Economics and employment

Context

Chapter 11 of Volume 2 of the PEIR presents the preliminary assessment of effects associated with economics and employment. The airport’s total economic footprint in the UK in 2019 was estimated to be around 28,400 jobs and £1.8 billion in Gross Domestic Product (GDP). This included direct, as well as indirect and induced employment and economic activity associated with the supply chain and employee expenditure.

It is estimated that in 2019 the airport supported 10,920 direct jobs; these included jobs supported by airlines, head office functions of aviation-related companies, airport operations, airline support services, shops, hotels and restaurants. The majority of employees lived in Bedfordshire, where the airport is located, particularly in Luton.

Mitigation measures

A range of measures relating to economics and employment are proposed to enhance the benefits of the Proposed Development. These include:

Construction

• the design and construction strategy for the Proposed Development has sought to minimise disruption to existing local businesses and minimise adverse effects on airport or other employment;
• an Employment and Training Strategy (ETS) is being developed in liaison with key stakeholders and a draft version has been published with this consultation. The ETS proposes actions and initiatives with a vision to create quality careers and make the airport an inclusive and aspirational place to work. These proposals include establishing an employment and skills hub at the airport as a one-stop shop for engagement with local education institutions and training providers, explore the creation of an onsite training centre for construction and operational phases, encouraging hiring of apprentices and trainees through procurement and working together with airport employers, enhancing outreach with local community groups and schools, and facilitating research and innovation related to the future of sustainable aviation and construction;
• work would be undertaken with existing education bodies and employers in advance of construction to determine future skills requirements and gaps to help develop training programmes; and
• as part of their selection criteria, contractors’ ability to deliver social value would be considered (i.e. whether the contracts could deliver wider social, economic and environmental benefits).

Operation

For the operational phase a similar approach would be adopted. However, much of the employment growth would be drawn by existing operators rather than contractors. A number of these have bespoke training programmes – such as easyJet Academy.

It is anticipated that an Employment Charter for employers would be developed to work towards a set of agreed objectives that would include a focus on local employment and training initiatives.

Likely significant effects

Construction

The construction of the Proposed Development would generate new jobs from direct employment at the construction site, and also in industries supporting the construction works, such as those supplying construction materials and services. It is estimated that over the construction period a total equivalent of 620 Full Time Equivalent (FTE) jobs would be directly created. In addition, approximately 310 FTE jobs would be created as a result of additional demand for goods and services through the construction industry supply chain, and through expenditure in the local economy by construction workers. This is equivalent to an additional £429 million in Gross Value Added (GVA) generated across the construction period. While the construction of the Proposed Development may displace some workers from existing businesses, overall it is estimated to bring significant economic benefits to Luton and the surrounding three counties of Bedfordshire, Buckinghamshire and Hertfordshire. There will also be no significant effects on the local housing market during the construction phase due to additional demand for housing from new workers.

Operation

During operation, the Proposed Development would generate jobs to support airport operations, airlines and other companies serving the airport and additional employment in supply chains.

When comparing the employment growth and GDP by 2043 with existing employment and GDP in 2019, the total number of new jobs would be approximately 4,800 in Luton and an additional £755m in GDP, 6,600 in the Three Counties with £1bn in GDP, and a total of 12,100 across the UK equating to additional £1.6bn in GDP.

This would provide a significant beneficial effect to the UK economy.

The airport also supports economic activity by providing connectivity to the passengers that use it. For passengers travelling on business, the connectivity offered by the airport means that they are able to interact more effectively with global markets. The growth of the airport and the connectivity it offers would also enable more visitors to come to the UK. These visitors would support GDP and employment via an expenditure injection into the economy. The expansion of the airport also has the potential to generate additional tax revenue for Government through the Air Passenger Duty paid by passengers. These impacts would result in further significant beneficial effects to the UK economy. There will also be no significant effects on the local housing market during the operational phase due to additional demand for housing from new workers.

Completing the assessment

To complete the assessment, further engagement with technical stakeholders will be undertaken. In addition, any updates to the design of the Proposed Development will be assessed.

Documents

PEIR Chapter 11 : Click Here

Figures

11.1 Airport Employment Area : Click Here
11.2 Geographical Extent of Study : Click Here
11.3 Peak Hour Drive Time : Click Here

Appendices

11.1 Economic Impact Report : Click Here