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Welsh Government 2018-based subnational household projections: A warning
On 27 February 2020 the Welsh Government published its 2018-based subnational household projections, which replace the previous 2014-based projections (published in March 2017). The new projections indicate that there will be c.38,000 additional households living in Wales in 2028 compared to 2018, an increase of 2.8%. While the projections cover a 25-year period from 2018 to 2043, the Welsh Government’s focus in its announcement of the new figures (and my focus in this blog) is on the initial 10-year period, given that the results are increasingly uncertain in the longer term.The new household projections show a drastically reduced level of growth across Wales when compared to the 2014-based data set – 42.9% lower for the 2018 to 2028 period. The projections have been constrained to align with the ONS national 2018-based population projections for Wales, which show stagnation in the population during this period (+0.6% growth) and a decline in the longer term. The working age population (aged 16 to 64) across Wales is anticipated to decline by 1.7% from 2018 to 2028, whilst the number of residents aged 65+ is expected to increase by 13.8%. At the local authority level, the size of the total population is expected to reduce in a total of 11 local authorities, with the working age population projected to decrease in 17 local authority areas. This projected stagnation of population growth and decline in workers is alarming. It is critical that this model does not constitute the basis for forward planning in Wales, which should seek the achievement of sustainable development through promoting social, economic and environmental well-being. An important element of this pillar of planning is to deliver economic growth and tackle the challenges associated with an ageing population, including spiralling dependency ratios – issues readily acknowledged by the Welsh Government. Furthermore, one of the key themes of the Welsh Government’s national strategy, “Prosperity for All”, (December 2017) is to drive an economy which spreads opportunity and delivers prosperity, to include providing secure employment and creating the right environment for businesses to grow and thrive. The achievement of this aim will require supporting the retention of a suitably sized workforce through the provision of sufficient housing – which is clearly not reflected in the household projection figures. Use of the projections As required by Planning Policy Wales (PPW) (edition 10, December 2018), the new projections will form a “fundamental part” of the evidence base for Local Development Plans (LDPs), including in particular the setting of housing requirements. However, the negative direction of travel indicated by the new projections highlights the importance of the PPW requirement that plan-makers should consider the projections together with other key evidence, including the links between homes and jobs, the need for affordable housing, and the deliverability of the plan. The projections will also inform an updated set of national and regional “estimates of housing need” (date TBC) to replace those published in January and July 2019 (see my blog: Welsh Government Housing Need Estimates by Tenure). These estimates are referenced in the draft National Development Framework (NDF) (August 2019) and will inform future Strategic Development Plans (SDPs). Scale of growth A total of 15 of the 22 local authorities (excluding National Parks) are expected to experience growth in the number of households between 2018 and 2028, ranging from +0.3% in Merthyr Tydfil to +6.9% in Newport. A total of 7 local authorities are projected to experience decline, ranging from -0.4% in Denbighshire to -4.8% in Ceredigion. Figure 1 Welsh Government 2018-based subnational household projections: Scale of growth (2018-2028) Source: Welsh Government 2018-based subnational household projections / Lichfields Projected household growth is expected to be heavily focused in South East Wales, accounting for 72.2% of all growth in Wales between 2018 and 2028. Cardiff is projected to account for the highest proportion of total growth over the 10-year period (20.1%). Table 1 Top five areas of projected household growth (2018-2028) Source: Lichfields analysis of Welsh Government 2018-based subnational household projections The greatest reduction in anticipated household growth when compared to the 2014-based household projections relates to Cardiff, which is expected to see an increase of only 766 households per annum between 2018 and 2018, compared to 1,906pa in the 2014-based projections (a 59.8% decrease).Figure 2 Difference between the Welsh Government 2018-based and 2014-based subnational household projections (2018-2028) Source: Welsh Government 2018-based and 2014-based subnational household projections / Lichfields Why such a significant reduction? So why are the 2018-based household projections so much lower than the previous set? The Welsh Government has not yet published its full quality and methodology information on the new projections (expected in March 2020). However, the key reasons for the differences in this data relate to their basis in the associated 2018-based population projections. The Welsh Government introduced several changes to its methodology in producing the 2018-based subnational population projections, including constraining the total local authority population figures to match the national total published by the ONS. Interestingly, the Chief Statistician’s blog of 20 February 2020 notes that, had the Welsh Government not applied this constraint, the combined local authority figures would have continued to show “strong growth” over the projection period. There were some reasonable assumptions behind this methodology change but the difference it has made does highlight the need to take a critical view of the results. What is clear is that the projections do not reflect national and local committed strategies for economic growth and regeneration and fall far short of actual housing need in Wales. They simply carry forward past trends in natural change and migration, which would result in a rapidly ageing population and ever-increasing dependency ratios – outcomes which should not be acceptable in 21st century Wales. Impact and implications Unless substantial productivity improvements are delivered, the inevitable result of a reduction in the total workforce of Wales would be a shrinking economy. This would in turn make it more difficult to meet the increased social care costs associated with an ageing population. It is therefore vital that these projections are applied only as a starting point and that planning policies at all levels move quickly away from carrying forward these patterns of past underperformance. Instead, plan-making must support policies promoting prosperity and well-being through alignment with positive economic and social outcomes, such as those within the Cardiff City Deal. In particular, there is a need to attract and retain younger people and workers in order to boost the economy, provide skilled jobs and improve productivity. Hence, rather than a basis for future plan-making, these latest projections should stand as a warning about how Wales might look in 10 to 25 years’ time if we fail to deliver the positive social and economic outcomes desperately needed.

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Planning application fees in Wales are increasing – but will the service improve?
On the 16th December 2019, Welsh Government issued a consultation proposing changes to planning application fees. Essentially, what is proposed is an increase across the board of approximately 20%, the first increase in application fees in Wales since 2015. This appears to be an interim proposal, with the Welsh Government explaining that it will carry out further research in due course to understand the true cost of running development management services. As an example, they say that their evidence demonstrates that minor and householder applications typically cost much more to determine than the fee set by legislation, even with the proposed 20% increase. From our experience, the same could be said about s.73 applications which currently attract a fee of £190, but as we know, can be as complex and time consuming as a full application. The consultation document explains that a Local Planning Authority’s (LPA) primary source of funding is generated from fee income received from determining applications, which are intended to recover the costs for providing the service. However, the costs of running development management services is currently not being met. This is for a number of reasons including additional requirements on development management services due to revised legislation, changes to regulations and policy as well as cutbacks to planning departments as a result of cuts to local government funding. The Welsh Government explains that, alongside general budget cuts of approximately 53% to planning services between 2009 and 2017 the lack of funding secured by application fees could have an impact on the quality and timing of planning decisions. Its evidence suggests that the current fee levels for applications is not sufficient to run an efficient development management service. Whilst the current fee structure set out in the 2015 Regulations saw the most recent planning application fees increase in Wales, over the border in England, planning application fees were increased by 20% in 2017. At the time the Royal Town Planning Institute (RTPI) commented that: “planning fees, even with an increase of 20% recently, only cover 40% of the overall running cost of development control services in England” suggesting that there is still a long way to go before planning departments can fully recover their costs.” It is therefore important to note that a 20% increase may not be a panacea to a fully functioning planning service. So, what will this mean to those that regularly submit planning applications? Below we have set out the proposed application fees for a range of different applications going forward:   The below are theoretical examples only and should not be relied upon when calculating planning application fees. Please contact Lichfields if you require advice on calculating your planning application fee. We also note that it is proposed that the maximum fee limits will increase. For full applications for residential development the fee limit is proposed to increase from £287,500 to £300,000 and for outline applications the fee limit is proposed to increase from £143,750 to £150,000 respectively. Whilst an increase in application fees is not something that any developer would necessarily wish for, developers may conclude that paying slightly more may be worthwhile, but only if the service they receive from a planning department improves in line with the fee increase. Welsh Government statistics[1] show that the average time taken to determine ‘major’ applications in 2017/2018 was 240 days and that only 67.4% of applications were determined within the statutory time periods. The additional income as a result of this increase could in theory provide additional funds to recruit additional staff, which should potentially improve the quality and speed of service. However, a key question is whether the additional income generated is ringfenced for re-investment to the planning department (and associated internal consultees e.g. transport and drainage officers) as opposed to being used for wider local authority services. The consultation paper is unsurprisingly mute on this point. As is explained in the consultation paper it is also important that local government funding for planning departments is not cut further as a result of the additional income generated by the increase in fees. Otherwise, the rationale for the 20% increase cannot be justified and it is likely that the planning service will see a further deterioration, rather than the intended improvements in efficiency and quality. The RTPI’s research[2] into the “value of planning” reports that the planning system contributed £2.35 billion to the Welsh economy in 2016-17. Therefore, given the importance of the planning regime in realising social, economic and environmental benefits it is crucial that the Local Planning Authorities are properly funded. It is hoped that the increase in planning fees will assist in securing faster and better decisions from the LPAs, which is in the interest of the applicant, the authority and the general public – not to mention the economy. Comments are invited on the consultation document until 13 March 2020. [1] All Wales Planning Annual Performance Report 2017-18[2] The Value of Planning in Wales  

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