Major step toward re-opening Doncaster-Sheffield Airport

Fifteen months since DSA was closed by owners Peel Group, the Mayor, City of Doncaster Council and the Mayoral Combined Authority (MCA) have been working tirelessly in the interests of the public and businesses in South Yorkshire to find a way to re-open it that is legally and financially sound and protects the taxpayer.

Last summer, the MCA awarded City of Doncaster Council £3.1 million to prepare an Outline Business Case to take control of the airport through a leasing arrangement, re-establish operations under a new business model, and use the asset as an anchor for growth at the wider Gateway East site to support economic regeneration and benefits to the city and region as a whole.

The Outline Business Case, published today, states that re-opening the airport provides the best opportunity to secure economic growth and well-being not just in Doncaster but will have wider benefits for South Yorkshire as a whole.

City of Doncaster Council will have £138 million made available by the MCA via Gainshare to support economic ambitions including as outlined in the Doncaster Place Investment Plan which includes South Yorkshire Airport City and Gateway East. Elements of activity could also be supported from other MCA funding that has been set aside to support this project. Ultimately, significant investment is going into Doncaster to help it pursue the jobs, growth and opportunity it wants, and it will be local and regional residents and businesses who will benefit.

Crucially, the Outline Business Case is built on creating a sustainable airport hub with the airport anchoring a sector specific focus on aviation-related advanced manufacturing, advanced engineering and the growing jet-zero and decarbonisation industries. Applied research is one of South Yorkshire’s core strengths as evidenced through McClaren, Boeing, Rolls-Royce, and Hybrid Air Vehicles choosing to locate in the region, and the opportunity exists to locate the next wave of advanced manufacturing at Gateway East connected to global markets through a reopened DSA.

Linking the return of aviation to the UK’s first Investment Zone worth £160 million with a focus on advance manufacturing could present significant opportunities for businesses and communities in Doncaster and the wider region, helping address long term challenges in productivity, worklessness and low wages, and poor life outcomes that hold South Yorkshire back.

The MCA Board is being asked to approve the recommendation to work up a Full Business Case which could be completed as soon as Spring 2024. If this happens and a suitable operator is found, South Yorkshire could be well on its way to seeing DSA re-open.

City of Doncaster Council will continue to lead on the negotiation with airport owners and the procurement exercise to attract a new operator and public investment remains contingent on the successful completion of those negotiations. The MCA will continue to provide strategic advice and support to the council in relation to the wider regeneration of the development of the Gateway East site to support a reopened airport.

South Yorkshire’s Mayor, Oliver Coppard, said: “These proposals represent a major step towards re-opening our airport and delivering a 10-year plan for South Yorkshire Airport City at Gateway East; not only re-opening our airport but creating an internationally significant, sustainable aviation and advanced manufacturing hub in Doncaster.

“This is part of our plan for growth across our whole region, delivering long term benefits for Doncaster and the whole of South Yorkshire, with a thriving regional airport at its heart.

“Getting to this point has not been easy. I’ve always said reopening our airport would take time and huge amounts of hard work.

“But the plans we are putting forward at next week’s MCA meeting are a significant step in the process of reopening DSA.

“No ambitious plan is without risks, but alongside the other leaders in South Yorkshire, I believe the economic case is compelling.

“That cannot mean a blank cheque or a bad deal, so we are rightly following a process that is underpinned by robust governance. We’ve seen in other parts of the country what can go wrong if we don't put transparency, accountability and the interests of taxpayers at the forefront of our thinking.

“I'm determined to get a good deal for our community, to do this work properly no matter the hurdles, so we can deliver a long-term plan for our airport and South Yorkshire Airport City. That’s exactly what this next step allows us to do.”

Mayor Ros Jones, City of Doncaster Council, said: “Saving and reopening our airport is my number one priority, I am pleased to say that lease negotiations continue to progress positively, and I am confident that we can agree a deal, but we are not over the line yet.

“Our airport represents incredible opportunities for Doncaster and South Yorkshire. City of Doncaster Council have entered the next stage of the procurement process, which is progressing as planned, with the aim of appointing an operator in the Spring.

“I never wanted our airport to close, it did not have to be this way, as a council we did all within our power, including offering to purchase the airport from the current landowners which was rejected.

“We are following our carefully managed plan; this is yet another step in the right direction for us to see planes flying again from our airport.”

Gainshare

Gainshare funding refers to the money committed to South Yorkshire through the Devolution Deal agreed by the MCA, South Yorkshire local authorities and government.

The devolution financial settlement totals £900 million to be released by Government to the MCA in £30 million annual allocations over thirty years. The money is received in capital and revenue allocations on a 60:40 ratio. This means that each year the MCA receives £18 million of capital and £12 million of revenue funding. The MCA received its first allocation of funding in 2020.

Funding was earmarked to each plan on a per-capita basis, with £138 million earmarked to Doncaster, to be released in twenty-six annual instalments of c.£5.3 million each year as funding was received by the MCA from financial year 2024/25 onwards.

In June 2022 the Doncaster Place Investment Plan was submitted and endorsed by the MCA Board. This Plan set out the broad growth ambitions for Doncaster, covering requirements to invest in the city, its towns, villages, and key employment sites. The South Yorkshire Airport City proposal featured prominently in this Plan.

Timeline of activity

2017 – Award of £1.24m grant to DSA to support increased cargo capacity, funded from the MCA’s Business Investment Fund

2018 – Opening of the Great Yorkshire Way airport link road, part funded from the MCA’s City Region Investment Fund (£13m)

2019 - Advance of a £3.5m loan to support airport growth, funded through the MCA’s Business Investment Fund

2020 – Advance of a further £5.0m loan to support new airport growth activity, funded through the MCA’s Business Investment Fund

2021 – Recognition of the importance of the airport in the MCA’s 20-year Strategic Economic Plan

2022 March – Earmarking of £138m of MCA Gainshare funding to support Doncaster’s economic growth, to be made available in annual instalments of £5.3m from 2024/25 for 26 years

2022 July – Peel undertake a ‘strategic review’ on the future of DSA

2022 September – MCA offer bridging financial support to the Peel Group to enable operations to continue at DSA whilst a buyer was found

2022 October – Airport Closed

2022 October – MCA provides financial support to enable the judicial challenge on the decision to close the airport

2023 June – MCA endorsement of the Doncaster Place Investment Plan in which DSA featured prominently

2023 June – Agreement to award £3.1m of grant to Doncaster to prepare a business case to support the reestablishment of the airport

2023 December – Receipt of the OBC for South Yorkshire Airport City and submission into assessment processes

2024 February – Consideration of the OBC by the MCA Board.