Monday 12 September 2011

LDPs - Just how dodgy is the evidence base?

Much of the opposition to the various Local Development Plans now in the pipeline in Wales has concentrated on what many see as wholly unrealistic population forecasts, but LDPs are of course about much more than just housing. Let's take retail planning.

As part of the LDP process, local authorities commission specialist consultants to draw up retail studies which attempt to analyse current patterns of trading and identify areas where there may be scope for new retail development.

In Carmarthenshire, the council has for many years retained the services of Nathaniel Lichfield Partnership, a firm used by quite a few other councils in Wales, to advise them on retail development. NLP's website makes no bones about the fact that another major part of their business comes from advising supermarkets and other retail giants and helping them to win planning applications.

NLP produced a Retail Survey for Carmarthenshire, and this document forms part of the evidence base for the council's grand plan. As it happens, Carmarthenshire has quite a strong love affair with supermarkets and the major retail chains, and the county council has been trumpeting its successes in attracting a host of UK brand names to its shiny new St Catherine's Walk shopping centre in Carmarthen. Stroll through the new centre, and you will find no locally owned businesses, which have all been relegated to the outer bantustans of the town.

Anyone familiar with Carmarthen will know that parts of the historic town centre which not so long ago were busy and lined with a wide range of quality shops now resemble run-down parts of South London, as the centre of gravity in the town has shifted away to the new centre. The same thing has happened in Llanelli.

Not exactly a testament to the combined wisdom of Carmarthenshire County Council and NLP, is it?

NLP's Retail Survey was published as part of the LDP consultation, and it is now buried deep in the labyrinth of the council's website. Previous attempts to get the council to release the information by way of Freedom of Information requests were all rejected, as were appeals, on the grounds that publication might help developers identify business opportunities. Try getting your head around the logic of that one.

One of the reasons people were so keen to get their hands on the Study was because of a controversial planning application for a new supermarket in Newcastle Emlyn (pop. 1,500). This tiny market town already has an independent supermarket, a Co-op, a Spar and a host of smaller independent food retailers (butcher, baker, greengrocer, fish monger, delicatessens, etc.). Planning permission was also granted last year to Lidl to build a store in the town. So you can see why so many people felt that a Tesco or one of the other majors would be a step too far and would undermine the rest of the town.

The unpublished NLP study was used by the planning department to provide "evidence" that the town could not only take a Lidl store but also a branch of one of the major supermarket groups, and not surprisingly, this was music to the developer's ears.

It was clear from the extracts provided by the planning department to anyone familiar with the town that the "evidence" was completely unsound. For example, the turnover of the Spar shop was stated to be £0.53m, whereas the owner of the shop wrote to the council to inform them that it was in fact £1.2m. The Co-op was said to have a turnover of just £0.38m, whereas the true figure at the time (2009) was around £1.7m. Ask anyone in the town which of the two shops takes the most money, and they would not hesitate to say that Co-op is ahead of Spar.

NLP went on to say that all three stores (CK's, Co-op and Spar) were, in its view, over-trading relative to their size. It took the same view for the smaller shops, and concluded that together they could afford to lose 56% of their trade to the proposed new supermarket. No, that is not a typo. 56%. And, it said, even at that lower level, they could remain in business. In its view.

Helpfully, NLP put some numbers around some of these statements. In the case of Co-op, it said, 50% of the store's turnover (the bit it could afford to lose) was £1.7m. This is the same shop that NLP said a few paragraphs earlier had a turnover of just £0.38m. How many children would pass their Maths GCSE if they submitted work like that?

Objectors pointed all this out to the County Council, in the shape of the Planning Department. Their response was firstly to refuse to publish the full Retail Study, secondly to state that they would only accept audited accounts from the relevant shops as evidence of their turnover, and thirdly to state blandly that the authority had worked with NLP for many years and had no reason to question the reliability of its figures.

But it was not just the turnover of individual shops which was wrong. Part of the justification for the new supermarket was "leakage", which means that people from the town and the surrounding catchment area were doing too much of their shopping elsewhere, and the suggestion was that a supermarket in the town would capture much of this leakage.

In NLP's view, most of the leakage was going to Carmarthen (43% of all food shopping trips, they reckoned), with just 15% going to Cardigan. Again, any local could tell you that if they are going to go out of town to shop for food, they will usually go to Cardigan, 10 miles away, with a Tesco and an Aldi. Carmarthen is about 20 miles away along a diabolically awful but picturesque road which winds along a narrow valley floor with no overtaking for 7 miles. You only have to get stuck behind a slow moving horse box to know what eternity feels like.

And how would you calculate leakage from a catchment area? A reasonable person might think that you take the total spend on food for that catchment area and subtract the estimated spend at shops within that area. But they would be wrong.

The "correct" answer is that you subtract spending on convenience goods in just one part of the area (Newcastle Emlyn in this case) from the total spend for the catchment area and say that the difference is money leaking from the catchment area, even though quite a chunk of that money is being spent in shops in other villages and towns within the catchment area. Go shopping in Llandysul (in the catchment area), and NLP counts that as leakage.

Again, this is elementary maths, and neither the council nor its expensive consultants can get it right.

If this did not tilt the playing field in the direction of the developers and supermarkets enough, NLP has another theory to help out. This divides a shop's turnover into "benchmark" and "surplus" trading. Benchmark trading is what, in NLP's opinion, a given shop should be trading at, given their size, profile and location. Anything on top of that is deemed to be "surplus" trading and ripe for the picking by a supermarket. Built into this model is an assumption that Tesco and Asda are "allowed" to trade at a much higher level than their smaller counterparts (the calculation is based on sales per square metre). In other words, it's OK for Tesco to trade at e.g. £11k per square metre, but definitely not OK for a family run grocery.

This benchmark/surplus theory is not unique to NLP, to be fair, but Carmarthenshire accepts it and presents it as though it had been written on a stone tablet handed down from on high. It is, however, nowhere enshrined in officially stated policy or law, and it has been strongly criticised by the Planning Inspectorate in England who point out that it discriminates against independent traders, particularly in rural areas, because they operate on much tighter profit margins than the major players.

Of course, pointing out these shortcomings to Carmarthenshire has been a completely futile exercise, as anyone who has ever witnessed any of the council's "consultation" exercises will be able to confirm. This is a council which sits with its fingers in its ears, eyes closed, singing "la la la la".

But just imagine. If they have got it so wrong for this little backwoods market town, what are the chances that these errors have been amplified across the county as a whole, and very probably across most of Wales, as part of a plan to build massive numbers of houses and supermarkets to service the residents? A scary thought, isn't it?


Robert said...

Hi, over in East of England, here in Suffolk, NLP has advised our council to allow a Tesco in the centre of our market town, Hadleigh, with its welter of independent shops. Tesco is an NLP client. I have complained to the Royal Town Planning Institute about conflict of interest and it is now investigating. Sure they'd love to see any evidence you have that NLP's report is flawed or biased.

Cneifiwr said...

Robert, if you'd like to get in touch by e-mail, I may be able to help (e-mail address at top of blog).

The ultimate evidence against NLP's conclusions is that 2+ years further on, none of the supermarkets has taken advantage of this fantastic opportunity!