Appendix P Quantifying Development Impact Statement

The economic benefits from development is wide ranging and extends beyond the provision alone. This Statement explores the potential economic benefits which can be attributed to a residential development, from job creation to Council Tax Revenues. A theoretical scheme of 100 residential units is used to calculate the following potential economic benefits:

Job Creation;

Additional Spend in the Local Economy; New Homes Bonus; and Council Tax Revenues.

It should be noted that the figures in this Statement are indicative. However, they provide a realistic assessment of some of the economic benefits which can be attributed to a 100-unit residential scheme.

Job Creation

The delivery of development will have direct benefits through the creation of employment opportunities associated with the construction of the development and through additional spin-off employment opportunities e.g. site remediation, materials/ services suppliers, and end-use service providers (i.e. gardening, window cleaning etc.).

The ‘Economic Footprint of UK House Building in England and Wales’ report (HBF, July 2018) outlines the economic contribution that house building makes to the UK economy. Referencing research undertaken by Professor Michael Ball on behalf of the HBF and Construction Skills in 2005, the report seeks to quantify the number of direct jobs created by house building activity across the UK. It concludes that new housing developments create an industry average of 1 direct job per dwelling. On this basis, a residential scheme of 100 units has the potential to create 100 full time equivalent jobs (FTE).

In addition to direct, on-site employment, it is recognised that house building creates further indirect and induced employment opportunities. The HBF report makes reference to the National Federation Housing (2013) Housing and Economic Growth report which identifies an employment multiplier of 2.51 jobs per dwelling. For every 1 direct construction job, 1.51 indirect and induced jobs are created elsewhere in the supply chain and wider UK economy.

Additional Spend in the Local Economy

Further to job creation, the proposals will also result in additional spend within the local economy as a result of the increase in population. The Office for National Statistics (ONS) provides data on gross disposable household income (GDHI), the amount of money that all of the individuals in the household have available for spending or saving after income distribution measures (for example taxes, social contributions, and benefits) have taken effect. This therefore provides a useful indication of the available money a household might have to spend on recreational activities and non-essential purchases.

In the Chester Middle Layer Super Output Area, ONS data states a GDHI of £26,100 per head (based on 2018 figures).¹ Assuming an average of 2 adults per household, this results in a disposable income figure of £52,200 per unit, which equates to a total of £5,220,000 of disposable income per annum arising from a 100 scheme development. It would be reasonable to assume a large proportion of this total would likely be spent within Chester City Centre.

Construction Phase

Whilst it is difficult to quantify, there will also be additional income in the local economy as a result of the presence of construction workers. It is likely these workers will spend in local cafes and shops and may require the use of the public transport network. Similarly, construction workers that are not from the local area may require short term accommodation. www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/ smallareamodelbasedincomeestimates/financialyearending2018#average-household-income-by-local-area

On this basis, further to the creation of approximately 100 direct full-time construction jobs, a 100-unit scheme has the potential to create approximately 150 indirect FTE employment opportunities.

The New Homes Bonus is a grant paid by Central Government to Local Authorities to reflect and incentivise housing growth in their areas. It is currently paid each year for 4 years and is based on the amount of extra Council Tax raised for new-build homes, as well as including an extra payment for providing affordable homes. In 2016 the Government introduced a national baseline of 0.4% housing growth below which grants will not be made.

To calculate the bonus, it is necessary to understand the Council Tax banding of residential properties. The Council Tax banding applied to a property is based on its value. There is not one tax band which predominates in Chester City Centre and therefore a range of tax bands B to E has been assumed for the purposes of this calculation.

A scheme of 100 dwellings would have the potential to generate between £152,293.38 and £239,317.88 per year for 4 years in New Homes Bonus, to a total of between £609,173.52 and £957,271.54. In addition, a bonus of £350 is paid per year for each affordable unit which is delivered.

Appendix O Quantifying Development Impact Statement continued New Homes Bonus Council Tax Revenues

Each new unit within the development will also generate Council Tax to the Local Authority. As stated above, it has been assumed that the units will fall between Council Tax Bands B and E.

CWaC currently charges £1,529.05 and £2,402.79 per year for dwellings falling within band B and E respectively. As such, and assuming that all residents are paying the full requirement, the development has the potential to generate between £152,905 and £240,279 in Council Tax revenues per year.