Mitcham. The three wards of Cricket Green, Figge’s Marsh and Pollard’s Hill have 30.2% of total JSA claimants, despite having only 16.1% of the total working age (15‐64) borough population55.

53 Ibid

54 Note: rates have been calculated on the 15‐64 population rather than 16‐64 as is more usual due to the fact that the age bands in the Mid‐Year Population Estimates produced by ONS at ward level do not allow us to calculate the population of 16‐64 year olds. 55 DWP (2012) Claimant Count with Rates and Proportions – May 2012, and ONS (2011) Mid‐Year Population Estimates

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% of Working Age Population (15 – 64) Claiming JSA (May 2012)56

5.12. Information from Job Centre Plus (JCP) in Merton suggests that the causes of this pronounced east‐west divide reflect differing levels of wealth between the east and west, which is driven in part by different levels of social housing between the two halves of the borough (these themes are explored more fully in the next section). As we have already seen, there are fewer jobs in the east of the borough than the west, and poorer residents from the east of the borough are often reluctant to travel as far for work, which limits their opportunities.

5.13. Wider issues underpinning unemployment in Merton include issues around language skills, lack of basic numeracy and literacy skills, and lack of motivation. Some of JCP’s clients are less willing to engage with JCP, to the point of not answering phone calls. In some cases, underlying drug or mental health problems may limit employment opportunities, as may having to care for a relative with long‐term health problems.

5.14. The table below illustrates that the number of people claiming benefits of all kinds is much higher than the number simply claiming JSA, though JSA is the largest single category of claimant. In total, Merton has 13,530 claimants, or 9.3% of the working age population57. This is a lower proportion than either London (14.3%) or England as a whole (14.5%)58.

56 DWP (2012) Claimant Count with Rates and Proportions – May 2012, and ONS (2011) Mid‐Year Population Estimates 57 DWP (2011) Benefit Claimants – Working Age Client Group.

58 Ibid

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Numbers of benefit claimants by type (November 2011)59

Claimant Type Number of Claimants

Proportion of Working Age Residents (16 – 64)

JSA only 3,800 2.6%

Income support or pension credit only 1,850 1.3%

Incapacity benefit or ESA only 1,730 1.2%

Disability allowance and severe disablement allowance

1,350 0.9%

Disability allowance only 1,000 0.7%

All Claimants 13,530 9.3%

5.15. The map below illustrates that the east‐west divide persists when looking at the overall number of benefit claimants, though it is slightly less straightforward. The area immediately around Wimbledon has the lowest level of benefit claimants, with areas north and south having slightly higher levels. Moving east, the proportion of residents claiming benefits increases, with the highest benefit claimant levels in Mitcham.

% of Working Age Population (15 – 64) claiming any benefits (November 2011)60

59 DWP (2011) Benefit Claimants – Working Age Client Group. Note: the number of claimants for each type of benefit does not sum to the total number of benefit claimants as not all benefit types are shown.

60 DWP (2011) Working age clients for small areas – November 2011, and ONS (2011) Mid‐Year Population Estimates

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Youth Unemployment

5.16. As discussed above, a key national trend in the current recession has been the marked increase in youth unemployment. Due to the lack of a single publically available measure of those young people who are not in employment, education or training (NEET), a number of sources need to be assessed separately in order to understand the change in youth unemployment in Merton.

5.17. The claimant count provides up‐to‐date information on those individuals claiming job seekers allowance (JSA). The graph below illustrates that amongst all age groups claimant counts have risen since 2008. However, whilst this pattern has been highly pronounced amongst the general working age population including those aged 20 to 24, claimant count rates have risen relatively little amongst those aged 19 and under and are in fact lower than the long term trend.

5.18. Currently the proportion of young people claiming JSA is 4.2%, lower than either London (5.3%) or England (5.4%). The graph below further shows that whilst youth claimant counts in Merton have risen since 2008, they have not risen to the same extent as in London and England as a whole. Indeed, claimant count rates in Merton amongst 16 to 24 year olds are only 11% higher than the level in 2006, whilst at the London level young person claimant rates are 23% higher and at a national level young person claimant rates are 69% higher.

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5.19. The map below illustrates that youth unemployment follows a similar east‐west pattern to that seen across the population as a whole. Youth unemployment is especially concentrated in the east of the borough around Mitcham.

% of Young People (15 – 24) Claiming JSA (May 2012)61

61 DWP (2012) Claimant Count with Rates and Proportions – May 2012, and ONS (2011) Mid‐Year Population Estimates

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5.20. If the claimant count reflects underlying trends then this would suggest that whilst Merton has experienced growing youth unemployment it has not been as badly affected as other parts of London and England. It would also suggest that 16 to 19 year olds have been less badly affected by economic conditions than 20 to 24 year olds.

5.21. However, claimant count figures do not show those who are unemployed and not claiming benefits or those who have withdrawn from the labour market entirely and stopped looking for work. Unfortunately the data for young people in Merton for these measures (wider unemployment and economic inactivity) is of very low quality, making conclusions difficult to draw. Therefore more work is needed to properly understand the full extent of youth unemployment in the borough. One thing that is likely is that youth unemployment follows a similar geographic pattern to that of unemployment as a whole, with a very significant difference between claimant rates in the east of the borough compared with the west of the borough.

Supporting Employment in Merton

5.22. As a result of the issues identified above, JCP in Mitcham is undertaking a range of work aimed at supporting employment in Merton. This includes:

• Working with local employers to ensure greater provision of work experience for young people

• Financial support to address barriers to work such as travel costs, clothing, etc.

• Extra hours at weekends to support client job search

• Work with troubled families funded by the European Social Fund (ESF)

• Work with offenders to prepare them for the job market prior to release

• A multi‐agency approach to support clients involved in gang activity

• Work with partners targeted at clients in deprived wards

• Daily signing and specific cohort initiatives

• Get Britain Working initiative62

5.23. The Council is currently preparing an Employment and Skills Action Plan for Merton. This will focus on coordinating support to reduce unemployment with a particular focus on the east of the borough and young people.

62 The Get Britain Working initiative is a series of related policies aimed at reforming the benefit system, and incentivising and supporting people to achieve paid employment. JCP’s role in this is to ensure individuals benefit from specific Get Britain Working measures such as work clubs, the new enterprise allowance scheme, work experience, service academies, and skills training under the new Work Programme.

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6. LIVING IN MERTON

6.1. Merton has good transport links, with London Underground access to the Northern line from Colliers Wood, South Wimbledon and Morden stations, and District Line access via Wimbledon Park and Wimbledon stations. The borough also has rail access via 11 stations in the borough, with services running to and from Surrey and Central London. Merton also has access to the Tramlink network via eight stations in the borough, providing links to Croydon and other parts of South London.

6.2. As of 2011, there are 85,000 dwellings in Merton, approximately 2.6% of London’s housing stock63. Since 2001, Merton’s dwelling stock has increased at a slower rate than that of London’s as a whole, increasing by 5.2% compared to 7.4% across London as a whole.64

6.3. A relatively low proportion of Merton dwellings are either local authority owned or managed by a Registered Social Landlord (RSL). Only 13.6% of Merton’s total dwelling stock is publically owned compared to 24.1% across London as a whole and 18% across England as a whole65. Merton has the seventh lowest level of public housing stock of any London borough.

6.4. The median price of property in Merton at £320,000 is higher than the equivalent London average of £305,000 and the fifth highest of any Outer London borough66. Since, 2000, median house prices in Merton have increased by over 130%, a similar proportion to the increase across London and England as a whole67.

6.5. In general, Merton has relatively low levels of deprivation. Only two of the 124 Lower Super Output Areas (LSOAs)68 in the borough are in the 20% most deprived LSOAs in England and only 42 of the 124 LSOAs are in the 50% most deprived LSOAs in England69. In general, the south east of the borough is more deprived than the north west of the borough, with a concentration of deprivation around Mitcham town centre.

6.6. Merton is a relatively low crime borough. Over the period 2010 to 2011, Merton recorded the sixth lowest number of offences of any London borough70. Within the borough, crime is concentrated near town centre areas and the railway stations, with

63 CLG (2011) Dwelling Stock Estimates by Local Authority

64 CLG (2011) Dwelling Stock Estimates by Local Authority

65 CLG (2011) Number of Dwellings by Tenure and District

66 CLG (2011) Median House Prices based on Land Registry Data

67 CLG (2011) Median House Prices based on Land Registry Data

68 Lower Super Output Areas (LSOAs) are one of the smallest levels of statistical geography.

69 ONS (2010) The English Indices of Deprivation 2010

70 Metropolitan Police (2012) MPS Offences by Borough and Month

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relatively high numbers of offences recorded in the wards of Figge’s Marsh and Cricket Green (Mitcham), Abbey and Trinity wards (South Wimbledon) and Colliers Wood71.

The Geographic Divide within Merton

6.7. A key trend within the borough is the significant divide between the west of the borough and the east of the borough. As already noted, the area around Wimbledon and, to a lesser extent, Morden, is home to the vast majority of the jobs in the borough, whilst Mitcham and the rest of the south east of the borough have far fewer jobs over a comparable area.

6.8. As far as data is available, it appears that the geography of employment is mirrored by other socio‐economic indicators. There are significant differences in skill levels between residents in the Wimbledon constituency72 and residents in the Mitcham & Morden constituency, which manifest themselves in terms of large differences in average annual pay, with residents in Wimbledon earning an average salary of £40,400 per year compared to £28,000 in Mitcham & Morden73. The difference between workplace pay is smaller, but still quite large. On average, employees in Mitcham & Morden earn £24,800 per annum compared to £29,900 in Wimbledon74. There are also significant differences in house prices between SW19 (Wimbledon) and CR4 (Mitcham).

6.9. Deprivation is far more concentrated in the south east of the borough compared to the north west. The proportion of benefit claimants is also significantly higher in the South East of the borough compared to the North West, in terms of both job seekers and those on Employment Support Allowance (ESA).

6.10. Partly these differences reflect differing levels of transport connections in the borough. The north west of the borough is well served by the northern and district lines, whilst Mitcham is less well served, with both tram and railway access located outside the town centre. Differences in employment between parts of the borough also reflect the distribution of employment land within the borough, with more office space around Wimbledon town centre and more industrial land around Mitcham.

71 Metropolitan Police (2012) MPS Offences by Ward and Month 72 Parliamentary constituencies are the lowest level at which statistical information on skills is available.

73 ONS (2011) Annual Survey of Hours and Earnings (ASHE). Please note that due to the small sample size at this level of geography there is a large amount of potential error in the actual figure, though not enough to change the overall finding that residents in Wimbledon earn significantly more than residents in Mitcham & Morden.

74 ONS (2011) Annual Survey of Hours and Earnings (ASHE). Please see caveat in previous footnote.

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7. EMPLOYMENT LAND AND COMMERCIAL PROPERTY

B1 Use Classes

7.1. The most recent study of employment land in Merton is the Employment and Economic Land Study (EELS) published in September 201075. This study highlighted the fact that Merton has relatively little employment land compared with other South London boroughs, and the second lowest amount of office space of any of the adjoining boroughs. The office and industrial space in the borough is typically less modern than that found elsewhere in London.

7.2. The vast majority (74%) of Merton’s B Class employment land is industrial, with concentrations of industrial land around Mitcham and Mitcham Junction, and to the south and north of Wimbledon town centre. The remaining 26% of B Class employment land is office, which is heavily concentrated around Wimbledon town centre, with smaller concentrations around Morden and Mitcham Junction.

7.3. Merton has experienced a small loss of employment space over the last decade, mainly due to a decline in manufacturing space that has not been fully offset by the small rise in office and warehousing space. The EELS suggested that there was pipeline development equivalent to over 83,000 sq. metres but that the losses occurring on redevelopment would lead to a loss of employment space overall should these developments proceed.

7.4. Demand for employment space in Merton is mainly for office space, particularly within the Wimbledon area, with far less demand in the other key centres. Wimbledon town centre is already home to a number of head offices, but the town centre has a lack of large floor‐plate offices suitable for larger firms, such that in some cases larger firms are spread out over a number of buildings in and around the town centre. The EELS suggests a future shortfall of office space relative to overall demand equivalent to between 13,000 and 57,000 sq. metres.

7.5. Demand for industrial premises is fairly low, especially for larger units, though the EELS notes demand for small modern units with good parking. Under existing demand patterns, industrial land is likely to be oversupplied. However, the potential for waste management and education uses to locate on industrial land may mean that there would be insufficient land if demand were to arise from such uses. Demand for industrial premises going forward is likely to be for small, modern units.

7.6. The EELS identified very few current town centre sites that could accommodate office development, and that these sites were not certain to come forward within the next ten years. The Study also identified potential for office space on existing industrial sites, though these sites are likely to be less attractive to occupiers than town centre sites.

75 Nathaniel Lichfield & Partners (2010) Employment and Economic Land Study

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7.7. In addition, the EELS identified existing vacant space equivalent to 41,000 sq. metres of office space, 17% of total office space in the borough, and 51,300 sq. metres of industrial space, equivalent to 7% of the borough’s industrial space. Current estimates suggest that only 17,100 sq. metres of existing vacant office space could be reoccupied, implying that anywhere up to 23,900 sq. metres of office space in the borough is both vacant and not fit for purpose. Moreover, given the likely level of demand for office space discussed above, a further implication is that existing vacant space will not be enough to accommodate all future demand.

7.8. There is therefore a significant economic development challenge for Merton in ensuring that the amount and quality of future employment space is sufficient to meet market demand so that firms can continue to grow and locate in the borough. The existing space constraints will make this particularly challenging.

Retail

7.9. The Retail and Town Centre Capacity Study76 suggests that over the next 15 years, Merton will require an additional 60,000 sq. metres of (net) retail space. Of this, the majority (53,800 sq. metres) will be comparison shopping space with the remainder being convenience retail. This compares with the 336,000 sq. metres of retail floorspace identified in the borough in 2008 by the EELS, and implies that retail floorspace would need to increase by 17.9% over the next 15 years if demand were to increase as forecast. This is in comparison to growth of 3% over the ten years to 2008.

7.10. Clearly, the retail projections are forecasts not target figures and it is difficult to forecast the exact rate of demand growth over this length of time, a problem which is obviously compounded by the uncertainty over the future level of growth in the economy. Equally, the path of retail growth needs to be weighed against the national retail trends which have already been touched on. These include the shift to online retail, the increase in demand for experiential retail and new retail formats, and the expected reduction in consumer demand as households look to pay off debt accumulated over the previous decade. All of these trends suggest that only town centres with a strong retail and leisure offer will be sustainable. Smaller centres with a less attractive offer may struggle to retain their critical mass and may see shrinkage as a result.

7.11. Therefore in order to understand future prospects for growth, the current capacity forecasts will need to be supplemented with an analysis of how each centre is likely to be impacted by the broad trends in the retail sector.

76 LB Merton (2011) Retail and Town Centre Capacity Study

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8. APPENDICES

Notes on Statistics

Statistics on Businesses

8.1. Statistics on businesses at a local authority area are found in two Office for National Statistics (ONS) datasets:

• UK Business: Activity, Size and Location – 2011

• Business Demography

8.2. The former dataset provides data on businesses in 2011 whilst the latter provides information on businesses going back to 2004. The difference between the two datasets is that UK Business uses a snapshot count of the number of firms at a single point in the year whilst Business Demography uses a measure of the number of ‘active businesses’ in a given year – that is, the number of firms that have been active at any point in that year.

8.3. Because they are measuring businesses in a slightly different way, the two datasets give slightly different results. Thus according to UK Business, there are 7,420 firms in the borough as of 2011. Business Demography data shows that there were 8,765 firms active in the borough during 2010 (the latest year for which data is available). Some of these firms will have started up during the year whilst others will have shut down during the year.

8.4. In the above analysis we have used these two measures slightly differently. We have used the UK Business data for the total number of businesses at the current time, as this is the most accurate and up‐to‐date measure of the total number of businesses at any point in time. However, we have used the business demography data to understand how the total number of firms has changed over time, as this data gives a longer time series than UK Business.

8.5. In addition to these data sources, we have used confidential data from ONS’s Inter‐Departmental Business Register (IDBR). This dataset provides detailed information on individual businesses and their respective levels of employment in 2011.

8.6. The IDBR has records for 5,950 businesses. Because of the discrepancy between the number of businesses recorded in the IDBR and the number of businesses recorded in UK Business, we have used UK Business when describing the number of businesses in the borough, as this is the most inclusive measure.

8.7. However, where we have described the number of larger firms across the borough or in a given sector we have used the IDBR figure, as UK Business does not provide a size breakdown of firms by sector for individual local authorities.

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8.8. The IDBR has also been used to provide approximate employment figures for individual firms, as this data is not available via any other means. IDBR figures for individual firm level employment are approximated for confidentiality reasons and are employment figures (including management and owners), not just the number of employees in a given firm.

Statistics on Number of Jobs / Employees

8.9. At the current time there is no single dataset, which provides up‐to‐date, detailed information on the total number of jobs in a local authority area by sector. Instead, we are reliant on two different datasets produced by ONS in order to understand the employment situation in a given area.

8.10. The first of these datasets is the Jobs Density measure available via ONS’s Nomis website77. This provides a figure for total jobs, including all employees, self‐employed people, members of the armed forces and those on government employment programmes. Whilst this is the most accurate measure of total employment in the borough, it does not allow for any sectoral breakdown, or breakdown by employment type. In addition, at the time of writing the most recent year for which data was available was 2009, which is problematic given the downward shift in employment in that year. This measure shows that in 2009 there were approximately 79,000 jobs in Merton.

8.11. The second key dataset is the Business Register and Employment Survey (BRES). BRES provides data on both number of employees and a wider measure of employment which includes working proprietors (sole traders, sole proprietors, partners and directors). BRES provides these figures broken down by sector and also provides ward‐level data, which is advantageous when trying to understand the local economic geography of a place. BRES is also available up to 2010, which makes it more useful for understanding where the economy is currently.

8.12. However, even the more inclusive measure of ‘employment’ in BRES falls short of total jobs by a significant margin. Employment, as measured by BRES, suggests that there were 69,800 jobs in Merton in 2010, a discrepancy of over 9,000 jobs compared to the previous figure.

8.13. A further complication is that statistics on employment suffer from a number of discontinuities arising from changes in statistical methodologies. BRES itself only goes back to 2008. This is because BRES is the replacement for the Annual Business Inquiry (ABI), which provided employment statistics for the UK between 1998 and 2008. The figures for 2008 for the two releases do not match up, with the BRES figure typically being higher than the ABI figure. For example, the ABI employee count for Merton in

77 www.nomisweb.co.uk/

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2008 is 65,892, whilst the equivalent BRES figure is 66,936 – a difference of 1,044 or 1.6%.

8.14. Unfortunately, there is no easy way of reconciling this situation. Using total jobs from the Jobs Density series is a more accurate reflection of the total number of jobs in the borough, but provides no sectoral breakdown and is not up‐to‐date. Using BRES and ABI provides us with up‐to‐date data broken down by sector, but fails to capture perhaps 15% of the employment in the borough. Switching between these different measures would significantly complicate the narrative, with the jobs count in Merton rising and falling by over 9,000 jobs within a couple of pages!

8.15. For this analysis we consider that a need for a long‐term perspective requires that longer term statistics are used, and that a need for up‐to‐date statistics requires the most up‐to‐date statistics to be used to inform future strategy. To that end, when considering a longer term perspective we have used the ABI for years 2003 to 2008 and the BRES for years 2009 and 2010. This data is for employees only (excluding company owners). We have used the ABI figure for 2008 as it provides a less jarring discontinuity than using the equivalent BRES figure, but this may mean that the impact of the recession in 2009 is under‐emphasised. Unfortunately, this is the best compromise given the available data.

8.16. However, when considering the latest data (2010) we have used BRES data on total employment (including company owners). Whilst this more inclusive measure still falls short of the total employment in the borough, it begins to account for the impact of self‐employment whilst allowing us to look in detail at employment distribution at the local level. Nonetheless, it is important to bear in mind that current total employment in Merton is likely to be around 80,000.

Statistics on Unemployment

8.17. There are two main indicators of workforce unemployment. The most straightforward is the number of residents claiming Job Seekers Allowance (JSA). This has the benefit of providing an accurate number of claimants.

8.18. The drawback of using JSA claimant rates as a proxy for unemployment is that it understates the level of employment in two ways. Firstly, not all unemployed people will claim JSA, so potentially a substantial proportion of frictional unemployment can be underestimated. Secondly, the JSA claimant rate is calculated as a percentage of the working age population. However, not all working age residents will be looking for work, some will be economically inactive (see below). This could be, for example, because they are in full time education or because they are a full time unpaid carer. Therefore the JSA claimant count understates the level of unemployment by overstating the effective working population.

8.19. The second indicator of workforce unemployment is a modelled unemployment measure produced by ONS, which measures the proportion of total unemployment (those claiming JSA and those who are not) as a proportion of the total 'economically active' population ‐ that is, those who are employed plus those who are unemployed

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and seeking employment. This has the advantage of providing a fuller and more accurate picture of unemployment at a given time. The disadvantage of this measure of unemployment is that it is an estimate and as such is subject to a confidence interval of around 1.5% at the local authority level. For Merton, this means that estimates of the number of unemployed could be around 1,500 higher or lower than the actual number.

8.20. In the analysis above, we have used both measures as appropriate. The reader should bear in mind that where JSA rates have been used, the actual unemployment rate is higher, and where modelled unemployment rates have been used, there is a margin of error in these figures at the Merton level.

Definition of Sectors

8.21. The following are the definitions of sectors used in the sector analysis above.

Business, Financial and Professional Services

Sub‐Sector Detailed Sector (5‐digit SIC) 56210 : Event catering activities

70100 : Activities of head offices

78200 : Temporary employment agency activities

78300 : Other human resources provision

80100 : Private security activities

80200 : Security systems service activities

81100 : Combined facilities support activities

81210 : General cleaning of buildings

81221 : Window cleaning services

82110 : Combined office administrative service activities

82190 : Photocopying, document preparation and other specialised office support activities

82911 : Activities of collection agencies

82912 : Activities of credit bureaus

82920 : Packaging activities

Business Services

82990 : Other business support service activities nec

64191 : Banks

64192 : Building societies

64201 : Activities of agricultural holding companies

64202 : Activities of production holding companies

64203 : Activities of construction holding companies

64204 : Activities of distribution holding companies

64205 : Activities of financial services holding companies

64209 : Activities of other holding companies (not including agricultural, production, construction, distribution and financial services holding companies) n.e.c

64301 : Activities of investment trusts

64302 : Activities of unit trusts

64303 : Activities of venture and development capital companies

64304 : Activities of open‐ended investment companies

64305 : Activities of property unit trusts

64306 : Activities of real estate investment trusts

Finance

64910 : Financial leasing

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64921 : Credit granting by non‐deposit taking finance houses and other specialist consumer credit grantors

64922 : Activities of mortgage finance companies

64929 : Other credit granting (not including credit granting by non‐deposit taking finance houses and other specialist consumer credit grantors and activities of mortgage finance companies) n.e.c.

64991 : Security dealing on own account

64992 : Factoring

64999 : Other financial service activities, except insurance and pension funding, (not including security dealing on own account and factoring) n.e.c.

66110 : Administration of financial markets

66120 : Security and commodity contracts brokerage

66190 : Other activities auxiliary to financial services, except insurance and pension funding

66210 : Risk and damage evaluation

66290 : Other activities auxiliary to insurance and pension funding

66300 : Fund management activities

70221 : Financial management

65110 : Life insurance

65120 : Non‐life insurance

65201 : Life reinsurance

65202 : Non‐life reinsurance

65300 : Pension funding

Insurance

66220 : Activities of insurance agents and brokers

69101 : Barristers at law

69102 : Solicitors

69109 : Activities of patent and copyright agents; other legal activities (other than those of barristers and solicitors) nec

69201 : Accounting, and auditing activities

69202 : Bookkeeping activities

69203 : Tax consultancy

70210 : Public relations and communication activities

70229 : Management consultancy activities (other than financial management)

71111 : Architectural activities

71112 : Urban planning and landscape architectural activities

71121 : Engineering design activities for industrial process and production

71122 : Engineering related scientific and technical consulting activities

71129 : Other engineering activities (not including engineering design for industrial process and production or engineering related scientific and technical consulting activities)

73110 : Advertising agencies

73120 : Media representation

73200 : Market research and public opinion polling

74100 : Specialised design activities

74300 : Translation and interpretation activities

74901 : Environmental consulting activities

74902 : Quantity surveying activities

74909 : Other professional, scientific and technical activities (not including environmental consultancy or quantity surveying)

78109 : Activities of employment placement agencies (other than motion picture, television and other theatrical casting) nec

82200 : Activities of call centres

82301 : Activities of exhibition and fair organizers

Professional Services

82302 : Activities of conference organizers

R&D 71200 : Technical testing and analysis

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72110 : Research and experimental development on biotechnology

72190 : Other research and experimental development on natural sciences and engineering

72200 : Research and experimental development on social sciences and humanities

Hotels, Restaurants & Leisure

Detailed Sector (5‐digit SIC)

55100 : Hotels and similar accommodation

55201 : Holiday centres and villages

55202 : Youth hostels

55209 : Other holiday and other short‐stay accommodation (not including holiday centres and villages or youth hostels) nec

55300 : Camping grounds, recreational vehicle parks and trailer parks

55900 : Other accommodation

56101 : Licensed restaurants

56102 : Unlicensed restaurants and cafes

56103 : Take away food shops and mobile food stands

56290 : Other food service activities

56301 : Licensed clubs

56302 : Public houses and bars

93130 : Fitness facilities

93210 : Activities of amusement parks and theme parks

93290 : Other amusement and recreation activities

Media, Creative & Cultural Industries

Detailed Sector (5‐digit SIC)

58110 : Book publishing

58120 : Publishing of directories and mailing lists

58130 : Publishing of newspapers

58141 : Publishing of learned journals

58142 : Publishing of consumer, business and professional journals and periodicals

58190 : Other publishing activities

58210 : Publishing of computer games

58290 : Other software publishing

59111 : Motion picture production activities

59112 : Video production activities

59113 : Television programme production activities

59120 : Motion picture, video and television programme post‐production activities

59131 : Motion picture distribution activities

59132 : Video distribution activities

59133 : Television programme distribution activities

59140 : Motion picture projection activities

59200 : Sound recording and music publishing activities

60100 : Radio broadcasting

60200 : Television programming and broadcasting activities

62011 : Ready‐made interactive leisure and entertainment software development

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62012 : Business and domestic software development

71111 : Architectural activities

71112 : Urban planning and landscape architectural activities

74100 : Specialised design activities

74201 : Portrait photographic activities

74202 : Other specialist photography (not including portrait photography)

74203 : Film processing

74209 : Other photographic activities (not including portrait and other specialist photography and film processing) nec

90010 : Performing arts

90020 : Support activities to performing arts

90030 : Artistic creation

90040 : Operation of arts facilities

91020 : Museum activities

91030 : Operation of historical sites and buildings and similar visitor attractions

91040 : Botanical and zoological gardens and nature reserve activities

Location Quotient Analysis

Concentrated Large Industries Employment Location Quotient

Primary education 3,687 1.20 Retail sale in non‐specialised stores with food, beverages or tobacco predominating

3,360 1.10

Event catering activities 2,451 2.11 Social work activities without accommodation for the elderly and disabled 896 1.46 Washing and (dry‐)cleaning of textile and fur products 865 5.38 Construction of other civil engineering projects 650 2.01 Combined facilities support activities 572 1.03 Activities of other membership organisations 559 1.24 Plumbing, heat and air‐conditioning installation 556 1.60 Residential care activities for the elderly and disabled 548 1.43 Passenger rail transport, interurban 541 1.89 Hairdressing and other beauty treatment 539 1.03 Collection of non‐hazardous waste 535 2.03 Activities of sport clubs 518 1.44 Maintenance and repair of motor vehicles 505 1.23 Printing (other than printing of newspapers and printing on labels and tags) 420 1.25 Residential nursing care activities 418 1.07 Renting and leasing of other machinery, equipment and tangible goods 415 2.28 Non‐life insurance 389 1.16 Other passenger land transport 388 2.17 Urban, suburban or metropolitan area passenger railway transportation by underground, metro and similar systems

364 1.23

Operation of sports facilities 358 1.00

Concentrated Large Industries Employment Location Quotient

General cleaning of buildings 1,887 0.82 Computer consultancy activities 1,616 0.81 Management consultancy activities (other than financial management) 1,417 0.55 Other social work activities without accommodation 1,283 0.72

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Licensed restaurants 1,199 0.52 Temporary employment agency activities 1,097 0.39 General secondary education 1,067 0.61 Retail sale of clothing in specialised stores 1,026 0.66 Hospital activities 877 0.22 Other business support service activities 865 0.62 Other retail sale in non‐specialised stores 853 0.82 Urban, suburban or metropolitan area passenger land transport other than railway transportation by underground, metro and similar systems

850 0.99

Public houses and bars 781 0.71 Public order and safety activities 780 0.53 Real estate agencies 772 0.92 Other human health activities 703 0.82 Accounting, and auditing activities 678 0.38 Other education 606 0.87 Activities of head offices 586 0.52 Electrical installation 583 0.98 Regulation of the activities of providing health care, education, cultural services and other social services, excluding social security

563 0.98

General public administration activities 555 0.21 Other personal service activities 555 0.96 Other engineering activities (not including engineering design for industrial process and production or engineering related scientific and technical consulting activities)

551 0.67

Construction of domestic buildings 548 0.86 Other information technology and computer service activities 543 0.63 Activities of employment placement agencies (other than motion picture, television and other theatrical casting)

534 0.61

Solicitors 533 0.41 Child day‐care activities 481 0.94 Unlicensed restaurants and cafes 424 0.43 Postal activities under universal service obligation 413 0.68 Gambling and betting activities 410 0.81 Banks 406 0.12 Take away food shops and mobile food stands 405 0.66 General medical practice activities 370 0.81 Technical and vocational secondary education 368 0.58

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Appendix C

LONDON BOROUGH OF MERTONEconomic Development Strategy

September 2012

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CONTENTS

Foreword – Merton’s New Future ...................................................................................... 1

1. Introduction ...................................................................................................................... 2

Broad Economic Context ........................................................................................................... 3

Interactions with other Council Plans ....................................................................................... 4

2. Merton’s Economy Today .................................................................................................. 5

The Economic Challenges .......................................................................................................... 8

3. Our Economic Vision and Strategic Objectives ................................................................... 9

4. Achieving our Vision ........................................................................................................ 10

Retaining Existing Companies.................................................................................................. 11

Supporting Business Growth and Start‐Ups ............................................................................ 13

Inward Investment .................................................................................................................. 16

Town Centre Initiatives including BIDs.................................................................................... 18

Providing Support to Identified Sectors .................................................................................. 21

Supporting Residents into Work ............................................................................................. 23

Summary of Actions ................................................................................................................ 25

5. Principles for Success ....................................................................................................... 29

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FOREWORD – MERTON’S NEW FUTURE

Like many other places in the UK and worldwide, Merton has felt the effects of the global economic recession and slowdown. We face urgent and pressing challenges to support our residents, particularly our young people, and our businesses to succeed in these difficult circumstances.

Merton has already set out a vision for a new future. A future in which the reputation of the borough as a place to live and visit is matched by the borough’s reputation as a place to work, invest and do business. A future in which different parts of the borough are able to benefit equally from economic growth. A future in which all of our residents and businesses are supported to reach their full potential.

We recognise that current economic circumstances make this future more difficult to achieve. We have therefore developed this refreshed economic development strategy, to guide the borough in delivering these ambitious targets. This strategy sets out a plan of action for growth. It explains how we will work with businesses in the borough, large and small, to help them invest and expand. It sets out how we will work with incoming businesses to help them find suitable premises and locations in which to invest.

Our places and town centres within the borough are vital for our prosperity and identity. This strategy explains how we will work with local businesses and local residents to promote and develop our town centres, to make them better places to live and work and to make them more attractive to visitors and investors. This strategy sets out the huge amount of work we are undertaking to help improve our town centres and prime them for success.

As important as economic growth is, it cannot be an end in itself. Our goal is to enable our residents to share in the fruits of growth, through supporting better access to employment and training for residents across the borough. We will work with our partners to make this happen and with businesses to understand their skills needs and requirements.

Merton’s new future will not be achieved through any ‘quick fixes’. It requires a long‐term programme to ensure that our borough continues to succeed and excel. We believe that the actions set out in this revised economic development strategy will enable Merton to overcome the challenges of the current economic climate and prepare for long term and sustainable growth that will benefit our residents and our businesses. We hope that you will support us in helping make this vision a reality.

[Insert Signature] and photo

Cabinet Member for Environmental Sustainability and Regeneration

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1. INTRODUCTION

1.1. In 2010, LB Merton produced an Economic Development Strategy (EDS) entitled ‘A New Future.1’ The document set out a clear and positive vision for the future of Merton’s economy. Although A New Future was produced relatively recently, LB Merton consider that it is important to refresh the strategy in light of a national economic context which remains extremely uncertain, and new data on how Merton’s economy has responded to the recession.

1.2. Prior to producing this refresh, LB Merton have undertaken a review of the latest economic statistics to provide a complete understanding of Merton’s economy as it stands today. This has been developed into an Economic Narrative for Merton2, which underpins this strategy refresh and should be read in tandem with this document and the original 2010 strategy, both of which are available separately.

1.3. LB Merton remains committed to the vision set out in A New Future. We believe that Merton can build on its strengths as a great place to live with a high quality of life and become a location of choice for companies looking for a well‐connected location with a highly skilled workforce. This strategy sets out the actions needed to generate long‐term, sustainable growth that will benefit our residents across the borough.

Structure of the Refresh

1.4. The remainder of this section explores the broad economic context in which Merton’s economic growth will take place and how this refresh fits in with Merton’s other plans and strategies.

1.5. Section 2 summarises the findings of the Economic Narrative and describes Merton’s economy today.

1.6. Section 3 sets out the economic vision for the borough.

1.7. Section 4 sets out the components of growth, the six main drivers that will ensure that Merton achieves its economic vision for growth:

1. Retaining existing companies

2. Support business growth and start‐ups

3. Inward investment

4. Town centre initiatives including BIDs

1 LB Merton (2010) A New Future: An Economic Prospectus for Merton 2 LB Merton (2012) London Borough of Merton Economic Narrative

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5. Providing support to identified sectors

6. Supporting unemployed residents into work

1.8. For each of the above priorities, Section 4 will set out: how the Council is currently responding, what initiatives will be undertaken, and how the Council will use its land and property assets to support its objectives.

1.9. Section 5 sets out the principles for success which the Council will need to follow to achieve its goal of promoting long‐term economic growth.


1.10. Following the recession in many of the advanced economies in 2008 and 2009, the path of international and domestic economic recovery remains uncertain. Current projections suggest that 2012 will be a period of slow economic growth for the global and UK economies. The UK has already experienced a technical recession at the end of 2011 and beginning of 2012, and the IMF has projected that UK growth in 2012 will be just 0.2%3. The Office for Budgetary Responsibility (OBR) is more optimistic in projecting growth of 0.8% in 20124, but this is still very low by historic standards.

1.11. Already it is estimated that the current period of economic weakness in the UK has been longer than the Great Depression and national output remains below its 2008 peak5. Whilst mainstream forecasts suggest that growth will recover in 2013, there remains considerable uncertainty about long term growth prospects and the length of the economic recovery. There also remains the possibility that the ongoing and unresolved Eurozone crisis could deteriorate dramatically, which would undoubtedly have profoundly negative consequences for the global economy.

1.12. The impact of the economic depression in the UK has been to further exacerbate existing regional and local disparities, with successful areas suffering less than areas that were already struggling prior to the recession6. The recession has accelerated existing long term trends in the retail sector7, including the long‐run shift from physical to online retail, leading to increasing high street vacancies in secondary or tertiary locations8.

3 IMF (2012) World Economic Outlook Update, July 2012

4 OBR (2012) Economic and Fiscal Outlook – March 2012 5 NIESR (2012) Estimates of Monthly GDP – January 2012 6 Centre for Cities (2012) Cities Outlook 2012

7 For example BIS (2011) Understanding High Street Performance states that ‘the retail floorspace of town centres has fallen from 310 million sq ft in 2000 to 283 million sq ft in 2009, a decline of 27 million sq ft or 9% in just nine years’ and that ‘high street footfall (excluding Central London) has fallen by 10.4% over the past three years.’

8 BIS (2011) Understanding High Street Performance

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Equally worrying has been the significant rise in youth unemployment, which is at its highest level since the mid‐1980s9.

1.13. Prior to the recession, London had enjoyed a long period of economic expansion following the 1990s recession. This expansion saw a dramatic increase in financial and business services, professional services and the public sector, offsetting employment losses in the manufacturing sector. The latest indicators for London suggest that whilst unemployment has risen during the recession, it has not risen to the same extent as in England as a whole10. Likewise, London’s growth in 2012 is expected to be 1.2% ‐ low by historic standards but much better than the rest of the UK11. London is arguably in a much stronger position than the rest of the UK, having a larger pool of highly skilled workers that will help support economic recovery and being a key location for business. London will also get a boost following the Olympics and from associated developments.

1.14. However, London is not immune from the risks present in the rest of the economy. London is likely to lose somewhere in the region of 50,000 – 100,000 public sector jobs12. The impact that the 50% tax rate and new regulations will have on investment in the capital, particularly in the finance sector, also remains to be seen.

Interactions with other Council Plans

1.15. This revised Economic Development Strategy is an update to the previous economic strategy A New Future. The vision of the previous strategy remains highly relevant (see Section 3), but the actions suggested in A New Future are superseded by those set out in this revised strategy.

1.16. This Economic Development Strategy aligns with and supports the London Borough of Merton’s Local Development Framework (LDF) and the Regeneration Delivery Plan.

9 ONS (2012) Labour Market Statistics: January 2012

10 GLA Economics (2012) London’s Economy Today – Issue 113: January 2012

11 GLA Economics (2012) London’s Economic Outlook – Spring 2012

12 The latest estimates for public sector job losses are that 710,000 public sector job losses will occur due to the government’s spending (OBR (2011) Economic and Fiscal Outlook: November 2011). Assuming that these cuts hit all regions equally then this would imply 90,000 public sector job cuts in London, though clearly it is conceivable that public sector job losses could be more or less than this figure depending on how cuts are managed in practice.

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2. MERTON’S ECONOMY TODAY13

2.1. Relative to the rest of London, Merton has relatively low numbers of jobs. Moreover, the number of jobs in the borough has remained almost static between 2003 and 2010, such that by 2013 Merton will have experienced a ‘lost decade’ without employment growth. The chart below shows actual jobs by sector in 2010. The jobs that Merton does have do not match the sectors, which are projected to generate employment growth over the next ten to twenty years. Compared with the rest of London, Merton has a greater proportion of jobs in retail, manufacturing and construction sectors. However in absolute terms does not have enough employment in these sectors (and in business and professional services) to generate employment growth over the next two decades. This implies that Merton could face serious challenges over the coming decade without conscious action to achieve employment growth.

2.2. Merton’s relatively low level of jobs reflects a business base, which is smaller and more vulnerable than that of London as a whole. Merton has fewer businesses relative to its population and these businesses tend to employ fewer people than the London average and achieve lower levels of turnover. Merton firms are also subject to larger levels of ‘churn’ than in London as a whole, with high rates of business ‘births’ matched by a high rate of business closures.

2.3. Merton has relatively few large and medium sized firms. The low number of large firms means that that there is relatively little in the way of developed sectoral ‘clusters’ within the borough. Instead there are a relatively small number of firms in high value

13 The information in this section summarises the key findings of LB Merton (2012) London Borough of Merton Economic Narrative; and conversations with key stakeholders.

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subsectors with only loose sectoral linkages. These apparent weaknesses in the business base underline the borough’s relative lack of competitiveness as a business location. Going forward, it will be important to work with the larger firms in the borough and firms with growth potential in order to ensure that these firms can continue to expand within Merton.

2.4. Whilst Merton’s employment and business base could be considered a weakness, the borough has an undoubted strength in the high proportion of its residents with higher level qualifications. Average wage levels earned by Merton residents are higher than the equivalent London average and reflect the higher skilled occupations, which many Merton residents work in.

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%


% of working age residents withdegree level skil ls or better

% of working age residents inmanagerial or professionaloccupations

2.5. As a result of high average skill levels, Merton residents are less likely to be unemployed than other London residents. However, the recession has led to two trends, which are a cause for concern. Firstly, the proportion of residents who are economically inactive – i.e. those residents of working age who are not actively seeking work ‐ has risen significantly whilst the trend across London and England has been relatively flat. Secondly, the claimant count amongst young people has risen and, whilst this has not risen as high as in London as a whole, more work is needed to fully understand the extent to which young people in Merton are being excluded from the labour market due to economic conditions.

2.6. Other strengths of the borough include low levels of deprivation and crime, and generally very good transport connections. This has been reflected in relatively high average house prices compared to London as a whole. However, the aggregate picture masks a significant divide between the west and the east of the borough. The west of the borough is a prominent employment location, with better transport connections, a more highly skilled population, and consequent low levels of crime and deprivation.

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2.7. In contrast the east of the borough has poorer transport links, fewer numbers of jobs, a less highly skilled resident population and higher – though not high – levels of crime and deprivation. Whilst the east of the borough is not struggling in the same way that more seriously deprived parts of London are, the differences between the two halves of the borough are still jarring and suggest a need for economic strategy to focus on supporting opportunities for residents across the borough. In doing so, there is a need to recognise the role which differential quality of transport connections play in determining areas of economic strength in the borough.

% of Working Age Population Claiming JSA (May 2012)

2.8. These differences are reflected in the town centres in the different parts of the borough. In the west, Wimbledon is relatively strong, though it underperforms considering the strength of its brand, the high quality of place and the excellent transport connections it has. Colliers Wood is less successful, but it is expected that the physical improvement works that are planned will significantly improve its current performance, and there is evidence of latent demand for investment in the area. Raynes Park is smaller and relatively self‐contained but prosperous nonetheless. By contrast Morden’s and Mitcham’s respective town centres are less successful. Both struggle to attract a sustainable level of spend and Morden is supported in a large part by the presence of the Council offices. Mitcham also has relatively poor transport links compared to other parts of the borough.

2.9. Another aspect of the borough’s economic geography is the location, quantity and quality of its employment space. Merton does not have enough office space of sufficient quality to accommodate demand from large companies. The borough has lost employment space over the past decade and faces a significant challenge in terms of identifying and bringing forward sites for development or redevelopment. Where employment land has come forward, it has typically been in small, marginal sites. How this challenge is addressed will have a major bearing on whether the east / west divide is exacerbated or ameliorated over the coming years.

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The Economic Challenges

2.10. From the above, we know that Merton has many economic strengths, including a well‐educated resident population, high average wage levels which can support local retail and leisure, an internationally recognised sporting venue and competition, and excellent transport links. Nonetheless, the poor employment growth record of the past decade shows that these strengths, on their own, will not bring additional employment to Merton. Instead, Merton must address the economic challenges highlighted above. Specifically, the Council must work with partners to:

• Ensure that support is given to businesses to enable them to locate and grow in Merton. This applies to existing businesses as well as new firms choosing to locate in the borough.

• Ensure that infrastructure within the borough ‐ particularly in terms of commercial office space, but also broadband, parking and transport infrastructure – is of the quantity and quality to accommodate growth.

• Reduce the east / west divide through targeted employment support to deprived parts of the borough.

• Support Wimbledon to become the major Outer London centre that it has the potential to be given its high quality of place and good transport connections. At the same time, support other town centres to adjust to new economic and retail trends.

• Ensure that key sectors which are important for future growth are effectively supported.

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3. OUR ECONOMIC VISION AND STRATEGIC OBJECTIVES

3.1. In 2010, A New Future set out a vision for the next 20 years of development, based around a series of core objectives:

• To improve the average levels of productivity, gross value added (GVA) and pay for jobs in Merton

• To promote economic resilience through a diverse local economic base which does not rely too heavily on any one sector for its continued success

• To build on Merton’s strengths in location, attractiveness, brand value and expertise to promote its economy

• To ensure that activity is delivered in a way that supports other values and objectives, notably bridging the gap between the east and west of the borough and protecting heritage and the environment

3.2. For the purposes of making this strategy as relevant to residents as possible it is considered that an extra objective is needed, namely:

• To support residents to access employment, skills and training

3.3. The original strategy set out a 20 year economic ‘journey’ for the borough, with successive actions leading to long‐term, inclusive and sustainable prosperity across the borough over the next two decades. The long term goal of the original strategy is for Merton to be ‘synonymous with quality, productivity, innovation and efficiency’, and for growth to be ‘self‐sufficient and sustainable.’ This will be demonstrated by statistical indicators ‘significantly above London and South West London averages.’

3.4. The 20 year journey envisaged that by late 2011, ‘the groundwork for sustainable economic growth will be complete.’ In practice, whilst the Council has undertaken significant steps in the last two years towards supporting long‐term economic growth, some vital initiatives are not yet in place.

3.5. The next section sets out the steps needed by the Council over the next few years to progress towards the vision for the borough’s economy.

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4. ACHIEVING OUR VISION

4.1. The analysis in the previous sections explained where the Merton economy is today, its strengths and weaknesses, and the economic vision for the borough. This section sets out how Merton will achieve this vision.

4.2. Given the reduction in public expenditure, which is occurring across the UK, it is more important than ever that the Council works to support businesses in the borough and to encourage more businesses to operate in Merton. Merton’s 7,420 businesses play a fundamental role in the economic life of the borough, employing approximately 57,000 people. Achieving inclusive and sustainable growth will require the Council to support business growth and investment, and to work with employers and partners to support residents to access jobs locally.

4.3. We therefore consider that there are six principal components of growth – that is, areas of focus that are necessary in order to achieve long‐term, sustainable economic growth. The choice of each component partly reflects the original strategy, but also reflects an improved and updated understanding of the borough’s economy and business base, as well as a realistic appraisal of the Council’s capacity to support growth.

4.4. The components of growth are:

• Retaining existing companies

• Support business growth and start‐ups

• Inward investment

• Town centre initiatives including BIDs

• Providing support to identified sectors

• Supporting residents into work

4.5. Each of these components is discussed in detail in the following subsections. For each component of growth there is:

• A brief discussion of the rationale for inclusion in the EDS

• An analysis of existing relevant activities being undertaken and where there are gaps in provision

• Details of the key delivery actions and how these will be financed

• Details of the key development areas that will be impacted by the component in question

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Retaining Existing Companies

4.6. A key premise of the Council’s approach is that it is easier and more cost‐effective to retain companies already in the borough than to attract new firms into the borough. Therefore it is evident that the Council should look to build its relationships with medium and large sized firms in the borough so as to be better placed to address any issues that firms have and, where relevant, to facilitate investment in the borough by said firms. Merton has relatively few businesses and only 20 large private sector employers (employing 250 or more people in the borough), so it is vital that these firms are engaged with in order to retain employment in the borough.

Existing Activities and Business Investment

4.7. The Council already engages with businesses via a variety of different forums, including the town centre forums and the sector forums. These forums allow businesses to air concerns with the Council, but there is a need for this feedback to be more systematically recorded, communicated within and across the Council, and responded to. More generally, there is a need to ensure that the Council engages with its strategically important firms with greater precision and regularity. The current town centre and sector forums may exclude some firms that are of significant strategic importance to the borough, or may otherwise be unrepresentative.

4.8. Industrial estates are major economic bases and employers in the borough. Willow Lane Industrial Estate (WLIE) and South Wimbledon Business Area (SWBA) are the largest industrial estates in the borough. WLIE has over 150 companies employing over 2,500 people. It is the main location for the borough’s manufacturing, construction, environmental and other industrial companies, including many serving international markets. Similarly SWBA has over 150 companies located on the estate employing more than 2,000 people. These range from small independents to large national and international companies.

4.9. In recognition of their significance the Council has provided grant funding for both industrial estates under the Industrial Estates Programme. This includes funding for a portal for each estate to assist in promotion. The programme also funds a local facilitator, whose role includes working with firms to promote the sites and the businesses at each location. The council also provides ongoing support to all Merton’s industrial estates through the business growth officer.

4.10. 2012 is the third year of the Merton Business Awards, which are supported by the Council. More than 150 businesses entered this year and 58 businesses have been selected for the finals, which was announced at a celebration ceremony in September. The awards showcase the best of businesses in Merton, providing a platform to encourage collaboration, share good business practice and celebrate achievements.

4.11. In addition, the Council already carries out some key account management, speaking on a semi‐regular basis to specific firms. There are opportunities to scale this up and be more systematic, thereby improving efficiency and effectiveness.

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Planned Actions and Funding

4.12. The main action required is to significantly scale up existing business engagement on a more strategic and focussed basis. The Council will aim to engage with the ‘top 100 firms’ in the borough on a regular basis. This ‘top 100’ will be chosen on the basis of employment and strategic significance to the borough.

4.13. The Council will carry out an initial selection exercise using business intelligence from the Economic Narrative and other sources, including detailed business data. The Council will then aim to meet with each of these firms on a six‐monthly basis, making notes of discussions and following up any key issues raised by these firms. In total, this is likely to require around one to two days per week of internal staff time, plus modest travel expenses.

4.14. For this engagement to be effective, the Council must be able to respond to issues in a timely manner. The kinds of issues that firms might be expected to raise include issues around premises, parking, skills and business rates. The Council will need to ensure that there are robust channels for economic development staff to interact with other parts of the Council. Where business demands run counter to broader Council strategy – for example, where demands for more parking are in direct conflict with the Council’s desire to discourage car travel – then the Council will need to be prepared to make this case directly to businesses, or modify policy where there is a clear strategic case to be made against the status quo.

4.15. In the long term, this engagement with businesses will feed into other parts of the strategy. Engagement with firms will help provide information on employer skills demand, and will help open up opportunities for local employment or work experience. Through taking a strategic view of businesses in the borough, the Council may be able to support supply chain development where business intelligence indicates synergies between two or more firms. For some of the smaller firms in the top 100, engagement might provide information on where firms could benefit from targeted business support.

4.16. As well as pro‐active engagement, the Council will need to ensure that it is able to respond quickly and effectively to business concerns and queries. This will be resource intensive and will require re‐prioritisation of the current Business Growth Officers time to focus on this important activity or will require some additional part‐time resource to handle and deal with such enquiries from firms. This member of staff should have good access to other relevant parts of the Council that typically come into contact with businesses on a day‐to‐day basis (e.g. parking, licensing, etc.) As with the more pro‐active engagement, these contacts with firms should be recorded to supplement the Council’s business intelligence.

4.17. In addition to business engagement, the Council should renew the Industrial Estates Programme, with a view to continuing to provide location specific support to the businesses at the South Wimbledon, Willow Lane industrial estates and other estates in Merton. The Council should provide funding in 2013 / 2014 and 2014 / 2015 to enable this.

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Key Development Areas

4.18. Council funding should be given to continue with the range of business support and physical improvements needed to keep the industrial estates competitive and viable. However, over the longer term, there may emerge opportunities for the Council to work with firms strategically to move forward development. For example, where a firm is looking to expand or consolidate at one location, the Council may be able to use this demand as a pre‐let to get development moving at a key location. The Council will also be in a position to share information on where development is coming forward and discuss where this might fit in with a particular firm’s needs, thus helping to support the occupation of new commercial space. Where Council leases are set to expire and it is known that a tenant is unlikely to renew, the Council can discuss this with firms that might be interested in renting that space.

Supporting Business Growth and Start‐Ups

4.19. One of the headline findings of the Economic Narrative is that Merton has experienced a ‘lost decade’ of zero employment growth. In contrast, high growth firms in the borough representing less than 3% of total businesses added 3,500 jobs in the last year alone. This reflects wider findings that the majority of employment growth at a national level is driven by a small group of high growth companies.

4.20. Therefore it is vital that Merton concentrates its business support offer on firms that are aiming for growth. In this way, Merton can ensure that it gets the best return from its economic development budget. In the main, this will involve focusing on early stage and start‐up firms that are considered to have growth potential and an ‘appetite for growth.’ However, there will also be some resources to signpost all firms towards traditional business support in both the public and private sectors.

Existing Activities

4.21. The Council already undertakes a significant amount of business support. A programme of business support is undertaken through the Merton Means Business (MMB) programme, which was continued into 2012 to aid, assist and support businesses at any stage of their business journey. The service includes workshops, networking and 1:1 session support for both start‐ups and established businesses.

4.22. The Generator Business Centre in Mitcham provides a modern, purpose‐built, managed workspace for start‐ups and small firms, currently with associated business support contracted to December 2012.

4.23. The Council also has a Service Level Agreement (SLA) with Merton Chamber of Commerce to provide business support services including delivering the town centre forums and the Wimbledon BID (discussed in more detail in the Town Centre Initiatives section, below).

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4.24. An up‐to‐date business directory is being produced for Merton‐based businesses to market their products and services and an online commercial property database to market property available in the borough. These activities will promote the existing business offer and support the proposed retention of existing companies, encouraging business growth and inward investment proposals.

4.25. Feedback from stakeholders suggests that there is an opportunity to create larger returns on the Council’s investment, by focussing more carefully on firms with growth potential and by generating and using business intelligence more systematically.


4.26. The Council should agree a number of actions aimed at promoting and supporting business growth in the borough. These are:

• A new Merton Business Support Service (MBSS) contract with a major emphasis on supporting businesses with growth and job creation potential.

• Consider options for the management of the Generator site and in doing so increasing the emphasis on business growth and making it a self‐financing operation.

• Implement the Merton Business Loan Fund (MBLF)

• Implement the Finance Readiness Scheme (FRS)

• Review the Service Level Agreement (SLA) with Merton Chamber of Commerce

• Support the Greening SMEs Programme

4.27. The most important initiative in terms of overall expenditure will be the new Merton Business Support Service (MBSS) contract. This will be a sizeable contract to provide signposting, start‐up and growth support to businesses in the borough. The contract should be let for three years so as to allow the chosen contractor sufficient security to invest in the appropriate level of staffing. The contract will be divided as follows:

• Support for new business start‐ups, particularly those with growth and job creation potential. It will also include self‐employment and business franchising. There will be a contractual requirement for the appointed contractor to deliver between 300 and 330 new business start‐ups and 600 jobs per annum.

• Support for early stage businesses aimed at high growth and job creation potential. This will be focussed on early stage businesses that have been operating for less than 24 months and need quality advice to help develop and expand to the next stage. There will be a contractual requirement for the appointed contractor to support these businesses to create 400 to 600 jobs per annum.

• Support for established small and medium businesses in signposting and to broker and assist these businesses to access private and public sector support and advice,

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e.g. in accounting, legal, finance, intellectual property advice, winning public sector contracts and exporting.

4.28. The new MBSS contract provides an opportunity for a step‐change in the quality of outputs generated by the Council’s investment. It is expected that the quality of business information will be significantly improved and that the Council will get direct access to this. In time, this might be expected to lead to further opportunities to help firms in the borough grow and invest in Merton. The new MBSS contract will make much greater provision for the recording and evaluation of outputs, so that progress towards targets can be effectively monitored and measured.

4.29. The management of the Generator will be evaluated. The Generator currently has one vacant suite but this can fluctuate and sometimes can be only half‐full. The preferred option would be to continue to use the space to support business growth, however the site must remain viable to the Council until 2017 and so alternative options should be considered.

4.30. The Council will implement a Merton Business Loan Fund (MBLF), which will be used to provide finance to viable businesses who face barriers to financing, to enable them to develop and grow. The Council has made funding available which will be matched by the Greater London Enterprise Loan Fund. The fund will provide loans of between £10,000 and £20,000, along with post‐lending services to support the success of the initiative. Between 35% and 40% will be deliberately targeted at firms in the east of the borough and around Mitcham, to specifically address the challenges that some firms in deprived areas face.

4.31. Related to the MBLF, additional funding will be used to establish a Finance Readiness Scheme (FRS), aimed at supporting Merton’s small businesses to raise finance from banks and other sources. Support will be delivered via experienced Business Finance Advisors who will assist firms in aspects of finance raising such as completing loan applications, negotiating with banks, reviewing cash flow and business models, and identifying relevant public funding and contracts. Firms will pay a small fee for receiving FRS support equivalent to no more than 25% of support costs.

4.32. The Council should re‐negotiate the existing SLA with Merton Chamber of Commerce. This will provide support to continue some of the existing programmes, including the sector and town centre forums, Destination Wimbledon and the Wimbledon BID, which are all discussed in more detail below. As part of the SLA there should be challenging output targets and a new emphasis on resolving appropriate business/public sector related issues working in partnership with the council and other partners and collecting high quality business intelligence that can support the Council’s long term economic strategy and activities.

4.33. Merton is supporting the Greening Business Programme. This is a European Regional Development Fund (ERDF) funded programme in which ‘green doctors’ go into businesses to provide them with support on reducing energy / water usage and waste.

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4.34. The Generator itself is largely self‐financing, though the current offer doesn’t appeal to all businesses. As mentioned above, there is a management challenge to ensure that the Generator continues to provide for the needs of growth firms, however to remain viable all options regarding the site should be considered, including the possibility of the Council managing the site using internal staff and resource or continuing to out source the site for managed workspace.

4.35. Worsford House in Mitcham is currently vacant but had been previously used as council offices (to July 2012). The site is included in the Council’s Sites and Policies Development Plan Document (Site Proposal 17 Worsford House / Chapel Orchard) with the proposed long term use for a school or residential beyond 2013. Until a long term use is established the site could be considered for managed workspace or short term commercial lets. It is therefore proposed that this site is also considered as a key development area to support business growths and start‐ups.

4.36. Workspace, the business premises provider are proposing to develop managed office / light industrial space on the Rainbow Industrial Area in Raynes Park to be attractive to SME’s.

4.37. Over time, improved intelligence on growth firms may create opportunities for the Council to support development in the borough. Better relationships with growth firms will put the Council in a better position to highlight premises, which might be suitable for a given firm. Where lack of large employers is a barrier to pre‐lets, the Council may be able to use knowledge of multiple smaller firms to generate demand for pre‐let commercial space.

Inward Investment

4.38. A key driver of growth is inward investment, i.e. attracting new companies both foreign and domestic to Merton. Whilst every effort should be made to encourage firms within the borough to grow and invest, attracting investment from outside the borough remains an important priority for Merton’s EDS. At the same time there needs to be a recognition that attracting inward investment is often extremely difficult and that Merton has typically struggled to attract large scale investment over the past decade or so. Moreover, given the poor outlook for the UK economy the difficulty of attracting inward investment has increased.

4.39. The principal success story in the last few years has been the relocation of a major office employer to Wimbledon town centre, on the basis of the area’s good connections with Central London and the high quality of life in the area. We propose that, rather than a broad approach to inward investment, the Council should instead aim for a tightly focussed inward investment campaign, aimed at attracting office employers that are already based in London. This will ensure the most efficient use of limited Council resources.

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4.40. The rationale for focussing on office occupiers is that Wimbledon in particular has significant potential as an office location given its good transport connections and high quality of place, but that these qualities are relatively poorly marketed at the moment. There is a strong perception amongst stakeholders that Wimbledon is currently almost a ‘secret’ office location, which is greatly valued by companies that are already located there, but which punches below its weight when compared to other Outer London locations. Therefore an inward investment strategy, which addressed this could support Wimbledon to become a major Outer London centre whilst generating employment for residents throughout the borough.

4.41. Rather than just targeting any office occupiers, the emphasis should be on targeting office occupiers that are already present in London, as these are most likely to move to Merton. London & Partners have recently set targets to attract Foreign Direct Investment (FDI) equivalent to 200,000 new jobs over the next four years. Of their target sectors, Merton can make a strong case as an investment destination for business services, company / European headquarters and the creative industries. Depending on the needs of the business in question, Merton might also be a good location for IT services.

Existing Activities

4.42. At present the borough does not have an active inward investment strategy, though the Council does work with potential investors as and when interest is shown. Therefore, there is clearly significant potential to expand activities in a targeted manner.


4.43. Attracting inward investment is very resource intensive. Given the relatively small budget, this resource needs to be used carefully. Approximately a third of the budget might be used for ‘passive’ activities, such as the creation of an inward investment brochure or website targeted at attracting office employment, primarily to Wimbledon town centre. Such material will stress the quality of Wimbledon’s transport links, highly skilled resident population and high quality of living.

4.44. The remaining funding should be used to finance more direct marketing activities to companies. This will include sending marketing material out to potential investors, partnering (including joint funding of marketing) to target companies already in London that are seeking a suitable new location such as Wimbledon; marketing Merton at office employer events, giving presentations to interested companies and working with UKTI, London & Partners and other partner organisations to support inward investment opportunities in the office sector. Partnership working should include working with existing owners, property agents and developers for key sites as they emerge. This assumes that some staff time will be available to carry out these kinds of actions, perhaps one day per week, though clearly more is likely to be achieved with more staff resource. The Council should make strong efforts to secure financial contributions to this work wherever possible.

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4.45. Given the nature of the challenge in attracting firms to the borough, it is important to remember that whilst the inward investment brochure / website will be an important ‘set piece’, the real core of the work must be the week‐to‐week generation and follow‐up of leads and marketing directly to potential investors. It is this work that is most likely to result in investment in the borough.


4.46. In addition to new development, there will be significant employment potential through ensuring occupation of existing empty office space in the Wimbledon area. Therefore it is important that inward investment activity is supported by an up‐to‐date understanding of existing vacant office space, as this may be more suitable for smaller firms and start‐ups that have lower requirements but still value a Wimbledon location.

4.47 The extent to which inward investment will have a physical component will depend upon the nature of the proposed investments. However, it is clear that it will be far easier to make the case for the borough in general – and Wimbledon specifically ‐ as a major office location if the available office space is of the quantity and quality to attract significant investment. Therefore one of the most important things that the Council can do is to support the development of new high quality office space and the refurbishment of existing space to a higher specification through the planning process and working with the business community to shape Wimbledon’s offer.

4.48 The Council will work jointly with LoveWimbledon to procure research to determine the scope of expanding and intensifying Wimbledon’s business base. Drawing on the SW19 global brand, and knowledge of redevelopment opportunities, the Council and LoveWimbledon will develop a prospectus to drive inward investment, potentially being the UK’s first business led Community Plan to lead economic growth.

Town Centre Initiatives including BIDs

4.47. Merton’s town centres are significant economic assets. They are important focal points for employment and economic activity and recognisable places with their own identity. Nevertheless, they are subject to the same broader trends as other parts of the UK. Most importantly, wider trends in the retail sector will have a significant bearing on how well Merton’s town centres continue to prosper over the next decade. Increased internet retail and reduced consumer spending, as well as a longer term shift towards more ‘experiential’ retail, means that only town centres with a strong retail and leisure offer will be sustainable. Smaller centres with a less attractive offer will struggle to retain their critical mass and may see substantial shrinkage as a result.

4.48. Looking at Merton in light of these trends suggests that Wimbledon is relatively well‐positioned to prosper in the new climate, though it will need continued support and management. The challenges that Colliers Wood faces are likely to be addressed by the development programme that is now underway (see below) and Raynes Park is

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sufficiently self‐contained not to be greatly affected by wider trends. Morden and Mitcham are more challenging and may be more adversely affected by changing retail trends than in other areas. In all cases there is a need for ongoing management of the town centre areas to ensure that the potential of these areas is maximised.

Existing Activities

4.49. The Council is already supporting a range of initiatives and development around the town centres. A number of these schemes are managed by Merton Chamber of Commerce under their SLA with the Council. The Chamber supported the activity leading up to the ballot for a ‘Yes’ vote on the Wimbledon Business Improvement District (BID), known as ‘Love Wimbledon’, and also runs the quarterly town centre forums in all of the town centres including Wimbledon through the BID management.

4.50. The Council provided funding and support in the creation of ‘Love Wimbledon’ by supporting the BID proposal in the development and marketing work needed for a successful ballot result, recognising the benefits of BID’s to all businesses by making the area more attractive and ensuring it is well represented, serviced and promoted. Alongside, investment in the public realm has taken place over the past two years and ‘Destination Wimbledon’ was formally completed in June 2012, creating better facilities for residents and businesses.

4.51. The Raynes Park town centre enhancements set out a programme of improvements to the local centre which not only enhanced the public realm but also maintained convenience for the local population by strengthening the centre’s economic role. It also strengthened Raynes Park’s retail offer, making it a more attractive destination for local shopping needs. The council’s investment in infrastructure and public realm has contributed to the success of Raynes Park High Street as a vibrant shopping and business destination. A recent report found that Raynes Park is London’s best performing High Street in London in terms of occupancy rate. 14

4.52. Aside from the Council‐funded activity, there are a number of other business groupings in the borough, including: Wimbledon Village Business Association, Willow Lane BID, South Wimbledon Business Area and Raynes Park Business Association. Via Merton Chamber of Commerce, the Council has loose links with all of these groups, though relationships could be strengthened.


4.53. Given the changing retail trends discussed above, a major driver of successful town centre management will be properly understanding the retail context for each of the town centres in the borough. The Council should allocate funding to undertake a retail

14 Evening Standard 14th September 2012/ Local Data Company September 2012

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study to understand how these retail trends are expected to impact the performance of each centre. This should provide analysis of current provision, footfall and catchment area, as well as detailed analysis of the future prospects for each centre.

4.54. When this study is complete the Council will have a far better understanding of how best to respond to changing trends at each location. In the case of successful areas such as Wimbledon, Raynes Park and Colliers Wood, this might involve more retail or renewal of existing retail space, whereas in Mitcham or Morden there may be an argument for a managed reduction of the town centre core.

4.55. The Council has received funding via the Mayor’s Outer London Fund (OLF) for a town centre initiative in Mitcham. This will include some public realm improvements, general business support and marketing and promotion for the area. A number of projects will be delivered to improve the business and job prospects within the centre as well as creating an attractive town centre to help increase footfall and support businesses and retailers increase sales. The funding programme includes provision of a facilitator to oversee the interventions for Mitcham and Colliers Wood. They will be responsible for ensuring co‐ordination with other parts of the Council’s business support offer and with the town centre forums.

4.56. The Council was successful in being awarded £2.7m from the Mayor’s Regeneration Fund to help repair the damage to businesses and the economic fabric of Colliers Wood following the August 2011 riots. This along with the proposed council funding will be used to help revitalise and transform the town centre. The programme of activity includes a number of projects to promote Colliers Wood as a shopping destination, as well as schemes to support businesses, job creation and wider economic development of Colliers Wood and South Wimbledon.

4.57. The Council should allocate funding towards a business premises programme until 2014 / 2015, which includes match funding from the High Street Innovation Fund. This programme will predominantly support the refurbishment of shop fronts particularly those that bring vacant premises back to use as well as refurbishment of other business premises in the town centres.

4.58. More generally, the Council will look to support existing and new business structures in the town centres. Where there is demand for a BID in town centres apart from Wimbledon, the Council should pledge to support this. The project facilitator for Mitcham and Colliers Wood will support local events and place promotion as part of the re‐negotiated SLA with Merton Chamber of Commerce. Also, as part of the new SLA, Merton Chamber of Commerce will lead the development of new interactive websites for each of the town centres to support local businesses to network, market their services and trade with each other. The Council should seek to retain and build upon the existing town centre forums, so as to get better feedback about the impact of its policies. As with other elements of the economic development strategy, the new SLA with the Chamber will require greater gathering of intelligence on businesses and ensuring that business issues are recorded and responded to more systematically.

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4.59. One specific area in which the Council could use the town centre forums is to engage with retailers in the Morden area prior to the TfL development (see below). The Council should seek to support retailers to transition into the new development where there is demand.


4.60. The Colliers Wood plans are now being prepared for a major redevelopment programme to transform the fragmented shopping areas into a single coherent retail location. This will involve public realm improvements including the creation of a new public square outside the Colliers Wood Tower. The Tower itself is being refurbished as a predominantly residential development with high quality retail and business space on the ground floor to attract new quality retailers, restaurants and business service companies. The Priory Retail Park will be redeveloped with better frontage to Christchurch Road. The Council will look to leverage the development to attract a higher quality, more sustainable offer that can ensure Colliers Wood remains a competitive and attractive retail and leisure location.

4.61. Merton is set to see a significant amount of development in and around its town centres. The most notable of these are plans to develop next to Morden tube station. This is likely to involve a significant retail footprint on the ground floor which will need to be considered in light of the findings of the retail study, as well as either hotel, residential or even a small amount of office space above.

4.62. Wimbledon has a number of key sites suitable for office development along the Broadway and near the station that are expected to come forward for development in the next few years. As discussed previously, there is a need for the Council to use its development sites to support growth, which in Wimbledon will mean support for developing modern office space that will attract high value employers to the borough.

4.63. There is an opportunity in Mitcham to develop the transport network and public realm. The proposed programme includes the development of the green, the marketplace and funding to support shop front improvements.

Providing Support to Identified Sectors

4.64. As a general principle, the Council should focus on supporting individual businesses of importance to the borough or with growth potential, rather than attempting a sectoral support approach. This is due to the small size of the business base and the general lack of scale within tradeable sectors that would be suitable for such an approach.

4.65. There are, however, a few sectors that are considered to be of sufficient scale or importance to justify development of a sectoral approach to support. One is retail, which has already been discussed in the context of town centre initiatives and is largely a location‐specific issue rather than a sector with a borough‐wide focus. Other sectors that are considered to warrant a separate focus are:

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• Creative and Cultural

• Green Technology

4.66. Creative and cultural activity in the borough is relatively small in total employment terms, but includes some significant employers, including Square Enix and Wimbledon Studios. Moreover, the creative sector is supported by the presence of Wimbledon College of Art. Likewise, relatively few people in the borough are employed by green technology firms and there are no large firms. However, the sector is considered to have significant prospects for growth. In particular, there is potential in terms of sustainable construction and installation of renewable energy generation. In the case of both sectors there is the potential for the Council to support promotion of the businesses within the sector, and to promote the emergence of larger‐scale opportunities by supporting networking between a number of smaller companies.

Existing Activities

4.67. There are already sector forums for both the creative and cultural sector and the green technology sector. Both of these forums are chaired by Merton Chamber of Commerce on behalf of the Council under the existing SLA. Feedback from stakeholders suggests there is scope to build on the current setup and expand the number of businesses that engage with these forums. There is also scope to improve the way the forums capture and feedback information on businesses and the sector as a whole. A broader issue is that the way in which the forums currently work does not necessarily encourage whole‐sector collaboration in the way that it should and it is considered that there is room for improvement in this regard.

Planned Activities

4.68. The Council should allocate a small amount of funding to both the creative and cultural sector forum and the green technology sector forum. This funding will enable joint marketing and promotional activities for firms in these sectors. This investment will need to be supported by work with the firms in each sector to develop broader initiatives that benefit the entire sector. Otherwise there may be a tendency for sectors to not spend the money strategically or in a way, which only benefits part of the sector.

4.69. In the long‐term the Council should consider funding a study to explore potential actions to strengthen the creative and cultural sector, such as how Wimbledon College can promote start‐ups and how they can work more closely with businesses to develop commercial opportunities.

4.70. With regards to the green technology sector, the Council should undertake a survey of low carbon business activity in the borough. This survey should not only map companies whose activity is predominantly based on green technology, but also those firms for whom green technology forms a part of a wider offer.

4.71. Once this survey has been completed, the Council should focus on the key opportunities available. These are likely to be mainly in the sustainable construction sector, rather

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than in more complex sectors such as renewable energy generation and manufacture of renewable energy equipment. The Council has the potential to support the emergence of local consortia of multiple small companies to provide sustainable construction services to larger organisations including the public sector and housing associations. These opportunities should be explored through the sector forum.


4.72. At the current time there are no specific developments to note. However, the Council is aware of a number of potential investments, which might impact upon the sectors in question, particularly the creative and cultural sectors. Where there is potential to bring these investments forward, the Council will wholeheartedly support these initiatives.

Supporting Unemployed Residents into Work

4.73. Although total unemployment in Merton is relatively low, this obscures some important differences between places within the borough. In particular there is a significant divide between the east and west of the borough, with the area around Mitcham having particularly high incidences of unemployment. A key part of the economic vision for the borough is to support residents to access employment and training. In particular, there is a need to focus on long‐term unemployment and youth unemployment, which have been exacerbated by the poor condition of the UK economy.

Existing Activities

4.74. The Council is in the process of setting up an employability sub‐group whose task will be to support the delivery of better frontline services. The group is composed of representatives of Merton Council, Merton Chamber of Commerce, Merton Priory Homes, the voluntary and charity sector, Job Centre Plus (JCP) and the colleges. The group should also include employers, delivery and employment representatives. In time, the employability sub‐group will take responsibility for delivering the skills strategy that is to be prepared (see below).

4.75. The Council has engaged with some of the Work Programme providers covering the Merton area and is seeking to engage with the remainder. The Council has also undertaken some preliminary conversations with employers with a view to expanding apprenticeships in the borough. There is a recognition that significantly more can be done to address employment and skills issues in the borough.

4.76. Job Centre Plus (JCP) Mitcham is undertaking a number of programmes aimed at reducing unemployment in the area. This includes promoting work experience for young people and working with companies to increase work experience opportunities, providing financial support through the Flexible Support Fund to enable residents to overcome barriers to work (e.g. costs of work clothing, transport), and providing out‐of‐hours office support at weekends to support clients in their job search. JCP Mitcham are also carrying out work under the ESF‐funded Troubled Families and Families with Multiple Problems initiative. In addition, JCP Mitcham are working with offenders prior

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to release to reduce re‐offending rates. The strategy will recommend that the Council continues to support these initiatives wherever possible.


4.77. One of the principal problems is that there is no existing skills and employment strategy for the borough to inform the Council’s actions. The Council should therefore allocate funding for the production of an employment and skills strategy. The kind of areas that the skills strategy will need to address are:

• Ensuring that education and training provision is informed by skills and recruitment needs of employers

• Reducing the numbers of young people not in Education, employment or Training (NEETs) / youth unemployment

• Reducing long‐term unemployment

• Increasing the numbers of apprenticeships

• Using local procurement to support improved employment outcomes

• Addressing barriers to work

4.78. Each of these topics will need to consider how they could build on the proposed relationship‐building with companies/employers in the borough. The employability sub‐group will be one means towards the delivery of the strategy.

4.79. The Council should allocate funding for an Employability and Access to Jobs Programme. This programme should look to fund gaps in provision as well as match fund other employment and skills activity so as to enable other initiatives to build scale and impact. To support this work and other initiatives, the Council should make funding available to employ an additional employment and skills specialist


4.80. The nature of this component of growth is that there are no direct developments of relevance. More broadly, the Council should look to work with developers to generate local employment. This will involve talking to developers ahead of the building phase to understand their employment requirements, and trying to match local residents to these roles.

4.81. The Council is working collaboratively with Transport for London and adjoining boroughs to bring forward significant tram improvements. This includes supporting infrastructure upgrades to facilitate increased frequencies on the existing network, together with a tram route extension to Sutton via Morden Town Centre. A new tram stop serving Willow Lane Industrial Estate in Mitcham is also being considered as part of this work. Such improvements will make it easier for residents to access town centres and

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Industrial Estates within the borough, though clearly it will also make it easier for non‐borough residents to access jobs in the area as well.

Summary of Actions

4.82. The table below summarises the actions discussed above under each of the components of growth.

Component of Growth

Description of Action

Resources Timescales for Delivery

Expected Outputs

Engage the ‘top 100’ most strategically important companies in the borough

1‐2 days of staff time per week. Expenses budget for meetings and travel.

Long‐term / recurring six‐monthly meetings with firms.

Greatly improved business relationships and intelligence

Facilitate supply chain and networking opportunities

Minimal staff time – will be accounted for by general relationship management

Long‐term / ad‐hoc depending on nature of opportunities

Dependent on the nature of opportunities – but would expect commercial benefits to business and improved business to business relationships within the borough

Respond quickly and effectively to employer enquiries and concerns

1 full time staff member (in post) however a case be made for an additional resource to support this activity in the light of the Business Growth Officer workload

Long‐term

Improved business retention; Greatly improved reputation amongst businesses and some business intelligence

Retaining Existing Companies

Renew Industrial Estates Programme

£90,000 3 years to 2014 / 2015

Increased business and job retention, increased turnover for businesses

Tender a new Merton Business Support Service (MBSS) contract

£200,000 per annum

3 years to 2014 / 2015

300 – 330 start‐ups supported / 200 early stage firms given support for growth / Between 1,000 and 1,200 new jobs

Supporting Business Growth and Start‐Ups

Review proposals on the Generator and Worsford House

No expense ‐ 2 years

Generator has good occupation levels / Businesses at the Generator have significant growth potential

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Component Description of Timescales for Resources Expected Outputs

of Growth Action Delivery

Merton Loan Fund (MLF)

£300,000 (to achieve match funding from the London Loan Fund)

Aug 2012 to Dec 2015

34 loans totalling £600,000 to 34 Merton firms / £200,000 of additional finance accessed / 17 jobs directly created / 51 jobs directly safeguarded

Finance Readiness Scheme (FRS)

£39,400 (includes contingency)

Aug 2012 to Dec 2015

71 days of bespoke assistance to Merton firms / 40 successful applications to banks and other finance sources / Total of £200,000 raised for firms

Renew the SLA with the Chamber

£30,000 per annum for the next three years

3 years to

2014/ 2015

Continued business support / forum management / town centre initiatives. Resolution of appropriate business/public sector related issues; Improved business intelligence gathering and reporting.

Greening SMEs

£20,000 ERDF funding, possibility for more ERDF match if officer time allocated.

3 years to 2014 / 2015

Improved environmental performance amongst SMEs

Production of a brochure / website

£10,000 Long‐term Improved inward investment outcomes

Inward Investment Inward

investment promotion activities

£20,000 / 1 day of staff time per week

Long‐term Improved inward investment outcomes

Retail study £50,000 2012 ‐ 2014

Completed retail study with robust intelligence on future market demand at each town centre

Mitcham Town Centre Initiative

£45,000 (remainder is Match Funding from OLF and other sources)

2012 ‐ 2014

Improved place promotion / public realm / local business support for Mitcham town centre

Town Centre Initiatives including BIDs

Business Premises Programme

£200,000

(£100,000 already received from High Street Innovation Fund)

3 years to 2014 / 2015

Improved shopfronts and other town centre premises leading to increase footfall and shoppers/sales; improved image and perception of town centres

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Support future BIDs where there is demand

Minimal Long‐term commitment

New BIDs for town centres where there is business demand

Place promotion for Colliers Wood and Mitcham

Accounted for under the SLA with the Chamber

Long‐term Improved image and profile for Colliers Wood and Mitcham

Mitcham Outer London Fund activity

Accounted for under the Mayor’s funding and proposed match funding

2012 / 2013 and 2014 / 2014

50 jobs created, 15 new businesses started; 20 jobs safeguarded; increase footfall

Colliers Wood Mayors Regeneration Fund activity

Accounted for under the Mayor’s funding and proposed match funding

2012 / 2013 and 2014 / 2014

50 businesses supported; 20 jobs created; 50 jobs safeguarded; 20 shopfronts improved; 15 new businesses attracted; increase footfall

Improve the town centre forums


Long‐term

Improved attendance / Better feedback from Council on business concerns / Better business intelligence

Develop social networking websites


2012 / 2013 Social networking websites developed and promoted

Fund sector marketing and joint‐working initiatives

£20,000 (£10,000 for each sector forum)

2013 / 2014

Improved profile for the key sectors; Improved business intelligence; Improved inter‐business trading

Providing Support to Identified Sectors

Commission a creative and cultural sector study to support growth

Indicative cost of £10,000 ‐ £20,000

2013 or 2014

A study with firm recommendations for how to build on the success of the creative and cultural sector

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Undertake mapping exercise of green technology firms

Minimal expense and staff time. Requires contacting accreditation bodies for details and setting up a database of registered suppliers in the borough

2013‐2014

Comprehensive data on companies operating in the borough whose derive some or all of their turnover from green technology activities

Support networking of green construction firms

Accounted for under sector forum budget

2013 ‐ 2014 Opportunities for scale working identified and explored with green firms

Skills Strategy/Action Plan

£20,000 2012

A skills strategy and action plan setting out the key actions required to tackle skills and unemployment issues in the borough

Employability and Access to Jobs Programme

£200,000 3 years to 2014 / 2015

Match‐fund other employment and skills initiatives to maximise scale and impact

Supporting unemployed Residents into Work Additional staff

resource specialising in employment and skills and support to business growth activity

£90,000 2 years to 2014/15

Co‐ordinate the implementation of skills and employment strategy/action plan; bid for funding for employment and skills projects; work in partnership with employment and skills organisations

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5. PRINCIPLES FOR SUCCESS

5.1. The sections above have identified the components of growth and the key actions that will be undertaken to support these. In doing so, some principles for turning the Council’s planned actions into successful outcomes have been touched upon. This section re‐emphasises and expands on those principles that will best ensure the success of the strategy. In most cases these principles involve reflection on how the Council and Council policy more widely can support economic development and remove barriers to growth.

A unified business intelligence system

5.2. In many parts of the strategy we have spoken of the need to improve quantity and quality of intelligence that the Council keeps on businesses in the borough. A key aspect of this is ensuring that there is a unified system for managing business intelligence, which brings together information from direct conversations, sector and town centre forums, the Generator, and other business interactions with other parts of the Council (e.g. complaints about lack of refuse collection.) For each business in the borough there should be a single file containing all of this information, and this should be kept up‐to‐date. To ensure business confidence, this information should be stored securely and confined to key members of the economic development team. Business intelligence gathered by the Council and its partners should be supplemented by relevant studies by other organisations, such as the Annual Business Survey undertaken by South London Business.

A formal mechanism for communicating business concerns to members

5.3. If the intelligence which the borough is intending to collect on business concerns and issues is to have maximum impact, there must be a mechanism for feeding back this information to cabinet on a regular basis. Moreover, this mechanism must include feeding back the cabinet response to businesses so that companies feel as though their engagement with the Council is worthwhile. In this way, the Council will be able to properly engage with business concerns and demonstrate that the major employers in the borough are valued by the Council.

A presumption in favour of commercial development

5.4. It is likely that the development case for most areas will favour residential development rather than commercial development. This is a historic pattern that the Council needs to be aware of and address. In some cases this may mean that the Council does not maximise the value of its landholdings, but instead looks to business rate retention or other means for achieving long‐term financial returns. This is especially important in the case of office space within Wimbledon town centre. Wimbledon can be a significant asset for the borough and an important Outer London office location, but this can only happen if the Council supports the development of new office space and the refurbishment of existing space to a higher quality specification.

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A policy decision on transport and parking

5.5. Current policy is in favour of a move towards more sustainable transportation within the borough. Though this is a laudable aim, there is a significant amount of feedback from stakeholders and businesses, which suggests that this policy position is having a negative impact on enterprise within the borough. Merton has an unenviable reputation for poor parking provision and high levels of congestion. The health of the town centre businesses in particular is dependent upon good transport access and there is evidence of a need for more short‐stay car parking around the town centres. The Economic Development Strategy cannot dictate policy with regards to transport. However, the Council does need to review its transport policies in light of its goals for economic growth, and perhaps seek to find a balance, which better supports local businesses.

A local procurement policy to support growth

5.6. Even with projected cuts in spending taken into account, the Council is a significant presence in the local supply chain. Without prejudicing its own financial position or legal responsibilities, the Council should seek to support local firms to access public sector contract opportunities, so that this spending can be retained within the borough. This might involve workshops with firms to help them understand the Council’s tender processes and more actively inviting local firms to bid for relevant tenders.

The Council has already started to consider how this can be achieved and recently introduced the Action Plan that the council will adopt to ensure that the ‘Procurement Pledge on Employment and Skills’ is delivered on. This is in response to the London Councils Paper written for London Council Leaders. At the London Council Leaders Committee meeting on 13th December 2012 Councillor Alambritis agreed to the following pledge: ‘London Borough of Merton is committed to creating jobs and training opportunities through its supply chain.’

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Committee: Cabinet Date: 22 October 2012...2012/10/22 · MMB contract extension (Dec 2012) 132,000...

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Transcript of Committee: Cabinet Date: 22 October 2012...2012/10/22 · MMB contract extension (Dec 2012) 132,000...