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Britain’s population is ageing and the implications are wide-ranging. Using population projections to 2036, this blog looks at how this major demographic shift will affect cities and rural areas both in relative (i.e. increasing share of people who are over 65) and absolute terms (i.e. increasing number of older people).The analysis presented below follows up to my previous blog and the publication of a report on age segregation in England and Wales by the Intergenerational Foundation. The methodology is at the end of the blog.Two trends clearly emerge when analysing dependency ratio at the rural/urban, coastal/non-coastal level. First, in 2036 coastal locations in Britain consistently show higher dependency ratios compared to non-coastal areas. Second, there is an almost linear relationship between an area’s degree of urbanisation and its dependency ratio. Both trends are easily spotted in Figure 1 below. Figure 1 – Dependency ratio by local authorities’ degree of urbanisation, unweighted average Source: ONS, NRS, Statistics for Wales, NLP analysis This rural-urban trend is even more evident in Figure 2 below, which shows how all local authorities in Britain will score in terms of their dependency ratio in 2036 and the proportional increase in number of people over 65 in 2036, compared to 2016 levels. Broadly, a higher degree of urbanisation corresponds to lower dependency ratios, despite higher proportional increases in people over 65 by 2036. Figure 2 – Dependency ratios and increase in older people in Britain’s local authorities, by rural-urban classification In short, what is expected to be a national demographic shift will have diverse implications at the local level. Crucially, public finances in rural authorities may have more difficulties in providing adequate adult social care in the future, given that in some areas there will be an average of 7 older people for every 10 people of working age. Also, all other things being equal, coastal areas’ finances could be under greater pressure than their non-coastal counterparts.In theory, adult social care costs should not be as pressing for urban areas. Given their relatively lower dependency ratios (a good proxy for economic activity) and the ability to increase Council Tax by up to 2% each year and to retain business rates from 2020 (see page 4, here), urban areas’ finances could be better placed to meet the increasing pressures of adult social care expenditure –  if not comfortably, potentially more so than rural authorities would.However, cities will likewise face the pressure of planning to house an ageing population. Both in relative terms (see Figure 2 above) and absolute terms (see size of bubbles in Figure 3 below), urban areas will experience the strongest growth in the number of people over 65. Figure 3 – Average dependency ratio by local authorities’ degree of urbanisation and number of people aged over 65 (expressed via area size of the bubbles) Source: ONS, NRS, Statistics for Wales, NLP analysis Failure to meet the housing needs of this older cohort could lead to future increases in adult social care costs for urban local authorities, which have already been hit by budget cuts since 2009/10 and have almost unanimously increased Council Tax by 2%, once given the opportunity to do so, to meet the rising costs of adult care (again, see page 4 here). Ageing cities As Britain grows older its cities age too. Dependency ratios will increase in all of the largest urban areas in Britain between 2016 and 2036. Despite this and the substantial absolute increase in the number of older people (from +38% in Birmingham and Leeds to +64% in London, see Figure 4), the influx of younger, working people would keep the increasing dependency ratios relatively low (between 23% in London and 40% in Newcastle) even by 2036. Figure 4 – Dependency ratios and increase in older people in selected urban areas Source: ONS, NRS, Statistics for Wales, NLP analysis One of the main challenges of this increase will be meeting older people’s specialist housing needs, especially at a time when housing costs are rising for all age cohorts and all tenures (albeit at different rates in the North, the Midlands and the South of England).Almost 4.3 million people over 65 will live in Britain’s largest cities by 2036 (up from around 2.9 million today). National and local governments must ensure that the housing stock will be large enough (and of ‘good enough’ quality) to accommodate them all, as the cost of not meeting these needs would be borne by local authorities via adult social care expenditure.In sum, the same demographic shift is expected to impact differently on cities than it will on rural areas (and on coastal locations compared to non-coastal ones). Urban areas are likely to see pressure on their housing market increase, while rural areas will need to find solutions to cover rising adult social care costs, as older people will make up an increasing share of the local population.This challenge highlights the difficulty of devising a national housing policy, since any intervention by the government will have implications for local governments’ finances and for the housing market. Building more homes may not be the single solution to solve Britain’s ageing-related issues, but it does seem a very sensible starting point. Methodology The analysis is based on dependency ratios, a measure of social support need expressed as a ratio of the number of people aged over 65 to that of people between 16 and 64. (A value of 0% means that there are no people over 65 in an area, while a value of 100% means that there are as many people over 65 as there are between 16 and 64.) These are calculated using ONS, NRS and Statistics for Wales’ population projections for 2036, the furthest year common to all datasets.I also distinguish between coastal and non-coastal areas. Coastal areas are all those UK local authorities whose territory meets the sea, for whatever length or proportion of the total. I identified 109 coastal local authorities. The remaining 271 areas are non-coastal areas.Each local authority is assigned a Rural-Urban Classification score, calculated by the ONS for England and Wales. Using the same approach, it is possible to estimate a score for Scottish local authorities.Urban areas data are based on Primary Urban Areas.To gain a fuller picture of the implications of an ageing population in Great Britain, you can also read our Research Note.  

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After a wait of nearly a year since the release of the Strategic Options Consultation, the draft Greater Manchester Spatial Framework (GMSF) was finally released on 20th October 2016.  It will be presented to the Greater Manchester Combined Authority’s (GMCA’s) Executive Board for approval (and, unusually, amendments) ahead of a formal consultation process beginning on 31st October.The report has been awaited with great anticipation amongst the local development community as it will set out the approach to housing and employment land across all ten Greater Manchester (GM) authorities for the next 20 years.  In recent weeks leaked documents, local newspaper headlines and e-newsletters have built up expectations, suggesting that the GMSF will be ‘ambitious’, create 200,000 new jobs and result in a radical re-drawing of GM’s Green Belt boundaries, with substantial new releases for housing and employment development as a consequence.Given the Government’s devolution agenda and continued supported for the Northern Powerhouse initiative, the GMSF has a key role to play in making GM a financially self-sustaining city, sitting at the heart of (and driving forward) the Northern Powerhouse.  Many industry observers had expressed disappointment at the level of housing delivery set out in the 2015 Strategic Options Consultation.  Indeed, NLP produced a report on behalf of a housing consortium analysing GM’s potential role as a driving force behind Osborne’s Initiative, and what this was likely to mean in terms of housing and economic growth.  The work suggested that a step change in housing provision was required in the order of 16,640 dwellings per annum [dpa] compared to 10,350 dpa in the 2015 draft. It is fair to say that the newly released draft GMSF has been met with a mixed reception by the development industry so far.  The document seeks to accommodate land for 200,000 jobs and provide 227,200 new homes over the 20-year period 2015-2035 (at a rate of 11,360 dpa), with a strong emphasis towards directing new development to brownfield land in urban locations.  This represents a 10% uplift on the housing target that was previously put forward, and as we can see from the Figure below, represents an 18% uplift on the latest household projections.  However it still remains well below the level of housing many observers (ourselves included) feel is necessary to address years of under-delivery in GM and to effectively drive forward the Northern Powerhouse agenda. Furthermore the level of job growth, at just 0.7% annually, is lower than the 1% job growth that has been achieved in recent years - hardly the level of growth necessary to allow Greater Manchester to drive forward the Northern Powerhouse and act as the counter-weight to London that George Osborne originally envisaged.There are also concerns that there is a strong reliance on high density apartment schemes to help make up the numbers.  The Table below indicates that 98,470 apartments are envisaged to come forward, or 43% out of a total housing requirement of 227,200.  We might expect some particularly high contributions in Manchester City and Salford.  However, identifying 43% of the overall housing target as high density apartments puts the overall housing and economic strategy at risk as there is a particular need for family accommodation and aspirational housing more generally.It is also unclear from the evidence that has been released to date why Rochdale’s contribution towards the housing target should be a figure almost two-thirds higher than the starting point demographic projections, whilst Stockport’s figure is only 8% higher (despite being an area with some of the highest house prices and development pressure in the sub-region).  Perhaps the justification for this will become clearer once the detailed evidence base documents are released in the weeks ahead.However, even at this relatively modest level of housing delivery, the GMCA accepts that it cannot accommodate all the homes within the existing settlement boundaries and has therefore accepted that exceptional circumstances exist to amend the existing Green Belt boundaries.  The draft GMSF has identified 55 potential new allocations for residential, industrial and commercial development in the Green Belt, which would result in a net reduction in the total area of designated Green Belt of 4,900 ha, or 8.2% of the total.  This would reduce the total land area of GM covered by Green Belt from 47% to 43%.The GMSF has also added three large sites to the Green Belt, at West Salford Greenway; Rectory Lane, Standish (Wigan) and land within the Roch Valley in Rochdale. *Note: includes some sites that straddle two local authority administrative areas – the housing allocation has been split 50:50 in these instances. In total, we estimate that the draft GMSF makes provision for almost 70,000 new homes from Green Belt/greenfield releases, 30.7% of the total; although the pattern is distinctly uneven.  Whilst many of these Green Belt releases appear logical and are likely to have considerable support amongst the development industry, there is also a concern that many of the releases are not located in those parts of the sub-region where housing need is strongest.  This could mean that sites either take longer to come forward or do not materialise at all.  Furthermore, it is unclear for the time being how the GMCA has justified the scale of Green Belt release in each district, given that it has not undertaken a comprehensive urban capacity study.  It has instead relied upon existing SHLAAs and 5-year land capacity studies undertaken by each LPA independently (each presumably having different approaches and assumptions).  This could present consistency problems further down the line. Many of these Green Belt releases are also intended to stimulate economic growth.  This is part of a strategy of planning for over 2.4 million sqm of new office floorspace and 4 million sqm of industrial and warehousing floorspace, with the latter representing a 40% increase in development rates compared to the average achieved since 2004.  Whilst the GMSF suggests that these site allocations deliberately allow for a significant level of choice and flexibility (which is to be welcomed), it is curious that such considerations have not been applied to the housing and commercial office allocations.Hence whilst there is much to be welcomed in this latest draft of the GMSF, it still seems to be pursuing conservative levels of housing and employment growth levels well below many cities elsewhere in the UK.  A re-booted, pro-development, GMSF would be beneficial for Greater Manchester, sustain the Northern Powerhouse and act as a healthy counterweight to London and the Greater South East.  

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