24108/A3/RC 10 th October 2014 EXAMINATION OF THE EAST STAFFORDSHIRE LOCAL PLAN DEVELOPMENT DOCUMENT

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1 PS /A3/RC 10 th October 2014 EXAMINATION OF THE EAST STAFFORDSHIRE LOCAL PLAN DEVELOPMENT DOCUMENT PLAN Statement On Behalf Of Taylor Wimpey UK Ltd In Respect Of Strategic Issue 6: Housing need and requirement This Statement is prepared on behalf of Taylor Wimpey ULK Ltd who control land to the east of Aviation Lane, Burton on Trent (formerly known as land south of Henhurst Hill). Representations have been made to the Pre-Submission East Staffordshire Local Plan in November This Statement expands on points previously made in our written submissions, whilst taking account of up-to-date information and the modifications proposed by the Council following the Pre- Submission consultation. 6 (a): is the requirement for the provision of housing identified in the Plan soundly based on an Objective Assessment of Need for market and affordable housing; and 6 (b): is the requirement for the provision of housing identified in the Plan based on an appropriately defined housing market area? As set out in our representations to the Pre-Submission Local Plan, in order to comply with the requirements of the NPPF we would ask that the dwelling requirement as set out in Strategic Policy 3 is referred to as a minimum requirement. We also raised concerns as to whether the housing requirement stated was high enough to cover housing needs in the Borough over the Plan period, which we consider further below. We have taken the opportunity to utilise the latest relevant data to further consider the appropriate housing target for East Staffordshire Borough Council over the Plan period. We attach at Appendix 1 to this note a technical review of the housing requirement, and highlight some of the key points below. We acknowledge that the suggested housing target of 613dpa is above the most up-to-date official population household and migration projections published by CLG and ONS which suggest a target of 500 dpa however, this should only be considered as the starting point as part of a full objective assessment of overall housing need, as emphasised by the Planning Practice Guidance ( PPG ). Notwithstanding the fact that the 2014 SHMA only assesses East Staffordshire as a self-contained Housing Market Area ( HMA ), meaning that it has in our view fallen short of complying with the NPPF and PPG requirements in objectively assessing housing need on a wider HMA-level, we have concerns with the methodological approach taken by the Council in meeting economic needs and responding to market signals. In terms of meeting economic needs, the Council has based their assessment on Experian forecasts taken from the 2013 East Staffordshire Employment Land Review, which equates to approximately 300 jobs per annum (5,728 jobs across the borough ). However, figure 5.9 on page 120 of the East Staffordshire 2014 SHMA shows that, dependent on whether a 15 or 25 year trend is taken, job growth is projected to total between 420 and 758 per annum. Therefore we consider the

2 24108/A3/RC 2 10 th October 2014 Council s employment-led forecasts to be unnecessarily constrained, being based on the significantly lower figure of 300 jobs per annum without any clear justification. Furthermore, the SHMA fails to provide clear conclusions on whether there should be an upward adjustment on future housing requirements based on market signals. We do however note that there has been a clear worsening in housing affordability since 1997 and that there is a high need for affordable housing 112dpa; these factors suggest that the market signals are for an increase in the housing provision. Therefore whilst we support the Council s approach of adopting an employment-led approach to determining housing provision over the Plan period, we consider: - A full return to the 2008 household formation rates should be pursued, to ensure concealed households are not projected forward; - A higher level of employment growth in accordance with past trends and more recent forecasts, would have the potential to show a significantly higher requirement; and - The SHMA should provide clear conclusions on the impact of market signals for the Borough s housing requirement. There is no doubt in our view that responding to the above concerns will necessitate a further uplift in the housing requirement, above that currently proposed by the Council, and require the release of additional sustainable development opportunities such as the land to the east of Aviation Lane, Burton-on-Trent.

3 APPENDIX 1: TECHNICAL REVIEW OF EAST STAFFORDSHIRE HOUSING REQUIREMENT

4 EAST STAFFORDSHIRE TECHNICAL REVIEW OF HOUSING REQUIREMENT OCTOBER 2014

5 EAST STAFFORDSHIRE TECHNICAL REVIEW OF HOUSING REQUIREMENT Project Ref: 24108/A /A5 Status: Draft Final Issue/Rev: Date: 03/10/ /10/2014 Prepared by: Kevin Nimoh Kevin Nimoh Checked by: Simon Macklen Simon Macklen Authorised by: Simon Macklen Simon Macklen Barton Willmore LLP The Observatory Southfleet Road Ebbsfleet Dartford DA10 0DF Tel: (01322) Ref: 24108/A5/KN/jp Fax: (01322) Date: 07 October COPYRIGHT The contents of this document must not be copied or reproduced in whole or in part without the written consent of Barton Willmore LLP. All Barton Willmore stationery is produced using recycled or FSC paper and vegetable oil based inks.

6 CONTENTS PAGE NO 1.0 INTRODUCTION PLANNING POLICY CONTEXT DEMOGRAPHIC TRENDS AND PROJECTIONS EVIDENCE BASE REVIEW CONCLUSION 17

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8 Introduction 1.0 INTRODUCTION 1.1 This report has been prepared by Barton Willmore LLP on behalf of Taylor Wimpey UK Ltd. It is intended to provide a detailed technical review of the evidence base documents and other published research relating to the need for housing within the East Staffordshire Housing Market Area (HMA). 1.2 The key evidence base document, and therefore the main focus of this report, is the April 2014 East Staffordshire Strategic Housing Market Assessment (SHMA), prepared by East Staffordshire Borough Council (ESBC), which has identified East Staffordshire as a selfcontained HMA. 1.3 This report is structured as follows: 1.4 Chapter 2, National Policy Context, briefly summarises the key elements of the National Planning Policy Framework (NPPF) and Planning Practice Guidance (PPG) relating the assessment of the need for market and affordable housing. 1.5 Chapter 3, Demographic Trends and Projections, reviews the latest official demographic for East Staffordshire s HMA, including: Latest population and household projections Past migration trends 1.6 Chapter 4, Evidence Base Review, provides an overview of the contents of the April 2014 SHMA. The analysis in this chapter identifies the key findings of each document, and establishes any potential weaknesses in the approaches taken. 1.7 The report then concludes in Chapter 5 with a summary of key findings /A5/KN/jp 1 October 2014

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10 Planning Policy Context 2.0 PLANNING POLICY CONTEXT 2.1 The requirement for all Local Planning Authorities (LPAs) to base their housing targets on objective assessments of need is rooted in national planning policy specifically the NPPF and the PPG. National Planning Policy Framework (NPPF, 27 March 2012) 2.2 NPPF sets out the Government s planning policies for England and how these are expected to be applied. NPPF states that planning should proactively drive and support sustainable economic development to deliver the homes that the country needs, and that every effort should be made to objectively identify and then meet housing needs, taking account of market signals (paragraph 17). 2.3 In respect of delivering a wide choice of high quality homes, NPPF confirms the need for local authorities to boost significantly the supply of housing. To do so, it states that local authorities should use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the HMA (paragraph 47). 2.4 With regard to plan-making, local planning authorities are directed to set out strategic priorities for their area in the Local Plan, including policies to deliver the homes and jobs needed in the area (paragraph 156). 2.5 Further, Local Plans are to be based on adequate, up to date and relevant evidence, integrating assessments of and strategies for housing and employment uses, taking full account of relevant market and economic signals (paragraph 158). 2.6 For plan-making purposes, local planning authorities are required to clearly understand housing needs in their area. To do so they should prepare a SHMA that identifies the scale and mix of housing and the range of tenures that the local population is likely to need over the Plan period (paragraph 159). Planning Practice Guidance (PPG, 06 March 2014) 2.7 PPG was issued as a web based resource on 6th March Guidance on the assessment of housing development needs (PPG ID2a) includes the SHMA requirement set out in NPPF and supersedes all previous published SHMA practice guidance (CLG, 2007) /A5/KN/jp 2 October 2014

11 Planning Policy Context 2.8 The primary objective of the housing development needs assessment (the SHMA) is to identify the future quantity of housing needed, including a breakdown by type, tenure and need (PPG ID2a 002). 2.9 Housing need refers to the scale of housing likely to be needed in the HMA over the Plan period, should cater for the housing demand in the area and identify the scale of housing supply necessary to meet that demand (PPG ID2a 003) The assessment of need is an objective assessment based on facts and unbiased evidence and constraints should not be applied (PPG ID2a 004) Use of the PPG methodology for assessing housing need is strongly recommended, to ensure that the assessment is transparent (ID2a 005). The area assessed should be the HMA (ID2a 008), reflecting the key functional linkages between places where people live and work (ID2a 010). PPG methodology for assessing housing need 2.12 The full methodology is set out at ID 2a 014 to 029 (overall housing need at ID2a 015 to 020), and is introduced as an assessment that should be based predominately on secondary data (ID2a 014). Starting point estimate of need 2.13 The methodology states that the starting point for assessing overall housing need should be the household projections published by the Department for Communities and Local Government, but that they are trends based and may require adjustment to reflect factors, such as unmet or suppressed need, not captured in past trends (ID2a 015). The household projection-based estimate of housing need may require adjustment to reflect factors affecting local demography and household formation rates which are not captured in past trends. For example, formation rates may have been suppressed historically by under-supply and worsening affordability of housing. (2a-015) (Our emphasis) 24108/A5/KN/jp 3 October 2014

12 Planning Policy Context Adjusting for demographic evidence 2.14 The PPG methodology advises that adjustments to household projection-based estimates of overall housing need should be made on the basis established sources of robust evidence, such as ONS estimates (2a-017). Adjusting for likely change in job numbers 2.15 In addition to taking into account demographic evidence the methodology states that job trends and or forecasts should also be taken into account when assessing overall housing need. The implication is that housing numbers should be increased where this will enable labour force supply to match projected job growth (2a-018). Where the supply of working age population that is economically active (labour force supply) is less than the projected job growth, this could result in unsustainable commuting patterns and could reduce the resilience of local businesses. In such circumstances, plan makers will need to consider how the location of new housing or infrastructure development could help address these problems. (2a-018) Adjusting for market signals 2.16 The final part of the methodology regarding overall housing need is concerned with market signals and their implications for housing supply (2a-019:020). The housing need number suggested by household projections (the starting point) should be adjusted to reflect appropriate market signals, as well as other market indicators of the balance between the demand for and supply of dwellings. (2a-019) 2.17 Assessment of market signals is a further test intended to inform whether the starting point estimate of overall housing need (the household projections) should be adjusted upwards. Particular attention is given to the issue of affordability (2a-020). The more significant the affordability constraints and the stronger other indicators of high demand the larger the improvement in affordability needed and, therefore, the larger the additional supply response should be. (2a-020) 24108/A5/KN/jp 4 October 2014

13 Planning Policy Context Overall housing need 2.18 An objective assessment of overall housing need can be summarised as a test of whether the household projection based starting point can be reconciled with a) the latest demographic evidence, b) the ability to accommodate projected job demand, c) the requirement to address worsening market signals. If it cannot be reconciled, then an adjustment should be made The extent of any adjustment should be based on the extent to which it passes each test. That is: It will at least equal the housing need number implied by the latest demographic evidence; It will at least accommodate projected job demand; and On reasonable assumptions, it could be expected to improve affordability. Affordable housing need assessment 2.20 The methodology for assessing affordable housing need is set out at 2a-022 to 029 and is largely unchanged from the methodology it supersedes (SHMA 2007). In summary, total affordable need is estimated by subtracting total available stock from total gross need. Whilst it has no bearing on the assessment of overall housing need, delivering the required number of affordable homes can be used to justify an increase in planned housing supply (2a-029). The total affordable housing need should then be considered in the context of its likely delivery as a proportion of mixed market and affordable housing developments An increase in the total housing figures included in the local plan should be considered where it could help deliver the required number of affordable homes. (2a-029) (our emphasis) LOCAL PLANNING POLICY East Staffordshire Borough Council: Submission Local Plan (October 2013) 2.21 In April 2014, ESBC submitted its Local Plan to the Planning Inspectorate for independent examination, scheduled to take place later on in the year /A5/KN/jp 5 October 2014

14 Planning Policy Context 2.22 The Local Plan sets out the spatial strategy and planning policies for development in the Borough for Plan period, Strategy Policy 3 of the emerging Local Plan sets out the Council s future housing ambitions for the Borough. ESBC will aim to deliver 11,649 dwellings over the Plan period of , equating to 613 dwellings per annum 1. This figure is underpinned by the employmentled scenarios identified in the ESBC s 2013 SHMA. We examine the appropriateness of this target further in the following sections of this report In regards to the NPPF s duty to cooperate requirement, immediate neighbours to ESBC have confirmed that they do not expect East Staffordshire to deliver any part of their housing requirement, with the exception of Derbyshire Dales District Council. In response, the council states that a Statement of Common Ground is being prepared by the Derby HMA authorities setting out the agreed approach to the Derbyshire Dale s shortfall. 1 Strategic Policy 3, Page 81, Submission Local Plan, East Staffordshire, East Staffordshire Borough Council, October /A5/KN/jp 6 October 2014

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16 Demographic Trends and Projections 3.0 DEMOGRAPHIC TRENDS AND PROJECTIONS Office for National Statistics (ONS) Sub-national Population Projections 3.1 Table 3.1 sets out the official ONS sub-national population projections (SNPP), from the 2006-based series to the most recent 2012-based series (published in May 2014). The Interim 2011-based SNPP was the first projection data supplied since the 2011 Census was published in July The latest 2012-based SNPP projects the lowest population growth for East Staffordshire of recent ONS projections. However it important to note how these latest 2012-based SNPP are underpinned by recessionary trends ( ). At a national level the 2012 SNPP assumes significantly lower levels of net international migration across England than trends would suggest, a factor which subsequently affects projections at the local level. The 2012-based SNPP should therefore be treated with caution. Table 3.1 ONS Population Estimates and Projections for East Staffordshire & (per annum) (per annum) 2012-based 113, , , , ,700 7,400 (740) 13,800 (690) Interim based 113, , , ,700 (970) based 111, , , , , based 110, , , , ,600 Source: ONS; Note: Figures may not sum due to rounding 10,700 (1,070) 7,100 (710) 19,700 (985) 13,600 (680) Communities and Local Government (CLG) household projections 3.3 As Table 3.1 (above) shows, the 2012-based ONS SNPP projects low population growth when compared with the historic projection series. However in the absence of reflective based CLG household projections, the most recent household projections available are the interim 2011-based CLG projections (April 2013), based on the previous interim 2011-based ONS SNPP (September 2012). 3.4 CLG s interim 2011-based projection projects growth of 500 dpa in East Staffordshire (see Table 4.2 below). As we have outlined above, the PPG states how CLG projections should form the starting point estimate in objectively assessing overall housing need. Furthermore the interim 2011-based CLG household projections are underpinned by recessionary trends 24108/A5/KN/jp 7 October 2014

17 Demographic Trends and Projections in household formation, and are widely accepted as underestimating future household formation, and projecting forward concealed households created by these recessionary trends. This is emphasised by the much higher 2008-based CLG projections, which project the same household growth as the interim 2011-based projections despite being underpinned by much lower population growth (see Table 3.1). 3.5 In this context it is considered that the CLG projections remain valid in providing a starting point estimate of overall housing need for East Staffordshire, but are only this; a starting point estimate. Notwithstanding these concerns they project growth of 500 households per annum. Table 4.2 CLG Household Estimates and Projections for East Staffordshire, & (per annum) (per annum) Interim 2011-based 47,000 50,000 52, ,000 (500) based 47,000 49,000 52,000 54,000 56,000 Source: ONS 5,000 (500) 9,000 (450) ONS Estimates of Net Migration 3.6 The ONS population estimates provide annual data in respect of net migration trends at local authority level, and for East Staffordshire, Table 3.3 (below) sets out the recent trends. Table 3.3: ONS Net Migration Estimates: East Staffordshire 03/ 04 04/ 05 05/ 06 06/ 07 07/ 08 08/ /10 10 /11 11/ 12 12/ Net Migration Source: ONS The ONS estimates show a fluctuating pattern of net in-migration to East Staffordshire over the past decade, ranging from 13 people (2011/12) to almost 875 people (2006/07), and leading to a long-term trend of 413 people per annum. Despite recessionary conditions between 2008 and 2013, net in-migration remained at an average of 234 people per annum. It is important to note how the long-term trend is higher than the net migration average projected in the 2012-based ONS SNPP (370 people per annum) /A5/KN/jp 8 October 2014

18 Demographic Trends and Projections Summary 3.8 In summary, this section has set out the most up-to-date official population household and migration projections published by CLG and ONS, which should be considered as the starting point as part of a full objective assessment of overall housing need. 3.9 The PPG emphasises that CLG household projections should only form the starting point in an objective assessment of the overall housing need. This starting point is currently growth of 500 households per annum in East Staffordshire However as we have identified, the interim 2011-based CLG projections and the 2012-based ONS SNPP are underpinned by recessionary trends and should therefore be treated with caution /A5/KN/jp 9 October 2014

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20 Evidence Base Review 4.0 EVIDENCE BASE REVIEW 4.1 This chapter provides a technical review of the key evidence base documents relating to the assessment of housing need in East Staffordshire. 4.2 Firstly, the East Staffordshire SHMA, first published in October 2013 and then subsequently updated in April 2014, is reviewed. This SHMA contains the most up-to-date evidence prepared by the local authorities on objective assessment. 4.3 The conclusion to the chapter then summarises the key strengths and weaknesses of the SHMA, and how it aligns with NPPF/PPG requirements. East Staffordshire Strategic Housing Market Assessment, East Staffordshire Borough Council, April The East Staffordshire SHMA was prepared to inform the future development of planning and housing policies for the ESBC over the period Housing Market Area Definition 4.5 The 2014 SHMA addresses overall housing need in ESBC only, but provides analysis of key functional indicators between East Staffordshire and surrounding authorities, including migration, travel to work patterns and house prices. 4.6 The SHMA identifies that there is a very strong market connection between East Staffordshire and South Derbyshire, which is partly influenced by the close proximity of Burton upon Trent to the two local authorities borders. Furthermore, the functional indicators show relationships with the larger conurbations of Derby and Birmingham, especially in respect to employment. 4.7 It is clear, that the SHMA shows evidence of functional linkages to surrounding authorities. However, the SHMA identified ESBC as a self-contained HMA largely based on the Council s opinion that: Evidence therefore demonstrates that East Staffordshire does not fit neatly into any one strategic housing market area, and this suggests that for East Staffordshire to undertake a SHMA with any 24108/A5/KN/jp 10 October 2014

21 Evidence Base Review one partnership of other local authorities would not have made sense Nevertheless, in defining What is a housing market area?, the PPG states: A housing market area is a geographical area defined by household demand and preferences for all types of housing, reflecting the key functional linkages between places where people live and work. The extent of the housing market areas identified will vary, and many will in practice cut across various local planning authority administrative boundaries. Local planning authorities should work with all the other constituent authorities under the duty to cooperate. 3 (our emphasis) 4.9 As the PPG reference above states, ESBC should acknowledge the relationship surrounding authorities have with the Borough. Therefore, it is important that authorities also work together to form a wider HMA to assess housing need, where applicable. As the 2014 SHMA only assess ESBC as a self-contained HMA, it has fallen short in complying with the NPPF and PPG requirements in objectively assessing housing need on a wider HMA level From reference to research carried out by the Centre for Urban and Regional Development Studies (CURDS) at Newcastle University, the ESBC s HMA definition can be challenged. The CURDs definition of the HMA concludes that the Borough falls on the border between the Derby (inc. Derby, Amber Valley, Derbyshire Dales and South Derbyshire) and Stoke HMAs (inc. Stoke on Trent, Congleton, Crewe and Nantwich, Newcastle under Lyme, Stafford and Staffordshire Moorlands). Thus, confirming the functional linkages with surrounding authorities as emphasised in the 2014 SHMA The CURDs research was funded by the CLG and its approach is considered robust. It is unlikely that ESBC is a self-contained HMA and has clear linkages with surrounding authorities. Objective Assessment of Housing Need 4.12 The SHMA states in its introduction that it provides an objective assessment of the need for market and affordable housing, and summarises the key elements of the NPPF and PPG that should be complied with. This indicates that the SHMA intends to provide a full policycompliant assessment of housing need for the HMA. The extent to which the individual components of the OAN meet the requirements of the NPPF/PPG are considered below. 2 Paragraph 3.79, Page 51, Strategic Housing Market Assessment, East Staffordshire Borough Council, April Paragraph: 010 Reference ID: 2a , Planning Practice Guidance, 06 March /A5/KN/jp 11 October 2014

22 Evidence Base Review i) Demographic Starting Point and Household Formation Rates 4.13 Before any modelled scenarios are taken into account, it is important to understand the starting point estimate of overall housing need across the HMA. As summarised in Chapter 2 of this review, the PPG confirms this starting point as being the official CLG household projections. The SHMA incorporates the most up-to-date household projections that were available at the time of publication the CLG 2011-based interim household projections These latest household projections project growth of 500 new households per annum, This starting point is lower than the planned level of housing growth (613 dwellings per annum) in the emerging Local Plan It is important to note, however, that the interim 2011-based CLG projections are widely recognised to suppress household formation rates, due to the recessionary period from which their underlying trends are drawn. In this context the PPG states the following: The household projection-based estimate of housing need may require adjustment to reflect factors affecting local demography and household formation rates which are not captured in past trends. For example, formation rates may have been suppressed historically by under-supply and worsening affordability of housing Furthermore the RTPI s Planning for Housing in England (January 2014) states: Planning on the basis of the latest projections could lead to an under-provision of housing In addition to this, the interim 2011-based household formation rates only cover a 10-year period, as opposed to the 25 years projected by the 2008-based series. The PPG therefore advises that: The 2011-based Interim Household Projections only cover a ten year period up to 2021, so plan makers would need to assess 4 5 What is the starting point to establish the need for housing? Paragraph: 015 Reference ID: 2a , Planning Practice Guidance, 06 Page 1-2, RTPI Research report no.1, Planning for housing in England: Understanding recent changes in household formation rates and their implications for planning for housing in England, Neil McDonald/Peter Williams/University of Cambridge, January /A5/KN/jp 12 October 2014

23 Evidence Base Review likely trends after 2021 to align with their development plan periods However it is apparent that the most recent 2012 SNPP projects a lower level of growth than that underpinning the 2011-based CLG household projections. The 2012-based SNPP project a similar level of population growth to the 2008-based SNPP, which result in a household growth of 500 households per annum. ii) Demographic-led Modelling 4.19 The SHMA incorporates an approach to household formation rates through all scenarios which use household formation rates from 1) fixed 2011-based rates; and 2) 2008-based projections, rebased to the 2011-based starting position In total, two demographic-led scenarios are provided in the SHMA as follows. The explanations for the scenarios are taken from the SHMA itself, at Paragraph 6.46, page 135. Scenario 1a Rebased SNPP 2010 (2008-based changes in Headship): This scenario analyses the official SNPP dataset released by the ONS (2010 based). The dataset is updated to take account of the latest available data from the 2011 Census at the time the modelling was undertaken. It assumes that headship rates change in line with the 2008-based SNPP. This scenario results in a requirement of 601 dwellings per annum 7. Scenario 1b Rebased 2010 (Fixed Headship): This scenario builds upon the population analysis underpinning Scenario 1, however fixes headship rates for household formation at 2011 levels in order to test the sensitivity of the projections to changes in headship rates as included in the 2008-based SNPP. This scenario results in a requirement of 571 dwellings per annum It is clear therefore that the Council are planning for a higher level (613 dwellings per annum) than is tested in the demographic-led scenarios and the CLG starting point. 6 Paragraph: 016 Reference ID: 2a , Planning Practice Guidance, 06 7 Figure 6.9, Page 147, East Staffordshire SHMA, East Staffordshire Borough Council, April Figure 6.9, Page 147, East Staffordshire SHMA, East Staffordshire Borough Council, April /A5/KN/jp 13 October 2014

24 Evidence Base Review iii) Economic-led Modelling 4.22 The SHMA follows the demographic-led projections (Scenario 1a and 1b) with two economicled scenarios for growth, which establish the necessary increases in home to ensure such that job growth balances with labour supply The two scenarios are summarised in the SHMA as follows: PRO2a Employment Led (ELR) (2008-based changes in Headship): this scenario is aligned to the economic forecasts which underpin the 2013 East Staffordshire Employment Land Review (ELR). It assumes that headship rates change in line with the 2008-based CLG household projections. This scenario results in a requirement of 630 dwellings per annum 9. PRO2b Employment-Led (Fixed Headship): this scenario builds upon the population analysis underpinning Scenario 2a, and continues to take account of population changes arising from the future performance of the economy, in line with the ELR. However, this scenario fixes headship rates for household formation at 2011 levels. This scenario results in a requirement of 596 dwellings per annum The ELR scenario based on Experian forecasts taken from the 2013 East Staffordshire Employment Land Review shows growth of 5,728 jobs across the borough , equating to 300 jobs per annum Also figure 5.9 of the SHMA provides further employment growth scenarios which include two based on past trends. Paragraph 018 of the PPG states: Plan makers should make an assessment of the likely change in job numbers based on past trends and/or economic forecasts as appropriate and also having regard to the growth of the working age population in the housing market area Dependent on whether a 15 or 25 year trend is taken job growth is projected to total between 420 and 758 per annum 12. Therefore we consider the Council s employment-led forecasts to appear unnecessarily constrained, being based on the much lower figure of 300 jobs per annum. 9 Figure 6.9, Page 147, East Staffordshire SHMA, East Staffordshire Borough Council, April Figure 6.9, Page 147, East Staffordshire SHMA, East Staffordshire Borough Council, April Paragraph 018, Planning Practice Guidance, CLG, March Figure 5.9, Page 120, East Staffordshire SHMA, East Staffordshire Borough Council, April /A5/KN/jp 14 October 2014

25 Evidence Base Review iv) Market Signals 4.27 The final aspect of the SHMA s Objective Assessment of Housing Need reviewed is its response to adverse market signals. Section 3 of the SHMA establishes that East Staffordshire faces future market signals issues particularly in affordability The SHMA s analysis shows that the ratio between lower quartile house prices and lower quartile earnings is below the national average 13. However, East Staffordshire s affordability ratio has worsened considerably since House prices as demonstrated by the SHMA have shown a significant increase, between Nevertheless, the SHMA does not provide clear conclusions on whether there should be an upward adjustment on future housing requirements based on market signals. v) Affordable Housing Need Assessment 4.30 In addition to providing an overall objective assessment of housing need, the SHMA also sets out an assessment of affordable housing need. This assessment takes account of a range of data sources to determine the number of affordable units likely to be required over the Plan period. Backlog need and pipeline schemes are also taken into account The affordable need assessment concludes that a significant number of dwellings would be required to meet affordable need in full given current local authority affordable housing policies. In total, 112 dwellings would be required (on average) each year 14. Overall Recommendations 4.32 In its conclusion, the SHMA sets out an overall recommendation based on the various components discussed above. These recommendations are summarised in the table below. Table 4.2: Summary of SHMA OAN Conclusions (per annum) East Staffordshire Population-Led (2008 rates of change) Population-Led (Fixed 2011) Employment- Led (2008 rates of change) Employment- Led (Fixed 2011) Employment-Led Midpoint of Range Source: East Staffordshire Borough Council, East Staffordshire SHMA (April 2014) 13 Figure 3.9, Page 20, East Staffordshire SHMA, East Staffordshire Borough Council, April Paragraph 1.8, Page 4, East Staffordshire SHMA, East Staffordshire Borough Council, April /A5/KN/jp 15 October 2014

26 Evidence Base Review 4.33 As demonstrated in table 4.2, the SHMA set out four possible scenarios for future dwelling requirements over the Plan period in the Borough. The SHMA states that East Staffordshire should focus on meeting the demand generated by the employment growth as highlighted in the Employment Land Review. Thus, the SHMA recommends that the Council should plan for a housing requirement in line with the employment-led scenarios (2a and 2b). The SHMA advised to use the mid-point of scenario 2a and 2b /A5/KN/jp 16 October 2014

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28 Conclusion 5.0 CONCLUSION 5.1 This report has provided a detailed technical review of the evidence base documents and other published research relating to the need for housing within the East Staffordshire HMA. The key points to note are as forecasts: East Staffordshire SHMA As outlined in the PPG, the latest Interim 2011-based CLG household projections form the starting point for an objective assessment of overall housing need. It is therefore considered that the very minimum should be for a starting point of 500 households per annum. The demographic-led scenarios outlined in the SHMA are 1a (601 dwellings per annum) and 1b (571 dwellings per annum) 15. However it is clear that the Council is planning for a higher level (613 dwellings per annum) than is tested in the demographic-led scenarios and the CLG starting point. The employment-led scenarios for East Staffordshire scenario 2a (630 dwellings per annum, and 2b 596 dwellings per annum) 16 put forward by the SHMA would accommodate the Council s future job growth forecasts (based on Experian forecasts outlined in the East Staffordshire Employment Land Review). The SHMA concluded on a housing requirement which is the midpoint of the employment-led scenarios of 613 dwellings per annum. There is some concern that the two employment-led scenarios in the SHMA are below the past trends and Experian job forecasts of Experian. Since the publication of the SHMA, the national economic performance has improved, therefore increasing the likelihood that the latest September 2014 Experian forecasts may provide a higher job forecasts than used to inform the employment-led scenarios in the SHMA. The market signals outlined in the SHMA appears to justify the need for an uplift adjustment to the requirements set out in the demographic projections. 15 Figure 6.9, Page 147, East Staffordshire SHMA, East Staffordshire Borough Council, April Figure 6.9, Page 147, East Staffordshire SHMA, East Staffordshire Borough Council, April /A5/KN/jp 17 October 2014

29 Conclusion 5.2 Therefore whilst we support the Council s approach of adopting an employment-led approach, we consider: A full return to the 2008 household formation rates should be pursued, to ensure concealed households are not projected forward. A higher level of employment growth in accordance with past trends and more recent forecasts would have the potential to show a significantly higher requirement. The effect of these two considerations will be to increase the housing requirement above that currently proposed by the Council /A5/KN/jp 18 October 2014