Introducing MOAN – Model for Objective Assessment of Needs – A Fudge Factor Free Approach

We only have till 9th of November to respond to Planning for the right homes in the right places.

I have a week next week between finishing one contract and starting another so what better time to write up a model i’ve been developing for many months for estimating need for every LPA in England, and crucially without the ‘Global Fudge Factor’ that fatally undermines the DCLG -LPEG derived approach.  This model was a free by product of a research project which has to remain confidential for a few weeks.

There will be many technical post explaining the different modules and assumptions of the approach but first – here – a non technical introduction.

In summary the DCLG model wont work and will make our national systematic housing shortfall far worse.

The housing crisis in Britain has two main supply side reasons (there are demand side reasons but they are beyond the scope of planning an demography to address)

  1.  We have a systematic weakness in the UK planning system that means that housing need from places that wont or cant provide enough housing land is not reallocated to places that can and should (even if these overlap)
  2. We have provided more but not enough housing land in the fastest growing areas.  This has made housing affordability in these areas far worse since the 1980s – as the second order effects of additional households and in migration induced by the economics multiplier effects from housebuilding and construction is not accounted for in current methods.  The worst thing you can do is provide more but not enough housing land.

The DCLG consultation model is fatally flawed and will make matters worse.  It partially deals with the first problem – the ‘wont’ part – but a detailed analysis shows it will make matters far worse with the ‘cant’ part by reallocating housing need to the places with the greatest land shortages through a confused  ‘global fudge factor’.  This means that the systematic underprovision of housing nationally over the next 20 years or so will get far worse. It also doesn’t tackle the second part – and indeed will make matters far worse through cutting growth requirements in growth areas by the most – bizarrely and counter-productively just as plans for the next steps in the Oxford-MK-Cambridge project are to be announced in the Budget (formerly known as the Autumn statement).  The DCLG really has to scrap it and start again, but not from the drawing board, as sound methods for doing this have been developed over many years, indeed from the DCLG itself, and now seemingly forgotten given the institutional memory of the DCLG has become like Drew Barrymore’s character in the film 50 First Dates.

In many posts over the next week ill explain in detail the reasoning and analysis.

Where did the DCLG go so Wrong on Housing Numbers?

The dept used to be world renowned on this issue.  It had Alan Holmans as its chief demographer and housing economist – who died in 2015.  He developed what was known in the trade as the ‘demographic model.’    Later extended by equally renowned experts such as Glen Bramley and Christine Whitehead it became the basis of the model used by the National Housing and Planning Advisory Unit.  A model which was designed to neatly integrate with the DCLG Affordability model (an econometric model).    That was all lost.  Dr Holmans was never really replaced. For a while ideologically the dept believed it didn’t even need to do national statistics and estimates of housing need.

Along comes LPEG – many of us had warned that the NPPF system could only begin to approximate to partially work if it included a firm and unarguable OAN methodology.  Sadly I must confess the term ‘Objective Assessment of Need’ was my own, and like ‘Core Strategy’ and ‘housing numbers game’ will be engraved on my gravestone as planners jump up and down on it like Picasso on Franco’s grave cursing the hell id inflicted on the nation.

But in my defense ‘ seriously.  LPEG I give them credit, half composed of the authors of the NPPF, like John Rhodes, they realised the warnings it would be a disaster would be correct proved true and the LPEG report is their mia culpa.  The fudging and dodging of need was a disaster, the DTC hadn’t worked, the abandoning of strategic planning in growth corridors was a catastrophe.

However for an organisation less disfunctional than the DCLG it might have thought that the last person you get to fix your car after a crash is the person who cut the brakelines.   They are an expert now on avoiding car crashes now are they?  LPEG commissioned Nat Litch to provide a spreadsheet method to reconcile the demographic baseline with the aspirations of the Barker report for an ‘Uplift’ based on ‘Market Factors’.  This was the origin of the now notorious ‘Global Fudge Factor’ on page 11 of the consultation.  The problem was Barker misspecified the problem.  If you have a hurricane on a Caribbean island market factors will tell you afterwards though speculation you have a shortage of standing houses.  However the fact you have had a hurricane means you can predict straight away a housing shortfall.  By not predicting the obvious   and relaying on after the fact market signals it was institutionalising the British Problem – always being one step behind not one step ahead in meeting national housing need.  The Treasury, as always in their bullying of the DCLG on planning policy, had made matters far worse than to begin with.

How to Fix It

Over several posts we will be presenting MOAN.  The Model for Objectively Assessing Needs.

Its baseline model is a simple spreadsheet and totally non black box extension of the spreadsheet presented by ONS for the 2014 based household projections – effectively rebuilding the demographic /NHPAU model with modern ideas, data, and statistical techniques.

On top of this there is a second model for estimating many scenarios for bridging the gap between OAN and OAP (Objectively Assessed Potential) and helping inform high level national political decisions for bridging it.   This approach is a by product of a huge research project i’ve been leading spread across several countries and projects with support from a number of research institutions and which is about to go live as an open source research framework.  It arose out of the challenge of how to model and plan for our greatest challenge as a planet – rapid urbanisation – simultaneously our greatest generator of economic growth and greatest environmental destroyer.  It is a framework for generating model at a city, regional, national and global scale for swift assessment of high level scenarios for rapid urbanisation.  Its first live test on an area larger than a city is a model for the Oxford-MK-Cambridge Corridor and overspill from London and Birmingham. This model – and watch for this website coming shortly – is called Planet Planagon, and will require massive input from GIS, urban planning, housing and other specialists to realise its potential.

Watch this space.