ITEM CA9
CABINET – 21 APRIL 2009
RESPONSE TO GOVERNMENT CONSULTATION ON ECO-TOWNS: NW BICESTER AND FINANCIAL VIABILITY STUDY OF THE ECO-TOWNS PROGRAMME
Report by Head of Sustainable Development
Introduction
1. Cabinet in February 2009 considered a report on the Department for Communities and Local Government (CLG) consultation on a draft Planning Policy Statement (PPS) on Eco-towns together with an initial sustainability appraisal (SA) of the short listed proposals. Cabinet endorsed the comments in the report and in a draft joint report with Cherwell District Council and reiterated that on the information available the County Council would object strongly to the inclusion of the “Weston Otmoor” eco-town proposal in the final list of eco-town locations. Cabinet also delegated to me, in consultation with the Leader of the Council and Cabinet Member for Sustainable Development, finalisation of the joint report with Cherwell District Council for submission to the Secretary of State as this Council’s response to the eco-towns consultation.
2. The draft PPS includes a revised shortlist of 12 potential locations including Weston Otmoor and North West Bicester. I reported in February that the County Council would need to consider its position on NW Bicester in the light of the assessments that were underway. This report comments on the NW Bicester proposal.
3. I also reported that financial viability work for the eco-towns programme was being undertaken by Price Waterhouse Coopers (PWC) and others for CLG. CLG published their report “Eco- towns. Financial viability study of the eco-towns programme” at the beginning of March. I comment briefly on the conclusions of that report. Detailed comments on the viability study will be included in the joint report with Cherwell District Council.
4. The Government’s consultation documents can be viewed at: www.communities.gov.uk/housing/housingsupply/ecotowns/ and the Cabinet reports at: www.oxfordshire.gov.uk/content/public/Resources/hlpdownloads/CA/CA240608-07.htm and www.oxfordshire.gov.uk/content/public/Resources/hlpdownloads/CA/CA160908-08.htm
NW Bicester
5. The draft PPS defines eco-towns as new settlements of between 5,000 and 20,000 homes, separate and distinct but well linked to higher order centres, which will act as exemplars of good practice and provide a showcase for sustainable and low carbon living. A summary of the draft Planning Policy Statement is in Annex 1 (download as .doc file).
6. The eco-towns SA assessed the locations originally shortlisted by CLG plus a number of alternatives. North West Bicester was suggested as an alternative for appraisal as part of the SA process by Cherwell District Council. For each location, key strengths and weaknesses were identified and an overall rating given. NW Bicester was rated as B (might be suitable for an eco-town subject to meeting specific planning and design objectives). By comparison Weston Otmoor is the only one of the 12 short listed locations in the draft PPS graded C (only likely to be suitable for an eco-town with substantial and exceptional innovation). A summary of the appraisal for NW Bicester is in Annex 2 (download as .doc file).
7. Following the inclusion of NW Bicester in the eco-towns SA process, Cherwell District Council commissioned consultants Halcrow to undertake an assessment of the potential for an eco-development of 5,000 homes as an urban extension to Bicester, to inform the Council’s response to the eco-towns consultation. Halcrow have prepared a “ North West Bicester Concept Study” which includes a sustainability strategy, transport strategy, employment strategy and financial viability analysis The full document can be viewed at http://www.cherwell.gov.uk/media/pdf/g/5/Bicester_Eco-Town_Concept_Study_-_Feb_2009_(_a3_low_res).pdf .
8. The Concept Study includes a package of proposed transport measures, as well as initial results from transport modelling of the potential transport impacts of the eco-development. It also provides information on those transport solutions which were considered but not included in the final report. Halcrow suggest a transport package which they think is appropriate in terms of sustainability, mode split achieved, cost and practicability, and which includes: high containment of trips within the eco-town; enhanced bus services from the eco-town into and around Bicester; shuttle bus service from the eco-development to Bicester North and Bicester Town railway stations; additional bus priority measures; increased frequency train services between Bicester and Oxford; street plans to discourage car movement; travel awareness plans; discounted bus services; real time information; and high quality walk and cycle links to town.
9. On the economy the preferred strategy seeks to capitalise on the sub-region's strengths as a science and technology destination and location for high-tech activity; but with 40% of jobs focussed on non high-tech businesses to support the creation of a balanced economic base. Halcrow propose also an energy demand and supply strategy to meet the challenging standards in the draft PPS on Eco-towns for ‘zero carbon’ emissions from all energy use within buildings. The strategy proposes an Energy Centre which includes Biomass (woodchip) boilers, linked to a district heating system and a Biogas combined heat and power (CHP) system providing heated water.
10. Halcrow’s overall conclusions are that because Bicester has been a key location for housing and employment growth and further growth is being considered as part of the Core Strategy, it would be logical and consistent with wider policy aims to consider Bicester as a location for an eco-town type development. They also conclude that the location is at least as good as many of the other proposed eco-town locations and better than many – e.g. Weston Otmoor. They also suggest that further growth at Bicester has the potential to build on and complement the growth already underway and to help provide a critical mass and wider range of activities so that Bicester becomes a more fully rounded and self contained community. Overall they think that a viable eco-development can be provided.
11. The Executive of Cherwell District Council considered their response on NW Bicester on 30 March. The Executive resolved to support the inclusion of NW Bicester location (as defined and presented through the Concept Study) in the Government’s Eco-Towns Programme and Planning Policy Statement, but subject to a number of caveats. These include that Weston Otmoor does not go forward as an identified location; development at NW Bicester is within a context set by Cherwell’s Local Development Framework (LDF); that Government provides a “new deal” for Bicester and undertakes to channel significant Growth Point Funding to the town as a precursor to housing expansion; and that Government also delivers a joined up approach to accelerate cross-Government investment in the Bicester area. The report to the Executive, (which includes at Appendix 1 an extract of the conclusions from the Halcrow Concept Study) and resolution, are attached at Annex 3 (download as .doc file).
Financial Viability Study of the Eco-Towns Programme
12. A key challenge for any eco-development is the need to ensure infrastructure
and affordable housing are delivered. Financial and viability work for the original short
listed eco-town proposals has been undertaken by Price Waterhouse Coopers (PWC)
and others for CLG. The CLG report on
financial viability is described as “an
independent high level review and evaluation of the financial material and
related underlying assumptions provided to the Department in order to test,
where possible, the reasonableness of key assumptions made by the promoter in
preparing their initial financial appraisal of the scheme.” (para 2.4.1, page
12). The review assesses the viability of each of the eco-town proposals
originally submitted (including Weston Otmoor). It concludes that two of the
eco-town proposals are not viable without some form of public subsidy. All other
schemes are considered viable to a greater or lesser extent. The report also
refers to the Halcrow assessment of North West Bicester, but the assessment is
not subject to review or verification by the CLG’s advisors. A summary of the
CLG report is appended at Annex 5 (download as .doc file). Next Steps
13. Following this consultation, which ends on 30 April 2009, the Government will consider the various assessments and the SA will be revised. A final PPS including a list of locations with the potential to be an eco-town is due to be published later this year.
Comments of Head of Sustainable Development
a) NW Bicester
i) Eco credentials
14. The report that was considered by Cherwell District Council raises two key issues: NW Bicester as an “eco-development” location and the relationship between the eco-development and the development plan. On the first issue the report suggests that it would appear, from the evidence in the Halcrow report, that North West Bicester has strong elements to recommend it, certainly when compared to the proposal at Weston Otmoor; that it could provide an opportunity to meet the Government objectives of building a highly sustainable community and could provide this in such a way as would also directly benefit Bicester. The report notes that these benefits should be set against the background that Bicester is certain to grow in any event as a result of the levels of new housing proposed in the South East Plan; and that the North West Bicester site, delivered through the “ecotown” programme, may be a way of delivering further growth in a manner which would bring benefits that would not otherwise come to Bicester. The report, however, sounds a note of caution in relation to how an eco–development might be implemented, funding from government and the public sector, and land values.
15. I acknowledge that NW Bicester has potential to provide for an exemplar eco-development in accordance with the government’s objectives (although not as a freestanding settlement as envisaged in the draft PPS) which could bring real benefits to Bicester as a whole. However, it should be stressed that there is a real risk that, without careful planning and investment in things such as economic development, transport and services, an additional 5,000 dwellings on the NW of Bicester could simply exacerbate the existing imbalance of jobs and housing at Bicester and high level of out commuting. A fundamental issue with any development would therefore be the need to develop and deliver an employment strategy which provides sufficient jobs to reduce this imbalance.
ii) The development plan
16. So far as the relationship between an eco-development and the development plan is concerned, the draft PPS says that eco-towns are one of a range of options regions should consider when determining the overall level and distribution of housing in future RSS reviews and which local planning authorities should consider when determining how to meet their current or emerging housing requirements set out in the RSS. There would appear to be scope for Cherwell to include NW Bicester as an option for consideration in the preparation of their core strategy; indeed the resolution of Cherwell’s Executive says that the development should be brought forward through the LDF.
17. The South East Plan already identifies Bicester as a location for significant housing growth and the Cherwell local development framework will have to identify new areas of land for development. It remains the case, however, that the eco-towns short listed in the draft PPS have been identified outside the development plan process, and although there appears to be broad recognition from Government that an eco-town would contribute towards meeting the housing targets in the South East Plan, it is not clear by how much. 5,000 dwellings at NW Bicester is more than is required to meet the housing requirements for Cherwell in the Secretary of State’s proposed changes to the draft South East Plan. The provision (4,900 dwellings between 2006 and 2026) equates to land for 2,340 dwellings, taking into account existing commitments. Halcrow, however, estimate that the first housing completions would not be until 2014 and then at a rate of 250 per year. At this rate, 3,000 dwellings would be built by 2026, only c. 660 dwellings more than required by the SE Plan. The Cherwell report notes that, whilst not wholly in accordance with the emerging South East Plan, North West Bicester eco-development could be considered to be within the spirit of the Plan.
iii) Transport implications
18. A detailed assessment of the transport proposals is provided in the form of a Transport Technical Annex, appended at Annex 4 (download as .doc file). It is clear that the NW Bicester proposals come from a very different stable to the proposals in relation to Weston Otmoor. The NW Bicester scheme, although still at a concept stage, appears to offer a pragmatic response to the opportunities and challenges of the location. The proposals are not reliant on high risk interventions such as tolling and sophisticated demand management techniques. Equally, the proposals seek, where possible, to knit the proposed eco-development into the existing settlement of Bicester.
19. The main conclusions of the Transport Technical Annex are summarised below:
· Transport policy: In terms of fit with wider transport policy, the elements referred to in the NW Bicester proposals seem to reflect the general thrust of policy and guidance in this area. However, given the high level nature of the Halcrow report and its consequent lack of detail in many areas, more work is needed to ensure the proposals remain in line with wider transport policy objectives.
· Cherwell LDF: It will be important to ensure that, if the decision is taken to proceed with NW Bicester, it is brought forward for implementation within a context set by the LDF, thus allowing for integrated and sustainable planning of Bicester as a whole. The work currently underway on the Bicester Integrated Transport and Land Use Strategy will be a key vehicle for ensuring potential conflicts between plans for NW Bicester and the wider Bicester area are resolved satisfactorily.
· Concept Plan and transport strategy: From the detailed analysis provided in Section 4, the preliminary proposals contained in the Concept Study appear to be moving in the right direction. However, significant additional work must be undertaken if there is any appetite to translate the ideas as they relate to roads, rail and public transport into practical, deliverable and enforceable reality. (Annex 6 - Concept Plan - download as .pdf file)
· Transport Modelling: A great deal more transport modelling is required to fully understand the impacts of NW Bicester on the rail and public transport network, as well as the impact of traffic on villages and ‘rat runs’ around Bicester, particularly to the north, east and west if the proposals for NW Bicester are to progress further.
20. The NW Bicester Eco Town Concept Study presents a set of ideas and proposals which bring a number of challenges to overcome. There are undoubtedly many areas that still require substantial work, but in principle the proposals are worthy of further investigation and analysis from a transport perspective.
iv) Financial viability
21. A key issue for the proposed NW Bicester eco-development is financial viability. In terms of viability, Halcrow advise that the scheme is “currently a marginal proposition which merits further investigation with a view to longer term delivery”. Halcrow estimate that the value of the land required for the development proposed is approximately £7,000 per hectare or around £2.5m for the scheme as a whole. If viability is marginal at these low levels, it would clearly be less so at higher levels – always assuming that landowners were prepared to sell. Halcrow note also that there are several other factors that could affect the economics of the scheme. Further work could reveal greater costs (which would make the scheme less viable) or alternatively it could demonstrate economies of scale and other savings which would make the scheme more viable.
v) Conclusions
22. So far as the Halcrow report is concerned, I agree with the views expressed in the report to Cherwell District Council Executive that the Halcrow report provides a useful basis for understanding the issues, challenges and opportunities for bringing forward an eco-development in this location and a helpful illustrative concept of how an eco-development could possibly be delivered.
23. In February I commented that the County Council has consistently expressed concern about the eco-towns programme potentially bypassing the development plan process and that whilst there may be merits in an eco-development as an urban extension to Bicester, it should be considered alongside other options for meeting housing requirements as part of the regional and local development plan process. I remain of this view.
24. Overall, I consider that NW Bicester has significantly more credibility than Weston Otmoor as a potential eco-development and one that could deliver some real benefits to Bicester and Central Oxfordshire. However, as is confirmed by Cherwell District Council, more work is needed on the concept, viability and deliverability, and any proposal should be taken forward through the development plan process. It should also be noted that whilst NW Bicester could help deliver real benefits to Bicester as a whole, in the short term the pressing need is to focus on improving the economy of the town so as not to increase out commuting.
25. If the concept is promoted by Government it is important that they endorse the caveats that accompany the District Council’s support for the location.
b) Financial Viability Study of the Eco-Towns Programme
26. The CLG report contains a large number of disclaimers and caveats and seems in places to rely relatively uncritically on material provided by the promoters. Insofar as Weston Otmoor is concerned, it does not appear to take into account the comments made on potential S106 requirements by the County Council (although they are listed in an annex to the CLG report). The following represent the main concerns, although there are a large number of other significant concerns:
· the report indicates that the build period has now increased to 30 years and assumes a start in 2011 which I think is unrealistic, particularly given the need to deliver key items of major transport infrastructure in advance of other development; · the proportion of affordable housing (30%) is in conflict with the Secretary of State’s proposed changes to the South East Plan (40%) which would make a mockery of the government’s claim that eco-towns will fit within a plan led system; · contrary to claims in the report, there has been relatively little local authority involvement in the assessment; · there appears to be no mention of legal issues that have been raised and are potential show stoppers; and · the assessment seems to be based on a lot of unsubstantiated assumptions e.g. that the draconian demand management system will have no impact on house sales and overall viability.
27. Detailed comments on the viability study will be included in the joint report with Cherwell District Council.
Financial and Staff Implications
28. Notwithstanding significant financial support from CLG amounting to £143,000, the Government’s eco-town programme is having a major impact on staff resources and time. It is affecting other work areas, for example input to the preparation of local development frameworks, which are a key aspect of the government’s housing delivery programme.
RECOMMENDATION
29. The Cabinet is RECOMMENDED:
(a) to endorse the comments in paragraphs 13 to 25 above and in Annex 4 and to inform the Department for Communities and Local Government (CLG) that the County Council emphasises that in relation to NW Bicester, if the Government includes the location in the Eco-towns programme and PPS, it should only do so subject to the caveats in the resolution of Cherwell District Council’s Executive report dated 30 March 2009; and
(b) delegate to the Head of Sustainable Development in consultation with the Leader of the Council and Cabinet member for Sustainable Development, any further detailed comments for submission to the Secretary of State as part of this Council’s response to the consultation on the eco-towns programme.
CHRIS COUSINS Head of Sustainable Development
Background papers: · Draft Planning Policy Statement: Eco-Towns Consultation. CLG November 2008 www.communities.gov.uk/housing/housingsupply/ecotowns/ · Eco-towns Sustainability Appraisal and Habitats Regulations Assessment CLG. November 2008 www.communities.gov.uk/housing/housingsupply/ecotowns/ · North West Bicester Eco-town Concept Study. Halcrow draft February 2009. www.cherwell.gov.uk/media/pdf/g/5/Bicester_Eco-Town_Concept_Study_-_Feb_2009_(_a3_low_res).pdf · Report to Cherwell District Council Executive – 30 March 2009. Response to DCLG Consultation on Eco-towns. Response to the proposal for an eco-development at North West Bicester · North West Bicester Development Sensitivity Test, 16 March 2009 Halcrow · Central Oxfordshire Transport Model, Technical Note 1C, November 2008. Halcrow · Central Oxfordshire Transport Model, Methodology Statement and Model Assumptions, November 2008; Halcrow · Central Oxfordshire Transport Model, Variable Demand Model, Technical Note 4, November 2008 · Central Oxfordshire Transport Model, Technical Note 6c, December 2008
Contact Officer: Ian Walker, Tel: 01865 815588
April 2009
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