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SCOTTISH EXECUTIVE TRANSPORT GROUP
RELOCATION REVIEW - PHASE 1 APPRAISAL REPORT

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Purpose

1. The Transport Group Location Project Team was set up to oversee the location review for Transport Group, in preparation of the creation of the new National Transport Agency (Transport Scotland). The first phase of the review is now complete. The purpose of this paper is to report on the first phase of the appraisal and explain how the shortlist of locations was arrived at.

SECTION 1: SUMMARY

Background

2. The development of a Transport Agency was announced by Scottish Executive Ministers in the Partnership Agreement. As the Agency will be a new body, a location review is required under the Executive's Relocation Policy.

Current location

3. The Transport Group is currently located in one of the Executive's offices in Victoria Quay, Edinburgh. In total there are currently around 220 staff. The staff are split into transport policy groups and specialist groups eg road engineers. It is expected that a proportion of existing Transport Group staff will form the core of the new Agency. Other staff with particular expertise will be recruited and it is expected that the total number of staff in the Agency will be approximately 210.

Process

4. In August 2004 the Transport Group established a Location Project Team (LPT) to carry out the location review. The Team consists of a group of members chosen for their specialists inputs. There are representatives from Transport Group, Analytical Services, Land and Property Division, Human Resources and Relocation Policy Unit. Unions representing Transport Group staff are also included in the LPT.

5. The review is being conducted in two phases.

6. The outcome of phase 1 is to determine a shortlist of possible Local Authority areas to be investigated in phase 2. The criteria for determining the shortlist have largely been prescribed by the Relocation Policy Unit and are consistent with criteria used for recent location reviews and are expected to be included in forthcoming official relocation appraisal guidance.

7. Following receipt of a shortlist of possible local authority areas approved by Ministers, phase 2 will involve a more detailed option appraisal of the shortlisted options, with the main focus being on operational effectiveness and best value for money.

8 The option appraisal process is set out in more detail in the outline appraisal paper prepared at the beginning of the review process and agreed by Transport Group Management Board.

Core criteria

9. As recommended by the Relocation Policy Unit, each local authority has been evaluated against the 4 core criteria specified for Scottish Executive relocations:

• Socio-economic factors;
• Business efficiency;
• Sustainable transport links; and
• Property availability/suitability.

Weightings

10. The Relocation Policy Unit guidance recommends a weighting for each of the four core criteria. These recommended ranges are set out in the middle column of Table 1 below. The column to the right shows the weightings adopted by the Project Team. The rationale for the weightings adopted are set out in paragraphs 11-15 below.

Table 1 Core criteria and weightings

11. The Project Team adopted the recommendation of 50% for socio-economic factors as this reflects the importance of Minister' aim in assisting disadvantaged areas of Scotland.

12. The Team also agreed that one of the biggest drivers for moving towards agency status is the need to improve the business efficiency of the organisation and improve delivery of major transport projects in Scotland. It will be the efficiency of the Agency that will impact directly on its ability to meet its corporate objectives and targets, as well as risk the Agency's ability to deliver the major projects.

13. It will be essential that the Agency is able to retain many of its existing skills and knowledge at all levels as well as maintain sound working relationships with delivery partners and stakeholders. A maximum weighting of 20% is therefore assigned to this criterion.

14. The new location will have to offer sustainable transport access for the Agency's operational requirements. Good transport links will be necessary to maintain stakeholder accessibility as well as attract and retain employees. Moreover, the availability of sustainable transport links is important and must be consistent with Ministers' policy on transport and sustainable development. A weighting of 20% is therefore assigned to this criterion.

15. The last of the 4 core criteria is property availability/suitability. The existence of a local property market likely to provide suitable accommodation is a factor. However, there is no need for a large number of suitable fit-for-purpose properties as it could be built to the Agency's specification. A weighting of 10% has therefore been assigned to this criterion.

Sub criteria

16. Socio-economic factors, business efficiency and sustainable transport links are broken down into sub-criteria. The weightings for the sub-criteria, together with the appropriate indicators, are set out in Table 2 below.

Table 2 Core criteria, sub criteria, weightings and indicators

Analysis

17. The phase 1 analysis is based on scoring each local authority against each criteria and sub criteria using a score of 1 to 32. A higher score indicates that a local authority is more suitable for relocation, and a lower score an area that is less suitable. The scores are then weighted using the Project Team's weightings as set out in Tables 1 and 2.

18. The phase 1 weighted scores and aggregate rankings are set out in Annex 1 and are determined by the individual rankings for the core criteria set out in Annex 2.

19. The analysis and results section of this paper have been constructed with a separate section for each of the 4 criteria plus a final section that draws together the aggregate analysis.

Results and recommendations

20. Based on the results of the aggregate analysis the shortlist and final rankings (weighted score in brackets) are as follows:

• Glasgow City (29.2)
• Fife (26.0)
• North Lanarkshire (22.7)
• East Ayrshire (22.4)
• West Lothian (21.6)

21. It should be noted that although Glasgow and Fife are ranked first and second respectively, the weighted score and ranking do not reflect the difference in absolute terms between the two local authority areas. For example, it is possible that, under a particular criterion, one authority could be significantly more suitable for relocation than any other. However, it would only score one point higher ie 32 compared to 31 for the second placed authority. For example, Glasgow has over half of its population living in the most deprived 20% areas of Scotland. This is significantly more than any other local authority in Scotland, yet Glasgow only received one mark higher than the second placed authority.

22. Comparing Glasgow to Fife, of the 11 sub-criteria used Glasgow was deemed more suitable than Fife in 7 of the 11 categories. Moreover, Glasgow was higher than any other local authority area in 4 sub-criteria: claimant count unemployment; sustainable transport links; proximity to stakeholders; and Scottish Index of Multiple Deprivation.

SECTION 2: SOCIO-ECONOMIC FACTORS

Background

23. The socio-economic factors are intended as a measure of the degree to which relocation would assist in meeting Ministers' aim to assist disadvantaged areas of Scotland. The relative importance of the criteria is reflected by Ministers' insistence that 50% of the weighting should be allocated to this criteria.

24. Ministers have agreed three policy aims within the socio-economic criteria. These are set out in Table 2 in Section 1 but are replicated in the table below, together with the indicators used to assess each local authority against the sub-criteria.

Table 3 Socio-economic sub-criteria and indicators

25. The first policy aim involves " supporting fragile and declining communities". Indicators used to help assess the recent impact include the change in population between 1991 and 2001 (measured through census returns), which gives an accurate understanding of how each local authority's population demographic has changed in recent years. An assessment of each local authority's population density provides an indication of how sparsely the local population is spread out. Both of these indicators are published by GRO Scotland.

26. Previous location appraisals have averaged the two rankings to arrive at a ranking of local authorities with the most fragile and declining communities. It should be noted that averaging the two rankings implicitly assumes that both sub-criteria have equal weighting. It is possible that population decline could be regarded as a greater priority than population density. This issue has been considered as part of the appraisal and the Location Team and senior officials have concluded that equal weighting should be applied to ensure consistency with previous relocation appraisals.

27. The second policy aim within the socio-economic criterion involves " helping areas of economic hardship and deprivation." There are three indicators used to help highlight areas of greatest need, and which have the greatest potential to benefit from a relocation. The first indicator is the Scottish Index of Multiple Deprivation (SIMD). This is a composite index that combines a wider range of individual measures, each looking at different aspects of deprivation. Included are factors looking at income, employment, health, education and geographic access to services. (Although this indicator also includes measures of income and employment (see earnings and employment below) the SIMD is concerned with the concentration of these elements within a local authority area as opposed to averages and does not necessarily lead to double counting.) The second indicator is average weekly earnings. As part of the annual New Earnings Survey, the Office of National Statistics compiles average gross weekly earnings figures by local authority. The third indicator is the level of claimant count unemployment as compiled monthly by the Office of National Statistics. Each local authority is ranked under the 3 indicators. The 3 rankings are then be averaged to arrive at a ranking of economic hardship and deprivation.

28. Note again that averaging the rankings assumes equal weighting for each indicator. The issue has been considered and it was agreed to apply the weightings that have been used for previous relocation appraisals.

29. The third policy aim involves " sharing the benefits of public sector employment". The aim of this policy is to disperse public sector employment more evenly across Scotland. The indicator will be the level of employment in the public sector within a local authority area, as a proportion of total employment in that local authority area.

30. It should be noted that the Relocation Team is unaware of any studies demonstrating a direct link between the number of public sector jobs in an area and its socio-economic performance. In particular, no evidence has been provided to show that the lower the number of public sector jobs in an area, the lower the socio economic performance of that area. Nevertheless, Ministers have a deliberate policy objective of dispersing public sector employment across Scotland and the Project Team therefore included this indicator. In the future however, as this is not a socio-economic indicator, others may wish to give consideration to whether this should be a separate criterion in its own right.

31. The results of the socio economic analysis and the rankings for this criterion are set out in table 4 below. The rankings for each criterion are set out 1 - 32 (32 the most suitable for location). The final column sets out the ranking based on the weightings set out above.

Table 4 Socio-economic criteria rankings

SECTION 3: Business Efficiency

Background

32. In conducting a relocation review it is essential that for each potential location the impact on the organisation's business efficiency and effectiveness is considered thoroughly. It will be the efficiency of the Agency that will impact directly on its ability to meet its corporate objectives.

Sub-criteria

33. The following sub-criteria were identified as being relevant to the measure of business efficiency. These were agreed by the Project Team and assigned the attached weightings

• Main stakeholder accessibility - 33.3%
• Access to labour market - 33.3%
• Staff retention - 33.3%

34. It was agreed that each of the criteria should be assigned equal weightings as each factor would play an equally important role in the business efficiency of the organisation. The methodology and indicators used to assess the local authority areas are set out below.

Staff retention

35. Like many areas of the Scottish Executive the Transport Agency will clearly be a knowledge based organisation and the retention of existing skills and knowledge at all levels will be key to the organisation's ability to operate effectively.

36. To assess staff retention information was used from the staff questionnaire. The responses to the questionnaire revealed that almost half (48%) of staff in Transport Group would be willing to commute for up to an hour. The responses to the questionnaire also revealed how many staff would be willing to move or "may" be willing to move to each local authority. To rank the authorities under staff retention, the first step was to work out which local authorities (main population centre within each authority area) could be reached within an hour from the centre of Edinburgh using public transport. The lowest travel time was ranked highest eg Edinburgh, East Lothian, Midlothian, etc. For those local authorities outside the 1 hour travel time the ranking was based on the number of staff that "would move" and "may move" to the new location.

Access to the labour market

37. The Agency is likely to employ a very high percentage of staff with degree qualifications. The Agency will therefore need to be close to areas with this type of labour pool. The Scottish Household Survey (SHS) supplies data on the percentage of the workforce in each local authority area with first or second degrees. This was therefore used to rank local authorities, largest percentage first (32) and lowest last (1).

38. It is acknowledged that there are slight weaknesses in this approach. For example, the SHS does not disaggregate by subject of degree (information on the number of engineering degrees would have been helpful). Our methodology also means that the potential labour pool in adjacent authorities are not taken into account ie people could live in one authority and work in another. Nevertheless, it was agreed that, in the absence of any other information, it provides a reasonable indicator of the availability of potential recruits within the local authority area.

Proximity to main stakeholders

39. In order to achieve its corporate plan and targets, the Agency's staff will have to meet regularly with stakeholders and delivery partners in the transport sector. It will therefore be essential that regular contact with delivery partners and stakeholders across the UK is maintained. This meant that potential locations had to be considered against their proximity to stakeholders/delivery partners.

40. Questionnaires were sent to Heads of the 6 transport Divisions in the Group requesting information on the main stakeholders/delivery partners and their addresses. It was clear from the returns that the vast majority of stakeholders/delivery partners were located in Edinburgh and/or Glasgow and there was an even split between the two cities. To rank the authorities it was therefore decided to calculate the time taken to travel by public transport from the main population centre in each local authority to both Edinburgh and Glasgow. The two travel times were aggregated and then each authority ranked by total travel time.

Scoring for business efficiency

41. Table 5 below provides the rankings for the 3 sub-criteria and the overall business efficiency ranking.

Table 5 Business Efficiency Criterion

SECTION 4 PROPERTY AVAILABILITY/SUITABILITY

Background

42. A very general property specification was agreed with regard to size - it was recommended that 48,000 square feet would be required to accommodate the anticipated 300 staff that the Agency is likely to employ.

Scoring for phase 1 analysis

43. The Project Team was supplied with details of the availability of land and property in Scotland. The information consists of all the returns supplied by local authorities and local enterprise companies for their area. The individual sites were then reduced to those that consisted of at least 48,000 square feet. These individual sites were then aggregated for each local authority and the authorities were then ranked by the total available square footage in that area that could accommodate the Agency. It should be noted that the site search in the first phase was to be a general search, with the more detailed site specific search being carried out as part of the analysis in phase 2.

44. It should also be noted that there are acknowledged weaknesses with the above approach. First of all, it is assumed that all local authorities or local enterprise companies have provided the necessary information to make the material reliable. Some local authorities may have not responded and this may give the false impression that there are no available sites in the LA or LEC area concerned. Secondly, there is no way of knowing at this stage whether the properties identified in the spreadsheet are suitable for the Agency. For example, the property may simply be a warehouse, empty factory or office that has net been designed along the lines that the Agency will require. Despite these clear weaknesses, it was agreed that at this stage it was the best information available at the time to conduct the analysis and a more detailed search would be appropriate for the next stage.

Summary of results

45. The results of the property suitability/availability are set out below in Table 6.

Table 6 Property Availability/Suitability

SECTION 5: SUSTAINABLE TRANSPORT LINKS

Background

46. It is essential that the new location offers sustainable transport access for the Agency's transport requirements. By utilising the available information on transport links throughout Scotland a score has been derived for each local authority.

Sub-criteria

47. The transport links were divided into the sub-criteria below. In order to take account of the relative environmental impact, access for staff and stakeholders, as well as broader public access issues, the following indicators were assigned to the various modes.

• Rail 35%
• Bus 35%
• Car 20%
• Air 10%

Scoring for Phase 1 analysis

48. Each Local Authority Area has been awarded a score ranging from 1 to 5 for each of the 4 sub-criteria, with a higher score for the better sustainable transport links and therefore the more suitable for the location. The scoring has been assigned to each local authority area as follows:

Table 7: Scoring of Sustainable Transport Links

49. The definition of the categories varies per mode. For example, the bus links category is measured by the number of main cities in Scotland that can be accessed through local bus stations.

Results

50. The results for the sustainable transport links are set out in Table 8 below.

Table 8 Sustainable Transport Links Results

SECTION 6: PHASE 1 AGGREGATE ANALYSIS

51. The summarised rankings for the 4 criteria are set out in Annex 2. The overall rankings are also included in Annex 2, but ranked in order in Annex 1.

52. The inspection of the weighted scores and rankings reveals that, based on the criteria used, Glasgow City is the most suitable local authority area for relocation. Looking at the results, there is a clear gap between Glasgow City and the next ranking authority of Fife. There is a similar gap between Fife and 3 ^rd placed North Lanarkshire. The size of the gap between second placed Fife and 3 ^rd placed North Lanarkshire is the same between North Lanarkshire and 10 ^th placed Angus.

53. It should be noted that although Glasgow and Fife are ranked first and second respectively, the weighted score and ranking do not reflect the difference in absolute terms between the two local authority areas. For example, it is possible that, under a particular criterion, one authority could be significantly more suitable for relocation than any other. However, it would only score one point higher ie 32 compared to 31 for the second placed authority. For example, Glasgow has over half of its population living in the most deprived 20% areas of Scotland. This is significantly more than any other local authority in Scotland, yet Glasgow only received one mark higher than the second placed authority.

54. Comparing Glasgow to Fife, of the 11 sub-criteria used Glasgow was deemed more suitable than Fife in 7 of the 11 categories. Moreover, Glasgow was higher than any other local authority area in 4 sub-criteria: claimant count unemployment; sustainable transport links; proximity to stakeholders; and Scottish Index of Multiple Deprivation. Glasgow was also second highest in terms of the change in population between 1991 and 2001.

Annex 1

Annex 2