BLM looks into the impact the nuclear power development has had on the region, and what sets the county apart from the rest of the UK.
Somerset has historically conjured up iconic images of luscious green farmland, Glastonbury Festival and cider, but the region is currently in the midst of a business revolution, primarily driven by the Hinkley Point C power station developments.
But, what has made Somerset a great business destination? What have been the recent challenges? And with the hive of activity around the nuclear station, what does the future hold? BLM investigates.
Seizing the moment
In reality, the local economy has struggled in comparison to other areas of the country. Somerset has experienced below average economic growth In recent years and has provided less than 3% of the country’s Gross Value Added (GVA).
However, since 2016, Somerset has seen its economic growth rise slowly but surely, with Hinkley, a thriving construction and manufacturing scene, and many other factors driving the change.
With a modest population of just over 550,000 people, Somerset has seized the opportunities the upturn in the regional economy has presented. This had led to the region becoming a key business destination for national and regional companies.
Paul Williams, Director of National Offices at Avison Young comments: “Somerset is a great place to do business, benefiting from a combination of beautiful scenery, historic locations, and good road and rail links via the M5, A303, and mainline rail stations. Home to such famous names as Clarks Shoes, Leonardo Helicopters, Mulberry Group, Yeo Valley, and Thatchers Cider; Somerset allows business to thrive while providing a quality of life for their staff which is hard to beat.”
This sentiment is echoed by Dr Paul Phillips CBE, Principal and Chief Executive of Weston College.
He said: “There are many advantages to being based in Somerset for businesses. Somerset is strategically located at the access point to the South West and is part of the highly successful West of England region, where economic performance has consistently surpassed the national average and ambitions for growth through innovation, knowledge and creativity are strong.”
And the regions successes haven’t just been its traditional farming and foods, with huge growth in recent years in areas such as technology, professional services, education, leisure and tourism.
So, why has this happened?
Stephen Henagulph, Chief Executive of Somerset Chamber of Commerce explains: “There is a huge diversity of businesses in Somerset and new developments are helping to attract even more – Nexus 25 near J25 of the M5 in Taunton and Gravity near J23 of the M5 near Bridgwater are just two new, purpose-built business park developments. Gravity, in particular, will focus on ‘clean growth’, encouraging companies to harness new technology to help Somerset become the regional-leader in areas such as AI and robotics.
“The M5 runs through the middle of the county, giving good access, while London is only two hours away by train and we are actively supporting the proposed expansion of Bristol Airport in North Somerset. Businesses need good transport links to thrive and while there is scope for improvements, namely the A303 and A358 corridor to London, the county is well placed to offer a fantastic work-life balance. Glorious countryside on your doorstep and a short hop to major cities such as Exeter, Bristol, Birmingham and London.
“Somerset businesses build everything from helicopters to vacuum cleaners and are world-renowned for their fantastic cider and cheese. We have a welcoming, vibrant business community and there are huge opportunities for growth across all sectors.”
It is clear to see that businesses across all sectors have utilised the regions upturn in economic fortunes to their advantage. However, it hasn’t been a smooth transition – and there are still many challenges ahead if growth isn’t to be stifled.
Stephen comments: “While Somerset is well-placed for business, there are still pockets of the county with slow broadband speeds and poor transport links. It is absolutely vital the Government stands by its pledge to upgrade the entire length of the A303 and A358 to a dual-carriageway.
“Currently, just three of the eight sections earmarked for upgrading are being progressed by Highways England. This isn’t good enough and businesses consistently tell us they need better road links to the west of the county and to London.”
And it isn’t just the physical infrastructure of the region that has caused issues, many businesses in this rural area of the country suffer with poor internet and mobile connectivity – a huge problem for modern businesses.
He continues: “Somerset has one of the worst superfast broadband connection rates in the country. Somerset is a great place to do business but we have to make sure the county is not overlooked in favour of the bigger cities such as Bristol and Exeter or not just bypassed by people who are simply on their way to Devon and Cornwall.
“I think there is a perception among some people that Somerset is a sleepy backwater but nothing could be further from the truth. We have the largest construction project in Europe at Hinkley Point C, world-leading engineering and aeronautics businesses, the UK Hydrographic Office, as well as great food and drink industries, technical companies and professional services as well.”
Hinkley powering regional growth
Despite the obvious challenges, the region is currently on a healthy economic upturn. Since 2010 there are more than 115,000 new businesses in the South West, all helping to ensure the region has one of the lowest unemployment rates of any region in the UK. This has largely been driven by the Hinkley Point C nuclear power station.
Contracts worth over £1.3bn have already been awarded to South West businesses, according to government figures.
However, this is just the tip of the iceberg according to the Hinkley Supply Chain Team, which says that the opportunity to benefit from the project and create an industrial legacy for the region is only just beginning.
Published by the Department for Business, Energy and Industrial Strategy (BEIS) last year, the Hinkley Point C Wider Benefits Realisation Plan outlined that £650m has already been spent with businesses in the South West, with a further £700m worth of contracts entered into with regional suppliers.
Sam Evans, Head of Hinkley Supply Chain Engagement said: “With £1.3bn of contract value recently confirmed as going to Somerset and South West firms, the economic and skills boost to the region is significant. The contracts are being secured in a very competitive market that sees a national and international supply chain competing for work.”
Hinkley Point C is the first nuclear power plant to be built in the UK for decades and is one of Europe’s biggest construction sites. The project will create 25,000 job opportunities and 1,000 apprenticeships during construction alone.
According to the Nuclear Industry Association, the Hinkley development is set to unlock billions more in new investment and create more than 12,000 across Somerset, with many of those on site.
The region is now ideally placed to capitalise on economic opportunities worth in excess of £50bn to the UK economy, according to research commissioned into the region’s nuclear sector.
Emerging research commissioned by Nuclear South West highlighted the opportunities in the region for specialist suppliers and companies not connected with the supply chain. It states that South West-based SMEs, large companies and training providers could supply £15bn worth of work to the nuclear sector.
Stephen comments: “The Chamber works closely with EDF Energy, the company developing Hinkley Point C, and we run the Hinkley Supply Chain for them, maximising opportunities on the nuclear development for local businesses and putting national contractors in touch with local firms. Local companies have been able to invest and expand as a direct result of their involvement with HPC.
“There have already been 6,500 job opportunities created on site, £1bn spent with regional companies in the South West and £9.4m delivered to local community projects.
“EDF Energy has also invested millions of pounds to boost STEM knowledge in local schools and to upskill local people in the trades needed to build HPC. The power station is having a huge, positive impact on the region and will leave a lasting legacy for Somerset.”
Where is investment needed?
Somerset is clearly taking advantage of the opportunities that Hinkley has provided. However, there are some sectors and areas that have been neglected during the recent upturn in the local economy.
In order to maintain the current economic trajectory, certain investments need to be made – but what are the priorities?
Businesses across the globe are adapting to the apparent ‘Industrial Revolution 4.0’, where tech is infiltrating all areas of the working world. This is why there needs to be a serious investment in connectivity and new technological advancements, according to Dr Phillips.
He comments: “With the world turning more digital, and an increasing amount of people working from home, connectivity could certainly be improved. It has been reported that broadband speeds in the Somerset village of Brent Knoll are actually slower than at Mount Everest base camp, and if that doesn’t raise alarm bells then something is wrong. Investment here is crucial in order to keep up with the ever changing business landscape.”
It isn’t just technological connectivity that needs to be addressed in order for the region to grow and succeed.
Stephen comments: “Although Somerset is a great place to do business, we can’t afford to rest on our laurels. There must be more investment in ultrafast broadband across the county and better transport links to the west along the A303 and A358.
“In the north of the county, it’s vital Bristol Airport is allowed to expand to ensure the region can continue to offer the very best of both worlds – letting businesses flourish and workers enjoy a great work-life balance in this wonderful county.”