Business Case for Locating in the Leeds City RegionSeptember 2011

Contents

Page

Foreword - Neil McLean 2Leeds City Region – at the Heart of it 3

1 Leeds City Region: Host to the UK Green Investment Bank 5

1.1 The role of the Green Investment Bank 5

1.2 Introducing the Leeds City Region 6

1.3 Scope of this document 10

2 Leeds City Region: Supporting the Delivery of a Greener UK Economy 11

2.1 Financing the transition to a greener economy 12

2.2 Delivering green investment projects 14

2.3 Links with government 24

3 Leeds City Region: A Great Location for Business 26

3.1 Well connected 26

3.2 Outstanding quality of life for staff 27

3.3 Excellent commercial value 29

At the heart of it Page 1

At the heart of it Page 2

Foreword - Neil McLean, Chair, Leeds City Region Local Enterprise Partnership

As Chair of the Leeds City Region Local Enterprise Partnership I am delighted to present this business case for location of the Green Investment Bank in Leeds City Region.

With the second largest manufacturing base in the UK and cutting edge low carbon research facilities, low carbon is big business in the LCR. Innovative public sector policy has helped to encourage confidence within the local market. However, we know from talking to business that lack of access to finance is and will continue to stunt the growth of this important industry.

Nationwide, private sector investment in low carbon products and services is frustrated by a lack of technical understanding necessary for lenders to analyse risk accurately. The consequence for UK PLC is that without change there will be a failure to complete in an increasingly low carbon world. In this context, Government’s establishment of the Green Investment Bank will be a crucial development – and one that the Leeds City Region Local Enterprise Partnership is keen to support.

For the bank to succeed as a truly national institution, the right location is essential. We believe that the Leeds City Region – at the heart of the UK - is the best choice for location of the new bank. Not only does the city region have excellent connectivity to major cities across the UK, it is also in close proximity to the Green Investment Bank’s key sectors – including the UK’s second largest manufacturing sector, offshore wind in the Humber, and three coal powered power stations generating 17% of the UK’s energy .

Within this context, our financial, business and professional services sector has cultivated a track record of experience and expertise in low carbon projects. Together with a forward thinking public sector, these clusters of organisations within the city region have utilised this technical insight to evaluate and provide commercially viable investment for low carbon projects.

As well as an ideal location for the bank, we also believe that, utilising the existing skills clusters within the city region, we can support the bank in its establishment. For example, as a City Region, our financial services sector has been involved in 19 of the last 21 building society mergers – based on an in depth understanding of how new financial institutions are set up; how they are run; how they lend and how a new business model is adopted. We have ideas on how we can help in the set up and shadow running of the Green Investment Bank and we would like to offer this support to Government. We look forward to discussing our proposals in more detail with Government.

Neil McLean, Chair, Leeds City Region Local Enterprise Partnership

Leeds City Region - at the heart of it

Leeds City Region (LCR) is at the heart of the UK with excellent connections to the rest of the country, particularly London, and is able to provide all the necessary skills, expertise and infrastructure to facilitate the Bank’s success. The LCR’s Local Enterprise Partnership (LEP) is the largest in the country outside the south east both in terms of population and the number of jobs.

The Leeds City Region is the right location for the Green Investment Bank

Fulfilling the Green Investment Bank’s mission

The Leeds City Region hosts an exceptional ‘talent pool’ in the financial, professional and business services sectors with expertise in private sector finance and specialist advice capabilities in project finance, legal, commercial and technical sectors.

The LCR can provide the skills to support the Green Investment Bank’s activities locally and nationally. The LCR is the largest financial, professional and business services centre in the country outside of London. This sector includes five of the country ’s largest law firms, 30 national and international banks, 150 accountancy firms, leading private equity houses and three of the five largest building societies in the UK

Proximity to private sector financers and specialist advisers with access to an extensive talent pool

Market leading financial, professional and business advisors based in the Leeds City Region are delivering national and international green investment projects.

Advisors in financial, legal and technical services are currently working on green investment projects of national and international significance, across multiple sectors including energy, transport, waste and water.

Existing expertise in delivering green investment projects

The Leeds City Region is home to world-leading research universities and is a centre of excellence in green technology innovation and thought leadership.

As demonstrated by the work of centres of research excellence such as the Centre for Low Carbon Futures and the Centre for Climate Change Economics and Policy, LCR led research and innovation is contributing to the development of practical applications, products and business solutions needed for a sustainable low carbon economy. This makes the LCR a thought leader in the development of a culture of sustainable living.

A hub of green thought leadership and innovation

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The Leeds City Region’s public and private sector leaders are already working to deliver a greener UK economy

The LCR’s leaders are committed to creating a sustainable future and transitioning the area into a low carbon economy; a business environment in which the Green Investment Bank would prosper. The LCR’s industrial heritage provides a strong core understanding of the challenges and benefits in moving to a green economy. The LCR includes the headquarters of Kelda Group, GDF SUEZ Energy UK, and Drax Power Limited. In addition the LCR is the largest manufacturing centre in the UK outside of London, with particular strengths in the low carbon supply chain.

Proximity to project sponsors

Leeds City Region, as a location for business, represents strong commercial value and excellent connectivity to the broader UK economy.

The LCR offers strong commercial value; for example, Leeds offers the best value office space in Europe, taking both the quality and cost of facilities into account 1 .

Representing value for money

1 Cushman & Wakefield (2010) European Cities MonitorPage 4

Leeds City Region: Host to the Green Investment Bank1

1.1 The role of the Green Investment Bank

The Green Investment Bank (GIB) has a major role to play in the future of the UK economy. Its goal is to support, through investment, a shift towards a green economy while delivering long-term sustainable growth. This will be achieved by building the required experience within the financial markets and green investments, as well as addressing current market failures. Initial priorities will focus around helping to finance early-stage offshore wind, waste and non-domestic energy efficiency projects.

Location of the Green Investment Bank

The Coalition: Our Programme for Government May 2010

“We will support sustainable growth and enterprise, balanced across all regions and all industries, and promote the green industries that are so essential for our future.”

The GIB must be sited in a location that leverages existing expertise and talent in the areas of financial services and low carbon and green project innovation, finance, and delivery. The location must also be well connected to private sector financiers; corporate project sponsors; green thought leadership; and government 1.

Balancing the national economy: The Coalition Government has set clear objectives to promote sustainable economic growth across the UK economy, diversifying the economy and addressing sectoral and regional imbalances. The location of the GIB in the Leeds City Region offers an opportunity to consolidate and expand existing strength in the regions.

A lower cost alternative: The UK has entered a period of fiscal constraint and there is a clear need to seek efficiencies in public sector expenditure. In this context, the GIB should be based in a location that represents value for money. The UK’s regional centres offer stable, cost effective locations for the GIB, with reduced fixed operating costs and the potential for reduced professional fees.

Proximity to key stakeholders: The Government have asserted that the GIB should be based in a location that provides excellent connectivity to a range of stakeholders, specialist advisors and headquarters of nationally significant utilities, industrial and green project developers.

“As the GIB transitions into a fully operational entity in Phase II, it will need to be based in a location that allows it to operate in an effective, efficient and scalable manner”

With close proximity to: private sector financiers, project sponsors, specialist advisors, green thought leadership, and government;

That has easy access to deep pools of talent; and that represents commercial value for money.”

HM Government (2011) Update on the design of the Green Investment Bank

Page 5 1 HM Government (2011) Update on the Design of the Green Investment Bank

1.2 Introducing the Leeds City Region

1.2.1 Overview

Located in the heart of the UK with a population close to 3 million people, the LCR is a collaborative

partnership of 11 local authorities across North, South and West Yorkshire.

Figure 1 The Leeds City Region

The central location of LCR offers convenient road and rail access to major population centres across the UK. The LCR benefits from strong connectivity with London, with rail journey times of between one hour thirty minutes and two hours between the LCR’s cities and the capital. This level of accessibility to London will help to facilitate the engagement with Government required as part of the Bank’s operations. The LCR’s own international airport provides services to a range of major European destinations and it is in close proximity to the largest regional air hub in the UK.

The LCR Local Enterprise Partnership (LEP) is committed to creating the environment in which the Green Investment Bank would prosper. The LEP has set a clear direction for the LCR and alongside GVA and employment growth, the success of the LEP’s policies will be measured by reductions in carbon emissions across the LCR.

Leeds City Region LEP Mission

“to become a world leading, dynamic and sustainable low carbon economy that balances economic growth with a high quality of life for everyone”.

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1.2.2 The Leeds City Region economy

The polycentric geography of the LCR offers a diverse economy as shown in Table 1. With more than 1.2 mil-lion jobs and host to 100,000 businesses, LCR offers the skills needed to support the GIB and has examples of technical excellence and leading innovation in a range of sectors.

The LCR economy generates over £52 billion GVA 2 for the UK and this is forecast to increase to almost £60 billion by 2016 3. The LCR has attracted £5 billion in total inward investment in recent years, which has contributed to the area’s increasing GVA. Inward investment in LCR has included £4.3bn worth of property investment in Leeds 4 and significant investments in Bradford, Wakefield and York.

The LCR has the largest financial, professional and business services and manufacturing sectors in the country outside of London. The green economy is increasingly important to the LCR. Across the LCR, there are 21,000 people employed in ‘primary’ green jobs and 71,000 ‘secondary’ green jobs (Section 2.2) 5 . The breadth of this skill base in the LCR would provide access to a broad talent pool required to maximise the potential of the GIB.

2 Progress in Leeds City Region (March 2011) update report3“Draft LCR Summary” document, 2007 data4 Leeds City Council, Leeds Economy Briefing Note, January 20115“Draft LCR Summary” document, 2007 data

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Table 1. Population centres of the Leeds City Region

Local Authority

Population 7 Jobs 8

Total 2,976,500 1,255,300 The LCR supports diverse population centres with relevant expertise and experience

Home to the UK’s largest financial, professional and business services community outside London. Headquarters of Yorkshire Bank (part of the National Australia Bank group), First Direct (HSBC) and ASDA, a subsidiary of the Wal-Mart Group.Location of Leeds and Leeds Metropolitan Universities, recognised leaders in sustainability, low carbon and green research and development.

Headquarters of Yorkshire Building Society, the UK’s second largest building society, and Morrisons, one of the UK’s largest supermarket retailers. Headquarters of the Kelda Group.

Acknowledged innovator in green policies. Its ‘Warm Zone’ programme is a national exemplar in domestic retrofit and the Council has twice received the prestigious Ashden Awards for sustainable energy.

Wakefield contains back office functions of financial and business services. It is also a major transport and distribution centre.

Winner of Ashden Awards for Sustainable Energy (2006) for a wood waste fuelled district heating system. 9

Headquarters of Halifax, now part of the Lloyds banking group, the largest retail bank in the country.

The city has particular expertise in insurance with Aviva UK Life’s headquarters here. York is also a designated Science City and is leading innovation in the LCR. Home to the Centre for Low Carbon Futures, collaborative research centre between Leeds, York, Sheffield and Hull Universities.

Strengths in the FPS sector, with the town having a particular strength in the sub sectors of wealth management and finance-related ICT. The town is a leading conference destination.

Particular strengths in energy uses and in undertaking innovation in this area, as exemplified by hosting the country ’s first Carbon Capture and Storage pilot at Ferrybridge. Selby is also home to Drax power station, the world’s largest biomass co-firing project.

Leeds

Bradford

Kirklees

Wakefield

Barnsley

Calderdale

York

Harrogate

Selby

798,800 391,335

512,600 192,113

409,800 148,608

325,600 137,103

227,600 70,734

202,700 82,805

202,400 102,082

158,700 73,078

82,900 29,651

7 Office for National Statistics, Mid-year population estimates 2010 8 Office for National Statistics, Business Register & Employment Survey, Employees in employment, 2009 9 Ashden Awards are an internationally recognised benchmark for excellence in the field of sustainable energy (www.ashdenawards.org)

Craven 55, 400 27, 791 More than one in four jobs in the area are in banking, finance and insurance, including the headquarters of Skipton Building Society, the fourth largest building society in the country.

1.2.3 A strong and diverse financial, professional and business services sector

Ranking second in the UK to the international financial centre of London in terms of employment, the LCR stands out as a world-class financial, professional and business services centre, employing 240,000 people This includes employment in accountancy, stockbroking, corporate and retail finance, insurance, legal services, wealth management, venture capital, private equity and telephone and internet based financial services.

Largest financial, professional and business services sector outside London:

5 of the UK’s largest law firms

30 national and international banks

150 accountancy firms including 9 of the top 10 largest UK practices

10 stockbroking firms

3 of the 5 largest building societies in the UK (Yorkshire, Skipton and Leeds)

HQ for the UK’s largest provider of risk capital to Small and Medium Sized Enterprises (SMEs)

Headquarters of the Life Office of the UK’s largest insurance provider, including its strategic investment capability for over £75 billion of assets.

The financial, professional and business services sector has been the dominant economic cluster within the LCR over the past decade, generating a quarter of the LCR’s GVA. It has shown considerable resilience during the recent reces-sion, performing better than the national sector and London average in terms of output, productivity and employment. Notably the sector is forecast to contribute nearly 66% of the total net employment growth of LCR between 2011 and 2016.

“The investments within the region and the quality of people within the region are making us a force, both nationally and internationally.”

- Stuart Counsell, Barclays Wealth Management UK and Ireland Private Bank Advisory Committee, formerly Deputy CEO, Deloitte LLP

1.2.4 Delivering a green economy

The LCR’s leaders, both public and private sector, are already working to deliver a greener economy in Yorkshire and nationally. The private sector led LEP is a key supporter of the agenda and the opportunities the green economy presents for the regional and national economy.

10 ABI data shows that when excluding the pan London LEP, the LCR has in absolute terms the largest number of jobs in banking, finance and insurance.11 Financial Leeds Prospectus 201112 Financial Leeds Prospectus 2011

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the regional and national economy. The LCR also hosts the headquarters of a number of major utilities, manufacturing and retail organisations, committed to supporting the transition to a greener, more sustainable, UK economy. There is strong public sector leadership across the LCR’s local authorities and from organisations such as CO2Sense. The professionals based in the LCR are delivering a range of green investment projects both within Yorkshire, nationally and internationally. This expertise extends from financing green investment, to the provision of financial and legal advice, and the development of leading design and engineering solutions.

In addition, the LCR hosts a number of world-leading research universities including Leeds, Bradford and York. The LCR is also a centre of excellence in green technology innovation hosting a number of world leading research centres with particular focus on developing of practical applications, products and business solutions.

Locating the GIB in the Leeds City Region would mean that it is at the heart of this green thought leadership. This could help to promote a culture of innovation at the Bank.

“The advantage to locating the Green Investment Bank in the Leeds City Region is the vast experience of delivering low carbon infrastructure on the ground”

- Jon Price, Director, Centre for Low Carbon Futures

1.3 Scope of this document

This document sets out the strengths of the current financial, professional and business services offering in the LCR (Section 2.1) and the existing thought leadership and technical expertise in green innovation, investment and delivery (Section 2.2). It also demonstrates the opportunities presented by a Leeds City Region based institution, including the commercial value for money and quality of life offer of the LCR as a potential base for the GIB (Section 3).

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2 Leeds City Region: Supporting the Delivery of a Greener UK Economy

A Greener Economy

A greener UK economy is about more than just ‘low carbon’. The global and local drivers for reducing our greenhouse gas emissions are well documented. However, the focus must stay broad, the UK economy must become more resource efficient; decoupling economic development from resource consumption, ‘doing more with less’. In addition to decreasing the carbon intensity of our energy supplies, we must become more resource efficient – using less energy and water, employing closed-loop resource use, using smarter, more efficient transport systems, and improving our resilience and adaptive capacity. Financing initiatives to support a step change in these areas is a focus of the Green Investment Bank and part of delivering a more environmentally sustainable UK economy.

LCR as a location for the GIB offers both a strong existing financial, professional and business services (FPBS) sector and the expertise, motivation and commitment of this community can be leveraged to ensure the GIB’s success. (Section 2.1)

The LCR is making a significant contribution to the UK’s transition to a low carbon economy through the delivery of green infrastructure across the region, by undertaking world leading research in low carbon applications and by exporting the skills and expertise of our professional and technical services community to leading national and international projects. These are the LCR’s strengths:

Leadership - A culture of commitment to promoting the green agenda supported by both public and private sector partners (Section 2.2.1).

Delivery – A track record of the LCR’s talent pool delivering green projects across the UK (Section 2.2.2).

Innovation - World class research and innovation (Section 2.2.3).

Locating firms from similar industries in close proximity can bring positive outcomes for all parties in the form of agglomeration benefits 13 . Locating the GIB in the LCR will see the institution hosted within a highly skilled, well networked community with experience in delivering green investment projects nationally. A selection of this community ’s expertise is showcased below.

On Competition: Competition in Global Industries, Porter 1998 sited in Financial Leeds Prospectus (p10) Page 11

2.1 Financing the transition to a greener economy

The Leeds City Region hosts an exceptional ‘talent pool’ in the financial, professional and business services sectors with expertise in private sector finance and specialist advice capabilities in project finance, legal, commercial and technical sectors.

The FPS sector in the LCR generates an economic output in excess of £13 billion per annum, over 25% of the total regional output. Within the LCR, 55 million customer relationships are serviced by leading financial and professional services businesses. There are 290 large corporate firms within a 20km radius of Leeds city centre alone. The sector’s success is achieved through the LCR’s ability to attract and retain a highly skilled, motivated and diverse financial, professional and business services workforce of 240,000 people 14.

What sets the LCR apart from other UK cities is the size of the regional economy serviced by this professional community. Consequently, Leeds hosts a high concentration of professionals in senior management roles, managing significant and diverse portfolios.

Locating the GIB within an area with a workforce of this scale, diversity, and skill will be vital to its success. This community in the LCR spans the full spectrum of financial, professional and business services. The following sections present a summary of the recent capability and activity of LCR-based:

- Private sector financiers and financial institutions, and- Financial and legal advisors.

A summary of the expertise of the LCR’s technical advisors is presented in Section 2.2.2 along with a discussion of the way in which the LCR’s financial, technical and academic communities are coming together to deliver low carbon solutions.

2.1.1 Private Sector Financiers

Project Finance and Commercial Lending Capability

As the financial hub of the LCR, Leeds has a strong banking project finance and commercial lending capability; underpinning the city ’s position as the regional capital. The UK’s largest and most influential financial institutions have significant operations in the LCR including Barclays, HSBC, , Lloyds Banking Group, RBS and Santander. Notably, Yorkshire Bank is headquartered in Leeds as is HSBCs highly innovative banking subsidiary “First Direct”. The LCR is also home to three of the UK’s biggest building societies (Leeds, Skipton and Yorkshire) and the Ecology Building Society, the country ’s foremost ethical mortgage lender. All of the leading high street banks have Corporate and Structured Finance teams based in the LCR.

In addition to private sector financing capability, CO2Sense, a not-for-profit provider of low-carbon expertise based in LCR, has expertise in financing low-carbon projects.

Leeds City Region is home to an international community of advisers and professionals working on fund ranging projects including Public Finance Initiatives, Initial Public Offerings and Public Private Partnerships. This community delivers high quality advice for any organisation looking to raise capital.

The LCR’s many legal firms also have specialist project finance teams. For example, Addleshaw Goddard’s market-leading Banking Group advisory team is based in Leeds and acts for all major UK banks and 40 building societies nationwide.

14 Financial Leeds Prospectus Page 12

Private Equity

Early investment, in the form of private equity, will be critical to the commercialisation of low carbon technologies and the development of green infrastructure projects. LCR is home to around 10 private equity specialists and is well connected to a wider pool of private equity firms and investors across the north of England.

YFM Equity Partners was founded in Leeds and is the UK’s largest provider of risk capital to UK SMEs. YFM has made investments in the low carbon and renewable sectors including Eclipse Energy which developed innovative hybrid offshore gas and wind technologies. Eclipse was bought by Vattenfall in 2008 generating a return for YFM of £1.5 million 15.

Other private equity firms based in Leeds include:

- LDC, the leading UK regional mid-market private equity house, part of the Lloyds banking Group;- Liberum Capital, an independent investment bank with a global reach;- Evolution Securities, who act as nominated advisors for several AIM companies in the city region.- Endless, The UK’s leading turnaround investor; and- Finance Yorkshire, a £90 million JEREMIE 16 fund providing equity linked investments and mezzanine loans.

2.1.2 Financial and Legal Advisory Capability

The LCR hosts 200 accounting firms, including most of the 20 largest UK practices 17. The four largest professional services firms in the UK (PricewaterhouseCoopers, Deloitte, KPMG, and Ernst & Young ) all have major office bases in Leeds as do the leading practices of Grant Thornton, BDO, RSM Tenon, Baker Tilly and PKF. In total, almost 40,000 people are employed in financial service activities (excluding insurance and pension funding) across the LCR.

Financial advisors in the LCR were responsible for almost 200 deals in 2010 (a rise of 32% over 2009), the combined value of which was over £10billion 18. These figures are in contrast to the UK as a whole which saw the value of deals fall by 16% between 2009 and 2010. The transactions advised by LCR-based teams were across a wide range of sectors. While their core business is in the north of England, LCR-based practitioners currently advise on transactions in London, other UK regions and internationally. For example, 2010 saw the high-profile £5.8billion acquisition of EDF’s electricity networks business by a Hong Kong consortium which was advised by specialists based in the Leeds offices of both DLA Piper and Ernst & Young.

Complementing the financial services sector in the LCR is a strong legal services offer. With approximately 22,500 people employed in this sector in the LCR, the area has developed specialist skills and knowledge. This includes the activities of companies such as DLA Piper, Addleshaw Goddard, Eversheds, Walker Morris, Sanders Squire Hammonds and Pinsent Masons. These firms are currently acting on behalf of many green investments in the energy, waste, water and transport fields and the LCR based legal professionals have the appropriate skills to support the operation of the GIB in bringing such projects forward. Evidence of the contribution that these financial and legal professionals currently make to nationally significant green investment projects is outlined in Section 2.2.2.

15 See: http://www.yfmep.com/later-stage-buy-out/case-studies-article/items/eclipse-energy/ 16 Joint European Resources for Micro to Medium Enterprises17 Financial Leeds Prospectus 2011

18 Financial Leeds, 2010 Corporate Finance Review

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2.2 Delivering green investment projects

2.2.1 Strong Leadership

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The Leeds City Region’s public and private sector leaders are already working to deliver a greener UK economy

The LCR’s key players are already committed to creating a culture of sustainability and transitioning the region into a low carbon economy; an environment in which the GIB would prosper. Across the LCR, public and private sector groups are showing firm commitment and leadership to the green agenda. The LCR also hosts the head offices of a number of major utilities, industrial companies and other large companies that will be important sponsors the Green Investment Bank.

The following section provides an example of the organisations that typify the LCR’s green thought leadership and potential project sponsors.

Green Strategic Leadership – a snapshot

Leeds City Region: The LCR is committed to the delivery of a green economy and already has a strong track record to support these aspirations in a number of areas:

Domestic Retrofit: The City Region’s Domestic Energy Efficiency Programme (DEEP) aims to build on successful local initiatives such as the Kirklees Warm Zone to deliver energy efficiency savings to local communities across the city region. The City Region is currently working with DECC to advise on delivery of the Green Deal in the Leeds City Region through the DEEP. The Warm Zone scheme operated by Kirklees Council (2007 – 2010) was the largest home energy improvement programme in the UK. 130,000 energy assessments were carried out and over 50,000 homes had insulation measures installed. The scheme is recognised by DECC, the LGA and energy companies as a cost-effective means of delivering home improvements, green jobs and reductions in fuel poverty and carbon emissions 19. Further, the Primrose Hill Solar Village includes £400,000 in funding secured from a range of sources to install PV and solar thermal units on 121 Council houses.

Local Carbon Framework: The LCR is one of Government’s 12 LCF pilots, a DECC sponsored programme aimed at removing barriers to local delivery of carbon reduction.

Low Carbon Transport: The partnership’s transport strategy Delivering Low Carbon Connectivity to Promote Faster Growth is a long term plan for reducing emissions from the transport sector. As part of the delivery of the strategy, the city region is working with other partners across Yorkshire & Humber on an electric vehicle infrastructure funding programme.

Urban Eco Settlements: The UES programme is delivering high eco standards within sustainable communities on key brownfield extension sites across the city region. The programme is testing new low carbon technologies and approaches to develop truly exemplar communities.

19 See: http://www.kirklees.gov.uk/community/environment/energyconservation/warmzone/warmzonemenu.shtml20 See: http://www.kirklees.gov.uk/community/environment/renewable/PrimroseHillSolarVillage.pdf

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CO2Sense: CO2Sense is the not-for-profit provider of low-carbon expertise. Currently funded by Yorkshire Forward, it is in the process of establishing its financial independence and will continue to provide technical expertise and investment to businesses and local authorities at no cost to the taxpayer.

CO2Sense has worked on a wide range of projects in the north of England to allocate investment and to provide project management support. It raises awareness of investment funding, supports businesses through the application process, reviews projects and selects those most likely to succeed if given the appropriate support. Their experience includes working on community-owned hydro-electricity schemes, anaerobic digestion plants, waste collection and recycling projects (including not-for-profit community schemes) and the creation, in partnership with Dalkia plc, of the UK’s largest biomass wood pellet manufacturing facility. Investment provided by CO2Sense is repaid from income generated by the projects, and is then reinvested in further green initiatives – a virtuous investment circle.

Private Sector Leadership – a snapshot

At the heart of change, LCR hosts significant assets in the energy, water and manufacturing sector that continue to contribute to the UK’s transition to a greener economy:

- Coal fired power stations which generate 17% of England’s electricity (these assets will need to reduce their greenhouse gas emissions) 21. - A manufacturing sector employing over 160,000 people.- Strong energy efficiency resources and track record, particularly in the low carbon buildings retrofit market. - Substantial renewable and low carbon energy capacity especially in the areas of on-shore wind, biomass, energy-from-waste and micro-generation.

The LCR also hosts the headquarters of leading companies, vital in supporting this transition. The GIB will focus on investments in a range of sectors including energy generation and energy efficiency. The following examples of firms headquartered in the LCR fall into both of these categories:

Drax: Drax Power Limited owns and operates the Drax Power Station in Selby, North Yorkshire. The station is the largest coal-fired power station in the UK. The station is a strategic national asset and employs 760 people directly as well as being serviced by a wider supply chain. The company acknowledges the importance of its role in supporting the UK’s transition to a low carbon economy and is investing heavily in biomass renewable energy technology. (Further details presented in Section 2.2.2)

Kelda Group: The Kelda Group is the largest water services company in the UK. With headquarters in Bradford the group employs approximately 3,000 people in LCR. The Group is focused on innovating in both low carbon energy supply and low carbon processes for the supply and treatment of water and waste water with a research budget of £4 million for the 2009/10 financial year. The Group has a commitment to reduce the carbon intensity of their operations. Yorkshire Water, Kelda’s main subsidiary and one of the ten largest water companies in the world, employs over 2,100 people with major offices in both Leeds and Bradford. It manages water supply and waste water treatment for 4.7 million people and 140,000 businesses. The company has firm commitments to investing heavily in renewable and low carbon technologies to reduce both greenhouse gas emissions and operating costs. The company currently meets around 10% of its electricity needs through its own renewable energy installations including hydro electric power, combined heat and power and on-site wind turbines.

David Brown Gearing: With their head office in Huddersfield and international operations, the company is a global leader in gearbox manufacturing with a particular business focus on serving the wind energy industry (David Brown Windserve). The company recently secured £2 million in Regional Growth Fund investment for a wind gearbox research centre in Huddersfield. The centre will develop and test new gearing technologies for the wind industry to improve development and maintenance techniques for wind farms. The company has also recently launched a Masters Degree programme through Huddersfield University in ‘Gear Technology’ ensuring they have sufficient local engineering expertise to service their growing operations.

21 LCR Economy Summary’, 2007 data

InterfaceFLOR: InterfaceFLOR are world leaders in the production of environmentally sensitive modular flooring and other textiles. The company employs over 5000 people worldwide and has a manufacturing centre in Halifax, Calderdale. In 1994 the company’s founder recognised that the way industry worked was fundamentally unsustainable. Since then they have been using a series of initiatives to reduce the negative impact of the company’s activity on the Earth in terms of environmental and social issues. InterfaceFLOR have now embarked on Mission Zero, to completely eliminate the negative impact the company may have on the environment by 2020.

Land Securities: Land Securities is the largest Real Estate Investment Trust in the UK on the basis of equity market capitalisation with a commercial property portfolio worth approximately £10.6bn. Its retail portfolio includes 25 shopping centres and 20 retail parks, meaning that it has 20.6million sq ft of retail accommodation. One of Land Securities three office bases is located in Leeds. Sustainable environments are one of the five key themes at the centre of its business and which underpins its competitive strengths. The company has a commitment to delivering innovative new developments and retrofitting existing buildings to minimise environmental impacts and to respond to climate change. Since 2000/01 the company has reduced CO2 emissions from its shopping centres by approximately 7%.

Asda: Asda’s head office is in Leeds and employs almost 2,500 people. Overall the supermarket is one of the big four in the country with almost 400 stores and employing approximately 180,000 people. The company has a strong commitment to operating in a sustainable manner encapsulated in its ‘Sustainability 360’ approach designed to ensure that this is engrained throughout its operations. The company has three key targets:

- To use 100% renewable energy;- To produce zero waste; and- To sell products that sustain people and the environment.

Between 2008 and 2009, Asda reduced its carbon footprint by 7% and is aiming to further reduce this by 20 million tonnes by 2015.

Morrisons: With its head office in Bradford, Morrisons is one of the four largest supermarkets in the country. The company has more than 400 stores, employing more than 130,000 people. The company is committed to reducing its environmental footprint and the impact of its operations. This includes working to ensure food is produced, moved and sold with minimal waste and help customers reduce, reuse and recycle. Furthermore, the company has a target of reducing its total operational footprint by 30% by 2020 (from a 2005 baseline). In the last three years they have invested over £100 million in new and replacement refrigeration systems, a significant source of emissions. This has reduced direct refrigeration emissions by over 40%.

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2.2.2 Expertise delivering low carbon projects

The professional services and technical advisory community can leverage these skills to services the GIB’s activities nationally. Existing expertise spans the full project lifecycle from feasibility and financing to construction and operational efficiency. This knowledge bank would provide a firm basis for the GIB’s activities and the LCR’s financial, professional and business services community can leverage these skills to support and enable the Green Investment Bank’s activities nationally. Locating the GIB in LCR would also see the GIB located at the heart of the north of England where many of the Bank’s potential projects are situated.

The following examples provide an example of this expertise and include case studies of investment and financing, financial and legal services and engineering and environmental feasibility, appraisal, design and construction.

Existing Green Economy

There are nearly 21,000 people employed in primary green jobs within LCR. The leading areas include those involved in waste management (25%), water supply and treatment (20%) and energy management (18%). Notably, LCR is the base for over 70% of those employed in the energy management sector for the whole of the Yorkshire and Humber 22. In addition, over 70,000 people are employed in secondary green jobs with a significant portion of these employed in the sustainable transport sector (14,000). Strengths include:

- Electricity production;- Energy equipment manufacture;- Architects and quantity surveyors;- Professional & technical services;- Electrical installation; and- Sustainable transport.

The figure below (Figure 2) provides a breakdown of employment within these categories. The scale of employment in these two sectors is of importance for the GIB; it demonstrates the large range of people employed in a variety of green industries

E nergy Management

18%

E nvironmental C ons ultancy

9%

R enewable E nergy11%

G reen Infras tructure12%

Was te & R ecycling25%

Other S ectors5%

Water S upply & Treatment

20%

Figure 2 LCR Green Economy – primary green jobs

22‘Draft LCR Summary’ document, 2007 data

Market leading financial, legal and technical advisors based in the Leeds City Region are delivering national and international green investment projects.

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E nergy Management

18%

E nvironmental C ons ultancy

9%

R enewable E nergy11%

G reen Infras tructure12%

Was te & R ecycling25%

Other S ectors5%

Water S upply & Treatment

20%

Primary green jobs include: Energy Management, Environmental Consultancy, Renewable Energy, Green Infrastructure, Waste & Recycling, Water Supply & Treatment

Secondary green jobs include:Agriculture, Forestry & Fishing, Electricity supply, Energy Equipment Manufacture, Architects and Quantity Surveying, Building, Electrical and Heating Installation, Professional and technical services, Sustainable Transport

The following sections outline the breadth of expertise in LCR in delivering low carbon projects.

Investment

CO2Sense, based in the LCR, provides a pilot example of the expertise required to support and coordinate low-carbon investment.

Over the past five years, CO2Sense (section 2.2.1) has invested over £12.6 million in energy and waste projects, including:

- £750,000 invested in a £10m state-of-the-art 2.1MW anaerobic digestion facility in Driffield, near Hull. Opened in April by Lord Henley from DEFRA, this is arguably the most advanced facility of its kind in the UK.

- £4,800,000 invested in the UK’s largest production facility for carbon-neutral wood pellet fuel at Pollington, near Selby.

- £128,000 in Origin Wind, a community-owned 5MW wind farm, consisting of two large turbines at Norton, near Doncaster. Once built, this investment will provide the community with an annual income of around £300,000.

- £200,000 in a commercial hydropower station at Burley in Wharfedale, using the latest Kaplan technology and generating enough energy to power around 350 homes.

- £600,000 in a 400kW anaerobic digestion plant at Emley in Kirklees.

Financial Services

Biomass fuels – Creation of Stobart Biomass Products Ltd

A LCR based accountancy team has recently advised on the £30m strategic investment by Stobart Group in newly formed Stobart Biomass Products Ltd with market leader A.W. Jenkinson Forest Products Ltd. The team provided a detailed review of the commercial and financial rationale for the investment. The new company will source and distribute, on a long-term contractual basis, supplies of biomass fuel to the UK renewable energy market.

Waste management –Due diligence on acquisition of green waste firm

In 2010, an accountancy firm from LCR worked with one of the UK’s leading waste management and recycling companies to provide financial due diligence for their acquisition of a green waste recycling business. The company is a leader in the application and use of green technology, being at the forefront of resource recovery, recycling both inert and organic waste material of all kinds into reusable, sustainable end products. The acquisition will see the range and capacity of the company’s composting operations significantly extended.

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Waste to Energy Project - Financial procurement advice and fundraising: A team from a financial services firm in LCR has provided the financial, commercial and fundraising support to a joint venture of two major national waste and energy companies who have been successful in being selected preferred bidder for a major multi-local authority residual waste treatment project in Yorkshire. The Leeds team worked with the consortium to raise project finance, develop the commercial structuring of the project and deliver the financial aspects of the winning bid for this 25 year design, build, finance and operate contract. The successful solution is for the development of a waste processing facility to handle around 250,000 tonnes per annum of residual waste from which a fuel will be produced to feed a major new multi-fuel energy facility designed to deliver over 100MW of electricity.

Waste to Energy Project - Financial procurement advice and fundraising: A team from a financial services firm in LCR has provided the financial, commercial and fundraising support to a joint venture of two major national waste and energy companies who have been successful in being selected preferred bidder for a major multi local authority residual waste treatment project in Yorkshire. The team worked with the consortium to raise project finance, develop the commercial structuring of the project and deliver the financial aspects of the winning bid for this 25 year design, build, finance and operate contract. The successful solution is for the development of a waste processing facility to handle around 250,000 tonnes per annum of residual waste from which a fuel will be produced to feed a major new multi-fuel energy facility designed to deliver over 100MW of electricity.

Gasification – Corporate finance advice: A team from a financial services firm in LCR has recently provided corporate finance advice to a company and help it develop a new corporate structure. The client is one of the world’s leading manufacturers of plasma torches and a major player in the French hazardous waste market. The Leeds based team worked with the company to develop and finance a spin-out corporate structure for the roll-out of plasma gasification waste to energy plants in UK, Europe and North America. This structure allows the company to aggressively roll out facilities whilst maintaining ownership of its IPR. Corporate finance advice to the company included running funding competitions for equity and subordinated debt, and for lease finance for the gas engine component of the development.

Legal Services

Legal teams based in the LCR have advised on a range of environmental and low-carbon investments including renewable projects.

Renewables –Scout Moor windfarm: A LCR based legal team coordinated the delivery of England’s largest on-shore project financed wind farm at Scout Moor with a generating capacity of 65 MW. The team coordinated a financial team based in Exeter, bank advisors based in Glasgow, with the banks themselves based in London.

Waste - Didcot biomethane anaerobic digestion plant: A legal team from LCR advised on what is, to date, the only successful biomethane gas to grid project in the country. This was an investment joint venture between energy and water companies to run a pilot project of turning biomethane into something that could be injected into the national grid as renewable gas. Again, the professional services work for this was sourced out of the LCR with the LCR team coordinating consultants based in the South East, Birmingham, Sheffield and Edinburgh.

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Transport – Intercity rolling stock upgrade: A LCR based legal team advised the preferred bidder in respect of all aspects of the Intercity Express programme to replace the UK's intercity rail fleet. This consists of the project financed procurement of a significant number of high speed trains to replace the current fleets, and associated delivery of services, and will include construction of a new train plant in the North East of England.

Energy from waste - Rookery South Pit, Bedfordshire: A LCR based legal team has provided the legal advice to the first application in the country to be validated and to have been examined by the Infrastructure Planning Commission. The scheme will provide a 65MWe Energy from Waste plant at Rookery South Pit in Bedfordshire.

Technical Design and Delivery

Flood Risk Management – Leeds Flood Alleviation Scheme: Leeds has suffered significant damage and disruption as a result of flooding events in the past. This work has sought to identify an approach to manage the level of flood risk experienced in the city. Included within the design of this scheme has been an allowance for how flooding events are projected to increase in the future as a result of climate change. LCR-based engineering and technical services experts have provided technical advice in helping to the scheme.

Renewable Energy- biomass (Drax): Drax power station is the second largest coal-fired power station in Europe and the largest in the UK. It is currently undertaking the largest biomass co-firing project in the world, aiming to generate 12.5% of its electricity from co-firing activities and in turn stimulating the UK biomass market 23. The pilot project employs post-combustion technology to capture 100t of CO2 per day from flue gases, corresponding to 5MW of generation. The project is one of only 5 large-scale Carbon Capture and Storage (CCS) pilots in the country and will contribute to the wider development of the technology. Together, Drax and Siemens Project Ventures have announced their intention to jointly develop three dedicated biomass-fired renewable energy plants in the UK. Two sites, Immingham and Selby (each approximately 300MW), have already secured planning permission.

Nuclear – Hinkley Point C Nuclear Power Station: The suitability of a new nuclear power station at Hinkley, Somerset is set out in the National Planning Statement 6 for Nuclear Power Generation. LCR-based engineering, planning and environmental staff have worked with the local authorities, Sedgemoor District Council and West Somerset Council, evaluating the new nuclear proposals by EDF.

23 See http://www.draxpower.com/biomass/cofiring_plans/

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2.2.3 Local thought leadership driving global innovation

The Leeds City Region is home to world-leading research universities and is a centre of excellence in green technology innovation and thought leadership

This research and development expertise is supporting the development of centres of excellence across the LCR, contributing to a culture of green investment. The GIB would benefit from close proximity to the ideas and research expertise that enable green innovation.

LCR is a hub of low carbon and environmental expertise both in research and development and through the leadership of the LCR’s private sector firms. The knowledge base includes a mix of world leading academic research centres and organisations dedicated to the practical application of cutting-edge green technologies. Clusters of research excellence encourage innovation and stimulate entrepreneurial development; there is strong collaboration between the LCR’s academic institutions and the private sector as evidenced by the Centre for Low Carbon Futures (described below). The emerging research and technological innovation is already drawing in funding from national and international investors and the following examples highlight the existing capacity to both innovate and navigate the pathway from idea to application.

Leeds City Region: A Centre of Research Excellence

The City Region has eight Higher Education Institutions (HEI)– one of the largest groupings of HEIs in Europe and is internationally renowned for research and innovation. 36% of the research produced by Leeds City Region HEIs is considered world-class and a further 10% world-leading. Two of the universities appear in The Times HES/ QES Top 100 World University rankings

The Centre for Low Carbon Futures

Founded by the Universities of Leeds, Hull, Sheffield and York in a £50million partnership, the Centre for Low Carbon Futures is a world-class research centre that brings together multidisciplinary and evidence-based research to inform policy making and demonstrate low carbon innovations. Research themes include Smart Infrastructure, Energy Systems and the Circular Economy and activities are focused on the needs of business in both the demonstration of innovation and the associated skills development.

Centre for Climate Change Economics and Policy

Hosted jointly by the University of Leeds and the London School of Economics and Political Science (LSE), and chaired by Lord Nicholas Stern, the Centre for Climate Change Economics and Policy (CCCEP) brings together some of the world’s leading researchers on climate change economics and policy, from many different disciplines. CCCEP was established in 2008, and is funded by the Economic and Social Research Council (ESRC) and Munich Re.

Stockholm Environment Institute

SEI is an independent international research institute with a major centre at York University. It has been engaged in environment and development issues at local, national, regional and global policy levels for more than 20

years.

CenSA

The Centre for Sustainability Accounting (CenSA) offers integrated sustainability accounting for companies and organisations in the UK. They develop, promote and apply software to undertake carbon footprint analysis, triple bottom line accounting and corporate sustainability reporting.

Science City York

SCY is a leading innovation company, bringing together business, the public sector and academia, working regionally, nationally and internationally. Launched in 1998, in its first ten years SCY has successfully been the focus and vehicle for enabling a new knowledge-led economy for York, helping to establish over 100 technology companies and create and sustain around 2800 jobs.

Green Chemical Centre of Excellence

The Green Chemistry Centre of Excellence at the University of York is a world leading research centre which aims to promote the development and implementation of green and sustainable chemistry and related technologies into new products and processes.

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Leeds City Region: Leaders in Low Carbon Innovation

Carbon Capture and Storage: Yorkshire and Humber is a world class location to develop and deploy CCS. The region is home to the UK’s largest cluster of industrial CO2 emissions, equivalent to half the total domestic emissions of the UK. And has access to potentially decades of safe CO2 storage deep under the southern North Sea. The deployment of CCS over the next 20 years by energy intensive industry in the region is arguably the largest single step that could be taken to decarbonise the UK.

Leeds City Region based CO2Sense chairs a steering group of large companies including 2Co Energy, Drax Power, C.CEN, Tata Steel, Amec and National Grid Carbon, all of whom are potential participants in CCS. This group has developed a compelling strategic and business case for the development of a network pipeline that would reduce the costs associated with the transport and storage of CO2. Consequently there is considerably industrial activity:

- The Hatfield project in Doncaster, now owned by 2Co Energy won a 185m Euro grant through the European Energy Programme for Recovery to progress the development of a 900MW coal gasification plant with full CCS;

- Three commercial scale demonstration projects (2Co Energy, C.GEN and Drax/Alstom) are under consideration by the EIB for funding through the EU’s New Entrants Reserve 300 incentive;

- Consultation by National Grid on strategic options for a CO2 pipeline route and storage locations to serve initial demonstration projects; and

- A pilot project to capture 100 tonnes of CO2 per day is under construction at Ferrybridge power station by Scottish and Southern Energy, Doosan Power Systems and Vattenfall.

Electrification of Transport: Led by CO2Sense, ‘Plugged-in Yorkshire’ is a project that brings together private sector companies with the European Regional Development Fund (ERDF) to enable the spread of low carbon electric vehicles. The project will enable the development of charging points across the locality. This project is in development but has received positive sign-up.

Biomass: CO2Sense has partnered with an energy services company to build a multi-million-pound wood pellet mill, turning waste wood into up to 50,000 tonnes of quality highly-condensed wood pellet biomass fuel. This facility solves the problem of reliability of supply of biomass fuel, enabling schools, factories and other large-scale heat users to convert their heating systems to biomass – often enjoying savings as a result.

Energy Efficiency: Thermalite, a company in Huddersfield, make a heat-reflecting paint called Warmcoat. Containing nanospheres, it acts like a vacuum flask applied to the walls of a building, preventing heat from escaping. It also is used in hot countries to reduce the need for air conditioning.

Energy Efficiency (City-scale retrofit): There is ongoing work across the LCR in the area of energy efficiency retrofit and these skills are being applied nationally and internationally. LCR housing and regeneration strategy establishes the LCR’s desire to become a leader in eco-design and innovation for low carbon building solutions. CLCF, Arup 24 and LCR in partnership have explored opportunities for domestic and commercial property retrofit across the LCR.

24 Ove Arup & Partners are a firm of designers, planners, engineers and consultants with 90 offices worldwide, including 2 offices in Leeds City Region (Leeds and York).

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2.3 Links with government

There is a strong tradition of LCR public and private sector communities having close relationships with Central Government.

2.3.1 A regional base for central government

LCR is a trusted, effective location for central government functions and those of its agencies. This includes offices of:

- The Department of Health, including the new Commissioning Board for the NHS; - The Department for Work and Pensions;- UK Trade and Investment;- The Rural Payments Agency (an Executive Agency of Defra)- Inland Revenue; and - The former Academy for Sustainable Communities (now part of the Homes and Communities Agency).

These bodies demonstrate a track record of locating Central Government functions within the LCR.

2.3.2 A strong public sector relationship

Active links that result in practical action and demonstrable progress are best demonstrated through examples of the LCR’s governance bodies working side by side with Central Government.

Central Government departments including BIS 25 , TSB 26 , Skills Fund Agency, Job Centre Plus and the HCA 27 sit on LCR Boards and directly support and advise LCR on policy. In particular, the Joint HCA Housing Board is a unique collaboration between central and local government, which has allowed devolution of funding streams to the local level. The establishment of the Board. was the product of longstanding and effective relationships between the LCR and the HCA.

LCR also has strong ties with Treasury and BIS through close collaboration on a number of issues including the LCR Forerunner Pilot Programme (2009 – 2010) and the Accelerated Delivery Zones and Enterprise Zones.

The LCR is also one of DECC’s Local Carbon Framework areas, tasked to work with Central Government to identify best practice in carbon reduction at a sub-regional level. As a national exemplar in domestic retrofit, the LCR is also working closely with DECC to develop the Coalition Government’s Green Deal. LCR is also represented on DEFRA’s Local Adaptation Advisory Board to advise on joint working on the climate adaptation agenda.

The CO2Senseteam has liaised with senior policy advisers in DECC to discuss the Carbon Reduction Commitment legislation.

25 UK Department of Business Innovation and Skills 26 UK Technology Strategy Board 27 Homes and Communities Agency

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2.3.3 Private sector and academic relationships with Government

Firms present in LCR advise Government on a range of policy issues, using the professional expertise and experience from the region. The path from Leeds to London is well trodden with recent policy advice provided in areas as diverse as Tax Increment Financing, low carbon mobility and sustainable development.

The Centre for Low Carbon Futures, based in the LCR, regularly presents academic research to parliamentary committees. Recently they have advised Government, particularly DECC and BIS, on a number of low carbon issues including private sector engagement, Renewable Heat Incentive, Green Deal and low carbon innovation.

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3 Leeds City Region: a Great Location for Business

Leeds City Region, as a location for business, represents strong commercial value and excellent connectivity to the broader UK economy.

The LCR offers an abundance of affordable, high quality office space but the cost benefits of locating within the LCR extend far beyond excellent value rental. The GIB would benefit from access to an existing diverse pool of highly skilled labour with over 95% of those living in the LCR also working here.

The following section presents the case for the strong value in locating in LCR in terms of the connectivity of the LCR with the wider UK economy, low commercial costs and the ability to attract and retain the best people.

3.1 Well connected

Companies within the LCR have a culture of working closely with colleagues around the UK including those based in London. Evidence of these functional links is clear through the range of projects presented in Section 2.2. These close working relationships are enabled by excellent infrastructure links.

3.1.1 Connectivity with London and rest of UK

The fact that I can take a call in the Leeds office and I can be in London within 2.5 hours is absolutely fantastic.

-- Stuart Counsell, Barclays Wealth Management, UK and Ireland Private Bank Advisory Committee, formerly Deputy CEO, Deloitte LLP

The LCR sits at the centre of the UK with access to most major cities in under 2.5 hours.

London 1hr 50 mins

Manchester 35 mins

Liverpool 1hr 30 mins

Birmingham 1hr 56 mins

Sheffield 20 mins

Table 2 Major UK cities can be reached in less than two hours from LCR

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The primary link to London is on the East Coast Main Line (ECML), which principally serves Leeds, Wakefield Westgate and York railway stations. The fastest link between London and the LCR is 1hr 50 minutes to York. Leeds station has twice hourly direct rail services to London Kings Cross during the working day, with average connections of just over 2 hours. The journey time from Wakefield to London is 1hr 50 minutes. The standard peak time return fare from Leeds to London Kings Cross is 15% lower than from Manchester. The north-south A1(M) and M1 intersect the M62 motorway within the LCR and close to Leeds providing easy access to Leeds. A series of motorway spurs enable traffic to reach the centres of Leeds and Bradford quickly. There is a comprehensive secondary road network based on Leeds, Bradford, Huddersfield and York. The A1, A64 and A650 are important trunk roads.

LCR is served directly by Leeds Bradford International Airport, which is approximately 10 miles north of Leeds City Centre and has routes to 70 business and leisure destinations, including Edinburgh, Belfast and Bristol in the UK, and internationally to Paris, Brussels and Amsterdam serving as a hub for global travel. Leeds Bradford International Airport handled 2.8 million passengers in 2008 and this is predicted to rise to over 5 million passengers by 2016. In addition, Manchester International Airport is easily accessed by train and road in under an hour offering global access. Although the GIB may not itself be engaged in international travel, the international

connectivity of LCR is important for other funders, such as the European Investment Bank, which may co-invest on green infrastructure projects.

3.1.2 Local travel

Road and rail links make LCR an easy place for daily commuting. Average travel to work time in the morning peak period in West Yorkshire is 26 minutes compared with 44 minutes in London. 28 With a reduced travel to work time this offers both improved productivity for the employer and improved quality of life for employees.

3.2 Outstanding quality of life for staff

28 See: http://www.locateinleeds.co.uk/economy/communications/

“There are good career opportunities and big business challenges. I think those are the main attractions but there are also quality of life factors in terms of the region as well; it’s a good place to live and work”.

- Jeff Morris, Regional Managing Partner, Odgers

3.2.1 Housing

LCR housing market offers excellent value for money. At the start of 2011, average housing costs in Leeds City Region were 20% lower than the national average and 50% lower than the average in Greater London 29 .The LCR also offers a wide choice of housing, from city living through to suburban and rural housing and from affordable and intermediate housing through to the benefits of higher value properties in the ‘golden triangle’ between North Leeds, Harrogate and York. This offers the potential to meet the housing needs of all staff, from back office through to executive positions.

29 Land Registry of England and Wales, Figures for England and Wales are for the period April to June 2011

3.2.2 Education

LCR is recognised internationally as a leading centre for learning. The Leeds City Region is a net importer of HE students, over 36,000 people a year qualified at all levels from the HEI’s in the Leeds City Region in 2008, making it one of the most popular places in the UK to study 30. The City Region’s HEIs are also well positioned in the global league tables. For example, the University of Leeds and University of York are both in the Times HES/QES Top 100 World University rankings and many of departments, feature in the FT Top 100 World Class Business Schools.

All of these institutions work closely with employers to provide training programmes that meet employer needs, including a range of ‘fast-track’ courses.

LCR also offers an excellent range of well-regarded state and independent primary and secondary schools. This again offers high quality education at all levels of affordability to meet the needs of different staff and their families.

3.2.3 Culture and recreation

LCR has a high quality cultural offering to enable staff to enjoy a high quality of life, with national museums, art galleries as well as its own opera and ballet companies and two World Heritage Sites at Fountain’s Abbey in Ripon and Saltaire in Bradford. The LCR edges into the Yorkshire Dales National Park 31 and lies close to close to two other national parks plus several Areas of Outstanding Natural Beauty. The LCR also has excellent facilities for watching sport, including rugby league, rugby union, cricket and football as well as horse racing at Wetherby, York and Pontefract.

Page 28 HESA Student Record 2007/8

Leeds City Region Green Infrastructure Strategy (2010)

3.3 Excellent commercial value

LCR, as a location for business, offers excellent commercial value with lower cost rental rates than the majority of UK cities and lower than average professional salaries.

The LCR offers a highly competitive range of Grade A office options with prime headline rents from £12 to £24 per square foot (sqft). In addition to the prime rented market within Leeds city centre the LCR also offers Grade A office accommodation within the other authority areas.

Examples of selected LCR headline rents for Grade A office accommodation are illustrated in Table 3.

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Prime Headline Rent (£/sqft) 32

Bradford 12

Skipton 15

Wakefield 16.5

York 14.5

Leeds 24

Table 3 LCR example headline rental costs for Grade A office space

Rates in LCR compare very favourably to London, where the prime headline office rents range from around £95 per sqft in the West End to £40 per sqft in Canary Wharf/Docklands. Table 4 compares prime headline rents for the LCR with those of UK provincial cities.

32 DTZ, August 2011, except Wakefield sourced from King Sturge, August 2011

Prime Headline Rent (£/sqft)

Leeds City Region 12-24

Liverpool 18

Sheffield 20

Cardiff 21

Newcastle 22

Bristol 26

Glasgow 27

Edinburgh 27

Manchester 28

Birmingham 28.5

Aberdeen 31

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Source: Knight Frank – re-ordered in ascending prime headline rents, except LCR rates sourced from DTZ, August 2011.

Table 4. Property Vacancy rates in major cities (Quarter 2, 2011)

3.3.1 Recruiting and retaining the best staff

We attract the very best people. We have the highest calibre, most experienced individuals operating in the financial services sector of anywhere in the UK

Iain Moffat, Leeds Office Senior Partner, KPMG

Average employment costs are 24% lower than London and 6% below the UK average making the LCR one of the most competitive areas in the UK to be based 33. The critical mass of financial, professional and business services attracts high quality individuals: across the region there is a pool of 200,000 senior executives and managers making it easy to attract and retain highly skilled staff 34.

Knowledge-intensive employment is an important driver of economic prosperity. Of 64 UK cities, Leeds currently ranks 7th in terms of its concentration of high-skilled employment 35 , a direct reflection of the quality and scale of the financial, professional and business services sector.

Figure 3 Top 10 knowledge-intensive cities, 2010

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Prepared by Ove Arup, Leeds. September 2011