New DfT report indicates number of local jobs from Heathrow 3rd runway about 37,700 by 2030 – not “up to 77,000”
The Airports Commission’s Final Report said the Heathrow NW runway would lead to an additional 59 – 77,000 jobs [direct, indirect and induced jobs – ie. supply chain etc] in 2030 for local people. Indeed, Heathrow “astroturf” lobby group got membership partly on the strength of the jobs claims. But now, having looked at the details, the DfT has come up with much lower figures. While the statement on the DfT website on 25th October still says “up to 77,000” local jobs, its more considered assessment “review and sensitivities” document accepted these figures were exaggerated. Instead they now say, using a more accurate method, the number of local jobs might be 37,740 by 2030, not 77,000. By 2050, the DfT now estimate the number of jobs might be 39,100 – while the Commission expected 78,360. The DfT say the 2050 figure is the cumulative total, and cannot be added to the number of jobs created by 2030. The DfT “assessment and sensitivities” report states that it had “identified a number of uncertainties with the approach taken” to assessing jobs by the Commission, which used job multipliers from the airports. These “could lead to significantly different results”. The new DfT figures use Berkeley Hanover Consulting Ltd (BHC) and Optimal Economics Ltd survey data rather than airport assumptions to generate estimates of the indirect job multipliers, which are likely to be more robust.
The Airports Commission’s Final Report said:
“Expansion at Heathrow would drive a substantial increase in employment at and around the airport, generating an additional 59 – 77,000 jobs [ie. additional direct, indirect and induced jobs] in 2030 for local people and for the fast-growing wider population in London and the South East, including for black and minority ethnic communities for whom Heathrow is an important employer.”
The new DfT document assessing the validity of the Airports Commission analysis is at
Further Review and Sensitivities Report.
Airport Capacity in the South East
Moving Britain Ahead
Below are most of the extracts that relate to jobs:
Purpose of this Report
7. The main purpose of this report is to set out the monetised costs and benefits of
the three shortlisted options for airport expansion in the UK to the economy, the
environment, and society, as well as the impacts on local jobs.
18. The department engaged with external experts to further refine the AC’s
methodology for estimating the wider economic impacts and the number of local
jobs created that could follow expansion. Although it is recognised that there will
be wider economic benefits from trade, these are no longer included in the central
NPV, due to the risks of double-counting. These benefits are closely related to
business passenger benefits as well as wider economic benefits from increased
agglomeration, and further review has suggested that these cannot be deemed as
additive to one another. Given the significant uncertainties that remain around the
estimates of wider economic impacts, a range is now presented. The department
also developed a revised methodology for estimating the number of new local jobs
that may be delivered by expansion, which are now also presented as a range
(see chapter 6).
…..The AC did not monetise the impacts on the local economy, but undertook a literature review of the local economic impacts of expansion and estimated the impact on the number of local jobs. This local impact is not necessarily additional at the national level, as the local jobs may be displaced from elsewhere in the country due to passengers switching from other airports, or displaced from other employment sectors altogether.
6.4 The department agrees with the AC’s overall framework for analysing local jobs
impacts, but identified a number of uncertainties with the approach taken. These
uncertainties mean that varying the assumptions in the analysis could lead to
significantly different results. The department has therefore undertaken work to
further review the evidence and generate a range of estimates for the number of
local jobs created. In addition, inconsistencies were identified between the AC’s
stated method and the actual calculation of these impacts, so some further
revisions were made to the estimates for LGW Second Runway scheme.
6.5 The department’s alternative approach uses the same data as the AC (on-airport
employee surveys) for the projections of the number of direct jobs. For the
estimates of indirect and induced jobs the AC relied on multipliers provided by the
scheme promoters. The department has considered an alternative approach which
uses data on current employment at Gatwick 31 and Heathrow 32 [31 ’Gatwick Airport Employment Generation to 2020 in the Context of the Local Labour Market’, Report to West Sussex County Council, Berkeley Hanover Consulting, 2011. 32 http://www.heathrow.com/file_source/Company/Static/PDF/Communityandenvironment/Heathrow-Related-Employment-Report.pdf ]
from Berkeley Hanover Consulting Ltd (BHC) and Optimal Economics Ltd respectively in order to re-estimate these impacts. These studies use survey data rather than assumptions
to generate estimates of the indirect job multipliers, providing additional assurance
around their robustness. Estimates of the number of induced jobs supported are
however calculated using multipliers assumed by BHC and Optimal. A further
difference arises as the size of the Heathrow local catchment area used in the
department’s approach is smaller than that used by the AC. Indicative analysis
suggests this only accounts for a small proportion of the difference between the
6.6 The number of local jobs supported by the presence of an airport depends on
many factors including the type of airport, size of the airport passenger and
employment catchment areas, and even the size of these areas compared to the
size of the country as a whole. Reflecting these uncertainties, Table 6.1 displays a
range based on the revised AC estimates and the alternative approach considered
by the department. It should be noted that the local jobs created by 2050 are the
cumulative total, and cannot be added to the number of jobs created by 2030.
Heathrow jobs by 2030 – 37,740 not 76,650
While the DfT puts out the assessment of 37,740 Heathrow local jobs by 2030, it also puts out on the same day (and Grayling tells the House of Commons) the old 77,000 figure
Meanwhile, on the DfT website another document blithely states, as did Chris Grayling in the House of Commons, that the total was 77.000 jobs.
This document, entitled “Heathrow North West Runway Economic Benefits” from the DfT. 25.10.2016 says:
• Separate analysis by the Department for Transport and the Airports Commission suggests that an additional runway at Heathrow could deliver up to 77,000 additional local jobs
• This will help the airport to deliver its promise of creating 5,000 new apprenticeships by 2030, doubling the current total to 10,000.
• Heathrow has pledged that these new opportunities would have the potential to drive down youth unemployment in the five boroughs nearest to the airport – Ealing, Hillingdon, Hounslow, Slough and Spelthorne.
Why can’t the DfT’s runway announcement give the same figure, as is written in the report on the same day, from the same department?
Did the writer of the press release not know the right figure? Was it done by mistake?