At some point some where challengers at a plan inquiry were going to focus their attack on whether the reduction in the rate of household formation seen during the recession genuinely reduced the need for housing or not. I covered this issue in the past here. The argument was that the fall was largely recession induced and in the young with a fall in formation for general market housing largely being matched by an increase in need for affordable housing.
In the recent West Dorset/Weymouth and Portland Decision the inspector held that the 2011 based household projections do not form a firm basis for assessing need. Queue howls of outrage from the authorities. If they cant rely on ONS household projections what can they rely on? So am I satisfied with being proved correct? No because there are more important things than being right. Having a firm basis for swift plan making is one of them.
Looking at the Inspector’s Initial Comments they had an old SHMA which they attempted to update with the 2011 based household projections.
In taking account of the 2011 ONS household projections I appreciate the Councils have endeavored to justify their latest stance…I am aware that the ONS published their 2012-based national population projections for the UK on 6 November 2013. The results will provide the basis for 2014 DCLG household projections and are relevant to future housing requirements. Initial indications suggest that household formation rates used in the 2011-based projections were too low and that population growth varies considerably between different age groups. While details are not yet available, preliminary findings suggest the need to fully appreciate the components of household change. In essence, I have yet to be convinced that the Councils have undertaken an objective assessment of their housing needs.
Now if LPAs cant rely on ONS household projections what can they rely on? The problem I think here was twofold. Firstly they only updated the estimate of need where it was favorable to lowering HH formation. They should also have asked where the people who would have formed the households have gone. Many would be local and still wishing to form a household, i.e. they show up in increased demand for affordable housing. If you have a comprehensive SHMA model then this should show up, the problem was relating on an external model not comprehensively updated. Secondly there will be aspects of suppressed household formation that will emerge with economic recovery. Many forced to live at home who would have moved away (i.e. students and sofa surfers) will now form households, those would would have sold up and moved in will now move in, some of those in the affordable bracket may be able to afford general market housing.
What should authorities do then? It is possible to project over a cycle to remove some of the extremeties of household formation at the top and bottom of a housing boom. Would I recommend any authority to do so? No the reason why is that the ONS Projections are adjusted so that all migration in and out for each local authority balances. (in fact to make it more computationally tractable they group local authorities into twos and threes). If individually LPAs try to model future HH formation they are modelling in and out migration and there is no guarantee that globally the figures for the national will add up. It is a potential huge source of error, this is best left in the hands of the ONS.
It is much better to wait for the publication of the official ONS regionally balanced figures and until then only update the components of a SHMA model that can be updated i.e. the population baselines and the affordable housing need model. The consequence of this is the objective need is likely to rise as economic recovery progresses but there is an easy answer to that, do a review of the plan which you have to do after the 2 yearly cycle of household projections (remember when it used to be four) any way.
The danger of this, if reflected in the final inspectors decisions, is that either plan making nationally will be put on hold for several months as LPAs wait out the 2013 based HH projections, or far worse LPAs will try and second guess them. One become nostalgic for the pragmatic inspector who presented with a draft plan rendered instantly out of date by new housing data who simply approved the plan and ordered an early review recognizing that the best is the enemy of the good. The problem is the NPPF gives no leeway. A plan which is out of date is essentially scrap paper even if adopted yesterday. What is needed in the NPPF or accompanying guidance is a period of leeway (say 12 months) from publication of new ONS data till BWYLWYK applies.
There is no way back for these two aithoriyies however. They made other mistakes such as two end dates in a joint plan and not syncing job growth to housing need.
One other comment on the Inspectors report. I think he went too far in criticizing the process.
the Plan appears to have evolved as a reaction and counter-reaction to representations rather than as a well-honed strategy which promotes a logical and reasoned means of addressing the difficult issues facing both authorities. Because of this, I remain to be convinced that the spatial strategy represents a realistic approach to the future planning of the area and one which is supported by the evidence base.
It is not legitimate for an inspector to judge process, except as far as it relates to legal requirements, only outcomes. If the outcome is not the best possible plan, deliverable and supported by the evidence base then say so, and then comment that this may be because of the tooing and frooing. Here the political reaction of cllrs was naturally to reduce numbers of inevitably controversial strategic sites, whereas the evidence on housing suggested that to get a sound plan instead they should have been increasing the numbers. The authorities would be immune from criticism if the concerns expressed were genuine and in reflecting them they still produced the best plan in the circumstances.