Housing market issues part 1 cornwall

Housing in Cornwall Part 1. A think piece for the Cornwall and Isles of Scilly LEP

Robin Miller

Understanding Data Ltd.

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About this report

This report draws together key data about housing in Cornwall relevant to the refresh of the Strategic Economic Plan for Cornwall and Isles of Scilly Local Enterprise Partnership.

It provides headline analysis and draws out key messages. It does not attempt to pass comment on every aspect of the data presented. Where appropriate national trends and context are provided.

Part 1 discusses key issues facing the housing market in Cornwall, and highlights area for further discussion as part of the SEP refresh, and in terms of formulating responses to these issues.

Part 2 will precis evidence and issues for the Isles of Scilly.

Part 3 contains detailed data analysis and sets out core Census characteristics, house price and house rental value data.

Charts and Tables can be reused, and should be acknowledged as created by Understanding Data Ltd. Maps can be reused keeping the note about data source and creation.

THIS PAPER COVERS PART 1 ABOVE.

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1) Introduction Cornwall and Isles of Scilly LEP commissioned a report to consider key issues that shape and influence the housing market locally1, and to highlight key areas for discussion and consideration, to help with ongoing dialogue as part of the LEP’s refresh of its Strategic Economic Plan (SEP 2016).

Local Enterprise Partnerships have a key role in providing leadership and establishing a strategic vision of growth for their area. Government looked for an approach which brought together the LEP and its partners across the LEP area around a common growth agenda. The SEP should explain the drivers and barriers to growth specific to each LEP area, but to have regard to national policy on growth, including for example on housing, transport, skills, industrial strategy, flooding and rural economies.

In line with the guidance published by government in July 2013 on what SEPs need to have regard to, this report is a contribution towards the debate about how the local economy can grow and develop in the coming years, highlighting key issues pertinent and relevant to housing issues.

2) Background It may seem strange to start a report about housing in Cornwall with express reference to London, and national housing issues. They are however linked.

The highlighted section below is from an opinion piece in The Guardian2 on the 10th May 2016, written by Danny Dorling, Halford Mackinder Professor of Geography, University of Oxford. It acts as a strong and relevant precis of current thinking and counter thinking on the housing crisis. It is relevant.

“The housing situation in the UK is so bleak that the key reason increasing numbers of people are becoming homeless is that they are unable to pay extortionate private sector rents. In February 2016, the Financial Times described the help-to-buy scheme as “help to cry”, naming it “one of the most perversely named government policies ever”. Squatting is on the rise again despite being outlawed in 2012: when people’s only choice is criminalised, the legitimacy of the law itself is discredited.

Nearly four out of five Britons say we are experiencing a housing crisis. I could try to shock you with the latest statistics on rising street homeless, deaths among the elderly unable to heat their poorly insulated homes, four-figure monthly or even weekly rents, mortgages that last until you die, beds in sheds, three families to a flat, but you have probably become immune to them by now.

We don’t need to hear how bad the crisis is any more. We need it fixing, especially in London. This would dampen down the whole of the south-east housing market, and in turn the rest of the UK. So how can the new mayor go about addressing this issue?

Khan should start by explaining that London’s housing problems have not been caused by immigration, but rather by the housing laws of the UK. Laws that allow landlords to charge tenants so much for such lowquality homes. Laws that encourage others to hoard housing, leaving more and more of it empty in the very heart of the capital. London urgently needs rent regulation of its private sector. This might be outside the

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This report covers Cornwall. A separate report covers issues for the Isles of Scilly. http://www.theguardian.com/commentisfree/2016/may/10/how-to-fix-housing-crisis-sadiq-khan-london

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new mayor’s powers, but there is nothing to stop him campaigning on a similar scheme for the UK to Berlin’s rent cap.

Khan should petition for a new council tax system, one which fairly reflects the current value of homes Khan should seek further devolution of powers to enable the introduction of a tax on landowners for land in London with planning permission that has not been developed within three years of permission being granted. And he should petition the government to re-establish dedicated grant funding programmes and support to local authorities to bring empty properties back into use, enabling local authorities to enforce their power to compulsorily purchase properties if required. And he should petition for a new council tax system which fairly reflects the current value of homes.

Ever since 2009, the UK government – first Labour, then the coalition, and now the Conservatives – has stoked up the London housing market through a series of budget initiatives. At first it was done to try to avert a house price crash, such as those in Portugal, Spain, Ireland and Iceland. But later it became more obvious that the goal was for prices in London to be as high as possible. They thought the market knew best and was simply indicating who should now leave the capital. The former mayor Boris Johnson expressed no desire to see rents and house prices stabilise, the more billionaires arriving (or just buying property to occasionally visit) the better.

However, now the majority of Londoners find that they are paying too high a rent or too great a mortgage and living with too much precarity3. Each year they are joined by thousands more whose situation is even worse and many leave the capital. London has the potential to shift in a different direction as long as Khan lives up to his campaign promise and does not fail to work on housing every day of his term in office.

What does this mean for Cornwall in 2016?

Issues such as those highlighted above are not unique to London. Owner occupied or bought to let housing has become a clear investment choice, and there has been a blurring between housing as a home, housing as holiday accommodation, housing bought to rent out, and housing bought to appreciate in value, sometimes being left empty.

The issue given most recent coverage locally has been the intended “ban” on new homes being used for second home purposes in the St Ives Neighbourhood Plan. This has been a reaction to perceived high levels of second homes and recent new developments in the area that have been marketed as ideal for holiday second home use.

Definitive local data no longer exists on second homes, following the Council’s (Cornwall Council) decision to end the second home council tax discount.

The 2011 Census had a category which counted “unoccupied household spaces”. This is defined as “A household space with no usual residents may still be used by short-term residents, visitors who were present on census night, or a combination of short-term residents and visitors.

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Precarity is a precarious existence, lacking in predictability, job security, material or psychological welfare. The social class defined by this condition has been termed the precariat

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Vacant household spaces and household spaces that are used as second addresses are also classified in census results as household spaces with no usual residents.”

This data sometimes attracts the overarching label of second homes, but could include wider holiday accommodation, vacant properties and second homes.

There is sometimes an assumption that the wealth to buy a (second) house, and only partly use it, or to leave it empty, comes from outside the area.

The 2011 Census also introduced data on second addresses. This is defined as “A second address is an address at which a person stays for more than 30 days per year that is not a person's place of usual residence. This includes addresses that are in the UK and those outside of the UK. Typical second addresses include armed forces bases, addresses used by people working away from home, a student's home address, the address of another parent or guardian, or a holiday home.

If a person with a second address was staying at that address on census night, they were classed as a visitor to that address, but counted as a usual resident at their home address.”

There are two relevant issues here. Second homes are part of wider unoccupied stock of dwellings, alongside holiday rental units and vacant units. The Census showed in 2011 that over 8,000 second addresses in Cornwall were “owned” by people whose main address was also in Cornwall.

Spatially the areas with the highest levels of second addresses are coastal, predominately holiday areas, but also include Falmouth, where the second address numbers could be boosted by properties let to students. A second address can also be linked to work patterns. second address

Cornwall & Ios England and Wales Abroad

usual residence

usual residence

Cornwall & IoS 8,050 19,900 5,524

England and Wales 31,173 2,029,108 820,814

A further 25,424 residents of Cornwall and the Isles of Scilly have a second address elsewhere in England and Wales or abroad.

So even though there is clearly an impact on coastal settlements of high numbers of holiday related accommodation, there is evidence that the ownership of these properties is local as well as further afield.

The reality of the evidence is more nuanced than the headlines.

Levels of private renting have increased. Social renting remains both a political priority however, due to funding and legislation changes is increasingly difficult to deliver, as mainstream Government funding has effectively been shifted to subsidise purchase.

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The government currently offers:   

help with a deposit, through a Help to Buy ISA (UK wide) or low-interest loan (in England and Wales) a mortgage guarantee (UK wide) a home through shared ownership (UK wide)

There are schemes to help council tenants and housing association tenants buy their property.

International and national competition exists just as surely in Cornwall, as it does in the heart of London.

This element of the market in Cornwall is found largely in coastal resorts and appears to include both larger detached period properties, and bespoke low maintenance flats and newer energy efficient, high design builds.

Within local markets there is then clearly a further level of competition exists, from those able to compete and outbid others in the purchase of a home to live in. This is in turn fuelled by decisions about preferred places to live, while working elsewhere (commuting) and by an increase in home working (for an employer) and running a business from home.

On top of this, Cornwall remains a popular visitor destination, it is strongly marketed as a good place to visit, to invest, to work. It should not be a surprise that some then, view it as a good and safe choice to raise a family, to move to, to partake in an advertised lifestyle.

Economic investments, and priorities around this “destination” theme have clearly played a part in reinforcing population growth, migration trends and housing market performance and pressures in recent decades.

There are also clearly strong feelings expressed about local change, the nature of development and growth, often expressed, as elsewhere nationally, in equally strong “them and us” terms.

The Guardian on the 31st May published its own “Cornwall” specific article which picks up some of the issues raised by Danny Dorling on the 10th May 2016.

Although it is a less coherent overall piece, linking a new book on the dangers of fishing, the St Ives Neighbourhood Plan referendum on new build second homes and various real life vox pops, it is timely for this paper.

Its main argument covers: The “banning of second homes”, rising “unaffordability”, a (misunderstanding of the nature of) deprivation in Cornwall (taking the area as a whole instead of expressing the concentrations and the wealth that exists, often close by), the loss of young people, the cost of living, in particular for the young, and those in seasonal (often multiple low paid jobs), and highlights the use of both caravans and boats as alternative sources of accommodation, for those priced out of buying/renting.

The full article is hyperlinked, and it is worth reading and then scanning through some of the 1152 comments made in response to it.

The messages are clearly complex, and mixed! However, they clearly reflect the range of opinions, voiced regularly in the media, by politicians, lobby groups, developers, interest groups, community groups and think tanks.

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This work does not seek to address or challenge every statement made on housing issues in Cornwall. It provides clear evidence for the LEP, and develops some discussion points of relevance to guide the LEP ‘s approach in its SEP refresh.

Cornwall shares many of the issues highlighted by Professor Dorling, such as: Housing as investments, under used or not used at all.

Housing unaffordable to people who provide services to renovate or upkeep the properties, that once may have been in local ownership.

Increasing numbers of people renting.

What does this mean for the Cornwall and Isles of Scilly LEP. There is a need to consider the basics of the housing market, stock, type and changes in those, before considering any responses.

The value of the Cornwall housing market (measured by ascribing a monetary value to units) is large.

Conservative estimates are that the value of the occupied housing stock4 is around £52 billion. The yearly value5 of privately rented properties is around £250 million.

Figure 1 Illustrative Scale £52,000,000,000 Value of Housing Stock – estimate £8,500,000,000 GVA LEP area 2014 £1,000,000,000 Investment Funds driven

by LEP until 2020

The scale of the value of housing stock is over 6 times the value of a single year’s economic output (GVA).

This should inform a reality check of whether indirect or even direct LEP investments would significantly “fix” housing issues like price. This value also represents a clear opportunity.

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Calculated by applying average price values 2011-2015 to Census housing stock Calculated using 2011 Census private rented stock with annualised average rents

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Housing and Planning The Local Plan process requires that a Strategic Housing Market Assessment should identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period which: • Meets household and population projections, taking account of migration and demographic change; • Addresses the need for all types of housing, including affordable housing and the needs of different groups in the community (such as but not limited to, families with children, older people, people with disabilities, service families and people wishing to build their own homes), and • Caters for housing demand and the scale of housing supply necessary to meet this demand’.

Housing and the economy Economic changes are a key driver affecting housing demand and household formation rates and it is necessary to consider how the level of economic growth in Cornwall relates to the possible level of housing provision.

Income levels are directly related to employment opportunities and have an important relationship with the ability of households to exercise choice in the housing market and the level of need for affordable housing products. For example, it is more likely that a new household can enter the housing market when the state of the economy is good and employment levels and confidence are buoyant.

The relationship between an areas housing target requirement and economic growth and local jobs is also important in ensuring that there are sufficient workers to fill planned jobs, and achieve regeneration and other objectives. To support economic growth, a comparable level of homes will need to be provided to support the growth of economically active residents.

The LEP Role6 Research carried out by Lee Pugalis, Nick Gray and Ania Ankowska of Northumbria University, and Alan Townsend of Durham University, reviews the development of LEPs so far and analyses their role in relation to the statutory planning system. It also considers the potential of LEPs as alternative strategic planning mechanism.

This work concluded as follows: LEPs and planning 7: 



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There are no special planning tools at the disposal of LEPs and they lack clarity in terms of their role in the planning system. Whilst the National Planning Policy Framework places a duty on local planning authorities to take account of the views of LEPs, they possess no statutory basis for directly making decisions in the formal planning system. LEPs themselves highlight their limited freedoms to devise and coordinate the implementation of place-based strategies.

Understandably then, there is a significant variation in LEPs’ engagement with the statutory planning system and activities such as devising, coordinating or contributing to strategic spatial frameworks.

http://www.rtpi.org.uk/media/1400949/rtpi_research_report_planning_for_growth_final_report_9_july_2015.pdf

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“planning” here should be seen a short hand for relevance to housing issues, whether overall targets, location of development or indeed type and mix of housing development.

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The lack of clarity and institutional remit of LEPs in relation to planning have not restricted those LEPs that do wish to influence spatial planning decisions, and it has been common for LEPs to provide a “business perspective” on planning matters. At the same time, other LEPs have made it clear that they do not see planning as part of their remit.

Many LEPs are reluctant planning actors, however, the planning roles that they have performed have increased over time and this looks set to continue in some areas, including in relation to strategic planning. Further, LEPs are now perceived by both internal and external stakeholders as performing an important role in shaping places. Their priorities and decisions have important implications for local planning authorities and other statutory planning machinery. Even those LEPs who have been less proactive in planning matters are influencing spatial planning decisions, and their “control” of resources (exceeding £1 billion in some areas) means that they are powerful planning actors. Neither is this a one-way process, for example policies in local plans such as employment land allocations can be significant for the work of LEPs.

Local Growth 

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The study found that many SEPs acknowledge that the LEP is only one piece of the “institutional jigsaw” of local growth. Twenty-five SEPs refer to the intention either to align or pool local authority growth related spend, particularly in relation to housing, transport, economic development, regeneration, planning and infrastructure. Nineteen refer to joint contracts or collective decisionmaking arrangements, and 17 to combined authorities or economic prosperity boards.

In this developing context, LEPs could provide a collaborative space for the consideration of spatial policies and economic priorities. In theory, LEPs can provide a flexible framework both for deployment of economic resources over a period (depending on specific funding streams), and a frame of reference within which local planning authorities could shape local plans. Further, “soft spatial frameworks” are seen by LEPs and other stakeholders (including local authorities) as a potentially effective way of satisfying the duty to cooperate, and of addressing the missing strategic tier of statutory planning.

The future As the LEP considers reviewing its strategic direction, as it refreshes its Strategic Economic Plan (SEP) there is clearly a need to build a balanced future case for clearer relationships with the Local Plan process, to better integrate an understanding, and a lead, on economic vision, job and productivity forecasts and technical work to predict future housing numbers.

There is a strong economic case to support the delivery of homes in the right place and of the right type, beyond a role the LEP has taken so far. The economic benefits include: 

 

Maintaining a diverse population base, which in turn supports labour mobility and recruitment, the availability of sufficient public and private services as well as expanding the local income base which in turn supports the growth of town centres Meeting an identified need for housing to support future demographic projections and to address current issues such as the provision of a mix of types and sizes of homes to meet all needs.

Addressing issues related to housing such as affordability issues (which can in turn impact on the functioning of a healthy economy) and addressing social issues around an ageing population.

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3. Evidence Highlights A parallel evidence review was undertaken as part of this work. The key highlights from this are: 

An ageing population would, left unchecked, have a significant impact on the future make up of labour force. Net migration to Cornwall is still working age in the majority but a balance of population change (workforce) and jobs is still needed to ensure that future expectations of job (and productivity) growth will be met. This is a key challenge for the LEP.

So What? Population projections show an ageing population (in line with national trends and other areas).

Proposed housing targets in the Local Plan8 are based on population projections which suggest a working age, labour force increase of around 26,000 (taking into account adjustments for the extension of the pension age). Tested job targets following independent appraisal as part of the Local Plan process by Ash futures9 suggest a full time equivalent jobs target of 38,000. Net migration would form a key part of the labour force uplift, but for this to happen requires the right mix of market conditions and investments to make the right homes and opportunities available. Cornwall Council at the Local Plan Examination has argued that the gap (working age population change and jobs target) can be additionally bridged by successful delivery of productivity led growth strategy of the LEP, through shifting more people in work into better work (more hours etc.) and more people economically inactive into work.

The chart below shows the age structure changes behind the Local Plan housing target. While the population growth is reliant on migration, there are clear shifts to the make-up of the population, relevant to the future workforce. Areas shaded in the darker columns show less people in 2030 than in 2015, and the lighter shading highlights those ages where there are more people in 2030 than 2015.

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At time of writing 5.6.16. https://www.cornwall.gov.uk/media/17166681/ash-futures-employment-final-161015.pdf

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Tenure shift –There is less owner occupation and more private renting but it is important to consider variations that exist across Cornwall. Equal emphasis should be placed on supporting all types of tenure, renting (social and private) and owned (as well as mixes in size, design etc.) This is key where LEP investment unlocks future housing developments. This type of housing provision (private renting) is often strongly linked to employment related moves, and there is a need to develop better understanding of private sector rental market values, churn and expectations around size location etc.

So What? Cornwall has seen an increase of the number of people renting privately. This is already a tenure with strong links to employment related moves, whether temporary or as part of a process that leads to a more permanent relocation. The LEP should consider how to support this sector. Trends towards buy to let investments have potentially led to an increase in supply, however there is no definitive sources of data around either reasons for renting, price changes over time on comparable levels with house price sales data, and wider issues around satisfaction and or quality. The LEP could work in partnership to develop a better understanding of this sector of housing, and take a view on the benefits and costs of further increases in levels of private renting.

This chart shows the distribution of the percentage of people who rent privately against the total population.

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Clear range of house price sales achieved. This is not as simple as “no one can afford” to buy a house. Prices in coastal areas and for larger properties, and/or larger properties with views are high but there has been a clear range of sales across all areas. This challenges several perceptions about the local housing market.

So What? The detailed tables and maps in the evidence report, and the maps shown below strongly indicate the range of house price sales from 2011-2016 vary widely. This is often lost when area averages are used.

The evidence reviewed has been unique to this work for the LEP, combining data from 2011, to allow for more much more detailed analysis of over 40,000 total sales. While the determinants of price remain a complex mix of factors, from size (and number of bedrooms) and location, to supply and finance availability, there appears to be a clear picture of a range of available prices and sales across Cornwall.

The maps show: •

The range of sale values within short distances 11

•

The lower values within historic town centre areas (terraced and flats).

The three maps show clearly the following prevailing trends for each area.

Camborne, Pool Redruth – a focus on lower value sales, in traditional town centre and immediately adjacent locations. Higher value sales increase away from the town centres, with some larger detached houses achieving high values in the surrounding countryside.

Falmouth Penryn (also showing St. Mawes) – a more mixed picture, with both low to mid value sales and high value sales within the built-up area of Falmouth. Sea views and larger terraced properties follow the local topography, and this is reflected in clear price zones. Penryn by contrast has lower price focus, especially in the older parts of the settlement. St. Mawes has seen exceptionally high sale values.

St. Austell & nearby St. Blazey are dominated by lower value sales, although there is a clear demarcation of the Carlyon Bay, Charlestown area which shows some higher value sales.

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Some clear shifts have been experienced in the age structure of net migration in Cornwall. This has been in part, clearly influenced by the level of sustained investment in HE/FE, infrastructure and student places. These interventions had direct impact on the flows in and out of Cornwall of younger people.

So What? There has been a clear reduction in the number of younger people (15-19) leaving Cornwall in the last 15 years. This can be clearly linked to HE/FE investments. Across this period however, there has been a slight shift in more 20-24 year olds leaving Cornwall. These are key issues to consider. The availability of jobs and homes, the vibrancy of towns and level of key services and facilities are all key factors in retaining and attracting younger workers. There are clear post graduate productivity factors in terms of how an innovative and entrepreneurial workforce can develop, that makes the age structure of the population, both now and in the future relevant to the LEP. Similar priority should be made on follow up issues of graduate retention in terms of housing, jobs and facilities etc., as was originally the case on investment in HE/FE facilities and infrastructure.

This chart clearly shows the changes in the age breakdown of net migration between 2001 and 2014.

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

There will be further population and housing growth in Cornwall. However, this is not likely to be evenly distributed. There is a need for the LEP to need to consider impacts and opportunities for economic growth as a lead to both population and housing. This is particularly true of the future role and function, and future commuting patterns of Truro.

So What? The available population projections at a small area, show an unevenness in the distribution of planning permissions. While this may be evened out as the Local Plan is implemented, it means that growth will be at different rates across Cornwall. The LEP should consider the impacts of this on wider economic factors, such as availability of local labour forces against economic investments, and the impact of increased levels of commuting on congestion. This may prompt a wider contribution from the LEP about the future capacity and shape of Cornwall’s settlements, and whether there are strong economic imperatives to support new villages/communities, as either part or an alternative to where to locate future development.

2015-2030 Population Change 14000 12000 10000 8000 6000 4000 2000 0 -2000

11669 9423 6634 6134 6025 4515 4294 3159 3081 2734 2680 2132 1694

1028 705

479

435

420

391

375

303

174

159

145

16 -251 -520

Torpoint Rame

Mevagissey Roseland

Saltash

St Just

Fowey Lostwithiel Polruan

Padstow

Lizard

Looe

Wadebridge

St Blazey Tywardreath

Penzance

St Ives

Callington

Camelford

Bude

St Agnes Perranporth

Bodmin

Hayle

Liskeard

Helston

Launceston

China Clay

St Austell

Falmouth

Newquay

Truro

Camborne Redruth

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4. Discussion points for the LEP To set in context the data and analysis used as part of this wider paper, it is useful to consider some of the wider framing issues10 facing the area.

These are:    

inequality and inclusion, economic underperformance, geography and settlement pattern and a growing and changing population.

These framing issues, help contextualise both the housing pressures and challenges, and possible LEP responses.

What is key, is that Cornwall’s future can be shaped and influenced.

What sort of economy and future does the LEP want for the 120,000 young people aged under 19 who currently live in the area?

One that they have access to good jobs and homes, that they can study in, work in and raise future generations.

OR One that where housing remains a barrier, where economic opportunities are limited, and the ageing population increases further, as Cornwall becomes less affordable.

This section is in two further parts.  

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Discussion of housing related debate points through a series of framing issues & concluding issues drawn out.

Draft recommendations to inform the LEP SEP refresh.

As set out in the Case for Cornwall 2015. https://www.cornwall.gov.uk/media/11539861/Case-for-Cornwall-March15-web.pdf

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1. Growing inequality and financial pressures.

Housing can be segmented by type, detached or flats, or by tenure, owned or rented.

In 2011 34,500 people in Cornwall lived in social rented accommodation, 12% overall, with this being as high as 17% of the population in Bodmin, and 18% in Penzance. The evidence has not specifically addressed any deprivation or inclusion data, however in terms of the context of the LEP response to housing in its widest sense, it is important to consider some broader inclusion issues. Evidence suggests that many of these issues of health, worklessness and child poverty are often interlinked, so prevention and intervention measures are likely to have wide ranging impact which cross service and organisational boundaries. However, the benefits of prevention and intervention can often be difficult to quantify and this can create tensions in managing short term priorities especially in the context of budget pressures and reductions.

There is a clear link between social housing, and former local authority public housing estates, and the concentration of deprivation.

People living in a deprived area have a life expectancy of up to 8 years shorter than those in more affluent areas of Cornwall. The 2010 Marmot Review “Fair Society Healthy Lives�, highlighted that people living in deprived areas are also more likely to suffer from illnesses like chronic obstructive pulmonary disorder, heart disease, and suffer from mental health problems such as anxiety and depression.

Where a Cornish resident is born or lives, can make a real difference to the very quality of their lives, i.e. their chances of doing well at school, or being involved in crime, their chances of getting work and indeed what type of work.

Nationally some of this debate has been widened to introduce the concept of squeezed working households. There is evidence that this is not a new issue to Cornwall. There are high levels of those in work, who have difficulties with high costs of living locally, low wages, high housing costs and high fuel and heating costs. The financial pressures on public services, the lack of alternatives in terms of quality jobs, mean that the challenges facing Cornwall are not just around inequality and deprived neighbourhoods, but cover those in work as well.

These are clearly acknowledged and responded to by the LEP in terms of strategy and priorities.

Debate Points The LEP has a key role in taking the economy forward. Does it have a clear vision of how this can be done in a way that benefits those who can’t care for themselves, the vulnerable, the ill, those that lack mobility, those that lack choice or opportunity in the labour market.

Population change and growth, housing targets, and economic growth (workspace, jobs, productivity) are all related. Ensuring the benefits of this growth impact on all areas and groups of need is a key challenge.

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2. Economic underperformance Cornwall is characterised by low Gross Value Added (GVA), low wages and low productivity. Recent investment in HE/FE has seen improvements in infrastructure and high level qualifications, but there is still a significant issue in levels of no or low level skills and qualifications among the population and the workforce.

Cornwall is defined as much by a (very) low number of large companies as it is by its peripheral coastal geography, settlement pattern and levels of small companies.

Cornwall’s levels of economic growth outperformed the national average significantly between 2000-2003, and 2005-06, however there has been a lack of economic progress in terms of relative ranking, with a host of per head and competitiveness measures lagging behind both national averages and similar regions. There have been clear signs and visible evidence of this investment and growth, new buildings, facilities, successful companies, a strong brand, national and international recognition. However, there has been continued low earnings, high levels of benefits dependencies, concentrations of deprivation on estates and rural dispersed deprivation.

High and consistent levels of investment in new workspace and infrastructure has enabled many companies to expand, but has not always been linked (or been successful) at tackling long term unemployment and unemployment hotspots.

Cornwall has a very clear picture of structural issues (sector mix, location etc.) and fragility (more recent economic performance), set alongside some signs of improving employment levels across specific sectors.

However, the combination of poor representation in high paying sectors, strong representation on low paying sectors, reduced public sector spend, high costs of living and housing, seasonality, higher levels of part time employment and distance from larger concentrations of population and markets remain fundamental challenges to attempts to rebalance and reshape economic activity within Cornwall.

Debate Points There are some clear contradictions to be understood. Cornwall has grown, often above UK averages in the last 15 years, but has not improved the core economic indicators, and remains both the smallest and weakest local economy.

Does GVA growth remain the right target to measure the future. Should economic strategy be aimed at clearer targets around reducing inequality, about improving incomes and creating a range of different jobs, about access to and quality of housing, in different locations, that address structural issues and local needs.

Can growth (however measured) trickle down, and make a difference to ensure living conditions, incomes, disposable incomes, and opportunities are improved throughout the population, and should specific housing objectives be part of the rationale for economic strategy and action?

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3. Cornwall’s geography and settlement pattern The characteristics of Cornwall’s communities remain varied and there needs to be flexibility in responding to the needs and opportunities of these communities. This is a defining and crucial issue for both land use, economic and infrastructure planning.

There are significant differences in terms population density, age structure, housing structure, type, size and costs, access to services and employment opportunities. These have an impact on how communities function and in turn on productivity.

These differences cut across geographies and administrative areas. Cornwall’s defining geographical feature could well be its local differences. One of the keys aspects to this is scale, there are differences across streets, villages, parts of towns and wider catchments.

The variation in the characteristics of people and places include some real ‘hotpots’ for issues such as deprivation, worklessness and child poverty. In Cornwall, there are neighbourhoods and households that are identified consistently as having challenging and inter linked issues, and high levels of service and intervention needs. These are often former public sector housing estates. These areas can often be found near high value areas, whether measured in terms of asset value, or income levels, through either employment or investment.

Cornwall is not an island, and in both understanding the issues and responding to these, there needs to be clear recognition of cross border links, pressures and opportunities with Plymouth. There are clearly a range of daily flows both ways, for work, leisure and retail purposes. Cornwall does not exist in an isolated bubble.

Debate points There needs to be a better understanding of how Cornwall’s characteristics vary geographically, and this is critical to how services, and investments are commissioned and funded, to exploit opportunity and tackle need. A one size fits all approach will rarely be effective.

For example, what is the future role and function of Cornwall’s town centres and the retail sector, given seemingly established (internet retail) trends and shifts in consumer behaviour?

Should the LEP debate and lead on proposing changes to the existing pattern of growth and future growth locations of both housing and economic development. Should this include an economic led vision of new settlements, whether large or small, as both a solution and as a way of linking and making other places work and function better. Would this prove an economic game changer?

Is Cornwall’s settlement pattern, fit for future purpose or should it be challenged and changed? What scope is there for greater cross border complementarity over service provision and strategic planning?

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4. Cornwall’s growing and changing population.

Cornwall’s population has been growing steadily since the 1960’s and is amongst the fastest growing areas in the UK. Recent patterns of growth have not been consistent across all areas, with more growth being particularly in larger towns, and less in coastal areas and settlements.

The growth in population has been chiefly driven by (net) migration, with more people moving to Cornwall, but in more recent years there has been a decline in the number of people leaving. Natural change (births and deaths) also influences population growth. The level of negative natural change is reduced from 15-20 years ago. Investments in education infrastructure and changing employment conditions have impacted on these trends.

The population is not only increasing, but also changing demographically. In line with national trends Cornwall has an increasingly ageing population, as life expectancy continues to rise. This is being driven in part by the post war (born around 1947) baby boom cohort ages (currently approaching 70 years old).

Average life expectancy in Cornwall is higher than the national average, although there are significant variations between more and less affluent areas. It is also important to recognise that age related behaviours, attitudes and characteristics vary person by person, and change over time.

Higher proportions of younger people are found in larger towns and the clay area villages, while higher proportions of older people are often found around the south coast and in more affluent rural areas.

Debate points Population growth is difficult to control or plan for, as there are many factors which influence the levels, locations and characteristics of growth. Changes to the distribution and structure of the population will impact on the labour market, the housing market and demand for services and facilities. However, it is key to remember that these very factors can in themselves be drivers for (economic) growth as well.

It is also important that service providers and employers understand these issues, and how the population changes and grows over time, to enable them to adjust plans accordingly. There is a key role for the LEP to share a vision of this changing workforce, and population.

The future can be influenced and changed. There are positive impacts of investments into HE/FE still being played out in terms of younger people’s migration behaviour. There are also pressures because of these changes, particularly on the host communities in Penryn and Falmouth, due to increased student numbers.

There is some evidence around post-graduation out migration, graduate retention remains a key economic challenge.

The younger population and the ageing population both offer a differing set of challenges and opportunities that should have a large impact on future economic strategies.

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Concluding thoughts for the LEP Board

The LEP board can look to influence various key aspects of housing related issues.

The first is to be more involved and specific from a purely economic perspective about how housing works across Cornwall. This work has used some bespoke town based geographies to analyse data. The council uses community network areas as an administrative level, between the unitary authority and parish and town councils. What is clear is that the characteristics, needs and opportunities are not fixed, and responses are unlikely to be effective if they are one size fits all.

Responses should be based on functional town based geographies, and consider differences within even this level of geography.

So What? Distribution, scale and mix

The LEP can play a major role in shaping the vision and opportunities for individual places across Cornwall.

This in turn, will have a major impact in future levels of both the scale and location of physical growth, houses, services, workspace, infrastructure. The LEP can play a key role in the strategic distribution and vision for areas/main towns. This will probably require difficult choices, as not everywhere can grow at the same rate, and thus, a linked challenge for the LEP will be to ensure that the benefits of some this investment and physical growth are shared, to places, neighbourhoods and people.

There is a linked key challenge in the LEP being a champion for the understanding and promotion of the growth that is likely to occur in Cornwall, even without direct involvement, by shaping it and ensuring that the benefits of this growth are both visible and effective.

A lot of current (housing & industrial/commercial) growth can lack a clear frame of reference with its local community. It can be monotone and uniform. Mixed developments, size, shape and tenure and use, could be a key role of the LEP’s greater involvement in shaping growth at a local level. Any LEP funded physical development should aspire to high design and accessibility standards.

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So What? Economic Opportunities

Current growth levels will see increases in the population, jobs, houses for Cornwall at significant levels. The LEP can be very clear about the benefits of economic led housing growth. Older people create clear opportunities around both employment, training, medical initiatives, and the physical provision of adapted homes, care homes, retirement villages etc.

The age of the workforce, and migration trends around younger people staying or coming to Cornwall, sees similar opportunities around getting career paths and progression, training in place and effective. The opportunities that sector or company clusters, or larger companies would bring to retaining and growing a younger workforce are also clear.

There is also a strong case to consider the very clear economic opportunities of the current 50,000 + housing target to 2030 within Cornwall. This could be from seeking to provide support to retain and develop spend associated with finance, maintenance and improvement as local as possible, through to targeted investments to for example, the manufacture, distribution and installation of solar panels on this increased amount of housing stock.

So What? Different Plans for the future?

Cornwall has been growing at broadly consistent levels since the 1960’s and the opening of the Tamar road Bridge.

The LEP Board can take a clear view on whether some of the inclusion and economic underperformance issues that is seeks to tackle would be better addressed by taking a different and a longer term view of the future. This could be through, for example considering the economic benefits of new settlements, as a different model to improve productivity and to provide essential public services and community facilities.

This in turn would allow for a different narrative overall, on growth and infrastructure requirements over a longer period, say for 50 yrs +. Currently strategic planning in its broadest sense has a 20 yr. horizon, but tends to work on shorter implementation timescales.

Would a longer-term vision lead to better outcomes? If nothing else it would be a way of linking land value uplifts gained through the granting of residential housing planning permission and more cohesive infrastructure investments, by spreading the costs against future benefits.

Finally, there may be a strong argument for the LEP being more influential in seeking to drive future economic led housing growth by market segment by area rather than the current greater focus on Cornwall wide targets.

This would be through an assessment of the economic potential of individual areas, and what growth, in terms of population, housing and infrastructure is required to realise this potential.

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So What? Capture and reuse land value?

Value capture is an umbrella term for mechanisms that harness property value uplift, where “the agency responsible for the development of [the] infrastructure captures part of the financial benefits gained by land developers or the community at large. This benefit is reflected in an increase in the real property values, which can be regarded as a comprehensive index of all the benefits generated by the development, including improved accessibility and an increase in business opportunities.

Against the backdrop of a shrinking public purse and the localism agenda, infrastructure delivery agencies across the country are looking to property and development to part-fund their schemes.

The public sector needs to be smarter in capturing the increased land value generated by growth and development for the direct benefit of the local community. There is an increasingly urgent need to address this issue, but just because of pressure on providing the infrastructure that is needed to support new economic or housing growth, but also as a way of involving and communicating the direct benefits of this growth for local communities.

Increased land value can generate sizeable financial sums and if effective mechanisms are in place then this can be captured and shared for the benefit of the community and the key infrastructure provision.

Land value uplift is likely to be higher if the development goes beyond the standard ‘market led’ approach, and embraces both higher quality and design issues, and a clear focus on wider community economic benefits.

Infrastructure funded by capturing this value could include schools, roads, workspace and offices, and facilities which result in a higher quality working communities than the standard market led approach would otherwise deliver.

The LEP should consider the appropriateness and most practical mechanisms for this approach to future developments in Cornwall.

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SEP Housing related recommendations for debate are as follows:

Maintain an understanding of infrastructure requirements The LEP should have access to a strategic analysis of key11 sites and their constraints, so that it knows what infrastructure investment is critical to delivery, what the required investment is, and when it will be required to ensure delivery. This should extend to an understanding of where there are capacity constraints in terms of highways, water and waste water treatment, and other utilities that call for investment.

This would allow the LEP to identify priorities in the use of its own funds, and to seek to influence the investments made by other bodies.

The LEP should consider exploiting the practicality of   

how to value capture12 for major infrastructure, housing and economic developments, to consider a process to identify strategic sites for development of sustainable new communities in the longer term, to ensure an adequate pipeline of new housing provision addressing key strategic opportunities to reshape both the economy and settlement pattern.

This would represent a step change for the LEP in its involvement and championing of the overall growth agenda, driven by economic and social (and environmental?) imperatives.

Lead and advise on labour force and employment balance at a town based level It is recommended that the LEP develop a clear understanding of the implications of its economic strategy for job growth, the resultant demand for labour, and the implications for transport networks, at a local level.

It should also consider what is the best mix of raising economic activity rates, skills development, housing provision and allowing market mechanisms to redistribute economic activity between areas with different cost bases might be.

These are crucial inputs to future Local Plan work.

Develop a better understanding of the costs and issues associated with private sector renting There is a data deficit around the role, influences and costs around the growing privately rented sector. Given the importance of this sector, to students, to the workforce, and given pressures on social renting funding, the LEP should consider jointly commissioning more detailed primary and secondary analysis.

Lead a wider debate on what second homes and holiday accommodation means in 2016+ The LEP should consider a more balanced and economic led perspective on the balance of impacts (costs and benefits) of the interplay between second homes, holiday homes, holiday accommodation, the local housing markets within which these segments operate. What is the real impact?

Robin Miller Understanding Data Ltd. June 2016

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To be defined but the intention here is for major strategic sites of a significant size/impact With partners for wider benefits

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