Chipping Norton Enterprise Centre

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					                          Chipping Norton Enterprise Centre




                   Feasibility study and implementation plan

                                           Abridged Version




Irwin Grayson Associates in partnership with Annabel Jackson
                                                 Associates

                                             February 2006
Irwin Grayson Associates                                                                                                           Contents
are consultants in enterprise
and economic development.          NOTES TO ABRIDGED VERSION .................................................................... 3
They undertake strategic
reviews, programme design             Abridged Report........................................................................................... 3
and assist with implementation
on initiatives intended to         EXECUTIVE SUMMARY................................................................................... 4
provide support to new and
growing businesses such as            Introduction ................................................................................................... 4
incubator workspace and
finance. They also provide            Methodology................................................................................................. 4
policy advice to governments
and private sector                    Conclusions.................................................................................................... 4
organisations.
                                      Recommendations....................................................................................... 6
Annabel Jackson Associates
is an economic development         FEASIBILITY STUDY & PROOF OF CONCEPT ................................................. 8
consultancy. Annabel Jackson
is a specialist in                    1.           Introduction ..................................................................................... 8
entrepreneurship and an
evaluator with 20 years               2.           Plans for development.................................................................. 8
experience.
                                      3.           The local economy ...................................................................... 11

                                      4.           Potential demand........................................................................ 16

                                      5.           Provision of workspace ............................................................... 21

                                      6.           Development models.................................................................. 24

                                   PROPOSAL ................................................................................................... 27

                                      7.           A proposal ..................................................................................... 27

                                      8.           The facilities ................................................................................... 31

                                      9.           Support services............................................................................ 31

                                      10.          Proposed steps ............................................................................. 33

                                      11.          Conclusions ................................................................................... 34




      Irwin Grayson Associates, Unit 3, Hindley Hall, Stocksfield, Northumberland, NE43 7RY
      Tel +44 (0)20 7193 9984 e-mail david@irwin.org
Notes to Abridged Version

                    Abridged Report

                    The feasibility study for an Enterprise Centre in Chipping Norton was
                    commissioned by West Oxfordshire District Council and Oxfordshire
                    County Council on behalf of the Chipping Norton Town Partnership to
                    help inform them of the demands and potential viability of an
                    Enterprise Centre in the town. The report draws on wide ranging
                    research to support its findings. The scope of the research means that
                    much of the information paints an interesting and useful picture of the
                    local economy and therefore has a wider audience than just the
                    commissioning bodies.

                    However, the nature of the brief meant that there is inevitably some
                    information included in the full report that cannot be published
                    because it is of a commercially sensitive nature. The sections of the
                    report that have been removed are those that refer to:
                       Specific analysis of potential sites for an Enterprise Centre,
                       Reference to the potential involvement of named local
                       businesses, and
                       Financial forecasts.
                                                                        WODC January 2007




Enterprise Centre                                                                           3
Chipping Norton Enterprise Centre

Executive summary

                    Introduction

                    This report reviews the scope for establishing an incubator workspace
                    in Chipping Norton, makes a positive recommendation and sets out
                    the next steps required to implement the project.

                    Methodology

                    Testing the feasibility of a future enterprise centre is a complex task
                    requiring interpolation from past trends, using incomplete or proxy
                    data, and interpretation of subjective information. Demand is not a
                    black or white matter, but rather heavily conditional – dependent on
                    a host of other factors such as the location of the building, terms of
                    letting, management style and character of competing space.

                    We used a mix of complementary sources:
                           Review of strategic plans (Structure Plan, economic
                           development plans, Town Appraisal);.
                           Review of statistics (population, self-employment, VAT
                           registrations, new bank accounts and sectoral mix);
                           Compilation of information on the supply of small unit space in
                           Chipping Norton and more widely in West Oxfordshire.
                           Survey of small businesses in West Oxfordshire to ask about
                           property requirements;
                           Interviews with agencies with knowledge of potential tenants
                           of an enterprise centre (estate agents, landlords, business
                           support agencies and local authority officers);
                           Examination of potential sites for an enterprise centre in
                           Chipping Norton;
                           Consultation with key local decision-makers, including
                           members of the Partnership;
                           Initial conversations with potential partners for an enterprise
                           centre (funders, developers, co-locators or service providers);
                           Production of a financial model demonstrating the broad
                           perimeters within which an enterprise centre could work.
                    In addition, we drew on our own experience of developing and
                    managing enterprise centres. A draft report was circulated to our
                    steering group and comments accepted.

                    Conclusions

                    There is evidence of demand for an enterprise centre:
                           West Oxfordshire has the second highest rate of self
                           employment in Oxfordshire, behind South Oxfordshire (section
                           3.4);
                           West Oxfordshire has a low level of floor space per VAT
                           registered business compared to Oxfordshire and the South
                           East (section 5.2);


4                                                                             Chipping Norton
                           West Oxfordshire has a smaller number of businesses that grow
                           to a turnover greater than £1 million than any other district in
                           Oxfordshire except South Oxfordshire;
                           West Oxfordshire has a wide sectoral mix, with a high
                           proportion of sectors that are suitable for an incubator
                           workspace (section 3.5);
                           Chipping Norton has a number of industrial estates (section
                           5.3) as well as barn and agricultural conversions (section 5.4)
                           providing a good level of space for businesses seeking larger
                           sizes. However, the only space targeting new and growing
                           businesses is not a managed workspace (the Stones Business
                           Centre). There are a number of incubator and managed
                           workspaces in Oxfordshire, but only one in West Oxfordshire –
                           all of which report that they are full or nearly so (see section
                           5.6);
                           Estate agents believe that there is unsatisfied demand for
                           small units in Chipping Norton, especially from people moving
                           into the area who then want to start up a business (section
                           4.2);
                           The availability of small units in Chipping Norton has
                           decreased over the last couple of years;
                           Analysis of the Council’s property register suggests that there is
                           a gap in provision below 100 m2 (around 1,000 sq ft);
                           West Oxfordshire has a balanced sectoral mix, with many
                           sectors suited to enterprise centre type space;
                           A survey of Business Link clients (section 4.4) suggested that
                           many new businesses start from home and then seek to
                           expand into rented accommodation. The majority (around
                           50%) are looking for office space with 55 per cent wanting less
                           than 500 sq ft. The preferred location stated by respondents
                           was Chipping Norton.
                    Furthermore the policy climate for an enterprise centre is positive:
                           Oxfordshire Economic Development Strategy, West
                           Oxfordshire District Economic Development Strategy and
                           Chipping Norton Appraisal all express strong support for small
                           business development in Chipping Norton. New and growing
                           businesses help to reduce commuting, foster social cohesion
                           and protect the quality of life.
                           Chipping Norton Partnership has a vision of Chipping Norton as
                           a working market town with a balance between housing and
                           employment. This vision is heavily dependent on the existence
                           and growth of small businesses.
                    The only findings against an enterprise centre are that small unit rents
                    in Chipping Norton have not increased in the last couple of years and
                    that barn conversions have taken some of the demand for small units
                    away from the market towns.

                    Our analysis suggests that Chipping Norton could support an
                    enterprise centre of around 1,400 m2 (15,000 sq ft) providing 30-40
                    units in the short term – and possibly twice this in the longer term.

                    The issue is whether this can be met economically in an enterprise
                    centre, which generally need 2,300-2,800 m2 (c.25-30,000 sq ft) of
                    lettable space to cover the costs of management and support


Enterprise Centre                                                                             5
    services as well as some allowance for voids. This would be a large
    amount of space to provide in Chipping Norton, which suggests the
    need to:
            Phase development;
            Find capital subsidies for the development;
            Develop in partnership with private sector developers or
            workspace operators;
            Minimise management costs, for instance through operating
            as a satellite to a larger enterprise centre;
            Minimise service costs, for instance through concentrating on
            strategic services only;
            Avoid sectoral theming since this will lower the occupancy
            level – but use targeted marketing to raise awareness among
            clusters such as furniture and other crafts, film and other
            creative industries.
    The proposals for the enterprise centre are as follows:
            The proposed enterprise centre should have a range of unit
            sizes in the range 20 to 50 m2 (c.220-540 sq ft);
            The enterprise centre should be let on monthly licences;
            We recommend against sliding scale rents, although a lower
            rent could be offered for the first three months, to compensate
            for relocation costs;
            The first phase of the centre will be too small to support a
            dedicated manager. However, it should have on-site
            management part of the time, shared with partner
            organisations;
            We recommend against providing shared office services.
            However, the possibilities for IT support should be investigated,
            together with options for a package of business advice and
            training.
    The enterprise centre will not provide the whole solution to Chipping
    Norton’s needs. The balance that the Partnership desires will require
    some 200 jobs to match the 200 inhabitants of the Wimpey
    development as well as any gap left from the closure of Parker Knoll.
    Based on experience elsewhere, businesses in the enterprise centre
    will typically create 100 to 200 jobs over a period of two to three
    years.

    Our financial model assumes a total development cost of £2 million
    for 1,400 m2 (c.15,000 sq ft) and 40 units. Assuming that the only grant
    available is that through SEEDA, and that the remainder of the capital
    is financed commercially, requires a rent of £20 psf1 and a service
    charge of a little over £7 psf and a steady state occupancy level of at
    least 80 per cent. Accessing further grants will enable the rent to be
    lowered, which will increase the accessibility of the enterprise centre.

    Recommendations

    We recommend that:

    1It is normal to quote rents either as an inclusive amount per week or per
    month for a specified unit or else to quote as £ per square foot per annum
    (abbreviated to psf). We have stayed with this convention.


6                                                                  Chipping Norton
                    West Oxfordshire District Council appoints a ‘champion’ to
                    take this project forward;
                    A business support organisation be appointed to act as
                    managing agent for existing premises within the town;
                    West Oxfordshire District Council proceeds to develop
                    detailed plans to create an enterprise centre at Chipping
                    Norton and explore the scope for a partnership to take this
                    forward.




Enterprise Centre                                                                 7
Chipping Norton Enterprise Centre

Feasibility study & proof of concept

                     1. Introduction

                     1.1       Our brief

                     Our brief was to assess the need for an enterprise centre in Chipping
                     Norton and then to examine options for meeting the need and make
                     appropriate recommendations.

                     1.2       Definitions

                     Enterprise centres have three characteristics:
                           Small units;
                           Flexible letting; and,
                           Shared services, including easy access to business support.
                     The core characteristic of enterprise centres is that of providing a
                     supportive environment for small businesses. Enterprise centres belong
                     to the class of supportive environments that include incubators and
                     managed workspaces.

                     1.3       The study area

                     West Oxfordshire lies between the western edge of the City of Oxford
                     and the boundary with Gloucestershire to the west and Warwickshire
                     to the north. Chipping Norton is one of the three largest towns in West
                     Oxfordshire, with a population of 6,000 (behind Witney with a
                     population of 23,000 and Carterton with a population of 13,500).
                     Chipping Norton has a hinterland of some six miles beyond the town
                     which includes Charlbury and Kingham.

                     2. Plans for development

                     All the economic strategy plans for the south east, Oxfordshire and
                     West Oxfordshire stress the importance of working with and supporting
                     new and growing businesses. The Structure Plan was previously
                     restrictive on economic activity outside the main towns, but the
                     revised plan gives a higher priority to job creation across the County.

                     2.1       County Structure Plan

                     The Oxfordshire Draft Structure Plan 2016 states that: “In deciding on
                     the amount of employment land available in the above towns
                     (including Chipping Norton), weight shall be given to the content of
                     action plans that have been carried out following health checks and
                     other processes. Where such plans show the need for additional land
                     to maintain the vibrancy of market towns, then additional
                     employment land shall be released.” (E3)

                     2.2       Economic Strategies

                     Oxfordshire County Council has a strong policy of support for new and
                     growing businesses in the county. Small businesses are seen as more
                     sustainable compared to the larger high profile companies that in


8                                                                               Chipping Norton
                    practice have little loyalty to a locality. Small businesses can provide
                    work or employment locally, which reduces the pressure on
                    infrastructure, strengthens social cohesion and improves the quality of
                    life. The Oxfordshire Economic Development Strategy 2001-2005 has
                    as one of its 17 objectives to “refine support services for new and
                    growing businesses”.

                    The strategy states that “there is a strong demand for new businesses
                    for affordable, flexible business accommodation that are not subject
                    to financially restrictive long-term leases. A network of business
                    developments across the County has gone some way to addressing
                    this need. However, there is a continued demand for grow-on space
                    for companies graduating from this type of space”. The plan
                    recommends that the Economic Partnership “encourage the
                    provision of affordable, flexible accommodation for new business
                    start-ups and seek innovative means of supplying grow-on space for
                    developing companies”.

                    West Oxfordshire District Council’s Economic Development Strategy
                    2004-2007 notes that the market town health check for Chipping
                    Norton identified a demand and need for premises for new businesses
                    including incubator units and managed workspace. The strategy
                    states that the Council will “work to encourage the provision of
                    suitable premises for small businesses and will work with businesses
                    support partners to ensure new businesses or those people seeking to
                    set them up know where to access the full range of help and advice
                    available”.

                    2.3    Chipping
                           Chipping Norton Town Appraisal

                    Chipping Norton undertook a market town assessment in 2003. This
                    identified the early signs of economic drift, uncertainty about whether
                    tourism could advance the town’s economic health and concerns
                    about finding staff and about reliability of the infrastructure. The
                    appraisal concluded that future policies should recognise that
                    healthy businesses are “vital to the town’s future success”, that
                    Chipping Norton should aim to “attract more businesses” and that
                    planning policy should encourage SME development and expansion.

                    The Town Appraisal team put forward the vision for Chipping Norton
                    as “a working Cotswold town”. This requires a virtuous circle where the
                    town attracts new businesses, as well as shops and leisure facilities,
                    which strengthen the community spirit and attractiveness of the area.
                    The encouragement of local employment and jobs was a high priority
                    from the surveys carried out for the Appraisal. The Appraisal found “a
                    strong feeling towards the provision of starter premises” and the
                    encouragement of “new“ companies on the estates. The survey did
                    not test the demand for workspace, only support for its provision.

                    The appraisal was published about the time that Parker Knoll
                    announced its closure. One of the items included in the action plan
                    was a desire for an enterprise centre because of a concern that the
                    town was too dependent on a handful of large employers. Large is
                    relative as the largest employer only has around 120 staff.

                    2.4 Chipping Norton Partnership

                    The Chipping Norton Town Partnership is keen to explore the scope for
                    establishing an enterprise centre to support new and growing


Enterprise Centre                                                                           9
     businesses. Chipping Norton has a good balance of jobs. The 2002
     census confirms that the town has 3,051 jobs and 3,089 economically
     active people. Half the workforce works inside the town and half
     works outside the town. There is concern that the closure of Parker
     Knoll might tip the balance towards turning Chipping Norton into a
     dormitory town, although when Parker Knoll closed it employed 400
     people of whom only around 130 were resident in Chipping Norton.
     Whilst most found jobs, there is a belief that many would prefer to
     work in Chipping Norton if the right jobs were available.

     2.5 The need for an enterprise centre

     Whilst unemployment is low in Chipping Norton, there is a desire to
     create more local jobs, not only to replace at least some of those lost
     from Parker Knoll, but also to provide additional opportunities for the
     people moving into Chipping Norton as new houses are completed.
     An enterprise centre could support the achievement of that
     objective.

     The EU has defined an incubator as ’a place where newly created
     firms are concentrated in a limited space. Its aim is to improve the
     chance of growth and rate of survival of these firms by providing
     them with a modular building with common facilities as well as
     managerial support and back-up services. The main emphasis is on
     local development and job creation’.2 The overall goal is to support
     businesses that will be successful and prosperous generating wealth
     and employment. Incubator clients create jobs, innovate,
     commercialise new technologies, revitalise communities and
     strengthen local economies.

     The potential for job creation is shown by Project North East. Over a
     two year period, from Dec 1996 to Dec 1998, they followed the
     fortunes of all the tenants in three of their workshops:
             38 businesses passed through 32 units and just two failed;
             At the outset, the businesses in occupation had a combined
             turnover of £4m and employed 90 people; two years later,
             their combined turnover had grown to £13m and employment
             to 264.
     Businesses that start in an incubator are more likely to grow and
     prosper. Evidence suggests that, in general, about two thirds of
     businesses cease trading within five years. Businesses which receive
     support – advice and training during their crucial start up phase – do
     rather better. Typically, two thirds are still in business after five years.
     The evidence3 also suggests that the process of incubation is a
     powerful one in overcoming the stresses of starting and growing a
     business. It seems that about 80 per cent are still in business after five
     years.




     2European Commission OJ C186 – 51/52 dd. 27, July 1999
     3The UK Impact Assessment Study, 1999/2000. Commissioned by UKBI and
     sponsored by DTI and HSBC www.ukbi.co.uk


10                                                                  Chipping Norton
                    3. The local economy

                    3.1    Introduction

                    Social and economic statistics provide indirect evidence of demand
                    for workspace. Demand is associated with high levels of self
                    employment, high levels of VAT registration, high levels of business
                    borrowing, high household incomes and high representation in sectors
                    that require business premises. However, demand is also affected by
                    a host of other factors such as the location of any particular
                    workspace, the terms of letting and the competing space, whether
                    unserviced units or home working.

                    3.2    Population

                    The population of West Oxfordshire is 97,000. The total population of
                    West Oxfordshire grew by 17 per cent between 1981 and 2001. One
                    of the main challenges for the district is how to ensure sufficient
                    employment land given the discrepancy between land prices for
                    housing and employment use, and therefore the pressure from
                    developers to seek residential development.

                    3.3 Economic activity and employment

                    The 2001 census shows that 41,573 people are self-employed in
                    Oxfordshire, some 13.2 per cent of the economically active
                    population. This is marginally lower than the figure for the South East
                    (13.7%), but higher than the proportion for England and Wales overall
                    (12.5%).

                    West Oxfordshire has the highest proportion of economically active
                    people who are self-employed (15.4%) in the county following South
                    Oxfordshire (15.7%). West Oxfordshire has the highest percentage of
                    people in employment in Oxfordshire (71.4%) and the lowest
                    unemployment (1.5%) as well as the lowest population density (1.3
                    people per hectare). According to claimant count figures available
                    through NOMIS for September, 2005, unemployment is just 0.6 per
                    cent for West Oxfordshire compared to 1 per cent for Oxfordshire and
                    2.7 per cent for the UK. In Chipping Norton, it is 1.1 per cent, which
                    represents just 39 people.

                    3.4 Businesses in West Oxfordshire

                    Most published figures for business stock rely on using statistics for VAT
                    registered businesses, but not every business grows large enough to
                    register for VAT. We have access to unpublished data from Barclays
                    Bank to complement VAT data. Barclays Bank, based on their
                    business customers, but scaled up according to their market share,
                    suggest that there are some 114 businesses for every 1,000 adults in
                    West Oxfordshire compared to 93 for the south east as a whole and
                    90 for Oxfordshire.




Enterprise Centre                                                                            11
     Figure 1: Business stock (per 1,000 adult population)

         South Oxfordshire
          We st Oxfordshire
                    Che rwe ll
       Va le of W hite H orse
                      Oxford
             OXFORDSH I RE
               SOU TH EAST
        EN GLAN D & WALES

                                 0   20    40      60          80   100     120    140



     Source: Barclays Bank, SME Research Team, 2004
     Data on VAT registered businesses shows that West Oxfordshire has a
     higher level of businesses than Oxfordshire as a whole and than the
     south east England average. Indeed, only South Oxfordshire has a
     higher level of businesses.

     Figure 2: VAT registered business stock (per 1,000 adult pop’n)


          We st Oxfordshire

         South Oxfordshire

       V a le of White H orse

                   Cherwe ll

                     Oxford

               SOU TH EAST

        Oxfordshire County

                                 0   10    20      30          40   50       60      70



     Source: SBS/HMCE VAT registered businesses (2003)
     Looking at the stock only tells part of the story. It is important also to
     look at new starts (and new VAT registrations) and the increase in
     stock. West Oxfordshire does well. Whilst its new VAT registrations are
     about average (10.5% compared to 10.6% for both the south east
     and England as a whole) it has fewer deregistrations (7.9%, compared
     to 9.7% for both the south east and for England), so its stock is
     growing.

     Figure 3: Net gain in VAT registered businesses


                    Che rwe ll

          We st Oxfor dshir e

         South Oxfor dshir e

       Va le of W hite H or se

                      Oxfor d

                                 0        50             100         150           200



     Source: SBS/HMCE VAT registered businesses (2003)
     Looking at all new starts confirms the view that West Oxfordshire’s start
     up rate is about average. As can be seen from figure 4, it does better
     than most of Oxfordshire, but is at about the same level as the south
     east.


12                                                                         Chipping Norton
                    Figure 4: Business starts (per 10,000 adult population)

                         South Oxfor dshir e

                          W e st Oxfor dshir e

                       V a le of W hite H or se

                                       Che rwe ll

                                         Oxfor d

                             OX FORDSH I RE

                                SOU TH EAST

                       EN GLAN D & W ALES

                                                    0         20   40         60         80         100    120       140     160



                    Source: Barclays Bank, SME Research Team, 2005, H1
                    Comparison with VAT data shows that businesses in West Oxfordshire
                    are more likely to grow to the size where they need to register. As can
                    be seen from figure 5, south east England (in 2003) had a rate of 47
                    per 10,000 population, Oxfordshire had a rate of 48 but West
                    Oxfordshire had a rate of 61, some 50 per cent higher than the
                    average for England. This perhaps reflects the comment in the “Vision
                    for a working Cotswold town” of Chipping Norton having an air of
                    independence and an ability to sort itself.

                    Figure 5: Business registrations (per 10,000 adult population)

                          W e st Oxfordshire

                         South Oxfordshire

                                       Che rwe ll

                      V a le of W hite H orse

                                         Oxford

                               SOU TH EAST

                       Oxfordshire County

                                                    0         10     20            30          40         50         60        70



                    Source: SBS/HMCE VAT registrations (2003)
                    Businesses in West Oxfordshire are very small, with the vast majority
                    employing fewer than five people.

                    Figure 6: Businesses by size of workforce


                          200+

                       100- 199

                          50-99

                          20-49

                          11-19

                           6-10

                             1-5

                                   0                    500        1 ,0 0 0             1 ,5 0 0          2 ,0 0 0         2 ,5 0 0



                    Source: Oxfordshire County Council: Oxfordshire Business Directory 2003/4 reported in
                    West Oxfordshire District Council: Economic Development Strategy 2004-2007
                    Most new businesses are established as sole traders or partnerships. It
                    is usually only as businesses grow that they decide to incorporate. As



Enterprise Centre                                                                                                                     13
     can be seen from figure 7, West Oxfordshire has little difference in the
     number of sole traders, but there are fewer companies than in the
     south east as a whole.

     Figure 7: Legal status


                     Oxford

         South Oxfordshire

       Va le of W hite H orse

                   Che rwe ll

          We st Oxfordshire

             OXFORDSH I RE

               SOU TH EAST

        EN GLAN D & WALES

                                0     20           40           60             80       100

                                       compa ny    pa rtne rship     sole tra de r


     Source: Barclays Bank, SME Research Team, 2004
     There are no discernible differences in gender of entrepreneurs.

     Figure 8: Gender of entrepreneurs


          We st Oxfordshire

                     Oxford

                   Che rwe ll
         South Oxfordshire

       Va le of W hite H orse

             OXFORDSH I RE

               SOU TH EAST
        EN GLAN D & WALES

                                0%   20%       40%             60%          80%       100%

                                           ma le    fe ma le    "mixe d"


     Source: Barclays Bank, SME Research Team, 2004
     Whilst West Oxfordshire does well for businesses growing sufficiently to
     register for VAT, it seems that overall it does not perform very well for
     businesses staying in business or for growth in turnover.




14                                                                              Chipping Norton
                    Figure 9: Business starts in 2003, H1, still trading in 2005


                      Va le of White H orse

                                         Oxford

                                      Che rwell

                           West Oxfordshire

                          South Oxfordshire

                               OXFORDSH I RE

                                 SOU TH EAST

                       EN GLAN D & WALES

                                                      0             20            40                60                  80           100

                                                               < £1 00 k      £ 10 0k +    £1 m+


                    Source: Barclays Bank, SME Research Team, 2004
                    As can be seen in figure 9, about 70 per cent of businesses started in
                    the first half of 2003 in West Oxfordshire were still trading two years
                    later. West Oxfordshire had the second smallest proportion that had
                    grown to a turnover of more than £1m.

                    3.5         Sectoral mix

                    West Oxfordshire has a relatively balanced sectoral mix without
                    reliance on any particular economic activity. Chipping Norton has
                    242 businesses. The largest employer until recently was the furniture
                    factory and showroom of Parker Knoll (300 employees). Parker Knoll
                    ceased trading in 2003, leaving the two largest private sector
                    employers as CETA and Owen Mumford, each of which employ
                    about 100 people.

                    Businesses located in Chipping Norton include light manufacturing,
                    computing & communications and professional services. These are all
                    suitable for people to start in an incubator, or occasionally to start
                    from home and then to make the move into an incubator as the
                    business starts to grow.

                    Figure 10: Business activities


                          West Oxfordshire

                      Va le of White H orse


                          South Oxfordshire

                                      Oxford


                                    Cherwe ll


                               SOU TH EAST

                      EN GLAN D & WALES


                                                  0       10   20        30     40        50        60          70      80      90   1 00

                          Agriculture                          Production                                Construction
                          Motor Trades                         Wholesa le                                Re ta il
                          H ote ls & Ca te ring                Transport, Post & Tele coms               Prope rty Se rvice s
                          Busine ss & Fina ncia l Se rvice s   H ea lth, Educa tion & Social Work        Other Se rvices



                    Source: Barclays Bank, SME Research Team, 2004




Enterprise Centre                                                                                                                           15
     4. Potential demand

     4.1      Introduction

     This section uses several partial, but complementary sources of
     evidence about demand:
           Property enquiries. Small businesses, especially start ups, tend not
           to be systematic in their property search. The availability of
           premises often reveals latent demand.
           Opinions of estate agents, developers, support agencies and local
           projects. These opinions are sometimes subjective, albeit based on
           experience. Some interviewees have a vested interest in proving
           that there is no demand for workspace, for example, where they
           are seeking residential planning permission for themselves or their
           clients.
           Survey of potential users. This is a powerful source of evidence.
     Each of these sources inevitably tells us about demand today rather
     than demand at the time that a managed workspace would open.

     Small business space is described as that below 1,500 sq ft. Our
     analysis concentrates on space which is serviced and on flexible
     terms, but we also take account of space which is unserviced and
     offered on leases or a freehold basis.

     4.2      Survey of estate agents & developers

     We interviewed VSL and Partners, Savills, Atkins, White Mitchell, Berry
     Morris and Country Estates. Key points from these interviews were:
              There is a steady demand in Chipping Norton from small
              businesses wanting to set up or expand from working from
              home. Berry Morris have had 10 enquiries for space in
              Chipping Norton since March 2005, half for under 1,500 sq ft.
              Country Estates say that demand has increased over the last
              couple of years and Chipping Norton has higher demand
              than many of their other sites. Local agents say that there has
              been a steady stream of people moving into the area from
              London or elsewhere because of the attractive environment
              and then wishing to run small businesses from the area. Berry
              Morris emphasised that the provision of broadband in the area
              has increased demand, especially from knowledge based
              individuals or small companies.
              Demand is for freeholds and for leaseholds, but for short lease
              holds rather than long leaseholds. The economic downturn in
              some sectors is reducing any desire for long term commitment.
              Atkins, who were marketing the Depot, received a mix of
              enquiries, most from established businesses. Overall there have
              been 15 enquiries, but nine are from agents so the intended
              use is difficult to judge. Low interest rates and changes in
              pension legislation are fuelling a demand for small businesses
              to buy their premises for their pension funds.
              Supply in Chipping Norton has decreased over the last couple
              of years. However, rents have not increased as a result. Rents
              are £5.50-£6 per sq ft for industrial space and £10-£14 per sq ft
              for offices. The time taken by occupiers from enquiry to
              occupation is longer than in the past. But this is because of the


16                                                                Chipping Norton
                             increased involvement of lawyers and other advisors rather
                             than because of changes in demand.
                             The quality of space is important. Professionals and knowledge
                             businesses expect to have a good environment and image as
                             well as ample parking. As evidence of demand for quality,
                             Berry Morris has forward sold 45 per cent of Apollo Business
                             Park in Banbury before construction has commenced on site,
                             and within a couple of weeks this is likely to reach 80 per cent.
                             Where small space does not let, as is the case with some units
                             in Witney, this is often because of poor quality.
                             There is little employment land in Chipping Norton. As one
                             agent put it, land is “tight as a drum”.
                             Demand is more for office than for industrial uses.
                             Commercial demand is concentrated in the larger centres of
                             Oxford, Witney and Banbury. Chipping Norton is not a
                             recognised office location, but demand comes from local
                             people.
                             Chipping Norton is on the way up. The retailing has improved
                             recently and is now of a good standard.
                             Barn conversions have taken some of the demand for small
                             space from the small towns.
                             Estate agents and developers were not aware of any demand
                             for shared services. One interviewee suggests that the fear of
                             identity theft had made business more secretive and
                             independent than in the past.
                             There is demand for workspace in Chipping Norton. The issue is
                             whether this demand can be met economically.

                    4.3 Business support agencies

                    There used to be two enterprise agencies in Oxfordshire: Thames
                    Business Advice Centre (TBAC) and NORBIS. However, TBAC decided
                    to focus on its workspace and transferred all of its other business
                    support services to NORBIS which has formed a new company,
                    Oxfordshire Business Enterprises (OBE), to provide start up support
                    throughout Oxfordshire.

                    OBE has seen 232 pre-start and start-up clients in West Oxon over the
                    past 12 months (against a target of 220) of which 168 went on to start
                    a new business. Interestingly 42 of their clients were within a 5 mile
                    radius of Chipping Norton and 60 were within a 12 mile radius. OBE
                    notes that business survival rate at 26 months is 76 per cent
                    (compared to 63 per cent for businesses without support). It
                    supported 26 people made redundant by Parker Knoll.

                    4.4 Business Link

                    Business Link has provided statistical information for businesses in West
                    Oxfordshire.
                    Table 1: Business Link clients, West Oxfordshire
                                             Pre-start         Start up      Total businesses
                    2003                          249                  19          1,165
                    2004                          410                  60          1,828
                    2005 (to Sep)                 367                  78          1,433
                    Source: Business Link Solutions



Enterprise Centre                                                                               17
                                     It should be noted that there has been steady growth in the number
                                     of start ups (that is, businesses less than one year old). The figure for
                                     2005 represents six months, so one might realistically expect around
                                     150 start ups over a full year.

                                     Business Link estimates that, as of 30 September, West Oxfordshire has
                                     some 1,388 pre-starts and 125 start ups. The maps in figure 11 show
                                     established businesses, new (that is less than 12 month old) businesses
                                     and pre-start business per 1,000 adult population of working age.

Figure 11: Established, new and pre-start businesses in West Oxfordshire




Source: Business population, as at Sept 2005, from Business Link Solutions; working population from Census 2001
                                     With the assistance of Business Link, we surveyed the clients on their
                                     database who are based in West Oxfordshire. Specifically, all those
                                     clients with e-mail were sent an e-mail inviting them to participate in a
                                     web-based survey.

                                     After eliminating duplicate and test responses, we received a total of
                                     45 responses of which 43 were from businesses that were already
                                     trading. It was disappointing not to receive more responses from
                                     prospective entrepreneurs, but perhaps reflects the uncertainty that
                                     surrounds people until they have actually started up.

                                     Over 40 per cent of respondents are trading from home. Many office
                                     type businesses are able to do this but as they expand, then they will
                                     want to move into business accommodation.

                                     Figure 12: Current location


                                                 H ome

                                        In rente d space

                                        In owne d space

                                                Sharing

                                                  Other

                                                           0%      10%          20 %        30%          40 %        50%



                                     Source: IGA/AJA survey
                                     This is reflected in the reasons for wanting to move, though many of
                                     those in business accommodation also want to move, citing size,
                                     quality, wrong terms and wrong location as the main reasons.




18                                                                                                           Chipping Norton
                    Figure 13: Reason for seeking new premises


                      Premises too small

                            N o premises

                            Wrong terms

                         Wrong location

                                   Other

                                            0%        5%         1 0%    15%     20%     25%      30 %   35 %



                    Source: IGA/AJA survey
                    About 15 per cent said that they wanted to move within six months –
                    and some more quickly than that. Around 40 per cent hoped to move
                    within six months to a year.

                    Figure 14: When move anticipated


                      In 6 months to ye ar

                              Over a ye ar

                         Within 6 months

                                       Other

                                               0%          10%          20 %      30%          4 0%      50 %



                    Source: IGA/AJA survey
                    Not surprisingly, most people are looking for office space. Enterprise
                    centres tend to concentrate on office spaces, though the typical
                    planning designation for an enterprise centre (B1) includes some light
                    manufacturing, provided it does not interfere with the neighbours.

                    Figure 15: Type of space required


                             Office
                             Reta il

                         Industria l
                      H i-tech/ la b
                       Wa rehouse

                             Other

                                       0%           10%          20 %     3 0%     40%         50 %      60%



                    Source: IGA/AJA survey
                    Most respondents wanted very small units, with around 55 per cent
                    wanting less than 500 sq ft.




Enterprise Centre                                                                                               19
     Figure 16: Amount of space required


       Less than 250 sq ft

              2 50- 499 sq ft

              5 00- 999 sq ft

         1,000 - 1 ,500 sq ft

          Over 1,500 sq ft

                                  0%        5%      10%       15 %   20%    25%    30%     35%



     Source: IGA/AJA survey
     We asked respondents to tell us their preferred location and any other
     locations that they would consider. As can be seen from figure 16,
     Chipping Norton was by far the most popular location, though this
     may be partly a reflection of the fact that the survey was presented
     as being about Chipping Norton. Nevertheless, this does provide
     some evidence that people from other parts of West Oxfordshire
     would be keen to identify suitable premises in Chipping Norton.

     Figure 17: Location required


             C hipping N o rt o n

                           Wit ne y

                       C ha rlbury

                    Wo o ds t o c k

                         B urf o rd

                      Kidlingt o n

                           O xf o rd

            S t o w o n t he Wo ld

           M o re t o n in M a rs h

                         B a nbury

       B o urt o n o n t he Wa t e r

           S hips t o n o n S t o ur

                                       0%   10%     2 0%      30%    40 %    50%   60 %    70%

                                                  Preferred     Would consider


     Source: IGA/AJA survey

     4.5 Other evidence

     There is further anecdotal evidence of demand. For example, Vivian
     Woodell of the Phone Co-op and Charles Wilmoth of County
     Commercial Properties Ltd both talked of the numbers of business of
     which they are aware that are looking for space. Charles Wilmoth has
     been developing small units in the county for some 20 years – and
     reported that he already has serious interest in the first 4,000 sq ft of his
     next development, currently without a suitable site. Wilmoth believes
     that Chipping Norton could support an enterprise centre of around
     10-12,000 sq ft.




20                                                                                 Chipping Norton
                    5. Provision of workspace

                    5.1         Introduction

                    The existing supply is important because it provides competing space,
                    complementary space and also because lack of supply can mean
                    that demand is latent. For example, estate agents tend only to know
                    about the state of the market when they have sites to market.

                    5.2         Floorspace

                    Our own data suggests that West Oxfordshire could have a lack of
                    space.4 South east England has around 197m2 (retail, office and
                    factory space) per VAT registered business, Oxfordshire has 216m2 but
                    West Oxfordshire has just 171m2. For comparison, England averages
                    284m2 but some areas have much more. Tyne & Wear, for example,
                    has 657m2. The low level of supply seems particularly problematic
                    given the relatively high rate of business formation.

                    Figure 18: Floorspace (sq m per VAT registered business)


                           West Oxfordshire

                                      Oxford

                                    Che rwe ll

                         Va le of White H orse

                           South Oxfordshire

                                 SOU TH EAST

                                 Oxfordshire

                                                 0   100       200         300        400      500



                    Source: ODPM (floor space) & SBS/HMCE (VAT registered businesses) (2000)



                    5.3         Employment sites in Chipping Norton

                    Chipping Norton has five existing employment sites.

                    Table 2: Industrial estates
                    Cromwell              Office       Purpose built
                    Park Office
                    Park
                    Elmsfield             B1, B2       Converted
                    Industrial                         agricultural
                    Estate                             buildings
                    Station Lane          B1, B2       Purpose built
                    Industrial
                    Estate
                    Worcester             B1, B2       Purpose built
                    Road
                    Industrial
                    Estate
                    Greystones            B1           Converted


                    4   Based on figures from HM Treasury & ODPM


Enterprise Centre                                                                                    21
     Industrial                    agricultural
     Estate                        buildings



     The West Oxfordshire Employment Land Audit observes that “there is
     very little outstanding land with planning permission for employment
     use in Chipping Norton”. Furthermore, developers have been pressing
     to develop employment sites for residential use.

     5.4      Workspace

     There is no managed workspace in Chipping Norton. There are barn
     conversions and agricultural buildings around Chipping Norton:
              Threshers Yard, Kingham;
              Mount Form, Churchill;
              Monkston Priory, Kingham Station;
              Cornbury Park;
              South Combe;
              Weston on the Green;
              Broadstone Grange;
              Heath Park;
              Cotswold Business Centre, Moreton in the Marsh.
     There are a number of serviced offices available, though the provision
     does not appear to be greater than other parts of the region. One,
     the Stones Business Centre, appears to suggest that demand is lower
     than suggested by the rest of the evidence. Stones is owned by CETA
     and, in addition to a pub on the ground floor, provides nine small
     units. These have been fully occupied in the past, but currently just
     two are let. However, it appears that they are marketed solely by a
     notice in the post office. They are also of fairly low quality. CETA does
     admit that as this is not their core business, it probably does not get
     the attention that it deserves.

     5.5 The Council Property Register

     The September 2005 West Oxfordshire District Council property register
     includes one unit on Cromwell Business Park, 1,250 sq ft for £13,000 pa
     (£10.40 psf). Worcester Road Industrial Estate has an unspecified
     number of vacant units including ones of 1,200 sq ft, 1,118 sq ft, and
     2,420 sq ft at £5.16 psf (for the larger unit) to £7 psf (for the smaller
     unit).

     In September 2004 the property register listed nine vacant units on
     Cromwell Business Park (Berry Morris) at rents of £9.74 p sq ft for 3,543
     sq ft to £11.72 psf for 1,586 sq ft. Worcester Road Industrial Estate had
     three vacant units according to the property register. These were 620
     sq ft, and 939 sq ft and 1,200 sq ft and with Marriots. Rents varied from
     £7 psf (for the larger unit) to £21.56 psf (for the smaller unit).

     The October 2003 property register lists 10 units on Cromwell Business
     Park and two units in Fleetwood House. The rent on Cromwell Business
     Park was £9.60 psf for a 5,000 sq ft unit up to £11 psf for a 1,250 sq ft
     unit.

     Figures for 2005 are not directly comparable with those for 2004
     (because Worcester Road Industrial Estate only lists various units rather


22                                                               Chipping Norton
                               than giving individual listings), but this aside, the overall impression is
                               that the stock of small space in Chipping Norton has decreased
                               between 2003 and 2005. There were five units under 1,500 sq ft in 2003
                               and only two under 1,500 in 2005. The total floor space for let under
                               1,500 sq ft was 6,250 sq ft in 2003 and 2,318 in 2005. Furthermore, bar
                               two units in 2004, all the small units have been 1,000 sq ft to 1,500 sq ft
                               not under 1,000 sq ft.

                                   Table 3: Analysis of property register
                                                             2003                          2004                       2005
                                                     Under        Over            Under         Over       Under           Over
                                                    1,500 ft2   1,500 ft2        1,500 ft2    1,500 ft2   1,500 ft2      1,500 ft2
                                   Units                 5              8              5             9            2             3
                                   Area (sq
                                   ft)              6,250           27,305        5,259       26,164       2,318         6,239
                                   Average           1250            3673          1052           2616         1118          2158

                               5.6 Incubator workspace in West Oxfordshire

                               There is effectively just one incubator in West Oxfordshire – at Witney –
                               though there are many more elsewhere in Oxfordshire.

                               The UK Business Incubation Directory5 lists 13 incubators (though only
                               includes one of the centres managed by Thames Business Advice
                               Centre (TBAC). Of the 13, some eight are managed by Oxford
                               Innovation. Five of these (at Begbroke, Cherwell, Banbury (Colin
                               Sanders), Bicester and Harwell) are also SEEDA enterprise hubs; there is
                               a further hub at Wallingford.

                               In addition, SEEDA has a gateway at Faringdon, which is managed by
                               Business Link Solutions. This rents space on a desk by desk basis. It has
                               two rooms with three desks and two rooms with two desks and some
                               open plan space. They report that businesses do not like open-plan
                               space but seem quite happy when a couple of businesses share a
                               room. A desk costs £10 per day or £7.50 per day when rented for at
                               least a month (equal to £1950 per year). They provide mentoring,
                               training and networking – and have some thriving networking clubs.
                               They have a waiting list of 16 so believe that there is considerable
                               demand for more space.

                               TBAC used to be a full service enterprise agency, but recently has
                               decided to focus solely on the provision of managed workspace.
                               They currently have four centres, though have in the past managed
                               other centres. All are leased (rather than owned) and all are fully let.

    Table 4: TBAC Workspace

                           Witney                    Abingdon                         Oxford                     Woodside
    Units           26                        6-7                            9                            15
    Size (sq ft)    105-410                   138-242                        165-420                      94-300
    Rental          from £55 per week =       from £66 per week =            from £69 per week =          from £50 per week =
                    £27 psf                   £25 psf                        £22 psf                      £28 psf
    Occupancy       100%                      100%                           100%                         100%
    Source: TBAC



                               5   www.ukbi.co.uk


Enterprise Centre                                                                                                                    23
     The TBAC manager, John Waterfield, stresses that there is good
     demand throughout Oxfordshire for affordable, flexible space. All his
     space is provided on easy in, easy out licence, at a typical rental of
     £30 per sq ft, excluding phone, broadband and intruder security, but
     inclusive of everything else.

     Waterfield, and his board, are keen to identify more workspaces to
     manage, though are slightly hampered by their lack of resources and
     their need, therefore, for any additional premises to make a
     contribution from day one.

     6. Development models

     6.1               Incubator workspace

     Incubators can reduce risks and transactional costs for tenant firms,
     especially at key stages of development and when “doing things for
     the first time”.

     An incubator, or enterprise centre, is not the same as serviced office
     space. Simply providing workspace is an important part of the mix but
     is not sufficient by itself. They do generally offer shared office services,
     flexible licences, expandable space, and sometimes access to
     equipment, all under one roof. Importantly, though, incubators need
     to create an environment which can nurture young firms, helping
     them to survive and grow during the start-up period when they are
     most vulnerable. Incubators provide management assistance, access
     to training and expertise, access to finance and other support
     services. Clients need to be supported at a level with which they are
     comfortable, or else they will simply ignore the advice that they are
     offered.

     Figure 19: Segmenting workspace
                                Low           Med i um          Hi g h      Technol og y
                                                                               level


                            Ind ustr ia l     Busin ess        Scien ce
            Low




                              esta te          park             park
            Med i um




                            Ma n a g ed      Enter p r ise   In nova tion
                            wor k sp a ce      cen tr e         centr e




                             Business        Busin ess &     Techn olog y
            Hig h




                            in cub a tor     in nova tion      centr e


           Ma na g em ent
             sup p or t

     Source: “Benchmarking of Business Incubators”, EU Enterprise Policy Group, Feb 2002



     The EU has attempted to classify small unit accommodation
     according to the level of technology and the intensity of the
     management support. Whilst there are no firm boundaries, this
     segmentation can be helpful in defining a position and characteristics
     for a property based business support initiative.


24                                                                            Chipping Norton
                    Provided rental levels are not dramatically out of line with rental levels
                    close by, generally, the rental level is not an issue. Certainly, it is
                    questionable whether there is a need to subsidise the rent, other than
                    normal landlord practice of perhaps offering a short rent free period
                    to compensate for relocation costs.

                    Businesses with a realistic ambition for growth are more likely to be
                    attracted to a workspace offering value for money. Businesses
                    focusing on low cost alone may not be the ones with greatest growth
                    potential. It is the package of facilities and support – and what it can
                    do for the firm – that is important. Most tenants consider the rental
                    levels charged by incubators to be relatively high: on the other hand,
                    taking into account all the services and facilities provided, they also
                    judge that the incubators offer good value for money.6

                    Whilst population size is only one factor, Basepoint (and other
                    workspace developers) work on the basis that there needs to be a
                    population of at least 30,000 to support one of their workspaces.
                    Project North East, as a rule of thumb, works on 1,000 sq ft of
                    workspace for each 1,000 population.

                    6.2     Virtual incubation

                    A number of operators around the country are experimenting with
                    ‘virtual incubation’. Often, it has been difficult to distinguish this from
                    the services that might be provided by an enterprise agency.
                    However, Coventry University Enterprises is leading a consortium which
                    has been doing rather more than that. It has established Vision Works,
                    to provide pre-incubation support, currently working with 154
                    businesses. It has funding until 2006 from Advantage West Midlands
                    and Government Office – West Midlands.

                    They are the lead member of a consortium offering virtual incubation
                    services, and hope to expand the services available from the centre
                    through both virtual incubation and rural incubation. The virtual
                    incubator is providing clients with broadband supported computer
                    facilities to enable them to access a range of services including
                    integrated business support, virtual office services (including
                    telephone answering, postal addresses, etc).

                    They currently provide ‘touch down’ services (including tables at
                    which to work, wi-fi internet connections, meeting rooms and
                    refreshments) at all of their physical sites but are keen to start offering
                    these further afield. They are keen to start providing similar facilities in
                    other rural areas.

                    Most businesses benefit considerably from the physical interaction
                    that comes through locating in an incubator, but not every business
                    wants the additional cost or, particularly in rural areas, the need to
                    travel some distance to premises. Virtual incubation can provide
                    some of the benefits and could be a useful addition to a physical
                    centre.




                    6Paul Hannon & Paul Chaplin, “The Practice of UK Incubators: identifying
                    Good Practice”, UKBI, 2001


Enterprise Centre                                                                              25
     6.3    Village hall complex

     One way of spreading the costs of managing managed workspace is
     by co-location with social uses such as village halls. The village hall
     can benefit from a greater visibility and contact with a wider cross
     section of the population. The combination might widen the sources
     of funding. A report that Annabel Jackson Associates carried out early
     in 2005 found that Lottery distributors were reluctant to fund
     community buildings because of concerns about the quality and
     longevity of activity in the building, the number and nature of
     beneficiaries. A combined village hall and managed workspace
     centre might provide economies of scale and wider access.




26                                                            Chipping Norton
Chipping Norton Enterprise Centre

Proposal

                    7. A proposal

                                       centre
                    7.1 The enterprise centre

                    It is proposed that West Oxfordshire District Council develop an
                    enterprise centre which provides 30-40 units ranging from 20 to 55 m2
                    and averaging 32 m2 (allowing tenants to take more than one unit if
                    there is a need for larger amounts of space). Some costs, such as
                    management costs, are fixed and have to be spread over the total
                    space so the larger the number of units, the lower the cost of
                    providing the space. Building larger centres usually reduces the cost
                    per square foot. In general, enterprise centres need 2,300-2,800 m2 of
                    lettable space to cover the costs of management and support
                    services as well as some allowance for voids. This would be a large
                    amount of space to provide in Chipping Norton, which suggests the
                    need to:
                           Phase development – with an initial phase of around 1,400 m2
                           (c. 15,000 sq ft);
                           Seek capital subsidies, where possible;
                           Develop in partnership with private sector developers or
                           workspace operators;
                           Minimise management costs, for instance through operating
                           as a satellite to a larger enterprise centre or else having part
                           time management staff;
                           Minimise service costs, for instance through concentrating on
                           strategic services only;
                           Avoid sectoral theming since this will lower the occupancy
                           level – but use targeted marketing to raise awareness among
                           clusters such as furniture and other crafts, film and other
                           creative industries.

                    7.2 Setting up

                    A new build development will take around a year before it is able to
                    take in tenants. It would be sensible to use this time for marketing and
                    support to prospective tenants. An effective way of doing this would
                    be to develop partnerships with the business support organisations
                    such that they start to base more counselling and training in Chipping
                    Norton.

                    7.3 Management

                    Ideally an incubator workspace or enterprise centre should have a full
                    time manager – who can provide some support to tenants, but
                    importantly can network and ensure that the tenants are able to
                    benefit from a wide range of contacts and support. A good manager
                    can often pick up client issues at an early stage – thus ensuring that
                    they never become catastrophic issues – and can also often
                    introduce tenants to prospective customers and prospective
                    collaborators.



Enterprise Centre                                                                             27
     The first phase of the centre will be too small to support a dedicated
     manager. However, it should have on-site management at least part
     of the time. This could be achieved by, for example, the centre being
     developed as a ‘satellite’ by Basepoint, sharing management
     arrangements with a larger centre, or by having a manager provided
     by one of the business support organisations, such as Business Link.

     7.4 Potential partners

     There are a number of potential partners:

     7.4.1   Business Link
     Business Link Solutions already has a contract from SEEDA to manage
     the enterprise gateway at Faringdon. This has a number of multi-
     occupancy units – they rent space by the desk – and provides access
     to training and mentoring as well as organising regular networking
     events. They could be interested in managing a centre at Chipping
     Norton and, irrespective of whether they manage a centre there,
     would be willing to provide training and mentoring to businesses
     based in Chipping Norton.

     7.4.2   Oxfordshire Business Enterprises
     OBE works primarily with start ups – throughout Oxfordshire, but also
     draws clients from Northamptonshire, Warwickshire and elsewhere.
     They already provide support on a peripatetic basis – with training
     and counselling available in Banbury, Bicester, Farringdon and
     Oxford. They have a good relationship with Business Link which
     provides around 60 per cent of their funding; the District Councils
     provide a further 20 per cent.

     The OBE board has decided that they should not provide workspace
     themselves on the basis that they do not have the skills, though Chris
     Carr, the CEO, would not rule it out. However, OBE would be very
     keen to partner with a developer of a workspace in Chipping Norton
     and has already promised that they would provide training and
     counselling there for at least one day every week.

     7.4.3   TBAC
     TBAC is actively looking for new workspaces and would be keen to
     have the opportunity to manage a site at Chipping Norton. They
     would be unable to contribute financially to any capital requirement,
     but are experienced in managing workspace, and could be well
     suited to manage the space at Stones or at the Phone Co-op’s new
     site.

     7.4.4   Oxford Innovation
     Oxford Innovation is a private commercial company 40 per cent
     owned by the Oxford Trust and the other 60 per cent split between
     venture capitalists, business angels and another charitable trust.
     Oxford Innovation is the UK’s leading operator of Innovation Centres,
     managing 12 Centres that provide flexible office and laboratory
     space for over 300 innovative companies. It provides access to
     finance through three business angel networks including the
     Oxfordshire Investment Opportunity Network and helps with grant
     applications. It offers a virtual office service called Oxiflex aimed at
     early stage companies who are seeking to “test the water”, offering


28                                                              Chipping Norton
                    minimal exposure for the entrepreneur whilst providing an extensive
                    range of business support services. It plays a key role in creating
                    clusters and networks of SMEs through its cluster/ membership
                    organisations including DiagnOx, which helps to commercialise
                    research from the medical, veterinary, environmental and food
                    industries and Oxmedia Network, for the new media and creative
                    sector.

                    David Kingham, Oxford Innovation’s CEO, says that they could be
                    interested in some involvement in an enterprise centre in Chipping
                    Norton, especially if the businesses are innovative, entrepreneurial or
                    creative. They could play three roles: management, business support
                    and financing/ technical support; given the location, the last two of
                    these is more viable than the first, that is, they could be one of a
                    number of sources of business support.

                    7.4.5   Oxford Brookes University
                    Oxford Brookes has a link between its business school and businesses,
                    which it calls an enterprise centre. This carries out consultancy, short
                    courses and contract market research and joint ventures. It also helps
                    to roll out student enterprise training. Last year it had a turnover of
                    some £440,000 with a modest surplus. The enterprise centre has no
                    premises and no involvement in managing workspace. Oxford
                    Brookes could play a role in servicing the Chipping Norton enterprise
                    centre or, more likely, individual businesses in the enterprise centre.
                    This would be a specific business advice role.

                    7.4.6   Basepoint
                    Basepoint is a managed workspace operator based in Winchester.
                    Started in 1988 as City of Winchester Investments, the company now
                    has 13 managed workspaces across the South East. Space is targeted
                    at new and growing businesses, for example, those seeking their first
                    premises from working at home.

                    Basepoint is seeking to expand across England. Ideally the company
                    looks for 1.5 to 2 acres to build 2,300-2,800 m2 providing 60-90 units.
                    Basepoint generally works with local authority partners, usually by
                    taking a 125 year lease on local authority owned land, but it builds
                    and manages its centres. Deals vary, but usually Basepoint pays a
                    ground rent which starts at a modest level and then rises as the centre
                    fills and becomes more profitable.

                    Basepoint normally expects to staff each centre with a full time
                    manager and assistant, and the rents they charge need to include
                    this cost. Their rents vary from £16 – £40 psf fully inclusive dependent
                    on location.

                    Recently, Basepoint has been exploring the scope for establishing
                    satellites – typically of about 1,400 m2 (c.15,000 sq ft) – managed from
                    a central hub. Laura Wilkinson has previously had some discussion with
                    the District Council but Basepoint would be interested in further
                    discussions if we can show that there is sufficient demand.

                    7.5 Ownership

                    Ownership will partly depend on the route chosen to develop the
                    centre. There are a number of options, some of which are highlighted
                    in the table below:


Enterprise Centre                                                                              29
 Table 5: Ownership options

 Option                         Pros                                    Cons
 Council retain freehold of             Council can promote as                 Council has to find around
 land and building                      evidence of its support for            £2.5m to complete the
                                        new and growing businesses             centre
                                        Council can make a return              Council does not have skills
                                        on its investment (ideally             in managing incubator
                                        allowing any further surplus           workspace so will need to
                                        to be used to provide                  contract to a managing
                                        additional business support            organisation
                                        service)
 Council retain freehold of             Council can promote as                 Less opportunity to influence
 land and allow developer to            evidence of its support for            management once centre is
 own building                           new and growing businesses             complete
                                        Council only has to find               Developer may wish to
                                        sufficient money to acquire            provide additional facilities
                                        the land                               on the site that are not
                                        Council can make a return              wholly welcomed by the
                                        on its investment through              council
                                        charging ground rent,
                                        perhaps linked to the
                                        building’s rental income
                                        Assuming developer is
                                        Basepoint or Oxford
                                        Innovation, they will take on
                                        all management
                                        responsibilities
 Council support third party            Council can promote as                 Council has to find a
 owner (such as business                evidence of its support for            proportion of the total cost
 support organisation)                  new and growing businesses             (probably at least 25 per
                                        Third party has a resource             cent) but never gets any
                                        which will generate non-               return
                                        grant income, leading to               Less opportunity to influence
                                        greater sustainability                 management once centre is
                                                                               complete

                               If the council can find all the money, then retaining total ownership
                               gives maximum flexibility; if it cannot find all the money, then a
                               partnership with a developer is the next best option as it is unlikely that
                               any of the business support organisations would be able to convince
                               a bank to lend them a large part of the capital and they would be
                               unlikely to raise it as grant aid.

                               Supporting a third party to raise the money seems the least likely
                               option to succeed, at least in the short term. This leaves either the
                               District Council to invest the money required in a site and building and
                               contract directly with a managing agent; or secure an agreement
                               with a developer such as Basepoint or Oxford Innovation, with a track
                               record of providing the development finance.

                               Both would be interested in talking further, though OI would want to
                               focus more on high tech businesses.

                               7.6 Tenure

                               We recommend that units are let on an easy in, easy out monthly
                               licence.




30                                                                                            Chipping Norton
                    We recommend against sliding scale rents, although a lower rent
                    could be offered for the first one to three months, to compensate for
                    relocation costs. (The financial models assume one month rent free,
                    but not service charge free).

                    8. The facilities

                    8.1 Site specification

                    A building providing 1,500 m2 (c.16,000 sq ft) spread over two floors
                    with one parking space per unit requires a minimum of around 0.25
                    hectares (c.0.6 acres), allowing for some external circulation space.
                    Providing two spaces per unit requires nearly an acre, unless
                    basement car parking is provided, though this will add considerably to
                    the cost of the building. Some parking for visitors will also be required.
                    The final requirement will clearly depend on the site topography, ease
                    of access, etc. As noted above, Basepoint look for 0.6-0.8 hectares
                    (1.5-2 acres) to provide 2,300-2,800 m2 (25-35,000 sq ft). Until a specific
                    site is chosen and until there is an outline design, it would be sensible
                    to budget for around 0.4 hectares (1 acre).

                    8.2 Building specification

                    The design should relate specifically to the needs of an enterprise
                    centre – that is, it should give security, a high standard of
                    accommodation, and a sense of community. Both sites allow for
                    further space and this should be planned carefully to accommodate
                    anchor tenants and the possibility of grow on space as well as
                    adequate parking (1-2 spaces per unit).

                    9. Support services

                    9.1 Needs of tenants

                    In the survey of Business Link clients we asked them about the factors
                    that they might consider when taking a decision about a workspace.

                    The data (see figure 20) gives a vivid picture of the priorities of
                    potential enterprise centre occupiers. In the early days of incubator
                    history, occupiers valued office services and meeting rooms, but the
                    falling cost of technology means that businesses now prefer to make
                    their own arrangements. A service that might be helpful, however, is
                    one that helps the businesses when they run into IT related problems
                    The Chipping Norton data is consistent with a more modern small
                    business, where security, broadband and parking are key issues.

                    The need for parking was confirmed by other consultees; parking is an
                    issue in West Oxfordshire. Planning guidelines recommend a maximum
                    of one parking space per 30m2 (323ft2) of office space to fit in with
                    national and county policy. It is possible to exceed these but a very
                    good case needs to be made as part of any planning application.
                    This could be a challenge for an enterprise centre in which the unit
                    average size is 33m2, but where most businesses have at least one
                    employee in addition to the entrepreneur, many of whom will want to
                    drive. One solution, though it adds to the cost, would be to provide
                    basement parking.




Enterprise Centre                                                                            31
                                                      Figure 20: Factors affecting business premises decision

                                      S e c urit y

                                  B ro a dba nd

                                       P a rk ing

                           A f f o rda ble re nt

                     F rie ndly a t m o s he re

                            S m a rt building

                        E a s y in, e a s y o ut

             A bilit y t o e xpa nd o n s it e

                          A ll inc lus iv e f e e

                           2 4 ho ur a c c e s s

             Lo c a t io n ne a r m a in ro a d

                 Lo a ding dire c t t o unit

                                   S m a ll s ize

                       A bilit y t o buy unit

                           M e e t ing ro o m s

                                C a f é o n s it e

               O t he r S M E s in building

                         O n- s it e m a na ge r

     A v a ila bilit y o f o f f ic e s e rv ic e s

                                          O t he r

                                                      0%   10%     20%    30%   40%      50%      60%       70%   80%   90%   100%

                                                                                Esse ntia l   De sira ble


                                                      Source: IGA/AJA survey

                                                      9.2 Physical provision

                                                      In addition to the units, enterprise centres benefit from a smart
                                                      reception area (which doesn’t have to be permanently staffed, but
                                                      does have to make it easy for visitors to find their way around).

                                                      Ideally, there should be an area with tables and chairs where tenants
                                                      can meet with visitors rather than taking them to their units. There
                                                      should be a coffee machine or else easy access to a small kitchen. It
                                                      may be appropriate to promote such a facility to other businesses,
                                                      especially home based businesses, who do not want to meet visitors
                                                      at home, either because they are worried about security or think that
                                                      it looks less professional.

                                                      The building should be equipped with broadband – and if there is a
                                                      communal area such as the one described, then it would be sensible
                                                      to provide wi-fi access as well.

                                                      9.3 Unit size

                                                      The survey gave an indication of the likely size of units sought by start
                                                      up businesses. We recommend that units vary in size from 20 to 50 m2
                                                      (c.220-540 sq ft). Tenants needing more space than this can take
                                                      more than one unit. Ideally the design of the building will allow for
                                                      modular construction, providing sufficient flexibility during construction
                                                      to provide larger units if demand requires it, but allowing the scope to
                                                      divide them up later should that prove necessary. It may be
                                                      appropriate to provide inter-connecting doors between pairs of units
                                                      to facilitate letting units in pairs.



32                                                                                                                      Chipping Norton
                    Figure 21: Unit sizes




                       N umber of units
                                          14
                                          12
                                          10
                                           8
                                           6
                                           4
                                           2
                                           0
                                                   20       25      30       35       40      45          50
                                                                                             Size of unit (sq m)




                    9.4 Common services

                    We recommend against providing shared office services, as there is
                    generally little demand, highlighted by the survey results quoted
                    above. However, the possibilities for IT support should be investigated.

                    Our experience has been that there is little demand for meeting
                    rooms. This could be tested out in the early days of letting, since there
                    are likely to be vacant units that could be let on an hourly or daily
                    basis for meetings. If the demand turns out to be high, then a unit
                    could be retained as a meeting room; if it turns out to be low, then
                    meetings would be confined to the common area described above.

                    9.5 Business support

                    Ideally, a centre will not only provide support for tenants but will be a
                    magnet for other businesses, providing support to businesses who visit
                    the centre and also providing support on a virtual basis. OBE is keen
                    for a Chipping Norton base and may be willing to provide counselling
                    and training in Chipping Norton, so would welcome the provision of
                    suitable space within the building. Similarly, Business Link is willing to
                    provide some counselling and training from a centre within Chipping
                    Norton. This would require that they (perhaps together) rent a unit to
                    use as a training room, though this would need to be one of the larger
                    units.

                    10. Proposed steps

                    10.1 Introduction

                    We suggest three stages to development:
                                               Focus and clarify responsibilities through a steering committee
                                               and project champion.
                                               Test demand through support to town centre offices.
                                               Phase development of a new enterprise centre.

                    10.2 Steering committee and project champion

                    The most immediate need is to establish a small steering committee
                    which can move this project forward. Ideally there needs to be an
                    individual who can act as project ‘champion’ who takes overall
                    responsibility for the project.



Enterprise Centre                                                                                                  33
     10.3 Testing demand

     While the demand for space in Chipping Norton appears to be
     strong, we have some concern that some town centre offices remain
     unoccupied. Low occupancy could be the result of poor
     specification, high rental levels or weak marketing rather than low
     market demand. Addressing these issues would provide an ideal
     opportunity to test the market. The location, size and quality of units
     will not suit every business. However marketing the space effectively
     should build up a waiting list of businesses looking for premises as well
     as filling the seven empty units.

     We recommend that a business support organisation be appointed to
     act as managing agent for long term empty town centre offices.
     There are two clear possibilities. Business Link Solutions already
     manage space at Faringdon and could also provide training and
     mentoring to tenants. TBAC could also be interested as the space
     matches the profile of their existing premises.

     Space should be provided on easy in, easy out monthly licences with
     an all inclusive rent. The ideal arrangement would be one where the
     managing agent pays a percentage of the rent (after deduction of
     costs such as power, cleaning, security and rates) to the owner.

     10.4 Phasing development

     We recommend that the Council works with partners who can help
     develop, and share the financial and operational risks of the
     enterprise centre.

     The stages in developing a new centre include
             Finalising choice of site;
             Commissioning a design and detailed costing;
             Raising the finance;
             Identifying a suitable ‘managing agent’ and agreeing a
             contract, or agreeing a contract with a workspace operator;
             Letting a building contract, or agreeing a contract with a
             workspace operator;
             Agreeing arrangements with Business Link Solutions and/ or
             OBE to provide training and mentoring on site, not just for
             tenants but for anyone thinking of starting in business and for
             any business looking for support as they seek to grow.
     In the medium to long term, it is likely that there will be sufficient
     demand for a second phase adding a further 1,400 m2 (c.15,000 sq
     ft), giving a total provision of around 2,800 m2 (c.30,000 sq ft). This has
     the advantage, then, of being large enough to support a full time on-
     site manager. Whilst it is not essential that this is all on one site, clearly
     the management task would be easier if it were on a single site.

     11. Conclusions

     There is evidence of demand for an enterprise centre:
             West Oxfordshire has the second highest rate of self
             employment in Oxfordshire, behind South Oxfordshire;




34                                                                  Chipping Norton
                           West Oxfordshire has a low level of floor space per VAT
                           registered business compared to Oxfordshire and the South
                           East;
                           West Oxfordshire has a smaller number of businesses that grow
                           to a turnover greater than £1 million than any other district in
                           Oxfordshire except South Oxfordshire.
                           West Oxfordshire has a wide sectoral mix, with a high
                           proportion of sectors that are suitable for an incubator
                           workspace;
                           Chipping Norton has a number of industrial estates as well as
                           barn and agricultural conversions providing a good level of
                           space for businesses seeking larger sizes. However, the only
                           space targeting new and growing businesses is not a
                           managed workspace (the Stones Business Centre). There are a
                           number of incubator and managed workspaces in
                           Oxfordshire, but only one in West Oxfordshire – all of which
                           report that they are full or nearly so;
                           Estate agents believe that there is unsatisfied demand for
                           small units in Chipping Norton, especially from people moving
                           into the area who then want to start up a business;
                           The availability of small units in Chipping Norton has
                           decreased over the last couple of years;
                           Analysis of the Council’s property register suggests that there is
                           a gap in provision below 100 m2 (around 1,000 sq ft);
                           West Oxfordshire has a balanced sectoral mix, with many
                           sectors suited to enterprise centre type space;
                           A survey of Business Link clients suggested that many new
                           businesses start from home and then seek to expand into
                           rented accommodation. The majority (around 50%) are
                           looking for office space with 55 per cent wanting less than 500
                           sq ft. The preferred location stated by respondents was
                           Chipping Norton;
                    Furthermore the policy climate for an enterprise centre is positive:
                           Oxfordshire Economic Development Strategy, West
                           Oxfordshire District Economic Development Strategy and
                           Chipping Norton Appraisal all express strong support for small
                           business development in Chipping Norton. New and growing
                           businesses help to reduce commuting, foster social cohesion
                           and protect the quality of life.
                           Chipping Norton Partnership has a vision of Chipping Norton as
                           a working market town with a balance between housing and
                           employment. This vision is heavily dependent on the existence
                           and growth of small businesses.
                    The only findings against an enterprise centre are that small unit rents
                    in Chipping Norton have not increased in the last couple of years and
                    that barn conversions have taken some of the demand for small units
                    away from the market towns.

                    Our analysis suggests that Chipping Norton could support an
                    enterprise centre of around 1,400 m2 (15,000 sq ft) providing 30-40
                    units in the short term – and possibly twice this in the longer term.

                    The issue is whether this can be met economically in an enterprise
                    centre, which generally need 2,300-2,800 m2 (c.25-30,000 sq ft) of


Enterprise Centre                                                                           35
     lettable space to cover the costs of management and support
     services as well as some allowance for voids.




36                                                        Chipping Norton
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