Moorland & City Railway Heritage Railway Extension into Leek September 2013
Moorland & City Railway Heritage Railway Extension into Leek Summary Report September 2013
Moorland & City Railway Heritage Railway Extension into Leek September 2013
TABLE OF CONTENTS
Page Numbers
Section 1 Introduction 1
Section 2 The Project 2 Section 3 Market Summary 7 Section 4 Summary Economic Assessment 15 Section 5 Conclusions 23
Moorland & City Railway Heritage Railway Extension into Leek September 2013
1
1 Introduction
Background
1.1 This Summary Report has been prepared by the Leisure Consultancy in association with Mott
MacDonald and reviews the strategic context and market potential that could be optimised by
the heritage rail development planned by Moorland and City Railway (MCR). It also
encompasses the views of key consultees including representatives of: Churnet Valley Railway;
Staffordshire Moorlands District Council; Visit High Peak and Derbyshire DMO; and Team
Tourism. The Summary Report concludes with the likely economic benefits that could be
derived from the development proposals.
1.2 In this section of the report, we firstly comment on the development proposals before
outlining the report structure.
Proposed Development
1.3 MCR was established to “purchase, renovate and return commercial freight to the Stoke on
Trent – Cauldon Low rail route”. Linked to these key objectives are MCR’s tourist related
plans which are to: provide direct access to Alton Towers; to re-connect Leek to the national
rail network (the focus of this report) ; and to support the extension of the Churnet Valley
Railway (CVR), one of the most popular heritage railways presently operating in the Midlands.
1.4 The CVR has already benefited from the plans of MCR utilising the extended valley route
linking Cheddleton, Consall and Frogall to take in the Cauldon branch (which has been
brought back into use by MCR), with the overall trip now extending to a round trip of 26 miles.
1.5 As we understand it, MCR’s intention is to secure the planned rail development/extension
through cross funding with a residential development at Leebrook for which planning consent
is to be sought. This Summary Report will form part of the supporting material for a planning
application, presently being assembled by Capita.
Format of the Summary Report
1.6 Cognisant of the foregoing our Summary Report is set out as follows:
Section 2 The Project
Section 3 Market Summary
Section 4 Summary Economic Assessment
Section 5 Conclusions
Moorland & City Railway Heritage Railway Extension into Leek July 2013
2
2 The Project
Introduction
2.1 In this section of our Summary Report we provide the rationale underpinning the development
proposals and comment on the proposed facilities. We also review the strategic location of the site and
consider relevant strategies and policies which provide the context to the development proposals.
The Proposals and Rationale for Development
2.2 The proposals comprise three elements namely:
Extension of the railway which would be approximately ¾ mile
A new, purpose built station in Leek which would be located in an accessible and prominent
position in Leek
A residential development on surplus railway land at Leebrook
2.3 As noted earlier, this latter element is fundamental to providing the new railway infrastructure as it
will cross fund the railway proposals. Importantly, the new sub-section would “connect” Leek to the
MCR/CVR network bringing with it a number of important benefits which can be summarised as
follows:
Provide a new terminus for CVR heritage steam services
Provide a new terminus for MCR commercial services to Stoke, Alton Towers, The Churnet
Valley and the Cauldon line
Act as a catalyst to stimulate regeneration in the area, most particularly in respect of the
Cornhill development which, as noted in the Draft Churnet Valley Masterplan (DCVM) “has
been a focus for the Council for a number of years”. As highlighted in the DCVM, this area has
the potential to create employment and leisure development, noting the assets of the railway
and canal – land availability combined with the MCR/CVR railway development plans are
supportive in this respect
2.4 The overall rationale underpinning the development proposals therefore is to develop the heritage
railway which will be a more significant “attractor” in the area, potentially widening its catchment
which in turn will add to the visitor economy, creating jobs and spend. The proposals will also have a
material impact on Leek, connecting it to the other tourist “honeypots” with the added benefit of
extending visitor dwell times. The proposals also have a commercial rationale linking services to
Stoke and other areas as well as “kick-starting” regeneration activity in the Cornhill area.
Moorland & City Railway Heritage Railway Extension into Leek September 2013
3
Location & Linkages
2.5 The following map illustrates the route of the railway and highlights its strategic location in relation to
other settlements in the area. It also shows the central position of Leek in respect of the Council area
and illustrates the connectivity that could be achieved through the development proposals.
Development Site
2.6 The proposed railway extension into Leek would follow the line of the disused railway track. It has
potential to act as a catalyst to development around the new station that would be built (as noted
earlier). The station would be located on vacant land that was previously used for employment uses
Moorland & City Railway Heritage Railway Extension into Leek September 2013
4
and, as part of the Cornhill/Barnfields proposals forms part of a wider Masterplan for mixed-use
development extending westwards towards the canal and the River Churnet.
2.7 Images of the site for the new Leek Station are shown below.
Site for proposed Barnfield development, the station would be located on the other side of the site, the trees mark the
line of the railway
Vehicular access to the site and station would be formed from the existing turning circle
Strategies and Policies of Relevance
2.8 Having commented on the rationale for the development proposals, the development site and its
strategic location, in this section we briefly comment on a number of strategies and policies which
also provide the context for the proposed rail development. These include the following:
Visit England – A Strategic Framework for Tourism 2010-2020
Visit England – Wise Growth Action Plan 2010-2020
Visit Peak District and Derbyshire – Tourism Strategic Framework 2011-2014
Staffordshire Moorlands Tourism Study – 2011
Churnet Valley Accessibility and Connectivity Study - 2011
Draft Churnet Valley Masterplan (Staffordshire Moorlands Local Development Framework –
July 2013
Moorland & City Railway Heritage Railway Extension into Leek September 2013
5
2.9 In the following table we briefly comment on each of these strategies.
Strategy Context
Visit England – A
Strategic Framework for
Tourism 2010-2020
(revised edition 2011)
The Framework notes that tourism is worth £97bn a year to the economy and,
although operating below capacity, suggests that the potential for growth is
significant. The Vision identified in the Strategy is “to maximise tourism’s
contribution to the economy, employment and quality of life in England” and this is
underpinned by 4 objectives and a number of action plans, one of which is Wise
Growth – noted below.
The economic value of tourism is clearly stated and this has particular resonance
with MCR’s proposals to facilitate extension of the heritage rail provision in
Staffordshire
Visit England – A
Strategic Framework for
Tourism 2010-2020
(revised edition 2011 –
Wise Growth Action Plan
Acknowledging the economic role of tourism, this Action Plan notes the need to
balance growth to provide sustainability ensuring that a co-ordinated approach is
taken to tourism development thereby achieving the best outcomes, economically,
socially and environmentally. Viability is one of the underlying principles providing
jobs for local people and optimising visitor spend in the local community.
MCR’s proposals would contribute to the local community in terms of jobs and
spend whilst also benefiting the area from an environmental perspective,
providing an alternative to car borne access and linking attractions together
Visit Peak District and
Derbyshire – Tourism
Strategic Framework
2011-2014
The Framework argues that there is a need to remain competitive in terms of cost
and value for money, whilst offering visitors a great experience. Future
development in the area should focus on growing the arts, culture and heritage
markets, and continued product development is required to keep people visiting.
In terms of sectors, the MCR proposals will contribute to developing the heritage
offer in the area in order to attract new visitors and retain existing ones
Staffordshire Moorlands
Tourism Study - 2011
The underlying aim of the study was to review the role and impact of the visitor
economy and consider opportunities for economic growth both in the Churnet
Valley and wider district. Part of the report looked at Product Development within
which a number of “Transformational projects” were identified, one of which
related to development of the Churnet Valley and Moorland and City Railways.
The report noted the likely stages of rail development to: Stoke; Alton Towers,
Leek and Waterhouses and the positive impact on visitor numbers that these
planned developments could make.
Growth in visitor numbers, creating physical and thematic linkages (e.g. Leek and
Alton Towers) were noted as positively contributing to the visitor economy
Churnet Valley
Accessibility and
Connectivity Study - 2011
Developed as part of the Churnet Valley Masterplan and to inform the Local
Development Framework, the study reviewed the potential for improving
accessibility in the area, promoting sustainable forms of transport and identified
future opportunities to improve links between attractions and “settlements”. The
report noted the good connection provided by the CVR (when operating) linking
the villages of Cheddleton, Consall and Frogall. Although, a number of key issues
were noted relating to all modes of travel, the potential to improve accessibility
Moorland & City Railway Heritage Railway Extension into Leek September 2013
6
was also highlighted with the Heritage Railway – future expansion identified as
having “good potential”.
The report noted that the CVR was not only a “major attraction for the area” but
also that it provided a key transport link to facilitate visitors exploring more of the
Churnet Valley. Commenting on planned development by MCR the report notes
that the “ability to introduce passenger services from Stoke into the Churnet Valley
would be highly beneficial in developing the area as a sustainable tourism corridor”
Draft Churnet Valley
Masterplan (Staffordshire
Moorlands Local
Development Framework
– July 2013)
Following extensive consultation, the Council has considered a number of options
to progress the Masterplan, with the officer recommendation to “approve the Draft
Churnet Valley Masterplan for statutory public consultation and support
designation of the Churnet Valley as An Area of Outstanding Natural Beauty”.
Some changes have been made to the Draft Masterplan, however, in relation to
this project, the following comments contained with Section 8.4 Sustainable
Transport are relevant: “there shall be continued support for the use of the Churnet
Valley rail line as a heritage and tourist attraction and support for the re-opening of
the rail line into Stoke-on-Trent and into Leek and the line to Cauldon Lowe for
both light passenger and freight use”. Although a cautionary note was made in
relation to the Alton Towers proposed link suggesting that further evidence would
be required in terms of feasibility and viability.
Within the Draft Masterplan the importance of the planned rail developments are
noted and there is recognition of the value of CVR as both an attraction in its own
right but also as a means of moving people and linking attractions.
Comment
2.10 Within this section of our Summary Report we have reviewed the development proposals and
rationale and considered the strategic location of Leek within Staffordshire Moorlands and its
relationship to the CVR.
2.11 We have also considered the strategic context in relation to tourism and highlighted the “fit” of the
MCR proposals to the development of the visitor economy both in the Churnet Valley and wider
district; acting both as an “attractor” and also in contributing to the strengthening of links between
attractions.
Moorland & City Railway Heritage Railway Extension into Leek September 2013
7
3 Market Summary
Introduction
3.1 Within this section of our Summary Report we briefly comment on UK/national trends of relevance
including: the leisure market; the tourism market; the visitor attractions market; historic and cultural
attractions; day visits; and, food and beverage. We also comment on Heritage Railways before turning
to the more local tourism markets in Staffordshire, Staffordshire Moorlands and Leek and concluding
with key points elicited from the consultation exercise.
Market Trends of Relevance
3.2 Leisure Market – The value of the UK leisure industry in 2011 (most recent data) is estimated by
Mintel to be a little over £66bn. This represents a fall of 3.2% since 2006 and a significant decline
from the £70bn achieved in 2007, pre-recession. In fact, in real terms, with the effects of inflation
removed, the decline in the value of the market between 2006 and 2011 is significantly more, i.e. 22%.
3.3 Although the statistics would suggest that a levelling out is now being experienced, to some extent this
is probably attributable more to the 2.5% increase in VAT combined with the high rates of inflation
which has been passed on from leisure businesses to the customer by way of price increases. Without
these factors, it appears more than likely that the value of the industry would have decreased.
3.4 In terms of the future, Mintel forecasts suggest that the value of the UK leisure industry will
experience a further small decline by 0.4% between 2011 and 2016, with its value being estimated at
£65.8bn.
3.5 Tourism Market – National - The tourism industry is one of the largest industries in the UK,
contributing an estimated £115.4bn to the economy in 2009 (taking into consideration both direct and
indirect impacts), equating to 8.9% of UK Gross Domestic Product. The number of jobs supported by
the industry is forecast to increase by 250k between 2010 and 2020, from 2.645m to 2.899m. Indeed,
one in twelve jobs in the UK is presently being directly or indirectly supported through tourism. In
the next decade, the visitor economy is forecast to be one of the best performing sectors, with above
average growth at 3.5 per cent in Gross Value Added terms, outperforming other key sectors in the
economy (source: VisitBritain Visitor Economy Facts – Updated July 2012)
3.6 Tourism expenditure is forecast to rise at an annual real growth rate of 3% between 2010-2020 with
spending by inbound visitors higher than domestic residents, – 4.4% compared with 2.6%. (source:
Deloitte).
3.7 The key findings for Visitor Attractions (June 2012) reported an improved position in terms of
visitor numbers in the first half of 2012 compared with the same period in 2011, although this was not
“across the board” with outdoor attractions not faring as well as indoor attractions, principally
because of the weather. Of those attractions that were outdoors, visitor numbers were noted as
follows: 64% down; 23% up; with 13% the same. In contrast with this mixed outdoor & indoor
Moorland & City Railway Heritage Railway Extension into Leek September 2013
8
attractions reported a slightly better position with: 52% down; 40% up; and 8% the same.
Interestingly, operators of outdoor attractions were optimistic about the summer, reflecting the fact
that the weather might improve and that there would be growth from overseas visitors.
3.8 Additional findings from the same report also indicate that: the popularity of free attractions has
increased, reflecting the economic position; visitor numbers in the May-June (2012) period have
declined by 2% on average; and that attractions in rural locations have performed less well than those
in cities/towns and seaside locations.
3.9 Historic and cultural attractions within the UK had an estimated 121 million visitors in 2010
(source: Mintel 2010), which reflects an increase of 15% over 2005 numbers. Museums and galleries
dominate the total visits to heritage and cultural attractions, accounting for 60% of the total, with
historic properties accounting for the balance. Approximately two thirds of adults have been to an
historic or cultural attraction of some type during the past year, although museums remain the most
popular (source: Mintel).
3.10 In respect of Heritage Tourism which includes industrial, maritime and transport heritage, this
sector is valued at £12.4bn a year supporting 195,000 jobs (source: Investing in Success: Heritage
and the UK Tourism Economy (2010); Heritage Lottery Fund; VisitBritain).
3.11 Turning to GB Day Visits 2011 data (encompassing data from England, Scotland and Wales), key
findings included: GB residents took a total of 1,545 million Tourism Day Visits of which 1,307 million
were taken to destinations in England; visitor spend was £52bn, £43bn of which was attributed to
visits in England; market seasonality was evident with (unsurprisingly) the highest number of trips
taking place between July and September (30%); going to visitor attractions ranked 8th (out of 15) of
GB visits by activities undertaken represented by 108m visits undertaken during a visit and 77m
where visiting the attraction was the main activity; and visitor spend to attractions in England
represented 6% of overall spend.
3.12 Looking at the volume of day visits in GB April-June 2013, and comparing them to the same period in
2012, a 14% decline was recorded. The value of these visits however, remained relatively stable at
£13.6bn, a small increase of 1% over the same period the previous year. Reviewing the year to date
situation, the volume pattern is the same with expenditure falling by 5% overall, probably due to the
falls experienced in the early part of the year because of the poor weather. In terms of England, the
picture is slightly different with volume declining by 16% (April-June 2013) in contrast with the same
period in 2012, although the value increased by 7%. Looking at the year to date figures, these broadly
mirror those of GB with an overall decline in value of 4% being recorded. (source: VisitEngland - GB
Day Visits 2013 April-June, GB & England).
3.13 The Food and Beverage market is also of relevance to the planned development. Recent research
(Allegra Market Research) has identified the value of the UK eating out market as £42 billion (July
2011). Their research highlighted how consumers are eating out more often in 2011 compared with
2010 (on average one in nine meals are consumed away from home in 2011 compared with one in ten
in 2010), however reduced disposable income has influenced the choice of where to eat out, with an
emphasis on value for money.
Moorland & City Railway Heritage Railway Extension into Leek September 2013
9
3.14 Other key factors to note from the survey included:
Consumers are more health conscious than in previous years with 92% of people stating a
preference for healthier choices
Local and regional sourcing is important, with over half of consumers preferring to eat at
establishments with locally sourced ingredients
Coffee shops (potentially applicable to the railway) have the highest frequency of visit with
23% of consumers making one meal purchase per week
3.15 Overall, we would comment that although the markets of relevance (summarised in the preceding
paragraphs) have been negatively impacted by the economic decline, there are signs of recovery.
Most particularly, growth in the: tourism market; the visitor attractions market; and in hospitality are
forecast which will be important in achieving the sustainability of the proposed rail extension, adding
to the local visitor economy.
Heritage Railways
3.16 Much of the heritage railway sector development has focussed on reinstating railway routes and lines
that were removed in the 1960s. The characteristics of heritage railways do vary reflecting their
locations, nature and scale of their visitor markets, their heritage and associated offer. In this section
of our Summary Report we provide an overview of the characteristics and visitor numbers at a sample
of other heritage railways in the UK.
3.17 Heritage railway preservation has developed into a growing industry with the railways often providing
differentiation in terms of the tourism programmes in many areas including for example Gwynedd
(Welsh Highland Railway) and the North Yorkshire Moors National Park (North Yorkshire Moors
Railway).
3.18 By way of background to the industry, there are 108 operating heritage railways, tramways and rail
cableways throughout the UK that, in total, attract between 5.3- 7.8 million visitors a year (source:
Heritage Railways). In 2011, these operations carried 7.1 million passengers generating
approximately £92 million to local economies through train journeys, catering, shops and workshops
(source: Heritage Railway Association). In terms of visitor profile, these were typically family groups
(65%) or couples (27%).
Churnet Valley Railway (CVR)
3.19 Turning now to the Churnet Valley Railway, the CVR route presently extends to a round trip of 26
miles placing it at the top end for length of route in the country. This provides a good base on which
to build a new station, and supporting infrastructure in Leek which in our view would create impetus
for further demand. In essence, Leek would become the operational hub for CVR-MCR and,
simultaneously, provide a basis for further tourism development in Leek.
3.20 In terms of background to the CVR - it was opened in 1849 as part of a secondary main line linking
Macclesfield with Uttoxeter via Leek. Having closed in the 1960s, it was opened as a heritage railway
Moorland & City Railway Heritage Railway Extension into Leek September 2013
10
line in 1996 which attracted approximately 7,000 visitors. In 1999, Consall Station was re-opened and
within a year visitor numbers increased to 25,000. Following this, in 2003, Froghall station was
reconstructed.
3.21 In 2011, the Heritage Railway received approximately 70,000 visitors a year. The railway holds many
events, such as children’s festival and Christmas events - at Christmas for example, CVR expects
1,000 visitors a day spread over the three stations. The majority of these visitors are local residents
from Staffordshire with numbers peaking in school holidays, Christmas, Easter and summer.
3.22 The CVR currently employs 6 full-time staff, 6 seasonal staff and approximately 180 volunteers. The
extension into Leek would require an additional 3 full-time staff.
3.23 Extending the line to Leek, Stoke-on-Trent and Alton Towers is expected to greatly enhance access,
connect tourism ‘zones’, increase visitor numbers on the heritage railway and therefore spur tourism
development in towns such as Leek. These potential benefits could be enhanced by other private and
public projects including developing visitor attractions and improving the accommodation stock.
3.24 In terms of CVR’s current market position, it is useful to review other comparable railways, most of
which are situated in visitor destinations. The information which is tabulated below has been
provided by MCR and provides insight into the scale and operation of various heritage/steam railways
around the country.
Railway Length (miles) Main Line Connection Visitors Resident Locos
Bluebell 9 Yes 175,000 30
East Lancashire 12 Yes 144,000 4
Glos/Warwicks 10 No 70,000 11
Great Central 8 No 150,000 10
Keighley & North
Valley
4.75
Yes
100,000
30
Llangollen 7.5 No 100,000 14
Mid Hants 10 Yes 150,000 16
Midland Rail Centre 3.5 No 130,000 22
Nene Valley 7.5 No 63,000 17
North Norfolk 5.5 Yes 130,000 6
Nth.Yorks Moors 18 Yes 335,000 12
Paignton/Dartmouth 7 Yes 350,000 6
Severn Valley 16 Yes 200,000 27
Swanage 6 No 250,000 5
West Somerset 20 No 200,000 9
Embsay & Bolton
Abbey
4.5
No
107,000
19
Kent & East Sussex 10.5 No 100,000 12
3.25 The data provided in the table present a snapshot of railways which display some different
characteristics in terms of their locations, operation and rationale for their existence with the
Moorland & City Railway Heritage Railway Extension into Leek September 2013
11
common feature being their contribution to the visitor economy. The railway operations highlighted
include: those located in major tourism destinations such as the North Yorks Moors, Paignton-
Dartmouth, Swanage and West Somerset; some that have been established on the back of railway
preservation activities such as Bluebell, Great Central and Severn Valley; and those close to major
conurbations such as East Lancashire. Notwithstanding this, there are a number of railways that
demonstrate similar characteristics to an extended CVR in terms of locational attributes and visitor
numbers achieved including: Keighley and Worth Valley (100k visitors); Llangollen (100k visitors);
Kent & East Sussex (100k visitors); and Embsay & Bolton Abbey (107k visitors) which very much
support the proposals to connect to Leek in the short term and the impact in respect of visitor
numbers, and indeed the longer-term aspirations for CVR to re-establish links to Stoke-on-Trent and
provide a main line connection, complemented by CVR’s potential link to Alton Towers in the future.
This would therefore provide a platform for further growth over and above what the extension to Leek
(the subject of this report) will deliver.
3.26 This provides good supporting evidence of the potential impact that the railway extension to Leek
could generate in terms of increasing visitor numbers (and, in consequence, spend). In particular,
analysis of the most comparable railways would suggest that a new terminus at Leek would lead to an
increase in CVR visitor numbers in the order of 95,000 to around 100,000 i.e. an increase of between
36-43%.
County Tourism
3.27 Staffordshire, like much of the surrounding area, has always been distinguished by its manufacturing
base. More recently however, its economy has diversified optimising the opportunities presented by
many of the characteristics of the area (e.g. hills & fells, parks & gardens, ceramics, canals and
heritage/heritage railways). Unsurprisingly therefore, a key objective of Staffordshire County Council
is to grow the Staffordshire tourism economy, increasing both visitor trips and spend (as noted in the
following table), attracting more staying visitors (currently, 94% of all visitors are day visitors) and
also penetrating the overseas market (dominated at present by the domestic market).
Indicator Aim
Number of visitors trips: A 7.1% increase from 20,134,000 (2010) to 21,727,171 (2014)
Average spend per visitor: A 13.6% increase from £48.85 (2010) to £55.5 (2014)
Contribution of leisure tourism to
Staffordshire’s economy:
A 15.4% increase from £1,037 million (2011) to £1,197 million
(2014)
Number of jobs supported: Increase of 10% between 2010 and 2014
Source: Staffordshire County Council
Moorland & City Railway Heritage Railway Extension into Leek September 2013
12
Local Tourism
3.28 Turning to the more local areas, the district of Staffordshire Moorlands has a population of
approximately 95,400, of which 53% are based in the three main towns; Leek, Biddulph and Cheadle
(source: Revised Submission Core Strategy, 2011).
3.29 The visitor economy in the district supports approximately 10% of total employment, contributing
£158 million to its economy in 2009. A high proportion of total visitors to Staffordshire Moorlands
are attracted to the location because of its diversity encompassing for example heritage, culture and
outdoor activities. Most visitors visit the area just for the day (in common with the county) and have
travelled from within Staffordshire (two thirds), often to the same location (80%) (source:
Staffordshire Moorlands Tourism Study, 2011).
3.30 More recent data about tourism in Staffordshire Moorlands (Scarborough Tourism Economic
Activity Monitor - STEAM: Visit High Peak & Derbyshire/ Global Tourism Solutions) reflects the
wider UK tourism performance noted earlier in this section with visitor numbers and spend showing a
decline from 2011 to 2012. In relation to visitor numbers, these have declined by 5% (5,107k to
4,843k) with tourist days showing a slightly smaller decline (4%). Given this, both tourist expenditure
(direct and indirect) and economic impact have also declined, both falling by 4%.
3.31 A key tourism ‘zone’ is Alton Towers. The Park receives 2.5 million visitors a year, of which only 18%
are from Staffordshire. These visitors contribute £38 million to the local economy (source: Alton
Towers Resort Long-term Plan) although most of this value is retained within the site.
3.32 Linkages between tourism ‘zones’ in Staffordshire Moorlands is weak which is partly due to poor
transport connections within the district – the proposed heritage railway extension planned could, in
part, address this situation. The Staffordshire Moorlands Core Strategy (2011) suggests that there is
modest growth potential for the district’s current markets. In terms of visitor numbers, the report
estimates increases up to 50,000 per annum in key locations.
3.33 Leek is of particular relevance to proposals and it is therefore helpful to consider some key
characteristics of the area. The town is situated in the north east of Staffordshire close to the south
west boundary of the Peak District National Park. As a traditional market town boasting a large
number of listed buildings and an industrial heritage, Leek plays a key role in the visitor economy of
the district, predominantly attracting day visitors (mostly from Staffordshire – 58%) who are drawn
to the town for sightseeing experiences (38% of total visitors), including heritage and natural history.
The planned opening of a new budget hotel in Leek (Premier Inn) may well help to attract more
staying visitors.
3.34 Leek is considered to have long term tourism potential; however reaching this is unlikely to be a rapid
process and could take up to 10 years. Potential projects that may help tourism develop within Leek
include: supporting and improving retail and catering, increasing accommodation stock (see previous
comment) and development of the Cornhill site (source: Staffordshire Moorlands Tourism Study).
Moorland & City Railway Heritage Railway Extension into Leek September 2013
13
Consultation
3.35 A focused consultation exercise was conducted as part of the study. This embraced representatives
from: the Churnet Valley Railway (CVR); Staffordshire Moorland District Council; Visit High Peak
and Derbyshire DMO; and Team Tourism. Key points raised are summarised below.
Significant growth of CVR in recent years with events making a major contribution
The Christmas period has traded successfully as illustrated by the fact that over 10,000
visitors were attracted over a 10 day period
Although families are an important sector, the dining experiences (fully booked for the year)
help to attract different audiences
Extension of the track to Cauldon resulted in a significant increase in visitor numbers (and
dwell time/spend) and a similar positive impact is anticipated in relation to the planned
development to Leek
Familiarisation trips presently organised with event promoters such as coach operators and
the opportunity for joint marketing initiatives with other attractions is to be further explored
Updated Churnet Valley Masterplan – still a major focus on the visitor economy with CVR
continuing to play an important role
Supportive of MCR plans for development to Leek & Stoke but more evidence required to
underpin proposals to extend to Alton Towers (e.g. how it might be delivered, the viability of
proposals, engagement with operator)
Importance of Visitor Economy to Staffordshire Moorland area
Need for continued investment in visitor infrastructure – plans for heritage rail extension
therefore welcomed
Rail extension and development of CVR considered to be a “Transformational” project,
capable of significantly extending visitor numbers over the period of the total development
Comment
3.36 Within this section we have considered trends in the key markets of relevance, noting the importance
and value of tourism to the economy – also evidenced through the consultation. The picture is mixed
however with the UK leisure industry being adversely affected by the wider economic decline but this
contrasts with the growth in sectors such as: visitor attractions; and historic and cultural attractions
in terms of visitor numbers. The picture for the food and beverage market is also positive with data
indicating that there is a greater propensity to eat out although “value for money” remains an
important consideration.
3.37 We have reviewed the heritage railway/steam sector commenting on the operation of a number of
heritage/steam railways noting their locational characteristics and impact on the visitor economy in
terms of the numbers attracted, and highlighting the achievability of the CVR numbers (driven by the
proposed rail extension to Leek) noted in the following section, when compared with similar
operations. Linking this with the forecast market growth in a number of relevant markets therefore
augers well for the future.
Moorland & City Railway Heritage Railway Extension into Leek September 2013
14
3.38 Finally, we have reviewed the tourism performance in the county and more locally, again recognising
the value of this sector to the economy, albeit noting the pressure on this market from the wider
economic decline.
Moorland & City Railway Heritage Railway Extension into Leek September 2013
15
4 Summary Economic Appraisal Introduction
4.1 This section contains a summary economic appraisal of the proposed heritage railway extension
which would facilitate tourism and leisure uses and will have a wider economic impact on the local
economy of Staffordshire Moorlands and Staffordshire. The following analysis presents an overview
of what this may consist of in terms of expenditure, jobs and Gross Value Added (GVA).
4.2 The analysis is based on an assessment of a series of employment and expenditure effects, as follows:
Temporary construction effects
Direct effects
Indirect effects through additional spend generated in the supply chain
Induced effects caused through the disposable income multiplier
Visitor effects
4.3 As appropriate, the analysis presented below provides both the estimated gross and net effects of the
railway extension. Gross effects are the expected observable changes in impact on the local economy
(for example an expected 3 extra employees will be hired). Estimated net effects remove impacts that
may have happened without the railway (deadweight), what has been shifted to the railway
(displacement), and the impacts that that do not benefit the local area (leakage). For Economic
Appraisal purposes the net effects are most valuable to consider as these effects adhere to HM
Treasury Guidance.
Temporary Construction Effects
4.4 Total construction costs for the proposed extension of the railway and new Leek station will amount
to approximately £1.2 million (based on discussions with the railway operator). This expenditure will
create temporary construction work during the development and construction period.
4.5 As the exact specification for the construction is not yet detailed, we have assumed that £80,000 of
construction expenditure is required to support one person year of employment. This assumption is
informed by recent economic impact studies we have conducted. The following table therefore sets
out our calculations of the temporary construction employment effects.
Capital
Cost (£)
Job:Capital Ratio Person
Years
FTE
Jobs
Supply
Multiplier
Jobs Supported in
supply chain
1,200,000 1:£80,000 15.00 1.50 0.4 0.60
4.6 Using HM Treasury guidance to convert person years of employment into Full Time Equivalent (FTE)
jobs; a FTE job will be for 35 to 40 hours per week and is anticipated as being available for at least 10
years. The construction period could, therefore, result in 1.50 FTE jobs being temporarily created
Moorland & City Railway Heritage Railway Extension into Leek September 2013
16
with a further 0.60 supported in the construction industry supply chain. Combined, the construction
phase would support an estimated 2.10 FTE jobs.
Direct Effects
4.7 Once the line extension is fully operational, 3 extra FTE jobs are expected to be created by the
MCR/CVR to support the additional activity and day visitors. We understand from discussions with
the client that these jobs would have a combined additional salary of £40,000 per year.
4.8 It is likely that there will be a degree of displacement in relation to the new development. In essence,
displacement occurs when a development takes some market share or skilled labour from other
existing local businesses and organisations. Therefore, while the proposals will enhance the tourism
and leisure sector in the area, this will not be completely additional and some displacement will occur
from other businesses. As such, the 3 FTE jobs represent a gross figure. It is impossible to accurately
foresee the exact scale of this displacement or the existing businesses that will be affected.
Nevertheless, we can draw on existing guidance to assist in this respect such as the English and
Scottish guidance on Additionality. As the economic impact assessment is focusing at the local level,
and given the limited amount of directly comparable employment opportunities in the area, we
consider that displacement would be fairly low, at 33%, as shown in the following table. Consequently,
the direct operation of the site will potentially result in a net additional gain of 2 FTE jobs when the
new line extension is opened, which will create income multiplier and GVA benefits as shown in the
following table.
Direct Impacts Numbers
FTE Jobs (Gross) 3
Total Additional Salary p.a. £40,000
Allowance for Displacement &
Deadweight
-33%
FTE Jobs (Net) 2
Additional Net Salary effects £26,667
Income Multiplier Effects 8,000
4.9 The direct FTE jobs supported will contribute an estimated £38,000 in Net Gross Value Added to the
local economy.
Gross GVA Numbers
GVA per job 19,000
GVA £ (direct) 57,000
Additionality – Net GVA Numbers
GVA per job 19,000
GVA £ (direct) 38,000
Moorland & City Railway Heritage Railway Extension into Leek September 2013
17
Indirect Effects
4.10 Indirect effects are supported by the operation of the railway and the additional demand for goods
and services that this generates in the local economy. The injection of this money into the local
economy will result in successive rounds of spending known as the supply chain multiplier.
Operational expenditure for the railway is estimated to increase by £100,000 per annum; based on
existing levels of non-salary operational expenditure and increased levels associated with higher
volumes of visitors. At present the railway incurs expenditure of about £667,000 per annum;
£450,000 of this is cost of sales (with gate direct costs accounting for £361,000 of this incurred for
costs of coal, diesel and engine hire); and, £217,000 is administration expenses (with salary and on-
costs costs accounting for £100,000 of this). Salary costs are included in our induced analysis
(below); for the indirect analysis we have suggested that the current £567,000 non-salary operational
expenditure would increase by approximately £100,000, predominantly through increased gate direct
costs as more locomotives are hired and operated.
Indirect (Supply Chain) Impacts Numbers
Expenditure within Supply Chain 100,000
Supply Linkage Multiplier 0.4
Supply Linkage Multiplier Effects 40,000
4.11 It is impossible to know the full extent of supply chain multiplier effects, but previous research and
experience suggests that a multiplier value of about 0.4 is reasonable in this type of situation. This
means that every £1 of expenditure supports a further £0.40 of spending in the supply chain.
Consequently, the £100,000 of operational expenditure in the local/regional supply chain results in a
further £40,000 of subsequent spending in the supply chain. This may be sufficient to support a
further 1 FTE job on the basis that an estimated £40,000 of expenditure in the economy is required to
support an additional FTE job.
Induced Effects
4.12 The induced effects generate further rounds of spending in the local economy as those who are
employed at the site spend their disposable income in the area. Again, it is impossible to know the
full extent of this disposable income multiplier effect, but research and experience suggests an income
multiplier of about 0.3 is reasonable for this type of proposal (source: Scottish Enterprise,
Additionality & Economic Impact Assessment Guidance Note. Tourism Income Multiplier (Hotels,
catering & pubs etc.).
4.13 In this analysis, we have reduced the salary expenditure to broadly reflect the allowance for
displacement as set out above. Therefore, the net additional salary expenditure is estimated at
66.67% of the gross total.
Moorland & City Railway Heritage Railway Extension into Leek September 2013
18
4.14 So, where the gross payroll figure is £40,000, the net figure at 66.67% equates to £26,667. The
disposable income multiplier is set at 0.3 so that every £1 of disposable income spent by employees
results in a further £0.30 of spending in the local and regional economy after leakage to international
and national levels occurs (i.e. mortgages, insurances, taxes etc). The multiplier effect results in a
further £8,000 of spending which in itself could support a further 0.2 FTE jobs. This would
contribute an estimated £3,800 in Net GVA.
Gross Effects Numbers
Gross Income Multiplier Effect 12,000
Expenditure per FTE Job p.a. 40,000
Gross Induced FTE Job p.a. 0.30
Net Additionality – GVA Numbers
Net Income Multiplier Effect 8,000
Expenditure per FTE Job p.a. 40,000
Net Induced FTE Job p.a. 0.20
Additionality - GVA Numbers
Net GVA £ ( Induced ) 3,800
Visitor Effects
4.15 Visitors to Leek would have an economic impact that is generated through the money they spend
during their visit, although this would also include upfront costs (like insurance), transport and travel
costs incurred in getting to the area. To assess the economic impact of visitors we have estimated the
number of visitors to the local economy and applied an average spend per head per day. An estimate
of £25 average spend per day per additional visitor has been derived from comparing STEAM
(Scarborough Tourism Economic Activity Monitor) data that estimates average spend in 2012 for day
visitors to Staffordshire Moorlands was £32.70 (though this will include the Alton Towers resort),
along with discussions with railway operators that indicate typically customers would spend less than
this.
4.16 Forecasting future additional visitors based on the rail extension is difficult and as the data in Section
3 demonstrates, trends for individual heritage railways are difficult to predict. Consequently, we have
estimated the effects of three scenarios based on the preceding analysis of the heritage rail sector and
discussions with the client about potential increases in volume of visitors following completion of the
extension. The three scenarios take a five-year horizon for delivering realistic levels of growth, as
follows:
Scenario 1 assumes an additional 20,000 passengers per annum
Scenario 2 assumes an additional 25,000 passengers per annum
Scenario 3 assumes an additional 30,000 passengers per annum
Moorland & City Railway Heritage Railway Extension into Leek September 2013
19
4.17 We also anticipate that of the existing 70,000 users of the heritage railway, adding the option of
visiting Leek would encourage an increase in spending from an average of £20 per head to an
increased average per head of £25 (for about half of existing visitors (35,000), due to the opportunity
for extended time in the area generating more opportunity for local businesses to capture visitor
spending. We estimate that approximately half the current users would be encouraged to visit Leek,
resulting in an additional £175,000 for the local economy from the additional spend of these visitors.
Induced (Visitor Spend) Impacts Scenario 1 Scenario 2 Scenario 3
Additional spend from current
passengers encouraged to
increase spend from £20 to £25
(£)
175,000
175,000
175,000
Additional train passengers p.a. 20,000 25,000 30,000
Spend per visitor (£) 25 25 25
Spend @ £25 per visitor (£) 500,000 625,000 750,000
Gross Additional Gain (£) 675,000 800,000 925,000
Allowance for Displacement &
Deadweight (£)
270,000
320,000
370,000
Composite Multiplier Effects (@
0.28) (£)
75,600
89,600
103,600
Net Additional Gain p.a.(£) 345,600 409,600 473,600
4.18 The gross visitor expenditure total, represented by the gross additional gain figure, estimates the total
amount of expenditure made in the local economy by increased tourist visits on the railway. We
estimate this at between £675,000 and £925,000. The gross figure has then been reduced by 60% to
account for deadweight, displacement, leakage etc. As a large number of the visitors are expected to
come from the Staffordshire area, displacement is expected to be particularly high. Once visitor
numbers have increased to reflect full scale-up, the anticipated net increase in spend in the local
economy is £345,600 in scenario 1, £409,600 in scenario 2, or £473,600 in scenario 3.
4.19 Our analysis above follows HM Treasury Green Book guidelines on the assessment of net additional
economic impact from project interventions. From that perspective it is the net additional gain which
is of foremost importance once deadweight and displacement are accounted for. However, at the local
level in respect of the town of Leek it is worthwhile noting that the full scale of the gross benefit will be
experienced as additional spend is injected into the local economy. Spending in shops, bars,
restaurants etc. will inject money into Leek businesses that will subsequently re-spend it in their
supply chains so that further rounds of spending and economic impact are experienced. This
represents a significant opportunity to stimulate Leek’s visitor economy and provide a platform for
further growth in future.
Moorland & City Railway Heritage Railway Extension into Leek September 2013
20
4.20 The following table includes a scale up of 20% per year to reflect the fact that an increase in visitors
and visitor spend would not be immediate. Again, we estimate £40,000 of spending is required to
support 1 FTE job equivalent. Once visitor expenditure has scaled up fully, we estimate the additional
expenditure will support between 8.6 and 11.8 FTE jobs.
Additionality from Visitors – Expenditure
Expenditure per
annum (£)
Scenario 1 Scenario 2 Scenario 3
1 69,120 81,920 94,720
2 138,240 163,840 189,440
3 207,360 245.760 284,160
4 276,480 327,680 378,880
5 345,600 409,600 473,600
Additionality - Jobs Scenario 1 Scenario 2 Scenario 3
Visitor Expenditure
(£)
345,600 409,600 473,600
Expenditure per FTE
Job (£)
40,000 40,000 40,000
1 1.7 2.0 2.4
2 3.5 4.1 4.7
3 5.2 6.1 7.1
4 6.9 8.2 9.5
5 8.6 10.2 11.8
FTE Jobs 8.6 10.2 11.8
4.21 Estimating £19,000 of GVA per FTE job supported, we calculate that via the FTE jobs supported,
additional tourist expenditure in the area would support an additional £164,160 GVA in scenario 1,
£194,560 GVA in scenario 2, or £224,960 GVA in scenario 3.
Additionality GVA
Year Scenario 1 (£) Scenario 2 (£) Scenario 3 (£)
1 32,832 38,912 44,992
2 65,664 77,824 89,984
3 98,496 116,736 134,976
4 131,328 155,648 179,968
5 164,160 194,560 224,960
FTE Jobs 8.6 10.2 11.8
GVA per Job (£) 19,000 19,000 19,000
GVA from FTE Jobs
(£)
164,160 194,560 224,960
Moorland & City Railway Heritage Railway Extension into Leek September 2013
21
Summary
4.22 In summary, operation of an extended MCR/CVR as an enhanced tourism attraction would have a
wider economic impact on the local economy. For scenario 2, which represents the mid-range
estimate for increase in visitors in the short-term, the effect on the local economy could amount to the
following (excluding the construction phase) as summarised in the table below based on the
preceding analysis in this section:
£952,000 gross expenditure per annum from the railway’s operation predominantly
focused on the town of Leek
£577,600 net additional expenditure per annum injected into the local economy
13.4 FTE jobs supported, and
a net increase in GVA of £255,360 per annum after five years
4.23 However, given the rural nature of the area a greater impact would be experienced as local jobs for
residents of an area with a low employment density would be provided, thereby expanding local
employment opportunities even if only in a small way. Simultaneously, the railway extension into
Leek would also positively impact on the tourism offer of both Leek and the district, which is a stated
policy objective.
4.24 By increasing the volume of visitors who come from outside Staffordshire the scale of net economic
benefit would be increased as local displacement would not occur and the net additional amount of
money brought into the local economy would increase. The CVR is marketing itself more widely and
having some success in drawing visitors from further afield which would be a strategy to support
growth in visitor numbers for the extended service too. Consequently, we consider the analysis
presented here to be realistic but conservative in nature. It is realistic for the early years after the
extension and would provide a basis for further growth if the railway offering could be more
extensively promoted and placed in the market with appropriate visibility.
4.25 The scale of the effects on the economy is strongly dependent upon the increase in tourists attracted
to the area as it is the increased volume of visitors which will drive the local economic impact. The
tables below provides our summary of the gross and net economic benefits that could accrue from the
railway extension into Leek in the early years of operation based on Scenario 2 which is our mid-range
scenario and the one we consider most likely in the initial five years after opening. Reported impacts
(excluding temporary construction effects) are per annum and are expected to be on-going. The gross
effects represent estimates of the observable impacts of the railway extension, i.e. the increased
expenditure of tourists attracted to the area. The net effects take account of displacement, leakage and
deadweight as discussed above. For Economic Appraisal purposes, the net figures are more relevant
to consider. Successfully implementing the extension to Leek provides a solid platform for further
growth and complements the work by other parties to raise Leek’s tourism profile and offer. Beyond
the initial five years of our assessment we would anticipate the scale of impact increasing further as
tourism numbers increase.
Moorland & City Railway Heritage Railway Extension into Leek September 2013
22
Scenario 2 -Gross Type of Effect Expenditure FTE Jobs GVA Based on FTE Jobs
Temporary Construction
supply chain £1,200,000 2.10 £39,900
Direct £40,000 3.00 £57,000
Indirect £100,000 1.00 £19,000
Induced £12,000 0.3 £5,700
Visitor Effects
Scenario 2 £800,000 20.0 £380,000
Totals per annum (excl
construction), Scenario 2
£952,000
24.3
£461,700
Scenario 2 - Net Type of Effect Expenditure FTE Jobs GVA Based on FTE Jobs
Temporary Construction
supply chain £1,200,000 2.10 £39,900
Direct £40,000 2.00 £38,000
Indirect £100,000 1.00 £19,000
Induced £8,000 0.2 £3,800
Visitor Effects
Scenario 2 £409,600 10.2 £194,560
Totals per annum (excl
construction), Scenario 2
£557,600
13.4
£255,360
Moorland & City Railway Heritage Railway Extension into Leek September 2013
23
5 Conclusions
5.1 This Summary Report has assessed the potential economic benefits that could be derived from the
proposed heritage railway extension to Leek. Informing this appraisal has been a review of the
development proposals in the context of: the “fit” with tourism related strategies; the opportunity to
optimise growth in relevant markets including the tourism market and the heritage/steam railways
sector; and the current performance and market position of the CVR.
5.2 What is clear is that the proposed rail development proposals “tick” a number of boxes including:
Acknowledging the value of tourism to the local economy with the CVR already playing an
important role in drawing people to the area and acting as an attractor and destination in its
own right.
The importance placed by the Council on developing its tourist products in general and
specifically in the Churnet Valley, with industrial heritage identified as one of the key sectors.
The potential to differentiate the Churnet Valley from its competitors (in other locations)
through the development of complementary activities/facilities/attractions of which the
railway is one.
The role that can be played by the extended railway in linking together other attractions as
well as “moving people”.
The need to enhance dwell times and visitor spend to which the railway extension will
contribute
5.3 Based on this (and other supporting data), the summary economic appraisal confirmed the positive
impact of the rail extension to Leek in terms of employment and expenditure. The appraisal
considered 3 scenarios in relation to potential increases in the number of visitors i.e. 20,000, 25,000
and 30,000. Taking the second scenario – an additional 25,000 visitors per annum – as being
realistic and achievable, the impact (excluding construction) could result in the following:
£952,000 gross expenditure per annum from the railway’s operation predominantly
focused on the town of Leek
£577,600 net additional expenditure per annum injected into the local economy
13.4 FTE jobs supported, and
a net increase in GVA of £255,360 per annum after five years
5.4 Given the rural nature of the area, these impacts are considered important and could be further
enhanced if the other MCR plan are realised. Moreover, these benefits form part of a platform for
further growth beyond the next five years as the railway implements further plans for its growth and
development.
Moorland & City Railway Heritage Railway Extension into Leek September 2013
24
The Leisure Consultancy Advantage Business Centre
132-134 Great Ancoats Street Manchester, M4 6DE
. 0843 2891606 info@leisureconsult ing.co.uk
VAT Number126 2736 22