The old carriage works in Swindon once churned out rolling stock for Isambard Kingdom Brunel’s Great Western Railway, dubbed “God’s Wonderful Railway” after it opened in 1843.
Nearly 180 years later, the vast sheds house pods for innovators and start-ups straining to pull the town out of a two decades-long investment slump and into the new cutting-edge industrial arc that stretches from Oxford to Cambridge.
But a shortage of land, planning blockages, regulatory uncertainty, post-Brexit trade barriers and a decade of local government budget cuts have combined to make it harder to get foreign companies to invest in the town.
It is a story that is not unique to Swindon, home to 220,000 people and which sits in the middle of a triangle of the university centres of Oxford, Bristol and Reading, about 80 miles west of London.
The fastest-growing town in Europe in the 1970s and 80s, Swindon is today a reminder of the perils of allowing the national conditions for investment to deteriorate over time — a situation to be addressed in a report by Tory peer Lord Richard Harrington to be published on the eve of next week’s Autumn Statement.
One of the organisations at Swindon’s old carriage works that is hoping to reverse the trend and rekindle the spirit of Brunel is the Innovation Centre for Applied Sustainable Technologies (iCAST), a hub for commercialising research from the universities of Bath and Oxford.
“We want to bring innovation back to the carriage works, where once trees and lumps of iron came in at one end and left at the other as beautiful railway carriages,” said Matthew Davidson, iCAST’s executive director.
“It’s the ‘moonshot philosophy’ we need to embrace again,” he added.
To succeed, Swindon will need to arrest a decline that began in the 1990s after a postwar investment boom that was driven by foreign direct investment.
The town’s success had been built on investment from some of the world’s biggest companies, including Intel, Motorola and Burmah-Castrol, according to Martin Boddy, professor of urban and regional studies at UWE Bristol and co-author of a 1997 book on Swindon’s rise and decline.
They were attracted by Swindon’s low-cost land and proximity to London via Brunel’s railway and the M4 motorway. But since the 1990s foreign investment has slowed, with non-UK businesses now employing about 10,000 people, down 38 per cent from the mid-1990s, according to Boddy’s estimates.
“Swindon has great potential but we also have big challenges,” he said.
Two years ago, the town suffered a heavy blow when Japanese carmaker Honda, which had built best-selling models at a site on the town’s outskirts since 1985, closed the factory, with 3,500 workers losing their well-paid jobs.
Plans to repurpose the site into a high-tech manufacturing hub never materialised and it was purchased by US-owned Panattoni, one of Europe’s biggest developers of logistics property, a lower-skill, lower-paid activity.
The experience has left the likes of Jim Robbins, the Labour council leader, clear-eyed about the uphill battle the town faces. Swindon Borough Council turned Labour last May for the first time in 20 years.
“We’d like to use those engineering skills in some other way, but the longer it goes on, the harder it gets” as the skills base dissipates, he said.
A shortage of land, compared with the 1970s and 80s, is among the most intractable difficulties for investors looking to manufacture, according to local land agents and Business West, the regional chamber of commerce.
One of those agents, Rob Gillespie, lived through the boom of the 1980s and is now managing director of consultancy Impact Planning Services. He said increased localism and a generation of mostly Conservative local politicians had gradually choked off supply.
“They have been unwilling to rock the boat with their core vote when it comes to planning decisions. The lack of vision to overcome these problems from local authorities means that Swindon has stagnated,” he said.
Even when land does become available, it is used for activities such as logistics, like at the Honda site.
Matt Griffith, director of policy at Business West, said that after Honda left there were investment inquiries from high-value international and domestic sectors but — with Panattoni now determining the fate of the site — the town did not have the land to fulfil them.
“If Swindon was better resourced within a coherent UK economic strategy for growth areas, we wouldn’t lose those opportunities and jobs,” he said.
The council is now identifying potential land for development. “It’s early days, but we want to be sure that should someone pick up the phone, that we have the offer all in place,” Robbins said.
Soliciting that phone call from big-ticket investors who have a global menu of options, is the next challenge. After a decade of local government budget cuts, Swindon, like councils across Britain, has a much-reduced capacity to drum up business.
Where there was once a team of enterprise officers and planners, the council now has only one business development manager and while Robbins is looking to hire another, he still needs to make £25mn in budget cuts to balance the books next year.
Help must therefore come at a regional and national level, according to Robert Buckland, the local Conservative MP and former minister, who used his connections earlier this year to bring the Norwegian ambassador to the UK to Swindon in an effort to flag the potential of the town to the country’s sovereign wealth fund.
“The capacity of small towns and local governments to do economic development just isn’t there any more. My view is we need an effective sub-regional body, with Swindon and other local authorities to attract investment to the M4 corridor,” he said.
Even with improved efforts to sell Swindon, Robbins said he could not escape the fact that Brexit has made it harder to attract investment because the UK is no longer the obvious stepping stone for companies looking to export into the EU.
“While we were in the EU single market you could go to a US company and say ‘we’ve got access to Europe, we’re close to Heathrow’ — but it’s clearly a trickier proposition now, but we still have to sell these places and say we are value for money,” he said.
Crystallising that investor proposition is key, not just for Swindon, but for the entire UK, according to Angus Horner, who founded and scaled up the Harwell Science and Innovation Campus south of Oxford in 2013 and is on the Swindon Futures commission, a new independent body that is trying to revitalise the town.
After the political and regulatory turbulence of the Brexit years, Horner believes the UK must become consciously more aspirational and aggressive about branding itself in order to attract investment.
The UK’s FDI challenge
Britain is struggling to attract the overseas investment needed to boost economic growth. In a series of articles, the FT examines the reasons behind the decline and what can be done to reverse it.
In Swindon’s case that means both improving infrastructure around its motorway junctions, while leveraging its heritage as a centre of industrial innovation, in order to sell itself to the world.
Advanced manufacturing is the “pivotal partner” to science-driven R&D, Horner added, and while Brexit will not be fixed immediately the UK can also reduce other barriers such as capital availability, planning delays, skills provision and visa red tape.
“Fundamentally, the UK offer to the world is unclear and clearly degraded because of Brexit,” he said. “What the UK wants to ‘win at’ is not that clear — both to the man on the street and the international investor — and we urgently have to fix that.”