Draft Policy S/JH seeks to adopt a housing requirement of 44,400 new dwellings over the 21-year plan period to 2041, reflecting an annual objectively assessed need of 2,111 homes per year.
As is detailed in the ‘First Proposals’ consultation, it is expected that 1,771 homes per year could be provided within the Greater Cambridge area during the 2020-2041 Plan period based on existing commitments, which would exceed minimum annual local housing need in accordance with the Government’s standard method (1,743dpa). The Council claim that their evidence shows the need to plan for about 550 more homes per year in order to meet a rounded need for housing, relative to existing commitments (37,200 dwellings), effectively comprising:
• c.340 dwellings per annum to meet objectively assessed housing needs (2,111dpa)
• c.210 dwellings per annum as part of providing a 10% buffer
The PPG (Paragraph: 010 Reference ID: 2a-010-20201216), sets out some of the circumstances that could justify an uplift on the standard method. These include, but are not limited to, the presence of specific growth deals and the funding and provision of strategic infrastructure. As is set out further within this submission, the economic performance and aspirations of the Greater Cambridgeshire Plan area must be reflected in the housing requirement to be adopted and there is significant evidence that would support an a more meaningful uplift to the standard method than is currently being proposed.
The 2,111 dwellings per annum, referred to by the Council as their ‘consume own smoke’ scenario, applies a sensitivity test, in which there is a 1:1 commuting ratio for housing growth generated by additional jobs above those supported by the Standard Method, assuming that the total additional housing growth generated by additional jobs above those supported by the Standard Method would be delivered in full within the Greater Cambridge area.
The full range of previously identified growth level options are set out below.
It is noted that the ‘maximum continue existing pattern’ requirement of 2,549 dwellings per annum is referred to in the Housing and Employment Relationships (HER) report as being the ‘higher growth scenario’.
(a) The relationship of housing and future economic growth
The HER considers three scenarios for growth;
• Standard Method – Housing need derived from the Standard Method, converted to population and then employment growth;
• Central – Central growth employment forecast converted to population and housing; and
• Higher – Higher growth employment forecast converted to population and housing.
As is set out in the Greater Cambridge Employment Land and Economic Needs Study (ELENS), only a single economic model (Cambridge Econometrics (CE)) has been used to generate jobs forecasts. It is standard practice to triangulate all 3 models (Experian and Oxford Economics together with CE) given that there are methodological differences between them regarding how the various job forecasts are derived. This can mean that in certain circumstances, and in certain spatial areas, one may produce a more realistic, or appropriate, level of job growth than another.
The ELENS acknowledges that the Greater Cambridge economy is dynamic and does not readily align with national or regional forecasts for jobs growth. It has a world-renowned life sciences cluster which has the potential to drive growth beyond typical regional or national rates. Since 2011 the Greater Cambridge economy has grown faster than any time in the last three decades, driven by some key sectors.
In recognition of this the ELENS concludes that a preferred range between a central (58,500) and higher growth (78,700) scenario is recommended in respect of jobs growth. As is set out in the table above, the Council’s proposed housing requirement would support only the central economic scenario and fails to meet this recommendation.
The ‘higher’ growth scenario assumes the baseline forecast for most sectors but identifies higher growth sectors particular to Greater Cambridge, being Research & Development (R&D), Professional services, and Health & care (related to R&D). For these sectors, the forecast is increased to halfway between the baseline and the historic growth rate from 2001-17 to reflect their higher potential. It also considers multiplier effects of growth. Overall, this is a plausible but more aspirational growth outcome. Such an approach is entirely consistent with the PPG in terms of how it answers the question on how business needs should be assessed, taking into account evidence of market demand, stakeholder engagement and key sectors from an area’s Local Industrial Strategy (ID: 2a-026-20190220)
As is set out below, there is a strong justification for the adoption of the ‘higher growth scenario, that would ensure that housing growth mirrors jobs growth in the Plan area.
(b) Economic Growth and Investment in Greater Cambridge
Greater Cambridge forms part of the Oxford-Cambridge Arc (‘the Arc’) which is considered to be a globally significant area between Oxford, Milton Keynes and Cambridge. It supports over two million jobs, adds over £110 billion to the economy every year and houses one of the fastest growing economies in England.
In February 2021, the Government published its plan for developing “a spatial framework” for the Arc, including a timeline and how it will work with local partners. The plan cites studies that forecast that by 2050 the area would see economic output growing by between £80.4 billion and £163 billion per annum, with between 476,500 and 1.1 million additional jobs. The plan goes on to note that the Government has identified the Arc as a national economic priority area.
The proposed Oxford-Cambridge Spatial Framework will have the status of national policy and is intended to form a material consideration for plan-making alongside the National Planning Policy Framework.
The Government recently sought views on priorities for the Framework as part of consultation on the document ‘Creating a Vision for the Oxford-Cambridge Arc’ (ending October 2021). The latest consultation proposals set out that it will aim to guide sustainable planning and investment decisions under four policy pillars:
a) the environment;
b) the economy;
c) connectivity and infrastructure; and
d) place-making.

This recent consultation follows publication of an initial policy paper in February 2021 setting out the approach to developing the Framework. Paragraphs 2.10 and 2.11 of the policy paper set out in terms of the strategy for housing and planning in the Arc the role of the Framework will not be to make site allocations or to include detailed policies set elsewhere in national policy or better left to local plans (including for example, setting out the housing requirement). However, the policy paper emphasises the importance of meeting housing needs in full (including the delivery of affordable housing) and therefore relies on the calculation of minimum annual local housing need in accordance with the standard method as its starting point. Opportunities to increase levels of development above this minimum starting point are clearly anticipated as part of the Framework’s aspirations to support economic development and ensure a balance between the delivery of new jobs and homes (see paragraph 2.6).
Paragraph 3.8 of the policy paper sets out that the government expects:
“local planning authorities to continue to develop local plans before the publication of the Spatial Framework. These changes will sit alongside wider planning reforms, and as we take forward our response to the ‘Planning for the Future’ consultation, we will outline transitional arrangements and the role of the Spatial Framework within any new system.”
The development of the Spatial Framework will be supported by two further public consultations: Towards a Spatial Framework (Spring 2022) and Draft Spatial Framework (Autumn 2022). It is the Government’s intention to commence implementation of the Spatial Framework throughout in 2023.
In addition to the Arc, Greater Cambridge has benefitted from significant Central Government investment through the Greater Cambridge Partnership (formerly the Greater Cambridge Growth Deal. An initial £100m investment was received in 2015, with the second round of investment, totalling £400m, being received in 2020.
The initial investment supported work on the first phase of the Cambridgeshire Autonomous Metro (CAM), which has since been suspended following political pressure to scrap the proposals. In addition to this, significant infrastructure improvements, including, the Histon Road scheme, the Abbey Chesterton Bridge, Trumpington Park and Ride were supported.
The second tranche of money is expected to support housing and jobs growth across the Plan area, including delivering public transport schemes at Histon Road, Milton Road and West of Cambridge along with the enhancements to the energy-grid capacity across the area so as to ensure that housing and employment growth is not restricted.
Indeed, within the early evidence sitting behind the Greater Cambridge ‘First Proposals’ including the Housing and Employment Relationship Report (HER) November 2020, there is a recognition of the economic growth and infrastructure aspirations across the Plan area.
Despite this the Employment Land Review considered the central employment scenario, equivalent to the Councils’ medium level of jobs, to be the most likely outcome taking into account long term historic patterns of employment including the fast growth of key sectors for the Greater Cambridge economy in the recent past.
With a consistent record of jobs creation, and given the objectives and commitments made as part of the Greater Cambridge’s inclusion in the Arc, along with the significant levels of investment in the area, there is robust evidence that jobs growth targets, as with housing targets, should be aspirational and look to establish the county as a leading economic force in the UK. As such use of the higher scenario is fundamentally supported.
The PPG (Paragraph: 010 Reference ID: 2a-010-20201216) is clear that where there either growth strategies for the area that are likely to be deliverable, or strategic infrastructure improvements that are likely to drive an increase in the homes needed locally then in these circumstances increases in housing need are likely to exceed past trends. In order to be justified by relevant in evidence in accordance with paragraph 35 of the NPPF2021 preparation of an appropriate strategy for Greater Cambridge must likewise have regard to relevant market signals. The elements specified in the PPG comprise directly relevant market signals within the plan area that have been rejected during preparation of the ‘First Proposals’ and thus render the proposed approach unsound (not positively prepared and not justified).
(c) Market Demand
Importantly the PPG states that levels of housing need beyond the standard method will need to be assessed prior to, and separate from, considering how much of the overall need can be accommodated. It states that there will be situations where previous levels of housing delivery in an area are significantly greater than the outcome from the standard method and that this will need to be taken into account when considering whether it is appropriate to plan for a higher level of need than the standard model suggests.
Paragraph: 015 Reference ID: 2a-015-201902261 of the NPPG highlights that the consideration market signals to justify a higher requirement that that which results from the standard methodology can be considered sound. or calculating housing need. It is therefore also appropriate to consider signals such as historic delivery and affordability.
Taking COVID-19 into consideration, clearly, as demonstrated by output, demand is continuing to grow across the Plan area and can be aligned with the recent trends in jobs growth as is detailed further.
Greater Cambridge, like many parts of the East of England, is characterised by high housing costs and particular affordability pressures.
The average house price in Greater Cambridge in September 2015 was £345,248 and in the most recently available figures, for September 2020, it stood at £402,500; an increase of 16.7%.
Across the Plan area, the City of Cambridge has significantly worse affordability issues than South Cambridgeshire, but the affordability ratios (and thus pressure in terms of access to market housing) are rising more quickly in South Cambridgeshire.
Both of the constituent Local Planning Authorities have seen a worsening trend in workplace-based affordability ratios over the past 5-years as demonstrated above in Table 3 notwithstanding levels of housing delivery.
Given the very strong jobs growth in recent years it would normally be expected that workplace-based affordability would demonstrate the greatest improvement or stabilisation (in keeping with the Government’s aims in introducing the Standard Method).
Assumptions regarding commuting are important in determining the population and future housing needs and ensuring a sustainable relationship between the supply of jobs and homes. In recent years in-commuting into Greater Cambridge has increased significantly. Housing delivery above that required to sustain the associated level of employment growth will likely result in a reduction of net commuting and an improvement in housing affordability within Greater Cambridge.
This is only likely to be achieved in circumstances where housing growth reflects the outputs of the Councils’ ‘higher’ employment growth forecast. Housing delivery below that required to sustain the associated level of employment growth will likely result in an increase in net commuting and a deterioration in housing affordability. This cannot be regarded as sustainable.
The Councils’ HEGER shows net in-commuting to Greater Cambridge in 2011 of 30,173 persons (Table 12). Table 19 anticipates that using the Council’s central scenario and a 1:1 commuting ratio forecast jobs growth would result in further net commuting inflows of 6,147 persons. This is because the 1:1 ratio is only applied to jobs growth that is supported through planned housing delivery in excess of that already provided for under the standard method (Paragraph 4.12). A total net flow of in-commuters of 36,347 cannot be regarded as sustainable. Furthermore, Paragraphs 4.31 to 4.33 of the HEGER look at the locational impact of housing additional workers outside Greater Cambridge, as generated under 2011 commuting ratios to support jobs growth under the central and higher scenarios compared to the balance achieved when a 1:1 ratio is applied to jobs growth above that supported by the standard method. The problem for the Council is that while it claims to avoid the impact of a 114dpa locational impact on surrounding authorities of the central scenario through use of the 1:1 ratio any jobs growth above this total will substantially increase in-commuting in order to provide for the number of workers required. Additional sensitivity testing is required to illustrate this, given that jobs growth continues to outpace housing delivery under existing trends.
In terms of the relationship with the affordability ratios set out in Table 3 it should be noted that the residence-based ratio for South Cambridgeshire is lower than the workplace-based figure (2020: 9.68). This ratio has remained relatively stable, albeit substantially in excess of national averages, and has not been significantly reduced by recent levels of housebuilding.
In South Cambridgeshire, the residence-based affordability ratio may be explained by an ageing population, who generally benefit from higher earning, could arguably account for this trend, with residents in the rural district taking the highest paying jobs across Greater Cambridge, with younger and generally lower paid workers being forced to commute further.
It is recognised that a significant proportion of new employees following recent jobs growth are in-commuters so if they are commuting into Greater Cambridge (and can’t afford housing) their earnings won’t affect the residence-based ratio (which is made up of the ageing population referred to above). It should also be recognised that not all jobs growth across the county will be high-earning, particularly growth in the service sector, which places upward pressure on workplace-based affordability ratios.
This is a significant negative side-effect of failing to sustain the required balance between the growth in homes and jobs. This scenario is effectively acknowledged at Paragraph 3.77 of the HEGER Report regarding recent increased in-commuting to South Cambridgeshire.
In these circumstances it is correct that use of the 2011-based commuting ratio in these circumstances would not suppress levels of housing need (i.e., it would not seek to lock-in even more unsustainable commuting patterns and sources of net additional labour supply from outside of Greater Cambridge). However, the practical issue is that continued impacts are only likely to be avoided where planned housing growth genuinely reflects a reasonable assessment of potential employment growth.
In these circumstances the ‘First Options’ proposals to suppress opportunities for growth in the rural area at sustainable settlements including Steeple Morden, in circumstances where this would encourage even greater long-distance commuting, are misconceived and unsound (not justified and not effective).
The present levels of economic growth have resulted in a supply-demand imbalance for housing, contributing to both house price growth and growth in net in-commuting into Greater Cambridge. As such, Greater Cambridge’s strong economic performance has led to a supply/demand imbalance which has created a further deterioration in housing affordability.
Greater Cambridge is clearly an expensive place to live and work, but there are clear indications of strong market demand. In the pre-pandemic years of 2018-2019 and 2019-2020, delivery across the Plan area exceeded 2,000 dwellings per annum.
The level growth witnessed in the years 2018-2020 has resulted only in a marginal improvement in the affordability recorded in Cambridge, but not in South Cambridgeshire, and therefore this height of growth at some 2,000 dwellings per annum is clearly insufficient to address worsening affordability trends. This is in-line with the Government’s position on minimum annual local housing need providing the relevant starting point but not confirmation of an appropriate level of supply to address housing market pressure.
The economy in Cambridgeshire remains amongst the most buoyant nationally and, with the Government prioritising the area for growth, it is forecast that economic activity rates, investment and the development of industries within key sectors will continue and grow in the years ahead. Accordingly, once again, there is a clear rationale for adopting a higher approach to housing need that would support the level of job growth that the Plan area has the potential to accommodate and, indeed, is accommodating.
There is sufficient evidence to support at least 2,549 dwellings per annum being planned for in accordance with the Plan area’s objectively assessed housing need. This is entirely in line with the Council’s own evidence base in respect of economic growth and would ensure that jobs growth does not continue to outstrip housing growth.