Summary

The review presents four scenarios for population growth and housing distribution in the East of England region. It is not possible to discover how the different scenarios were calculated. In particular, it is not clear whether they take account of the recent recession.

The lowest rate of population and housing growth presented – 26,000 homes per year - is based on the current plan, which is considerably higher than in the past. The highest rate – 34,000 homes per year – reflects the Government’s view that this is necessary to stabilise house prices. More than half the population growth comes from outside the region.
The housing distributions presented involve considerable development in rural areas: eg in Babergh excluding Ipswich fringe, between 6,700 and 11,000 homes between 2011 and 2031.

DVS considers:

It is irrational to plan new homes and attempt to fit new jobs to them. Homes should follow jobs, because (a) economic growth is unpredictable (b) the investment to produce economic growth has much longer lead-times than building houses, and is controlled by Government.

Over-predicting housing growth, and allocating housing targets and sites accordingly, is liable to lead to the sites least suitable in planning terms being cherry-picked by developers.

Of the choices offered, the lowest population growth rate is to be preferred.

The growth pole in East Anglia is the complex of container ports, large towns and major transport links represented by Felixstowe & Harwich, Ipswich & Colchester, the A12, the A14, and the Great Eastern mainline. This is where new jobs are likely to be concentrated, and where it is desirable they be concentrated. Therefore new houses should also be concentrated there: (a) to minimise transport costs and the associated carbon footprint (b) to minimise adverse effects on the surrounding coast and countryside.

Our main comments follow.

Main comments

The process

The consultation process is:

Three scenarios for regional population growth are presented

Each scenario of regional population growth is converted to local housing distributions, with one being converted to two different distributions

Consultees are invited to express a preference for one of the four housing distributions.

Scenarios of regional population growth

The consultation document says that Scenario 1 represents the aggregated views of local councils, while the others represent national Government advice.

The derivation and rationale of the scenarios is opaque. Exploring the references in Appendix 1, Evidence for the review, leads one to the East of England Forecasting Model (EEFM) and to the Office for National Statistics population estimates. But neither of these generates different scenarios.

Where we have been able to find multiple scenarios in the supporting material is in RSS Scenarios - Housing Stock 2031 Assumptions, which seems to be associated with the EEFM. But this gives no indication of the underlying assumptions. It also gives for Babergh, one of the two local councils of interest to DVS, much lower new homes figures than in the consultation document.

We suspect that all the scenarios are based on varying projections of experience over the period of the prolonged boom from the middle 1990s until the recent sudden and violent recession. If this is indeed so, they are flawed: specifically, biased upwards. This is brought out by the Summary to the EEFM Technical Note, which says

The general direction of change in the forecasts between 2007 and 2009 is, not surprisingly, one of increasing pessimism. In common with all other economic forecasters at the time, Oxford Economics did not foresee the emerging recession in mid 2007, and then in 2008 underestimated its severity. As a result, successive forecasts have had to catch up with a sharply deteriorating short-term outlook and postponement of forecast recovery. The scale of these revisions has been substantial – for example, a cut in projected population growth in the East of England over 2008-13 of just over 200,000. Virtually all areas share in these much more sober forecasts, although changes in data and in forecast assumptions mean that one or two areas buck the trend.

The consultation document gives no indication whether the scenarios take account of the recession.

It is therefore impossible for us to appraise the credibility of the scenarios. We are not even told the underlying assumptions. The opacity of the scenarios cripples the consultation. Those consulted cannot mount an informed critique of the scenarios: they are reduced to voting for the one with the outcome they dislike the least.

The only hint that is dropped is that the higher growth scenarios are what the Government “considers . . . necessary to stabilise long-term house prices . . .” (Consultation document, 3.6). DVS rejects the implied simplistic supply-and-demand model: first, house prices have been part of the asset prices bubble in Western, especially Anglo-Saxon, economies in recent years; second, houses get built because developers can sell them, not because the Government issue plans. House prices have increased in real terms because the necessary finance has been available and because buyers have believed they will always be able to sell at a profit – the conditions for an asset price bubble.

DVS suggests that the correct approach is as follows:

1. Growth in regional population and households is driven by (a) natural population growth, (b) relative economic dynamism (which drives net migration).
2. 1(a) can be predicted with fair accuracy. Predicting 1(b) is speculative: over 20 years, it is wildly speculative. This is crucial, given that over half of predicted regional population growth comes from net migration into the Region.
3. It is therefore irrational to predict population growth and attempt to make economic growth fit the prediction. The rational approach is to foster desirable economic growth, and, as and when it takes place, respond to the resulting population growth.
4. This approach also fits the relevant timescales for the investment controlled by government. Fostering economic growth in the region involves decisions on such things as major transport links (eg A120 dualling between Braintree and Colchester and rail gauge enhancement between Felixstowe and Nuneaton) which take many years to bring about and which depend on government. Providing houses to meet population growth can be done in a much shorter timescale – and will only be done in such a timescale, because it depends on private developers.

As to a choice between the scenarios presented, Scenario 1 is the least objectionable, in terms of both scale and rationale.

Conversion of regional population growth scenarios to local housing requirements

There is even less information, if possible, about the process of converting the regional population growth scenarios to local housing requirements, than about the derivation of the regional population growth scenarios. So it is impossible to comment on the merits of the processes involved.

It might be thought that the flimsiness of the regional population growth scenarios – as above – might mean that the local housing requirements derived from them are of negligible importance. But unfortunately not. The local housing requirements become binding on the planning authorities. They are therefore incorporated in Local Development Frameworks, often with sites identified. Once in the LDFs, developers can cherry-pick. The site might have been the least desirable in planning terms, only in the LDF because of an inflated housing target. But it might well be the most desirable to a developer. For example, a site in an unspoilt village may have a high market value but be damaging to amenity and involving high carbon footprint because dependent on travel by car, whereas a brown-field site in town may have a low market value. So this system of inflated but binding housing targets has a systematic tendency for the wrong sites to be developed.

What follows is in terms of the Sub-area called Haven Gateway. This is the area of concern to DVS (but the arguments put forward here may well apply to some other Sub-areas in the Region).

DVS emphasises the distinction between “Wider Haven Gateway” and “Core Haven Gateway”. By “Wider Haven Gateway” we mean the six local authority areas making up the Sub-area called Haven Gateway in East of England Plan >2031. By “Core Haven Gateway” we mean the “growth pole” that led to the concept of Haven Gateway being put forward, namely the complex of container ports, large towns and major transport links represented by Felixstowe & Harwich, Ipswich & Colchester, the A12, the A14, and the Great Eastern mainline.

Wider Haven Gateway has no economic rationale or uniformity: indeed, the differences in this respect between Core Haven Gateway and its hinterland, the rest of Wider Haven Gateway, could hardly be greater. It is ludicrous to put Southwold and Lavenham in the same pot for economic planning purposes as Felixstowe and Ipswich. Wider Haven Gateway is just an administrative and statistical convenience.

DVS notes that Essex CC took the view that the Colchester/Harwich area could accommodate more development, whereas Suffolk CC took the view that Ipswich could not accommodate more development, and that any additional population growth should go to market towns such as Sudbury, Hadleigh, Framlingham and Stowmarket. DVS strongly disagrees with the Suffolk view, for the following reasons.

Any population growth above natural increase is driven by economic dynamism relative to the rest of the country. In the part of the East of England region that concerns DVS, there is a clear location for any predictable large-scale relative economic dynamism, namely Core Haven Gateway. The rest of Wider Haven Gateway has no such claim to relative economic dynamism.
It is ludicrous for Suffolk CC to argue “We have potential for economic growth at Ipswich. But there are problems accommodating it there. So let’s divert it to Sudbury and Framlingham.” This is like nothing so much as the drunk looking for his watch under the lamp post, because the light is so much better than in the bushes where he dropped it.

In the first place, in terms of the jobs aspect, little of the potential economic growth will be, in the jargon term, footloose: it cannot simply be located where it is convenient: Core Haven Gateway growth occurs because of the circumstances of Core Haven Gateway. If someone has, say, a container traffic-related investment opportunity, it exists at or near the container traffic, not miles away down dodgy roads in a historic market town.

In the second place, in terms of the houses aspect, it is contrary to any attempt to mitigate climate change to locate new houses where commuting by car to employment and other services is inevitable.

DVS suggests that the correct approach is as follows:

1. Core Haven Gateway is the site of major economic growth in Wider Haven Gateway
2. Therefore that is where jobs growth should – and will - be concentrated.
3. Housing growth should be concentrated where jobs growth is concentrated
4. No development in Wider Haven Gateway should take place outside Core Haven Gateway, unless it can only take place there (and is justified on the usual planning criteria). The reasons are (a) almost everywhere in Wider Haven Gateway outside Core Haven Gateway is environmentally sensitive (so also is some of Core Haven Gateway, but read on); (b) to minimise carbon footprint, development should be located wherever possible close to major towns and major transport links.
5. 4 above does not mean that no economic development should or will take place outside Core Haven Gateway. There will be plenty of opportunities which are site-specific, for reasons varying from the richness of natural or historic features in the region to the person with the idea living there. But such development is small-scale and largely unpredictable. The only predictable element is that development based on natural or historic features is problematic, in that it cumulatively it detracts from that which it is based on.

Questions posed in the consultation document and DVS answers

Q1 Do you think we’ve chosen the right growth scenarios to consider? If not, what other scenario(s) should we consider and why?
A1 The selection is biased upwards: there should be a natural-population-growth-only scenario.

Q2 Do you have any comments on the four growth scenarios?
A2 DVS considers that the methodology is flawed: see main comments

Q3 What is your preferred growth scenario and why? Please give details of an alternate preferred scenario if you have one.
A3 None of those proposed. We suspect that even Scenario 1 is based on the boom conditions of the decade up to 2007, and hence biased upwards. We also reject the idea of projecting population growth in detail over 20 years. See our comments on Section 3.

Q4 Do you agree we have covered all the regional impacts of the four scenarios that have been identified? If not, what else should we have addressed?
A4 The discussion in the consultation document of climate change (at 4.2 to 4.5) is inadequate. It omits the crucial point that spatial planning can minimise the transport implications of development, and so mitigate its climate change effects – or fail to do so. The discussion of regeneration (4.7) is muddled: it suggests that increasing houses and population is a way to reduce unemployment in an area. The discussion of housing affordability (4.11) is muddled: it suggests that reducing relative house prices in an area involves increasing population in that area (see 3.8): rather, any supply-and-demand effect to reduce relative house prices requires creating more new houses than new households. The discussion of the historic environment (4.38 – 4.40) and landscape character (4.41 – 4.44) is broadly acceptable, bringing out the important point that amenity considerations point in the same direction as economic growth considerations (by favouring Scenario 3 over Scenario 2, and both over Scenario 4).

Q5 Do you agree that the vision and objectives of the current Plan remain suitable for the revised Plan? If not, what changes would you make and why?
A5 We disagree with Objective (iii), 2nd & 3rd bullets:
• providing for job growth broadly matching increases in housing provision . . .
• improving access to economic opportunities in London . . .
These are mutually inconsistent: Bullet 2 means local jobs – Bullet 3 means London jobs. And Bullet 2 puts the cart before the horse: housing provision should follow job and population growth.

Q6 Do you have any evidence to suggest that policies other than those identified need to be updated or created?
A6 No comment

Q7 Do you have any comments on the sub-area profiles?
A7 The Sub-area Haven Gateway is an apparently arbitrary grouping of ill-matched and disparate district and borough councils. A clear distinction should be made between Core Haven Gateway and Wider Haven Gateway: see main comments.

Q8 Do you have any comments on the Integrated Sustainability Appraisal? Is there any further information that should be taken into account?
A8 No comment