Independent review makes recommendations for the Joint Core Strategy about trends in household size

An independent review commissioned by Cheltenham Borough Council to look at trends in household formation has recommended that the Joint Core Strategy continues to use government household formation figures to plan for future demand. 

The Joint Core Strategy (JCS) partnership was formed by Gloucester City, Cheltenham Borough and Tewkesbury Borough councils to produce a coordinated strategic development for the area, and will plan how the area will develop during the period up to 2031.

In December 2011, Cheltenham Borough Council, along with its JCS partner councils, published a consultation document called “Developing the Preferred Option”. The “developing the preferred option” document set out the vision for the JCS area to 2031 and a number of emerging options for how the vision could be achieved.  The document included potential employment and housing options for the JCS area.

The issue that generated most responses from members of the public was the method used to calculate future housing requirements for the JCS area. In response to these concerns the JCS authorities commissioned independent consultants, Nathaniel Lichfield and Partners (NLP), to review the method being used to calculate future housing numbers for the JCS area.

Following on from the NLP report, all three JCS authorities endorsed a number of commonly agreed recommendations.  Cheltenham Borough Council wanted, however, to investigate further the evidence with regard to the specific issue of household formation, that is to say how individuals in the population form separate households.
 
Councillors wanted to understand what is happening to household formation rates because it is one of the factors that determine how many homes an area needs.  The greater the tendency for people to form separate households, the higher the number of homes needed.

In October the council asked a working group of its members to review the current evidence to determine how it could be used in the assessment of the number of houses required in the JCS area.  The working group was attended by members from the JCS partner authorities.

The working group commissioned Cambridge Centre for Housing and Planning Research (CCHPR) to undertake an independent peer review of household formation rates and to report back to them by mid-January 2013.  The working group’s findings will be presented to the council’s Overview and Scrutiny Committee on 23 January 2013. 

The outcome of the peer review provided evidence that average household size did not fall as projected between the 2 censuses (2001 and 2011).  If it had fallen as envisaged then there would have been over half a million more households in England and Wales than shown by the 2011 census.

However, the evidence does show that the changes in household formation rates have mainly affected single person households who, whilst being likely to feel the affects of affordability issues more quickly than other groups, are also able to respond quickly to better economic conditions. This means that it is more likely that this evidence represents a temporary rather than permanent trend.  This finding is in line with the conclusions drawn by NLP in their report referred to above.

CCHPR also presented evidence to show that the growth in the size of the population and the consequences of an ageing population both have more impact on the number of houses needed than does the tendency for people to live in separate households.

Based on the evidence presented by CCHPR, the working group’s report contains three recommendations.  The main recommendation is that, based on the evidence provided by the independent peer review, it would be prudent for the JCS to continue to plan on the basis of projected household formation rates that underpin the figures produced by the Department for Communities and Local Government (DCLG) in 2008.

The report also recommends that the JCS should consider building flexibility into the core strategy against the possibility that recovery to trend does not occur.

The third recommendation is that the JCS considers taking account of the most up to date figures by constructing a “hybrid” projection that uses the Office of National Statistics’ interim 2011 projections to 2021 and then follows the trend suggested by the 2010-based projections because these cover a longer period of time.  The plan should then be reviewed periodically to take account of new information as it comes to light.

The working group is asking the Overview and Scrutiny Committee to endorse its recommendations and forward them on to the JCS Member Steering Group at the end of January 2013.