The Oxford-Cambridge Arc Opportunity: How Could It Benefit You

The Oxford–Cambridge Arc has received a significant amount of media and government attention in recent months.  Sophie Willis brings you up to date.

The Arc spans Oxfordshire, Northamptonshire, Buckinghamshire, Bedfordshire and Cambridgeshire. It is the Government’s ambition to transform this region into one of the world’s premier growth corridors and a world-leader in sustainability.

On 18 February 2021, the Department for Housing, Communities and Local Government (DHCLG) produced a policy paper setting out the approach and timeline for developing an aspirational spatial framework for the Arc. However, mixed messages are emerging from Government, as exactly a month later, the Transport Secretary announced the cancellation of the Oxford-Cambridge expressway. What lies ahead for the Arc?

A new spatial framework

To ensure that the Arc achieves its economic potential, the Government intends to produce a spatial framework comprising a plan and policies for the Arc. The framework will have the status of national planning policy and sit alongside the National Planning Policy Framework (the recently closed consultation on changes to the NPPF suggests that plans should enable delivery of sustainable development in accordance with the NPPF and other relevant statements of national planning policy) . This is a fairly radical step in planning terms, signalling an acceptance by the Government of the benefits of cross-authority spatial planning.

As a material consideration, once published, councils within the Arc will have to take account of the framework when drawing up local plans and it will be given weight in the determination of applications, including where existing local plans conflict with it.

The framework will promote long-term sustainable growth by planning to 2050 and beyond. Although the policy paper has a very clear development angle, it includes explicit commitments to delivering positive environmental outcomes across the region, including biodiversity net gain, reducing flood risk and ensuring communities have greater access to green space. There is also an intention to make better use of digital tools to maximise collaboration with local partners including communities and universities.

Cancellation of the Oxford-Cambridge expressway

According to a recent policy paper, with the right interventions and investment, the economic forecasts suggest that by 2050, the economic output of the Arc could increase by up to £163 billion per annum with between 476,500 and 1.1 million additional jobs. This will only be achievable by significantly improving the existing infrastructure.

The Government’s decision to cancel the Oxford-Cambridge expressway was therefore of concern to many following the progress of the Arc. The press release referred to recent analysis showing that the benefits of the road would be outweighed by its cost. Critics of this decision have pointed to a report by the National Infrastructure Commission in 2017 which concluded that both East-West rail and the Oxford-Cambridge expressway were necessary for the Arc to achieve the level of growth envisaged. The Department for Transport has confirmed that East-West rail will continue and it will investigate more targeted road interventions within the Arc to support sustainable growth.

What is the impact on landowners?

The Arc initiative seeks “to foster agglomerative benefits by better connecting people, places services and businesses, and to see more effective commercialisation of research and development through better, more sustainable transport and truly sustainable patterns of development across the region.” This will result in opportunities for landowners and developers.

• Housing: a key aim is to increase the provision of housing where it is most needed. The Government has committed over £400 million of Housing Infrastructure Fund investment to support the delivery of housing within the Arc. The new framework will indicate locations for potential new homes, but will not include site allocations, which will remain in local plans. The potential for allocation will impact transactions within the area.   
• Commercial development: although the purpose of the Arc initiative is to promote economic growth, the policy paper for the framework is surprisingly quiet in terms of development of commercial property. That said, according to previous publications, the Arc has the potential to generate an additional 9.6 million sq ft of office and R&D (research and development) floorspace plus 69 million sq ft of warehouse accommodation.
• Infrastructure: certain areas will benefit from the new East West Rail link to connect Oxford and Cambridge in terms of an increased likelihood of development potential.
• Environment: land with significant environmental value is likely to be conserved. New opportunities may arise from the increased emphases on biodiversity net gain, which is likely to become a requirement once the Environment Bill passes through Parliament. Where a developer cannot provide net gain on-site, off-site mitigation may be possible for example by directly improving other land or the purchase of biodiversity credits and the creation of habitat banks. The precise mechanisms are still being finalised, but could affect the value of land needed to unlock development.

What happens next for the Arc?

Consultation on the vision for the Oxford-Cambridge Arc is expected to commence in summer 2021, with an aim of producing policy options for spring 2022. A draft spatial framework is expected to be published in autumn 2022 with implementation shortly afterwards.

Those with landholdings within the Arc are recommended to engage from the start of the consultation process. There are opportunities to help shape development of the spatial framework, which will ultimately have a significant impact on how development is carried out within the Arc.

For more information, please contact Sophie Willis or your usual Charles Russell Speechlys contact in our Real Estate Planning team.