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Need for regeneration

Investment in regeneration

The facts of deprivation in the Coastal Action Zone, as cited earlier in this proposal, have led the key agencies – this authority, the County Council, the Learning and Skills Council, the East Midlands Development Agency and the Government Office for the East Midlands to recognise the need for action in the Coastal Action Zone. Investment so far, however, has been modest and the casino and its related leisure facilities have a decisive role in regeneration.

We have noted the Hall Aitken6 study, which claims that many of the regeneration benefits of large (‘regional’) casinos are offset by displacement effects on nearby leisure activities. We do not believe that this argument applies to our proposals, which are for casino activity of modest scale in an area devoted to leisure activities and far from any competing gambling attractions. From the point of view of the Coastal Action Zone we expect the resulting activity to be almost purely additional. It will indeed generate positive spin-off effects both of the conventional multiplier-linkage kind and of the dynamic, qualitative kind that we listed in the introduction to this proposal.

The casino is the only real opportunity available to the Coast. Large urban areas, affluent coastal sites and those with access to good transport links can attract inward investors in office-based industries, or enhanced retail, commercial or other ‘clustered’ activities. We do not have these options. There is no alternative to a tourism industry led development on the East coast of Lincolnshire.

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Impact on employment and Gross Value Added

We have conducted a standard multiplier-linkage analysis of the impact of the casino and related facilities with the results shown in the table. Employment in the facilities themselves is broadly consistent with the three specific proposals actually received (see Section 5). We estimate that 17,500 of the 60,000 (all age) residents of the Coastal Action Zone are employed on average across the year and that the casino project, together with multiplier and linkage effects, will have an impact equal to 2% of current employment on a headcount basis7.

We expect construction to begin during 2008, and for one-third of work to be completed in that year with the balance in 2009. We expect half of the jobs tabulated above to be in existence during 2009 and the whole number from 2010 onwards. On these assumptions we anticipate an employment impact of 0.6% in 2008 – entirely from construction activity – and the 2% already mentioned from 2009 onwards, though in 2009 this impact will be about equally divided between construction job impact and operating job impact.

There are no official statistics for GVA for either East Lindsey or for the Coastal Action Zone. In 2003, Lincolnshire GVA was some £8.4bn. On the basis of the Coastal Action Zone’s share of population (something under 10%) and a range of evidence indicating low GVA per capita there, we estimate that about £600m of GVA originates from the Coast – though any such estimate is subject to major methodological difficulties. Lincolnshire County Council estimates indicate that GVA within the Coastal Action Zone is below that of Objective 1 levels. The direct and induced activity that will lead to the employment effects summarised above will, we estimate, add about £10.5m of added value to the total or 1.8% of our rough £600m estimate of GVA.

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A strong multiplier effect in a ‘self-contained’ locality

We anticipate that the new casino and its immediately associated facilities will create 260 headcount jobs. We estimate that there will be at least 16 ‘linkage’ jobs created on the Coastal Action Zone – these are jobs resulting from the casino and other facilities making purchases from local suppliers8 and those suppliers in turn increasing their orders to other suppliers. More significantly we anticipate that the ‘forward multiplier’ that is the effect of increase spending by people newly employed at the casino and associated facilities (and at suppliers) will raise the number of jobs by about 25% to an overall total of 350.

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Other regeneration outputs and outcomes

Some parts of the East Lincolnshire Coast effectively shuts down both economically and socially for the six months from October to March. This seasonality creates two coasts, first the one which holiday makers see: vibrant, lively and commercially successful and a second, largely unseen coast: quiet, cold, and economically inactive. A casino would help to level out the economy, provide an all year attraction and act as a catalyst for more all year facilities.

The graph shows the usual resident population level at 60,000 and the impact on the population when visitor numbers peak at the height of summer and there are over 130,000 people in the area – though its monthly averages do not show the peaks, exceeding 300,000 on some days in the summer.

Whilst located on the coast, the casino concept has the potential to attract visitors to the whole of Lincolnshire and thus act as an entrepot to the rural hinterland and enhance the tourism product of Lincoln, Boston, Louth and Woodhall Spa.

Employment summary
  FT PT (= 0.5 FTE on average) Headcount FTE Wage bill, £m
Casino and restaurants 75 75 150 113 1.71
Hotel 23 23 46 34 0.46
Entertainment facility 33 33 67 50 0.67
Sub-total for all direct effects 131 131 262 197 2.84
Local linkage 8 8 16 12 0.15
Sub-total 139 139 279 209 2.99
Apply forward multiplier @ 1.25 (see note) 174 174 348 261  
The forward multiplier is higher than the standard 1.18 because of high local ‘containment’
Excludes construction jobs (see text)
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6. Hall Aitken (Regeneration Consultants) – ‘The Social and Economic Impacts of Regional Casinos in the UK’, February 2006

7. Professor Glyn Owen – Economic Case for a Small Casino within the Coastal Action Zone

8. A schedule in Excel format detailing our assumptions is available from www.coastalactionzone.co.uk

Graph showing the influence of day visitors on the coastal population

A graph showing the influence of day visitors on the coastal population. Please click the image to view it at a larger size.