Main Modifications to the Proposed Submission Core Strategy

Policies OSS1and RA1

Policy OSS1 provides for at least 5,700 dwellings in Rother between 2011 and 2028. Policy RA1 deals with the rural housing provision and it plans for 1,670 houses in the rural areas across the plan period. We consider these policies to be unsound because:
1. The evidence base underpinning the OSS1 housing target is flawed and does not represent an objective assessment of need; and
2. The proposed 0SS1 housing target derived from this claimed objective assessment of need is unnecessarily constrained; and that this constrained figure unduly affects the housing provision of the rural areas in policy RA1.

We assess these two issues in detail in the following text.

Objective Assessment of Housing Need
Paragraph 47 of the National Planning Policy Framework (the 'Framework') requires authorities to use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area. In order to do this, paragraph 159 of the Framework recommends that authorities prepare a Strategic Housing Market Assessment (SHMA).

In establishing an objective assessment of housing need, the new draft National Planning Practice Guidance advises that household projections published by the Department for Communities and Local Government (DCLG) should provide the starting point estimate of overall housing need. The most up-to-date projections are the 2011-based Interim projections which were published by the DCLG in April 2013 (however, these projections are Interim projections which only run from 2011 until 2021). From here there are a number of recognised demographic forecasting models that will produce an objective assessment of need, using OCLG projections as a starting point. One such model is POPGROUP, which is owned by the Local Government Agency (with development and technical support provided by Edge Analytlcs) and is recognised as being a robust and transparent model which is and has been used by a large number of regional and local government authorities, health authorities, universities and planning consultancies. This is indeed the forecasting model that has been used by Rother District in their SHMA (June 2013) in identifying an objective assessment of housing need in the District.

Rother in their SHMA use as their starting point the DCLG 2011-based Interim household projections, which point to a need of 5,072 extra dwellings in years 2011-2021; which equates to a rate of 507 dwellings per annum. Because Rother's plan period runs from 2011 until 2028, Rother then roll forward the 2011-based figures (which only go as far as 2021) a further 7 years until their plan period end year 2028. It is concluded by the SHMA, using the 2011-based DCLG projections as a starting point over the full plan period and then forecasted through the POPGROUP demographic forecasting model, that the objective assessed housing need for Rother over the plan period of 2011-2028 is 6,180 dwellings; equating to 360 dwellings per annum.

Whilst the 2011-based household projections should be used as a starting point in identifying an objective assessment of need, caution needs to be applied in their use. These figures actually reflect a falling housing market rather than painting a picture of what is needed in the future as they project forward what has happened since 2008, during the recession. This is a period characterised by:
* A huge undersupply of new homes
* Increased overcrowding
* Asking prices remaining out of reach for first time buyers
* Restricted mortgage finances which has put the brakes on the market

We consider that it is entirely inappropriate to simply use these 2011-based Interim projections as a starting point for the whole of Rother's plan period (I.e. beyond 2021). In fact, upon their release, Edge Analytics (the technical consultancy behind POPGROUP) in their document 'CLG 2011-based Interim Household Projections: Reference Manual' advise that because of the Interim nature of the 2011-projections, a number of options should be used to forecast for the period after 2021 as it is not appropriate to simply roll forward the 2011- based Interim projections beyond 2021.

One such option given by Edge Analytlcs is to calculate the change after 2021 from the 2008-based DCLG projections. Indeed the 2008-based projections represent a pre-recesslon period which is not characterised by the same abovementioned issues associated with the 2011-based Interim figures and therefore represent a more accurate picture of actual housing need going forward beyond 2021. With specific regard to Rother, the 2008-based projections pointed to a need of 10,757 dwellings over the period 2006-2026; which equates to 538 dwellings per annum. Clearly, this is a higher level of growth than accounted for by the 2011-based Interim projections. Furthermore, the Cambridge Centre for Housing & Planning Research (CCHPR) in their May 2013 report 'The new Household Projections and their implications for the Cheltenham Borough Council, Gloucester City Council and Tewkesbury Borough Areas' express the view that 2011-based Interim projections should only be used until 2015. Onwards from 2015, CCHPR conclude that a projection which would paint a realistic picture of housing need would be a projection which lies somewhere between the 2011-based Interim projections and a projection which represents a 'partial return to trend' scenario (i.e. a trend which gradually returns towards the
2008-based projections from the year 2015).

Although the SHMA does attempt to justify its use of using only the 2011-based Interim projections and not the 2008-based projections by stating that the 2008-based projections contained statistical inaccuracies (overestimating the population by 550 people and overestimating the number of households by 515), we do not consider on this basis that they should be plainly ignored. The fundamental point being made here is that other baseline projection scenarios which represent the realistic prospect of a return to a rate of faster growth should have been incorporated into the objective assessment; as opposed to Rother's assessment which simply uses recession-based 2011-based Interim projections and then rolls them forward to 2028, which is beyond their end period of 2021. Once a more appropriate starting polnt(s) which represented the likely return to growth had been established, only then should such figures have been forecasted using POPGROUP. This would have meant that the true objective assessment of housing need would have been higher than the SHMA identified need of 6,180 over the plan period.

Proposed Housing Target
The second point to be made here is that the actual proposed housing target of at least 5,700 dwellings over 2011-2028, as provided for by policy OSS1, is an unjustifiably constrained figure from the claimed objectively assessed need of 6,180 dwellings over the plan period. Indeed as discussed above, the assessed objective need of 6,180 is in itself an artificially constrained figure.

Policy OSS1 provides for at least 5,700 dwellings between 2011and 2028 which is made up from:
* 3,100 dwellings at Bexhill
* 100-250 dwellings at Hastings Fringes
* 475-500 dwellings at Battle
* 335-400 dwellings at Rye
* 1,670 dwellings at Rural Villages

(Whilst the actual figures here point to a maximum of 5,920, the Council believe that this upper level is subject to uncertainties, which is why the target of at least 5,700 is given.)

A 'Summary Appraisal of Sustainable Housing Growth Potential,' which was produced by the Council and attached as an appendix to a report to cabinet dated 1 July 2013, aims to justify why the claimed objective figure of 6,180 cannot be met and why the 5,700 target is appropriate. Notwithstanding other issues which are claimed to constrain development at the main settlements which we do not wish to make comment on, a main identified constraint to meeting the objectively assessed need is the presence of the High Weald Area of Outstanding Natural Beauty (AONB). It is the Council's position that the cumulative implications of further activity and populace in the AONB will impact on its character. This is particularly relevant to the provision for 1,670 dwellings at the Rural Villages. Policy RA1 deals with rural housing provision in further detail; it provides for 1,670 dwellings over the plan period located in accordance with the accompanying settlement distribution, subject to refinement in the light of further investigation via the Development and Site Allocations DPD and/or Neighbourhood Plans.

Although we do recognise that a balance needs to be struck between the provision of much needed housing and the conservation of the AONB, it is our view that a higher level of housing can be accommodated in the rural areas than is planned for under policy OSS1 and subsequently policy RA1 without compromise to the AONB. On 7 May 2013 the Inspector wrote to the Council about the approach that they should be taking in respect of identifying an objective assessment of housing need:

"...the Area of Outstanding Natural Beauty (AONB) is cited by several respondents as a constraint. Paragraph 115 of the Framework indicates that great weight should be given to conserving landscape and scenic beauty in AONBs. It does not, however, include a presumption against development in an AONB and paragraph 28 seeks to support a prosperous rural economy' (our emphasis).

Whilst this letter was sent to the Council in the context of identifying an objective need, its advice is also applicable to the housing provision that results from the objectively assessed need. The Inspector here makes reference to paragraph 28 of the Framework; which seeks to support a prosperous rural economy. This paragraph needs to be read in the context of the Framework as a whole which has a clear focus on sustainable growth and a significant boost in housing supply. It is our view that more sites located in the AONB should be able to come forward and that the overall rural housing figure should be increased to reflect this. This would be more closely aligned to the Council's perceived objective assessment of need and the overall thrust of the Framework to allow sustainable development and foster a large increase in house building.

Moreover, an increase in rural housing would assist in developing 'balanced communities' if it further encourages younger people to live locally. This was a point that was made by officers in their 1 July 2013 Cabinet Report. Indeed such an approach of increasing the supply of housing in rural areas was recommended to the government by the 'Taylor Review of Rural Economy and Affordable Housing' (2008), authored by Lord Matthew Taylor of Goss Moor (also the lead reviewer of the planning guidance which has resulted in the National Planning Practice Guidance). This report states that restrictive planning policies contribute towards small rural villages becoming increasingly unsustainable and unaffordable for those who live and work there and that a large increase in housing supply is needed if this trend is to be reversed.

Conclusion
We consider that the proposed Main Modifications to the Core Strategy are unsound, with specific reference to policies OSS1and RA1. This is because:

* In identifying a starting point for an objective assessment of housing need, the Council have rolled forward the DCLG 2011-based Interim projections until 2028, which is 7 years past their 2021 end period;
* The 2011-based Interim projections represent a period characterised by the economic recession, constrained household formation and mortgage availability and do not paint a picture of what is likely to happen going forward once the economy returns to a state growth;
* Recommendations from the Cambridge Centre for Housing & Planning Research indicate that the 2011-based Interim projections should not be used after 2015; rather a projection which lies somewhere between the 2011-based Interim projections and a projection which represents a 'partial return to trend' scenario (i.e. a trend which gradually returns towards the 2008-based projections from the year 2015) should be used;
* Regardless of the soundness of the claimed objectively assessed need figure, the Coundl's proposed OSS1 housing provision of 5,700 dwellings is an unjustifiably constrained figure;
* When taking into consideration the overall thrust of the Framework and its focus on fostering sustainable development and significantly increasing house building, more sites within the AONB should be allowed for housing and the overall and rural housing figures provided by polices OSS1 and RA1 respectively should be increased to meet the Council's claimed objectively assessed need;
* More rural housing would assist with the Council's strategic objective of developing 'balanced communities' and would respond positively to the issues highlighted by the Matthew Taylor Report in respect of restrictive rural policies contributing towards rural villages becoming unsustainable.

Policies OSS1 and RA1
Policy OSS1 provides for at least 5,700 dwellings in Rother between 2011 and 2028. Policy RA1 deals with the rural housing provision and it plans for 1,670 houses in the rural areas across the plan period. We consider these policies to be unsound because:
1. The evidence base underpinning the OSS1 housing target is flawed and does not represent an objective assessment of need; and
2. The proposed 0SS1 housing target derived from this claimed objective assessment of need is unnecessarily constrained; and that this constrained figure unduly affects the housing provision of the rural areas in policy RA1.

We assess these two issues in detail in the following text.

Objective Assessment of Housing Need
Paragraph 47 of the National Planning Policy Framework (the 'Framework') requires authorities to use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area. In order to do this, paragraph 159 of the Framework recommends that authorities prepare a Strategic Housing Market Assessment (SHMA).

In establishing an objective assessment of housing need, the new draft National Planning Practice Guidance advises that household projections published by the Department for Communities and Local Government (DCLG) should provide the starting point estimate of overall housing need. The most up-to-date projections are the 2011-based Interim projections which were published by the DCLG in April 2013 (however, these projections are Interim projections which only run from 2011 until 2021). From here there are a number of recognised demographic forecasting models that will produce an objective assessment of need, using OCLG projections as a starting point. One such model is POPGROUP, which is owned by the Local Government Agency (with development and technical support provided by Edge Analytlcs) and is recognised as being a robust and transparent model which is and has been used by a large number of regional and local government authorities, health authorities, universities and planning consultancies. This is indeed the forecasting model that has been used by Rother District in their SHMA (June 2013) in identifying an objective assessment of housing need in the District.

Rother in their SHMA use as their starting point the DCLG 2011-based Interim household projections, which point to a need of 5,072 extra dwellings in years 2011-2021; which equates to a rate of 507 dwellings per annum. Because Rother's plan period runs from 2011 until 2028, Rother then roll forward the 2011-based figures (which only go as far as 2021) a further 7 years until their plan period end year 2028. It is concluded by the SHMA, using the 2011-based DCLG projections as a starting point over the full plan period and then forecasted through the POPGROUP demographic forecasting model, that the objective assessed housing need for Rother over the plan period of 2011-2028 is 6,180 dwellings; equating to 360 dwellings per annum.

Whilst the 2011-based household projections should be used as a starting point in identifying an objective assessment of need, caution needs to be applied in their use. These figures actually reflect a falling housing market rather than painting a picture of what is needed in the future as they project forward what has happened since 2008, during the recession. This is a period characterised by:
* A huge undersupply of new homes
* Increased overcrowding
* Asking prices remaining out of reach for first time buyers
* Restricted mortgage finances which has put the brakes on the market

We consider that it is entirely inappropriate to simply use these 2011-based Interim projections as a starting point for the whole of Rother's plan period (I.e. beyond 2021). In fact, upon their release, Edge Analytics (the technical consultancy behind POPGROUP) in their document 'CLG 2011-based Interim Household Projections: Reference Manual' advise that because of the Interim nature of the 2011-projections, a number of options should be used to forecast for the period after 2021 as it is not appropriate to simply roll forward the 2011- based Interim projections beyond 2021.

One such option given by Edge Analytlcs is to calculate the change after 2021 from the 2008-based DCLG projections. Indeed the 2008-based projections represent a pre-recesslon period which is not characterised by the same abovementioned issues associated with the 2011-based Interim figures and therefore represent a more accurate picture of actual housing need going forward beyond 2021. With specific regard to Rother, the 2008-based projections pointed to a need of 10,757 dwellings over the period 2006-2026; which equates to 538 dwellings per annum. Clearly, this is a higher level of growth than accounted for by the 2011-based Interim projections. Furthermore, the Cambridge Centre for Housing & Planning Research (CCHPR) in their May 2013 report 'The new Household Projections and their implications for the Cheltenham Borough Council, Gloucester City Council and Tewkesbury Borough Areas' express the view that 2011-based Interim projections should only be used until 2015. Onwards from 2015, CCHPR conclude that a projection which would paint a realistic picture of housing need would be a projection which lies somewhere between the 2011-based Interim projections and a projection which represents a 'partial return to trend' scenario (i.e. a trend which gradually returns towards the
2008-based projections from the year 2015).

Although the SHMA does attempt to justify its use of using only the 2011-based Interim projections and not the 2008-based projections by stating that the 2008-based projections contained statistical inaccuracies (overestimating the population by 550 people and overestimating the number of households by 515), we do not consider on this basis that they should be plainly ignored. The fundamental point being made here is that other baseline projection scenarios which represent the realistic prospect of a return to a rate of faster growth should have been incorporated into the objective assessment; as opposed to Rother's assessment which simply uses recession-based 2011-based Interim projections and then rolls them forward to 2028, which is beyond their end period of 2021. Once a more appropriate starting polnt(s) which represented the likely return to growth had been established, only then should such figures have been forecasted using POPGROUP. This would have meant that the true objective assessment of housing need would have been higher than the SHMA identified need of 6,180 over the plan period.

Proposed Housing Target
The second point to be made here is that the actual proposed housing target of at least 5,700 dwellings over 2011-2028, as provided for by policy OSS1, is an unjustifiably constrained figure from the claimed objectively assessed need of 6,180 dwellings over the plan period. Indeed as discussed above, the assessed objective need of 6,180 is in itself an artificially constrained figure.

Policy OSS1 provides for at least 5,700 dwellings between 2011and 2028 which is made up from:
* 3,100 dwellings at Bexhill
* 100-250 dwellings at Hastings Fringes
* 475-500 dwellings at Battle
* 335-400 dwellings at Rye
* 1,670 dwellings at Rural Villages

(Whilst the actual figures here point to a maximum of 5,920, the Council believe that this upper level is subject to uncertainties, which is why the target of at least 5,700 is given.)

A 'Summary Appraisal of Sustainable Housing Growth Potential,' which was produced by the Council and attached as an appendix to a report to cabinet dated 1 July 2013, aims to justify why the claimed objective figure of 6,180 cannot be met and why the 5,700 target is appropriate. Notwithstanding other issues which are claimed to constrain development at the main settlements which we do not wish to make comment on, a main identified constraint to meeting the objectively assessed need is the presence of the High Weald Area of Outstanding Natural Beauty (AONB). It is the Council's position that the cumulative implications of further activity and populace in the AONB will impact on its character. This is particularly relevant to the provision for 1,670 dwellings at the Rural Villages. Policy RA1 deals with rural housing provision in further detail; it provides for 1,670 dwellings over the plan period located in accordance with the accompanying settlement distribution, subject to refinement in the light of further investigation via the Development and Site Allocations DPD and/or Neighbourhood Plans.

Although we do recognise that a balance needs to be struck between the provision of much needed housing and the conservation of the AONB, it is our view that a higher level of housing can be accommodated in the rural areas than is planned for under policy OSS1 and subsequently policy RA1 without compromise to the AONB. On 7 May 2013 the Inspector wrote to the Council about the approach that they should be taking in respect of identifying an objective assessment of housing need:

"...the Area of Outstanding Natural Beauty (AONB) is cited by several respondents as a constraint. Paragraph 115 of the Framework indicates that great weight should be given to conserving landscape and scenic beauty in AONBs. It does not, however, include a presumption against development in an AONB and paragraph 28 seeks to support a prosperous rural economy' (our emphasis).

Whilst this letter was sent to the Council in the context of identifying an objective need, its advice is also applicable to the housing provision that results from the objectively assessed need. The Inspector here makes reference to paragraph 28 of the Framework; which seeks to support a prosperous rural economy. This paragraph needs to be read in the context of the Framework as a whole which has a clear focus on sustainable growth and a significant boost in housing supply. It is our view that more sites located in the AONB should be able to come forward and that the overall rural housing figure should be increased to reflect this. This would be more closely aligned to the Council's perceived objective assessment of need and the overall thrust of the Framework to allow sustainable development and foster a large increase in house building.

Moreover, an increase in rural housing would assist in developing 'balanced communities' if it further encourages younger people to live locally. This was a point that was made by officers in their 1 July 2013 Cabinet Report. Indeed such an approach of increasing the supply of housing in rural areas was recommended to the government by the 'Taylor Review of Rural Economy and Affordable Housing' (2008), authored by Lord Matthew Taylor of Goss Moor (also the lead reviewer of the planning guidance which has resulted in the National Planning Practice Guidance). This report states that restrictive planning policies contribute towards small rural villages becoming increasingly unsustainable and unaffordable for those who live and work there and that a large increase in housing supply is needed if this trend is to be reversed.

Conclusion
We consider that the proposed Main Modifications to the Core Strategy are unsound, with specific reference to policies OSS1and RA1. This is because:

* In identifying a starting point for an objective assessment of housing need, the Council have rolled forward the DCLG 2011-based Interim projections until 2028, which is 7 years past their 2021 end period;
* The 2011-based Interim projections represent a period characterised by the economic recession, constrained household formation and mortgage availability and do not paint a picture of what is likely to happen going forward once the economy returns to a state growth;
* Recommendations from the Cambridge Centre for Housing & Planning Research indicate that the 2011-based Interim projections should not be used after 2015; rather a projection which lies somewhere between the 2011-based Interim projections and a projection which represents a 'partial return to trend' scenario (i.e. a trend which gradually returns towards the 2008-based projections from the year 2015) should be used;
* Regardless of the soundness of the claimed objectively assessed need figure, the Coundl's proposed OSS1 housing provision of 5,700 dwellings is an unjustifiably constrained figure;
* When taking into consideration the overall thrust of the Framework and its focus on fostering sustainable development and significantly increasing house building, more sites within the AONB should be allowed for housing and the overall and rural housing figures provided by polices OSS1 and RA1 respectively should be increased to meet the Council's claimed objectively assessed need;
* More rural housing would assist with the Council's strategic objective of developing 'balanced communities' and would respond positively to the issues highlighted by the Matthew Taylor Report in respect of restrictive rural policies contributing towards rural villages becoming unsustainable.