Neil O’Brien: The next algorithm disaster – coming to a Conservative constituency near you. This time, it’s housing growth.

24 Aug

Neil O’Brien is MP for Harborough.

Algorithms have been in the news, not for good reasons. One lesson from the A-levels row is that principles which seem reasonable can lead to outcomes you don’t expect. Another algorithm’s coming down the tracks: the new formula for how many houses must be built in different places. There are few with higher stakes.

I wrote about the housing White Paper in my last column: it proposes not just to change the methodology for assessing housing need, but also to make a standard methodology compulsory for the first time. In other words, if we don’t like the results of the new algorithm, we’ll have blocked off the emergency exits.

The new algorithm is set out here. It’s not particularly easy to read. For example, one of many factors is set out in bullet point 30:

Adjustment Factor = [( Local affordability factor t = 0 – 4 4) x 0.25) + (Local affordability ratio t = 0 – Local affordability ratio t = 10) x 0.25] +1 Where t = 0 is current yearr and t = -10 is 10 years back.

Clear enough for you?

I thought it might be a while before we saw what the new algorithm would produce in practice. But Lichfields, the planning consultancy, has translated the algorithm into what it would mean for local authorities.

The numbers that the formula spits out can be compared to the number of homes actually being delivered over recent years, or to the numbers in the current (optional) national formula. Whichever way you look at it, it’s controversial.

I’ve long argued we should concentrate more development in inner urban areas, for various reasons I’ll come back to below.  But this algorithm doesn’t do that – at least not outside London.  In the capital, the algorithm would indeed increase numbers substantially.

But in the rest of England the formula takes the numbers down in labour-run urban areas, while taking them dramatically up in shire and suburban areas which tend to be conservative controlled.

Overall, the algorithm proposes a south-centric model of growth for Britain (with some growth in the midlands).

If we compare the algorithm to recent delivery, the South East has been delivering just over 39,000 homes a year, and will be expected to increase that to just over 61,000, a 57 per cent increase. The East of England would see a 43 per cent increase, the East Midlands a 33 per cent increase, the West Midlands a 25 per cent increase and the South West a 24 per cent increase.

For the North East, North West and Yorkshire, the numbers the algorithm proposes are lower overall than the numbers delivered over recent years. But as with A-levels, the devil’s in the detail.

The really controversial changes are within regions, where the algorithm suggests jacking up numbers for shires, while taking them down in urban areas. Comparing the existing national formula to the proposal, we can see this for most large cities.

The number for Birmingham comes down 15 per cent, while the rest of the West Midlands goes up 52 per cent.

Numbers for Leicester go down 35 per cent. The rest of Leicestershire goes up 105 per cent.

Nottingham goes down 22 per cent, the rest of Nottinghamshire goes up 48 per cent.

Southampton goes down 17 per cent, Portsmouth down 15 per cent and Basingstoke down 23 per cent, but the rest of Hampshire would go up 39 per cent.

Wealthy Bristol would see some growth (5 per cent) but much lower than the rest of Gloucester, Somerset and Wiltshire (47 per cent).

It’s the same story up north. Leeds down 14 per cent, Sheffield down 19 per cent, and Bradford down 29 per cent. But the East Riding up 34 per cent, North Yorkshire up 80 per cent, and North East Lincolnshire up 123 per cent.

In the north west the core cities of Manchester (-37 per cent) and Liverpool (-26 per cent) see huge falls, while the areas around them shoot up. In Greater Manchester, for example, the growth is shifted to the blue suburbs and shires. Outer parts go up: Wigan up 10 per cent, Bury, up 12 per cent, and Rochdale up 97 per cent. And areas to the south and north of the conurbation up much further: Cheshire up 108 per cent, while Blackburn, Hyndburn, Burnley and the Ribble Valley together go up 149 per cent.

But it isn’t just that the numbers in the new formula are lower than the old formula for urban areas. In many cases the new formula suggests a lower number than their recent rate of delivery. This is true of Sheffield (12 per cent below actual delivery), Leeds (16 per cent), Bradford (23 per cent), the entire North East (28 per cent), Nottingham (30 per cent), Manchester, (31 per cent), Leicester, (32 per cent) and Liverpool (59 per cent). The new formula seems to assume we are going to level down our cities, not level up.

It’s true that there’s another step between the Housing Need Assessment which this algorithm produces and the final housing target, which can be reduced a bit to account for delivery constraints like greenbelt.

But if we go with this algorithm unamended, outside London most Conservative MPs will be seeing large increases in the housing targets for their constituencies, while many Labour MPs see their local targets reduced. Is this what we want?

Leaving aside the politics, I think not. Compared to the rest of Europe, the UK has much less dense cities.

Places like Dundee, Glasgow, Liverpool, Sunderland, Birkenhead, Hull and Newcastle all had smaller populations in 2017 than 1981, while places like Birmingham and Manchester weren’t much bigger. Our cities have untapped potential, many went through a period of shrinkage and have space, and there are health and environmental reasons to prefer urban growth too.

In dense urban areas, people are more likely to walk or cycle – and in the UK, people in cities walk twice as far as those in villages each year. This reduces public transport costs and improves health.

Denser cities can sustain better public transport and so cut car congestion and time spent travelling. As well as reducing pollution from transport, denser cities reduce energy use and pollution because flats and terraced homes are much more energy efficient.

I’m not sure the draft algorithm is even doing what Ministers wanted it to. The document in which it is set out says that “the Government has heard powerful representations that the current formula underestimates demand for housing in the growing cities in the Northern Powerhouse by being based on historic trends.”

But the algorithm seems to do the exact opposite.

There may be technical reasons why things aren’t working out: there’s lots of ways to measure affordability… differences between residence-based and workplace-based income measures… there were certain caps in the old model, population projections have changed and so on.

However, the bigger issue is this.

There’s no “objective” way of calculating how many homes are “needed” in an area. While there are ways of carving up the numbers that are seen as more or less fair, ultimately a vision is required.

Projections of population growth are circular: the projected population growth for the farmland between Bletchley and Stony Stratford would’ve been pretty low before we built Milton Keynes there.

Likewise the forecast for the derelict Docklands of the early 1980s. While there are real economic constraints, the future need not resemble the past.

Though it took a huge effort, Germany raised East Germans from 40 per cent to just 14 per cent per cent below the national average income since reunification. That’s levelling up.

Do we want to continue to concentrate growth in the South East? Do we want European-style denser cities, or for them to sprawl out a bit more? An algorithm can help deliver a vision: but it’s not the same as one.

Richard Holden: On Wednesday, Sunak needs to display as much confidence in Britain as local publications are showing in North West Durham

6 Jul

Richard Holden is MP for North West Durham.

The Dairy Barn Cafe, North Bitchburn

As Saturday approached, you could feel the febrile excitement and demand for “the story” across the media. Television news and radio bulletins boiled over with predictions of carnage on Saturday night. The broadcasters and papers were eagerly anticipating Freshers Week-esque scenes of drunken debauchery as the public decided to get wasted in a post-lockdown bacchanal.

In North West Durham, I spent Saturday evening visiting the: Duke of Wellington, Consett Rugby Club, the Wheatsheaf in Leadgate and finally the Black Lion, my local in Wolsingham. I’m afraid that I must report that calm and friendly were the orders of the evenings – as it appears were the scenes across the rest of the country too.

Tog, the landlord of the Duke, four doors down from my office on Medomsley Road, took me to his beer garden to show me a mural he’d commissioned during lockdown from a local artist. Sarah-Jane, at the Black Lion, had me take a peak at how she’d transformed her beer garden from a flagged smoking area to a lively and welcoming garden of tables, tasteful lighting and colourful plants and flowers.

It was superb to see responsible local businesses at the heart of their communities investing in their businesses, and ensuring a safe and socially distanced experience for their customers. This hope of better things to come from local firms, with small but significant investments in themselves, is really welcome at a time when I know so many people are not only worried by the virus, but also about their jobs and their incomes.

However, in many sectors of the economy the broad economic impact of the global Coronavirus pandemic is coming through hard, and is reflecting just how interconnected demand is across our economy.

To give one example: at first as the crisis broke, I had travel agents and their staff get in touch. Then came had pilots and crew from Easyjet and British Airways based at Newcastle airport, as the airlines cut back. More recently, I’ve been in touch with a local manufacturing firm which makes inner parts for the wings of Airbus planes, and which is having to lay off half its staff (some of their factories across the UK have closed completely and will not re-open).

Very quickly, the lack of ability to – and demand for – travel has led to manufacturing job losses well down the chain. It’s clear that some sectors have been far more badly affected than others, and that base consumer demand is having a rapid knock-on effect.

Looking out of the panoramic window of the just re-opened Dairy Barn Café, I can see right up Weardale, and am reminded of a conversation I had early in the last election campaign. “Remember, we’re the working dale, Richard” a man in late middle-age in local authority housing in Stanhope had said to me.

At the time it made me think of where I grew up on the other side of the Pennines – walking up Pendle Hill in Lancashire 20 years ago, and looking south to the mill towns of East Lancashire nestled in the valleys below. Working towns like Burnley, Colne and Accrington which have since switched to electing Conservative MPs.

As the furlough scheme, which protected so many jobs at the height of the lockdown is wound down, we’ve got to do everything we can to help return demand to the economy – the demand that comes from confidence in the future. Demand that means work for decent working people up and down the seats of the ‘Blue Wall’.

This confidence and positive view to the future is not something anyone’s hearing from the Labour leadership under Keir Starmer. The best thing he could muster last week was to suggest that the Government was giving “mixed messages” by saying, “get out and about, have a drink, but do so safely”.  Which shows that he’s struggling to get cut-through – especially when the man in the village pub in County Durham is by and large is doing exactly what the Government has suggested.

Labour’s shambolic response to getting children back to school, by saying one thing nationally and another in Labour-run local authorities, certainly inspires no-one with confidence – except a growing confidence that Sir Keir is a political opportunist. He was, after all, remarkably quiet on anti-semitism under Jeremy Corbyn, in order to keep hold of Momentum votes for the leadership. And he tried to play both sides with Labour’s disastrous “we’ll accept the result, but negotiate a new deal, and then have a second referendum” policy on Brexit.

Perhaps most interestingly, this weekend marked the first time that any constituent has mentioned the Labour leader to me unprompted. She was a former Labour voter who switched to the Conservatives in 2017 (and had managed to convince her husband to do so in 2019), and it was clear that, after being initially open-minded, the new Labour leader was leaving them increasingly cool.

The Government has done well in giving support to business and jobs – Rishi Sunak has certainly won fans across the country for that. But without wanting to pile too much pressure on the Chancellor ahead of his statement on Wednesday, we’re all only as good as our most recent decisions in politics.

As we move out of the initial stages of lockdown, Rishi’s decision must be to put confidence as much confidence and therefore demand back into the economy – especially in hard hit sectors – as he can. Everyone knows that it’s going to a difficult time and no-one expects the Government to get everything a hundred per cent right, but voters do expect us to really try.

And in doing so over the next few weeks and months, the Government has got to show the confidence in Britain that my local publicans in North West Durham are showing. And, as they press ahead with “levelling up” their pubs, we must also keep that long-term goal in mind too for the North.

Confidence is the thing that underlies every relationship with the state that we have – from policing with consent to the value of the fiat currency in our pocket. Confidence that governments have the people in mind and the ability to deliver is what keeps them in office.

The electorate here in County Durham and in the mill Towns of East Lancashire took us into their confidence and bestowed their votes upon us. Despite the difficulties of the pandemic, the Government has supported people. Now our task is to give our businesses the confidence to look to the future positively, which will in turn give the people who work for them the confidence to invest and spend in a virtuous circle, bouncing forward out of the fear of recent months and towards the hope of a brighter future.

Richard Holden: On Wednesday, Sunak needs to display as much confidence in Britain as local publications are showing in North West Durham

6 Jul

Richard Holden is MP for North West Durham.

The Dairy Barn Cafe, North Bitchburn

As Saturday approached, you could feel the febrile excitement and demand for “the story” across the media. Television news and radio bulletins boiled over with predictions of carnage on Saturday night. The broadcasters and papers were eagerly anticipating Freshers Week-esque scenes of drunken debauchery as the public decided to get wasted in a post-lockdown bacchanal.

In North West Durham, I spent Saturday evening visiting the: Duke of Wellington, Consett Rugby Club, the Wheatsheaf in Leadgate and finally the Black Lion, my local in Wolsingham. I’m afraid that I must report that calm and friendly were the orders of the evenings – as it appears were the scenes across the rest of the country too.

Tog, the landlord of the Duke, four doors down from my office on Medomsley Road, took me to his beer garden to show me a mural he’d commissioned during lockdown from a local artist. Sarah-Jane, at the Black Lion, had me take a peak at how she’d transformed her beer garden from a flagged smoking area to a lively and welcoming garden of tables, tasteful lighting and colourful plants and flowers.

It was superb to see responsible local businesses at the heart of their communities investing in their businesses, and ensuring a safe and socially distanced experience for their customers. This hope of better things to come from local firms, with small but significant investments in themselves, is really welcome at a time when I know so many people are not only worried by the virus, but also about their jobs and their incomes.

However, in many sectors of the economy the broad economic impact of the global Coronavirus pandemic is coming through hard, and is reflecting just how interconnected demand is across our economy.

To give one example: at first as the crisis broke, I had travel agents and their staff get in touch. Then came had pilots and crew from Easyjet and British Airways based at Newcastle airport, as the airlines cut back. More recently, I’ve been in touch with a local manufacturing firm which makes inner parts for the wings of Airbus planes, and which is having to lay off half its staff (some of their factories across the UK have closed completely and will not re-open).

Very quickly, the lack of ability to – and demand for – travel has led to manufacturing job losses well down the chain. It’s clear that some sectors have been far more badly affected than others, and that base consumer demand is having a rapid knock-on effect.

Looking out of the panoramic window of the just re-opened Dairy Barn Café, I can see right up Weardale, and am reminded of a conversation I had early in the last election campaign. “Remember, we’re the working dale, Richard” a man in late middle-age in local authority housing in Stanhope had said to me.

At the time it made me think of where I grew up on the other side of the Pennines – walking up Pendle Hill in Lancashire 20 years ago, and looking south to the mill towns of East Lancashire nestled in the valleys below. Working towns like Burnley, Colne and Accrington which have since switched to electing Conservative MPs.

As the furlough scheme, which protected so many jobs at the height of the lockdown is wound down, we’ve got to do everything we can to help return demand to the economy – the demand that comes from confidence in the future. Demand that means work for decent working people up and down the seats of the ‘Blue Wall’.

This confidence and positive view to the future is not something anyone’s hearing from the Labour leadership under Keir Starmer. The best thing he could muster last week was to suggest that the Government was giving “mixed messages” by saying, “get out and about, have a drink, but do so safely”.  Which shows that he’s struggling to get cut-through – especially when the man in the village pub in County Durham is by and large is doing exactly what the Government has suggested.

Labour’s shambolic response to getting children back to school, by saying one thing nationally and another in Labour-run local authorities, certainly inspires no-one with confidence – except a growing confidence that Sir Keir is a political opportunist. He was, after all, remarkably quiet on anti-semitism under Jeremy Corbyn, in order to keep hold of Momentum votes for the leadership. And he tried to play both sides with Labour’s disastrous “we’ll accept the result, but negotiate a new deal, and then have a second referendum” policy on Brexit.

Perhaps most interestingly, this weekend marked the first time that any constituent has mentioned the Labour leader to me unprompted. She was a former Labour voter who switched to the Conservatives in 2017 (and had managed to convince her husband to do so in 2019), and it was clear that, after being initially open-minded, the new Labour leader was leaving them increasingly cool.

The Government has done well in giving support to business and jobs – Rishi Sunak has certainly won fans across the country for that. But without wanting to pile too much pressure on the Chancellor ahead of his statement on Wednesday, we’re all only as good as our most recent decisions in politics.

As we move out of the initial stages of lockdown, Rishi’s decision must be to put confidence as much confidence and therefore demand back into the economy – especially in hard hit sectors – as he can. Everyone knows that it’s going to a difficult time and no-one expects the Government to get everything a hundred per cent right, but voters do expect us to really try.

And in doing so over the next few weeks and months, the Government has got to show the confidence in Britain that my local publicans in North West Durham are showing. And, as they press ahead with “levelling up” their pubs, we must also keep that long-term goal in mind too for the North.

Confidence is the thing that underlies every relationship with the state that we have – from policing with consent to the value of the fiat currency in our pocket. Confidence that governments have the people in mind and the ability to deliver is what keeps them in office.

The electorate here in County Durham and in the mill Towns of East Lancashire took us into their confidence and bestowed their votes upon us. Despite the difficulties of the pandemic, the Government has supported people. Now our task is to give our businesses the confidence to look to the future positively, which will in turn give the people who work for them the confidence to invest and spend in a virtuous circle, bouncing forward out of the fear of recent months and towards the hope of a brighter future.