Strategic Planning and Uncertain Post-Covid Economic Geography

This will be important week for planning in England with the publication of the planning ‘Beigepaper’ or whatever colour it turns out to be. I will write on the issue of the future of zoning in another article.

Today though I want to focus on a key uncertainty that makes planning, especially strategic planning, difficult.

Strategic Planning is to a large extent predicated on forecastable growth. Forecastable economic growth by geography translates into household growth. That growth translates into household growth, which planning lagged behind, with household growth numbers used to set housing need by area. If an area was high growth but highly constrained then a strategic plan could distribute that growth to high potential but low constraint areas.

In the post-war system each element formed one tool in an integrated toolbox. Green Belt was designed to prevent cities expanding beyond a point where the cost of providing infrastructure became inefficient. The Green belt acted as a constraint but also designed to divert growth beyond it to partially economically self sufficient new Garden Communities/New Towns. Garden Communities/New Towns fell away in a period of constrained household growth when centralization was discouraged. that was in retrospect very short lived as inner urban economies recovered. In retrospect also chasing household formation was a mistake. During periods of recession household formation dropped and governments wrote to local authorities getting them to reduce targets in structure and local plans, further exacerbating long term deficiencies. Now there is more awareness than households form only where there are houses for them to form into and in many areas of England there has been massive suppression of household formation (concealed households) to the extent that the household formation projections are no longer a safe guide for strategic planning. This begs the question-what will be the agreed replacement?

In addition the ‘urban system’ that underlaid this was predictable. International in migration to cities, then migration of growing families to small growing towns and commuter belt areas, as well as young people from more economically depressed areas. In addition growth has expanded to most UK cities, but not the small towns forming belts of smaller industrial areas around them o remoter rural areas – other than those favoured by retirees. Now some of those certainties have fallen away. The level of international migration is anyone’s guess. Though it is likely that an aging population and collapsing fertility will require replenishment by international migrants – all all wages levels – to avoid an excessive dependency ratio which would cripple the welfare state.

Also the post-war Reginald Perrin World of commuting into City Centres seems broken. There are savings from home working to companies and productivity benefits from propinquity in offices, as well as indirectly to shops and catering outlets. These will effect individual companies differently. There can be little doubt however that a key constraint on planning, overloaded commuter rail lines’ is far less of a constraint than it was.

Take a back of the envelope calculation. Lets say the number of daily commuters into London fell by half to around 600,000 per day. It requires the space occupied by around 3 workers (including communal space) to free up space for one one person unit. So even if this dramatic fall were permanent it would only free up space in London for around 1 years national housing supply. It helps but with less demand for central London working there is less demand for suburban London cramming as well with census figures showing a dramatic and unsustainable increase in multi-household sharing of the existing stock. Ultimately covid will simply excerbate two long terms trends, more city centre living for these that can afford it and more decentralisation from suburban areas to growing areas in urban hinterlands.

Strategically that presents a number of challenges. Sustaining the fairbox for regional commuter networks and providing for zero carbon movement around much more dispersed living and working patterns. Ultimately I think this requires the underpinning of regional transport networks by some form of land value capture tax. If you assume that in future land values will be created by such networks, rather than internal combustion engine or heavy battery access, then this makes perfect sense.

It also makes sense to plan around areas where growth is enabled. Whether ‘science led’ growth areas like Oxford and Cambridge or the rings of small mill towns around northern cities that with better transport investment could extend the spillover economic effects of innovation to wider areas. After all it is now obvious that Brexit has killed off advanced manufacturing, the special advantage of the City of London in terms of access to the EU, and firms that relied on JIT trade to Europe. We don’t have much left other than science led growth.

In the short term we don’t have a firm platform for forecasting where future economic growth will be. But with commuting patterns disrupted by Covid jobs led approaches to strategic planning now make far more sense that outmoded housing led ones.

In addition many of the capacity arguments that prevented for example, arguments for a commuter station at Calvert or more strains to Marks Tey look ridiclous.

So as a future path for strategic planning I would suggest something like the following. How many jobs will we need in the future by City Region? There will be some interregional migration yes but opportunity areas in left behind areas should be pursued, whilst not assuming diversion away from areas where economic growth has hitherto been constrained by excessive inward commuting (like the arc). Such an approach would make much better sense for planning for areas like for example Cambridge and Oxford where the majority of people who need to live there cannot now and so dont show up in the household growth numbers.

A link series of nationally commissioned models (in partnership with LEPS) should form the new basis for strategic plans. LEP based models cannot at the moment as all of them double count the same workforce many time over. For example a Kent LEP assuming a worker from Yorkshire will move to Kent and a Yorkshire LEP assuming the same worker will stay in Yorkshire. Only a national balance sheet adjusted system (as we have in Ireland) can account for this. This also would demand the discipline of focusing growth on areas of potential – avoiding the ‘every crossroads town’ assumption (the lesson learned from the first wave of Irish national planning and fro the failures of Welsh strategic planning). As I have written here you dont need a single national plan just a series of regional plans with compatible economic assumptions.

Linked to this you will of course need it backed up by proper infrastructure plans.

The underlying assumptions of the old system makes it an unreliable guide for future strategic planning. But planning, especially zonal planning. cannot operate without the Oxygen of strategic planning. Ultimately covid has simply sped up economic geography trends that were occurring anyway. We cannot predict the forms that will occupy new business locations in 20 years for growth areas being planned now, however we can create the growth that will fill them by good strategic planning.

One thought on “Strategic Planning and Uncertain Post-Covid Economic Geography

  1. I think today there is no need to predict the forms that will take new places for business in 20 years. It is very important that you can now create growth that will fill them with good strategic planning.

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