Abandoning OxCam Arc ‘will cost our economy £50bn by 2030’

Government plans to scrap a centrally co-ordinated OxCam Arc project will cost the UK economy £50bn by 2030, a new report has claimed.

The Department for Levelling Up, Housing and Communities has shelved a strategic plan to create a UK rival to Silicon Valley from Oxford to Cambridge in order to prioritise ‘levelling up’ spending in the north of England.

Campaigners alarmed by the prospect of one million new homes in the region, and fearing the impact of development on biodiversity, were left relieved by the news.

But the new Radical Capital report, co-authored by property consultancy Bidwells and policy advisory firm Blackstock Consulting, calls for a new body to take the lead to rescue the potential in the Arc.

Nick Pettit, senior partner at Bidwells, said: “The Oxford-Cambridge Arc is the lifeblood of our life sciences industry and the home to world-leading innovation in sectors like advanced manufacturing, AI, robotics, and renewable energy that is internationally renowned.

“Creating a dividing line in access to funding and channelling investment away from global centres of excellence neglects the nationwide benefits that investment in the Arc and its scientific enterprises can generate. As an entity, the Arc would be brilliantly placed to forge greater and stronger collaborations and partnerships with, across and in other geographic and sectoral areas of expertise in the UK, for the national good.

“A central Arc body with powers to co-ordinate and deliver supporting infrastructure, investment, housing and space for innovation can unlock a once-in-a-lifetime opportunity that will benefit future generations to come.”

More than 60 investors, academics, industry chiefs and property developers are backing the report, which sets out a blueprint to ‘supercharge’ innovation in the Arc.

The Arc currently accounts for seven per cent of England’s economic output and is set to grow to £235billion by 2030. It already supports more than two million jobs.

Its economy doubled over the past two decades with the emergence of science and tech as a growth accelerator for the region. Bidwells estimates the size of the economy could double again to £235bn by 2030.

The region is home to some of the UK’s most innovative life sciences and technology businesses, as well as giants such as Cambridge-based Apple, Microsoft and AstraZeneca, which features heavily in the report.

A South Cambridgeshire District Council report last month revealed that there had been a “significant change” in the government’s approach to the Arc.

Council leader Cllr Bridget Smith told members: “As far as we’re concerned, the Arc is no more.”

The leader of Cambridgeshire County Council, Lib Dem Cllr Lucy Nethsingha, also warned that funding for the Arc has been “dramatically scaled back”.

Meanwhile South Cambridgeshire’s Tory MP Anthony Browne confirmed that the OxCam Arc is no longer a government priority.

The Radical Capital think tank argues a new body would ensure central co-ordination of activities which affect the area’s ambition to become a global supercluster similar to Silicon Valley – a region where economic output is similar to the whole of Finland’s. This new body, steered by appointed government ministers, would be responsible for co-ordinating the delivery of all new skills, training and commercial and laboratory space within the Arc, which covers three million people.

The Arc’s importance to key industries, including life science, isn’t viewed as essential to Chancellor Rishi Sunak’s vision for Britain to be a world-leading “scientific superpower”.

But by failing to accommodate the expansion of high value life science and technology in the cluster, the think tank argues that economic growth will fall at least £50billion short of its full potential, with demand for office and laboratory space currently the equivalent to six AstraZeneca HQs, or 300 scale-up businesses.

The report points out that the region is the birthplace of the Oxford/AstraZeneca Covid-19 vaccine, which helped open up economies around the world after extensive lockdowns. It is partly thanks to this that UK GDP now sits just 0.5 per cent below pre-pandemic levels.

Bev Hindle, the executive director of the Oxford-Cambridge Arc Leadership Group, said: “Future capital must look beyond the financial return as we seek to meet the greatest challenges we have as a species. With life sciences, energy, space, mobility, aviation, AI, quantum computing, agri-tech and many more critical clusters the Arc is the future frontier in the UK where not only will it drive economic prosperity but also social and environmental gain as well.

“Radical Capital seeks to amplify the case for the Arc across many areas of capital: knowledge, human skills, nature, connectivity. In a region of world-leading innovation such as the Arc, it may well be that the flow of value-added benefit does not need radical new approaches; it may be that radical just stresses the need for collective urgency.”

Andrew Teacher, managing director at Blackstock Consulting, said: “We have brought together captains of industry, academics and peers with one clear message: Britain’s levelling-up agenda depends on us leveraging science and technology. The Arc doesn’t need subsidies or bailouts, but it does need central co-ordination if we want to sweat the assets we have and spread the wealth of knowledge and research nationally.

“Right now, Cambridge and Oxford are bursting at the seams and as a result, growth is going abroad rather than to other UK regions. Our thriving life sciences sector has been in the spotlight on the world stage for two years. Now is the government’s opportunity to supercharge this cluster of growth to help support research and development in other places too.”

The Stop the Arc Group was left unconvinced by the arguments of the Radical Capital report and warned against ”vested interests” taking precedence over “objective assessments”.

The campaign group argues that proceeding with OxCam Arc plans would prompted “hundreds of thousands of workers” to relocate from elsewhere “into the already overheated South East”, with one million more homes built – a fourfold increase in the national average increase in household numbers predicted by the Office for National Statistics by 2050.

Prof David Rogers, secretary of the group, said: “The Radical Capital Report continues the special pleading for a region, the Ox-Cam Arc, that is neither special nor particularly outstanding economically or academically compared with other regions of the UK.

“Smart Growth UK identified five other ‘clusters’ of universities in England, including four with academic performances and student satisfaction ratings just as good as, or better than the collection of Arc universities, and better potential for Arc-type expansion. A 2020 Centre for Cities Report suggested that investing in the Midlands and North could boost the national economy by £183bn – £20bn more than the figure calculated for the Arc by the National Infrastructure Commission, and without all the upheaval that would be involved in Arc plans.”

Prof Rogers wanted to see how the economic output increase in the report was calculated and added: “Economic losses in the Arc that may result from the government’s nation-wide levelling up agenda will be more than compensated for by growth elsewhere, outside the South East. Lord Kerslake’s UK 2070 Commission Report showed that such levelling up offers a win-win situation with both the north and the south doing better than if the present over-investment in the South East continues. Local vested interests in the Arc should not be allowed to trump objective assessments of the growth potential of every part of the UK.”