The Cambridgeshire and Peterborough Devolution Deal committed to delivering substantial economic growth and to double economic output during the next 25 years. The Cambridge and Peterborough Combined Authority and the Greater Cambridge Greater Peterborough Enterprise Partnership acknowledge and support the economic growth potential of the Greater Cambridge area and consider that there is a need to substantially increase housing delivery in order to support economic growth (that is needed to meet the objective of doubling GVA by 2040) and address the significant housing affordability issues that exist (Cambridgeshire and Peterborough Independent Economic Review). At present there is an imbalance between rates of economic growth and housing delivery in Greater Cambridge.
Countryside are disappointed that the authorities have not taken the opportunity to plan more positively to meet the full need for housing. The evidence base clearly confirms that Greater Cambridge will continue to experience a significant demand and need for new housing, reflecting the strength of the local economy and the scale of investment being made by the Government to support and facilitate even more ambitious levels of growth in recognition of this area’s national importance as an engine for economic growth.
In proposing to plan for 48,840 homes over the period from 2020 to 2041, the authorities are currently assuming a need for only 44,800 homes, or 2,114 homes per annum. Whilst such a level of need exceeds that calculated using the standard method, it is clear from the supporting evidence base that it directly relates to an economic forecast – under which circa 58,500 new jobs could be created over the plan period – that is described as ‘business as usual’, ‘taking into account long term patterns of employment’. As we explain in our response, such an approach sits fundamentally at odds with the Government’s ambitions and expectations of this area. It also implies a retraction from more recent evidence of stronger job growth that has been sustained, reflecting in no small part the success of significant investment in infrastructure which is set to continue and indeed increase over the plan period.
In this context, it is of note that the evidence base itself acknowledges the potential for Greater Cambridge to see a ‘higher-growth scenario’ in which more jobs are created, and actually concludes that this should be used to ensure a positive plan-led approach to providing employment floorspace. This scenario is predicated on more positive expectations around the continued growth of identified priority sectors, and assumes that this could lead to the creation of some 78,700 jobs over the plan period. The evidence base concludes that approximately 56,500 homes, or 2,690 homes per annum, could be needed to sustainably support such growth.
Countryside consider that this should be recognised in the GCLP as a minimum level of housing provision, with the reasoning for this conclusion set out in more detail below. In providing for the appropriate housing land response, Countryside would also strongly encourage the authorities to reconsider the length of the proposed plan period, particularly given that the Oxfordshire Growth Plan – also recently subject to a process of consultation – looks to 2050 and Milton Keynes similarly has a “Strategy for 2050”, which indicates (in high-level terms) the ambitions for growth to that point and is set to be supported by an emerging review of the Local Plan. Given the benefit of consistent timeframes in these key parts of the Oxford Cambridge Arc (‘the Arc’) Countryside believe the GCLP should similarly look to 2050, which would necessitate a larger supply of land assuming a sustained need for 2,690 homes per annum, with this equating to a total need for 80,700 homes over a thirty year plan period.
In addition, in light of the requirements of paragraph 22 of the NPPF and the Council’s inclusion of significant extensions to existing villages and towns as part of its current proposed spatial strategy, the plan period should again be extended to a period of 30 years (2020-2050). Additional allocations will therefore be necessary in order to accommodate the additional needs over this extended plan period.
Justifying a higher level of housing need
We commend the authorities on the assembly of a detailed evidence base, which appears to demonstrate compliance with Planning Practice Guidance (PPG) and importantly looks in detail at the crucial relationship between job creation and housing need. It is right to identify that whilst the standard method provides an important starting point, there are still circumstances – established within the PPG – when a higher level of housing need may exist. This confirmation of a potentially higher need, beyond the level implied by the standard method, is therefore fully supported. Indeed, to do otherwise – by aligning with the outcome of the method and planning for a level of need that is inextricably linked to trend-based demographic projections – would fundamentally fail to recognise, as the evidence base acknowledges, the Government’s commitment to continuing sustainable economic growth in Greater Cambridge. This follows the Government’s award of the Cambridgeshire and Peterborough Devolution Deal 2017 and its commitment to the Arc, the spatial framework for which – once prepared – must be adhered to by the CGLP given it will have the same status as national policy.
An area of national economic significance – a Plan for Growth
The National Infrastructure Commission (NIC) presented to the Government a compelling rationale for recognising the Arc as a national priority in its influential report of 2017, titled ‘Partnering for Prosperity’, which advocated a ‘New Deal for the Cambridge-Milton Keynes-Oxford Arc’.
The Government reaffirmed its commitment to the Arc through last year’s Spending Review, identifying additional funding to support its promise to develop a spatial framework that plans for long-term economic and housing growth throughout the area. Reference to this commitment was equally made within the National Infrastructure Strategy, which also generally emphasised – in the context of cities, like Cambridge – a view that they are:
“…the anchors of successful regions across the world; they are engines of growth. To drive economic growth across all regions of the UK, the government is investing in growth in cities”
The spatial significance of Cambridge – and indeed the Greater Cambridge area to be covered by the GCLP – is clear in the spatial context plan included in the First Proposals Consultation Document, which shows it located not only within the Arc but also the UK Innovation Corridor and the Cambridge-Norwich Tech Corridor.
It is evident that Cambridge plays a significant part of the Government’s national economic ambition. The unique economic proposition of the Arc is reflected in its Economic Prospectus, published in Autumn 2020, which set an ambition that:
“By 2050, the Arc will be the world leading place for high-value growth, innovation and productivity. A global hub where ideas and companies are generated and thrive, home to exemplary models of 21st century development, with a high-quality environment and outstanding quality of live, and with a strong economic focus that drives inclusive clean growth” (emphasis added)
In the context of its acknowledged national significance, the Government is playing a leading role in directing its ambition for the growth of the Arc, with the intention of publishing a spatial framework that covers the entire area. To this end, the Government published an ‘Introduction to the Spatial Framework’ in February 2021.
This document, in justifying both the Government’s involvement in planning for the future of the Arc and its designation as a national economic priority, acknowledged that:
“Forecasts vary, but successive studies have found that there is a clear transformational opportunity”
It proceeds to suggest that, ‘with the right interventions and investment’, the Arc could create as many as 1.1 million extra jobs by 2050. It continues in this context to state that:
“The Arc’s success is key to the UK’s national prosperity, international competitiveness, and ability to meet the challenges and opportunities we will face as a country over the next century”
The Government identifies housing provision as one of three areas of particular concern. It observes, in the context of housing affordability being poor, that:
“The wider economic effect of this is to make it harder for businesses to attract the skilled workers they need, to locate in the most productive locations, and is forcing longer and more polluting journeys as people travel longer distances to get to work”
In this context, the report confirms the Government’s commitment to planning for the right level of growth in the Arc through the accelerated delivery of a robust, evidence based spatial framework over a period of only 30 months.
The implicit recognition of a need for progress by the Government was reflected in its publication of a consultation document in July 2021 titled ‘Creating a Vision for the Oxford-Cambridge Arc’. This evidently predated the current consultation on the GCLP.
It is clear from this latest document that, in establishing a ‘vision’, the Government expects the Arc to be ‘ambitious and aspirational’, with it emphasising the importance of looking at ‘potential opportunities for transformation’. With reference to both the planned level of job growth and the aligned proposed housing provision, Countryside consider that the Greater Cambridge authorities have so far failed to align with and take adequate account of this national ambition. This creates an unjustified inconsistency with the emerging strategic vision for the Arc, thereby undermining its potential to be realised and failing to represent a positive planning approach.
Investment in strategic infrastructure
The PPG is clear that investment in strategic infrastructure improvements, which are likely to drive an increase in the homes needed in an area, can justify a higher level of housing need than implied by the standard method.
The Government’s support of the Arc and its component authorities has gone beyond a commitment to assisting in creating policy and strategy. As far back as 2014 the Government signed a City Deal with the Greater Cambridge authorities, with this bringing up to £500m of funding over a fifteen year period towards transport and infrastructure projects managed by the Greater Cambridge Partnership. It is understood that much of this investment is underway and delivering strategic improvements to the area’s infrastructure.
The First Proposals Consultation Document includes a map of the existing and proposed major transport projects which are supporting the growth of Greater Cambridge, and are intended to keep doing so.
The Consultation Document itself recognises the role of investment in facilitating growth, noting for example the importance of the committed funding for the new Cambridge South Railway Station in facilitating the further growth of the Cambridge Biomedical Campus and the importance of investment to date in the development of the Babraham Research Campus.
This investment also reflects the Government’s awarding of circa £150m of Local Growth Funds in 2015 to the Cambridgeshire and Peterborough Combined Authority, all of which is understood to have been assigned to specific projects that have to date leveraged further funding of in the order of £328m. These projects are estimated to have already collectively generated some 6,500 jobs, with over 40,000 jobs forecast to be created in total. Projects in receipt of monies in Greater Cambridge include:
• West Cambs Innovation Park
• NIAB – AgriTech Start Up Incubator
• Hauxton House Incubation Centre
• TTP Life Sciences Incubator
• Illumnia Genomics Accelerator
• Medtech Accelerator
The 2016 designation of the Cambridge Compass Enterprise Zone, which comprises of five employment sites, also represents another commitment by the Government to the area and will continue to create further employment-generating opportunities. As set out above, the Government’s continued commitment to the Arc suggests that further monies will be directed at the area to build on these existing significant investments, such that it is reasonable to expect continued above-trend job creation and contributions to the national economy.
A history of economic success and forecasting growth
The investment noted above, both by the public sector and also by private companies – including internationally renowned businesses like AstraZeneca for example – has been matched by the generation of economic opportunities. Indeed, Cambridge’s economic prominence and success is acknowledged in the First Proposals Consultation Document, which cites recent research by the Centre for Cities in describing Cambridge as ‘one of the most important research and innovation-led hubs in the UK’.
The recent success of Greater Cambridge in creating new jobs is therefore undeniable, as is the pace of this growth. The Employment Land and Economic Needs Study (ELENS) uses data from Cambridge Econometrics to estimate that some 35,800 jobs were created throughout Greater Cambridge between 2011 and 2017, equivalent to almost 6,000 jobs per annum. Even when acknowledging uncertainties associated with the accuracy of historic job figures – which lead different datasets to suggest that job growth in this period may have ranged from 25,588 to 40,160 jobs – it is clear that the area has seen substantial and rapid job growth over this period.
The Business Register and Employment Survey (BRES) now provides an indication of job growth in three more recent years, which can be used to build on the analysis in the ELENS. Figure 2.3 shows how, according to this dataset, Greater Cambridge has sustained and indeed increased the rate at which new jobs have been generated across the area. It suggests that some 20,700 jobs were created between 2017 and 2020, its use of a mid-September reference point meaning that it technically captures the first six months of the COVID-19 pandemic. Taking an average over this period would suggest growth of almost 6,900 jobs per annum, indicating that job growth has been broadly sustained since 2017 rather than having peaked at that point, as the ELENS prematurely suggested.
Historic performance in the creation of new jobs an important context in the forecasting of future trends, albeit in Cambridgeshire there is notably a history of so-called “off the shelf” baseline forecasts underestimating the job growth that actually occurs, acknowledged first in the Cambridgeshire and Peterborough Independent Economic Review (CPIER) but also more recently in the ELENS.
It is acknowledged that the Councils’ evidence base at least attempts to account for this issue, with the ELENS confirming in its consideration of historic job growth data and forecasts that there are ‘questions about relying too heavily on an econometric model which constrains local potential within parameters which are defined regionally’.
The ELENS proceeds to develop alternative scenarios which build from the baseline forecasts and apply judgements to better reflect historic growth rates in a number of key industrial sectors, which are understood to include:
• Health and care;
• Computer related;
• Research and development (R&D); and
• Professional services.
The approach taken in the analysis of variant forecasts is not directly challenged by Countryside, given that these sectors are generally those which are both anticipated to remain the focus of investment and have locally experienced growth in recent years. It is separately noted also that the subsequent impact of the pandemic would appear to lend further support to the potential growth of health and care in the region, given the specific link to life sciences in Greater Cambridge, as well as related professional services and R&D.
This is borne out when looking at the ten sectors that have created the most jobs since 2017, illustrated at Figure 2.4.
The education sector has evidently played a significant role in creating new jobs, with further analysis revealing that this is largely attributable to “First-degree level higher education” and therefore suggesting that this reflects an increase in jobs related to the area’s universities. Separate to this, it is noted that strong growth has also been recorded in the professional, scientific and technical sector, information and communication and health over this period. This affirms the sustained ability of these key sectors to contribute significant growth, with no evidence that their capacity to grow has been curtailed. Indeed, it suggests in contrast that their growth is on course to remain at the higher rates seen over more recent years.
The evidence of sustained growth – most notably in these sectors but also across the economy as a whole – does, however, challenge the notion of a regression to longer term and lower growth trends, which is implicit in the central scenario presented in the Councils’ evidence base and seemingly favoured as a job target in the First Proposals Consultation Document. In contrast, it is observed in the ELENS itself that the ‘higher growth’ scenario ‘sits broadly in the middle of the longer term historic (1991 or 2001 – 2017) and recent historic (2011 – 17) absolute change’. In the context of the evidence of growth noted above, even this scenario could be viewed as being unjustifiably modest, but it does at least have the advantage of more closely reflecting the proven strength of the local economy.
The analysis of forecasts did also identify a scenario which suggested a still higher level of job growth, by allowing for the continuation of job growth rates recorded between 2011 and 2017. This identified the potential for more than 120,000 new jobs throughout Greater Cambridge over the plan period. Such a level of job growth is dismissed as unreasonable, but it nonetheless serves to highlight that even the so called “higher growth” forecast scenario could be exceeded.
It is pertinent to note, in the context of the above, that the First Proposals Consultation Document confirms – with reference to the ELENS – that the Councils are ‘mindful that the Study also identified a higher job growth forecast’, noting specifically in this regard the conclusion that the GCLP provide ‘flexibility in employment land in case the market delivers more jobs than anticipated’. This responds to a clear conclusion of the ELENS itself, which recommends that ‘in planning positively for growth, the KS2 Higher Scenario is planned for regarding B1a/b floorspace, without making any implied assumptions regarding jobs growth’. In justifying this conclusion, it confirms that this takes account of the fact that it ‘broadly aligns with completions trends and market feedback’.
This conclusion was presumably taken into account by the Councils in proposing their more flexible approach to providing for employment floorspace. Where the evidence suggests the target of 58,500 new jobs would translate into a need for circa 416,400sqm, the First Proposals Consultation Document identifies an existing pipeline supply of 624,310 sqm of employment floorspace, as of 2019, which aligns more closely with the level of floorspace calculated as being required to support the higher growth scenario (541,655sqm). The Consultation Document suggests that a proportion of this space is expected to build out beyond the plan period but even allowing for that it is the case that the Councils currently intend to be supportive of further increases to this pipeline, with Policy J/NE confirming that ‘proposals for new employment development will be considered on their merits’. Where the provision of new employment floorspace and investment in new facilities has evidently played an important role in supporting the high levels of employment growth achieved over recent years, there is every reason to believe on this basis that the circumstances will be in place and supported to allow this to continue over the plan period.
A reasonable forecast of economic growth and balancing housing needs
The Councils’ Strategy Topic Paper appears to recognise the strength of the Greater Cambridge economy, reflecting on the findings of the CPIER and in turn acknowledging that this ‘supports the argument for exploring the relationship between economic growth, future employment and the number of new homes to plan for’.
Critically, however, in arriving at its proposed approach to planning for new jobs and homes, the Councils observe with reference to the higher growth scenario that it is ‘considered possible but not the most likely’. Countryside strongly believe, in the context of the above – which draws on the Councils’ own evidence and reflects the Government’s national position – that this position is wholly unsubstantiated.
A more reasonable and positive interpretation of the evidence available, accounting for the Government’s clearly stated ambitions for the Arc of which Greater Cambridge is part, is that the GCLP must provide for and support a higher level of future job growth. As a minimum, the level of job growth associated with the so-called “higher” scenario would be more representative of the assessed economic potential of this area, where it:
• More closely reflects continuing evidence of stronger historic job growth, including in the key sectors that have been consistently identified as local drivers of growth in the published evidence base;
• Shows a greater alignment with the ambition which continues to be articulated by Government, which expects above-trend growth within its designated nationally significant growth corridors; and
• More closely aligns with the emerging approach of providing the employment land that will accommodate new business investment and growth, noting specifically the indication in the evidence base that the stronger associated growth aligns more closely with the market.
Based on the Councils’ published evidence, where alignment is sought with the higher of the job growth scenarios, the GCLP must make provision for 2,690 homes per annum or approximately 56,500 homes if the plan period to 2041 is retained. As referenced at the start of our response to this policy, however, Countryside are of the view that in order to demonstrate consistency with the emerging plans for Oxfordshire and Milton Keynes a plan period of 30 years out to 2050 should be used. This would necessitate a larger supply of land, assuming a sustained need for 2,690 homes per annum, with this equating to a total need for 80,700 homes over a thirty year plan period.
As we consider below, a failure to plan positively for housing provision in the context of sustained job growth over this period would continue to have adverse consequences for the population of Greater Cambridge.
The consequences of failing to positively plan for growth
The First Proposals Consultation Document is clear to acknowledge that to date the plan-led system in Greater Cambridge has not managed to enable a sustainable balance between jobs and homes, observing that:
“Over recent years, jobs have been created faster than new homes have been built, and this has contributed to higher house prices and increased commuting into the area”
It also notably concedes that there would be adverse consequences if the GCLP fails to provide the homes that are needed in future, stating with reference to the lower level of need implied as a minimum by the standard method that such a level of housing provision ‘would risk increasing the amount of longer distance commuting into Greater Cambridge, with the resulting impacts on climate change and congestion’.
Such a position was also articulated by the CPIER in its diagnosis of the consequences of failing to plan positively for growth in Cambridge, stating that:
“If nothing is done, the damage to society from the continuing drift away of less well paid workers may become irreparable, the ageing of the city (whose housing ladder’s bottom rung is out of reach of the vast majority of the young) will threaten its dynamism, and the cost to people’s mental health of commuting-induced stress and housing insecurity will soar”
Positively, the vision expressed in the First Proposals Consultation Document indicates that the Councils aspire to improve the sustainability of Greater Cambridge, which they ‘want…to be a place where a big decrease in our climate impacts comes with a big increase in the quality of everyday life for all our communities’.
In this context, and putting aside the scale of job growth planned for, the Councils’ apparent aim of ensuring that Greater Cambridge better balances job growth and housing provision by “consuming its own smoke” is supported. The assumption of a commuting rate to this effect is, as the Councils confirm, ‘consistent with the local plan theme of net zero carbon’ and also overcomes the lack of ‘certainty that neighbouring authorities would plan for the additional homes in their local plans in order to support the economy in Greater Cambridge’.
This is further reinforced, the Councils confirm, in the transport evidence and with reference to the developed transport model which notably suggests that
“…the approach of providing more homes could help reduce longer distance commuting, which could help limit carbon emissions, and explicitly highlight that if the number of jobs in an area increases faster than the development of homes for the population to service those jobs, then travel distances to access these jobs will increase, and the longer trips that this entails will most often by undertaken by car, leading to large increases in travel distance by car compared to more balanced strategies”
Even this ostensibly ‘balanced approach’ to commuting could, however, lead to adverse and unsustainable outcomes if the Councils do not accept and plan for the likelihood of a stronger level of job growth.
Similarly, underestimating potential job growth and therefore housing need will continue to exacerbate what are already acute affordability challenges facing many households. The CPIER highlighted even in 2018 that:
“Housing affordability pressures are one of the main threats to growth in Cambridgeshire and Peterborough, and one of the main burdens on people’s lives. Demand for housing has risen strongly, while supply, though increasing, has not been able to keep pace”
The serious consequences of acute affordability issues are explained in the Councils’ evidence base. The addendum to the study of housing need, for example, confirms that under each of the previously introduced jobs-led scenarios there is expected to be a net need for between 1,093 and 1,246 affordable homes for rent per annum across Greater Cambridge. This evidently represents a significant need when set against the overall need for housing across all tenures, and there is again clearly an imperative on ensuring that the supply of homes will positively address rather than worsen affordability for those households on lower incomes.
The acknowledged serious consequences associated with failing to better align jobs and homes provides a further compelling justification for the GCLP to more positively anticipate a stronger level of job growth and ensure the provision of the homes required to support it.