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Supporting the preparation of your Local Economic Assessment: Example Projects
Future Facing Assessment of the Devon Economy
Devon County Council
This project, led by SQW Consulting, provided support to Devon County Council in the development of its Local Economic Assessment (LEA) - 'Devonomics - the Devon Economy at your fingertips'. The work addressed a number of identified gaps within the draft LEA to improve interpretation of the county’s past economic performance, and provided a forward-looking analysis which developed alternative scenarios for future growth and identified the key sensitivities associated with these. CE's role was to develop the forward-looking scenarios, with a particular emphasis on the challenges faced by the county in raising the level of productivity to match the average for the South West as a whole. The work was implemented using a version of the Local Economy Forecasting Model (LEFM) tailored to the Devon Economy.
Integrated Spatial Model for South East England
South East of England Partnership Board
This project developed an economic model for the South East and its local authorities to be used to generate a common set of economic forecasts to inform the South East Plan, which is the key document for regional planning guidance in the region. The key outputs are gross value added and the number of jobs by sector, the space requirements for economic activity, the size of the population and the number of households. The model determines the location of population and employment simultaneously, with the results for one area (local authority district) determined by, and having an influence on, the results for neighbouring areas. This contrasts with the traditional modelling approach which examines population and employment independently and which is therefore less suitable to inform regional policy-makers in the production of integrated spatial and economic plans. The model was developed to include a particular focus on skill levels among the workforce and the implications of this for the level of productivity and the employment rate of workers. In its application, particular attention was paid to the impact of changes in land use.
Housing and Economy in the West Midlands
West Midlands Regional Assembly
This project, undertaken by SQW Consulting and Cambridge Econometrics, explored the interface between housing and the economy in the West Midlands. The objective of the study was to explore the scale of housing demand driven by likely economic growth and to compare this with the planned profile of housing supply provided for in regional plans. The work updated and expanded on a previous study undertaken by the consultants in 2007, in particular updating the economic and housing projections in the light of the economic downturn; disaggregating the results to local authority area, and providing further input to the ongoing debate on future housing in the region.
The model underpinning the analysis, developed by CE looks at the relationship between the economic and social drivers for net new housing allocations, taking account of the type and location of future jobs growth, the possible pattern of commuting, housing tenure choices and trends in average household size. In this study the model was developed to take account of the latest data from the Annual Population Survey and evidence of any changes in commuting patterns. The sensitivity of future demand for housing to alternative economic conditions was examined through three alternative economic scenarios developed by CE; CE's baseline forecast of July 2009, a 'convergence' scenario in which the West Midlands economy attains the same rate of growth as the UK as a whole; and a 'public sector austerity' scenario, which was an initial working of the possible impact of cuts in public spending that might be enacted in the medium term.
East Sussex Economic Model and Forecast
East Sussex County Council
East Sussex County Council (ESCC) commissioned CE to develop a model of the East Sussex Economy which could be used to develop scenarios and test the impact of various policy interventions on the county's economy. The model was based on CE's Local Economy Forecasting Model (LEFM), with additional modules developed to meet the specific user requirements of the client. The model was developed in consultation with the client, and the development process started with a workshop with ESCC and its partners to determine the drivers and outputs to be included in the model. The model was designed so that further scenarios and sensitivity analyses could be carried out in-house by ESCC in the future.
Assumptions that can be changed in the model include population growth, skill levels, activity rates, sectoral output growth, productivity and employment generated by development projects. A module was developed to allow the user to look at the impact on the economy of improving skill levels on the growth of productivity, output and employment. A module was also created to allow the user to analyse the impact of development projects in the county and incorporate them into a forecast.
A range of analyses was undertaken with model to assess the potential impact of policy interventions, such as achieving the Leitch Review targets for skill levels, or implementing specific development projects. As part of the project, a forecast was developed for East Sussex which incorporated best-estimate assumptions about the scale and success of particular policies.
The project included training for ESCC staff in the use of the model, and a workshop with ESCC and partners at which the model was launched. The workshop was used to explain to the partners the sort of analysis and results that the model could be used for, and to encourage them to make requests to ESCC for analysis and scenarios using the model.
Milton Keynes South Midlands Growth Study
SEEDA
SQW Consulting and Cambridge Econometrics (CE) were commissioned by SEEDA, on behalf of the MKSM Economic Development Group, to prepare an evidence base of the likely economic development trajectory of the Milton Keynes South Midlands (MKSM) sub-region. CE's role was to provide 'business-as-usual' projections of employment for MKSM, and then develop a 'growth' scenario that takes into account planned population growth in the sub-region. The baseline projections and scenario were developed using CE's Local Economy Forecasting Model (LEFM), tailored to the MKSM economy.
Strategic Northamptonshire Economic Action Plan
North Northants Development Company
Northamptonshire is part of the Milton Keynes and South Midlands growth area, promoted by the government under the Sustainable Communities Plan. This project, led by SQW Consulting, prepared the Strategic Northamptonshire Economic Action Plan and two integrated area-based delivery plans for North Northants and West Northants. CE's role was to develop a number of economic scenarios looking at the implications of rapid population growth in the county, including employment requirements and possible ways of achieving this. The scenarios were developed using a version of CE's Local Economy Forecasting Model (LEFM) tailored to the Northamptonshire economy.
Update to Shoreham Port Development Strategy
SEEDA
This project, led by BBP Regeneration, updated the earlier work carried out by the same project team to develop SEEDA's economic development strategy for Shoreham Port. CE's role in the project was to provide 'business-as-usual' projections of employment by sector, for Adur (the district in which Shoreham lies) and the neighbouring districts of Brighton & Hove and Worthing, and to develop several alternative scenarios to examine how development at Shoreham might impact on future employment growth. The scenarios took into account the potential increase in population from development of housing on the site, and the impact of various alternative development plans targeting particular employment sectors.
Cambridgeshire Development Study
Cambridgeshire County Council
This study, led by WSP and involving CE, SQW Consulting and Pegasus, was commissioned to provide key evidence for the response by the Cambridgeshire RSS Review Study Group to the consultation on the regional spatial planning options proposed in the review of the Regional Spatial Strategy. In particular the study: examined the prospects for housing and employment growth across Cambridgeshire in the period to 2031; considered – in the light of this growth – potential spatial options, focusing particularly on the period from 2021; and examined the sustainability of different spatial options, paying particular regard to their implications with regard to emissions of carbon dioxide and transport impacts.
CE's role in the study was to provide district-level employment projections that could be compared to the scenarios developed for the RSS and to model the potential CO2 emissions associated with the alternative spatial growth options that were developed.
Liverpool City Region Economic Assessment
The Mersey Partnership
This study considered the long-term potential for employment and GVA growth in the Liverpool City Region (LCR) and its constituent districts, updating similar analysis commissioned in 2007. It considered the effects of the economic downturn on the LCR economy to date, alternative paths of recovery in the short and medium term, and the future drivers of continued growth to 2030.
Pion Economics were commissioned to develop the alternative development scenarios, through consultation with local stakeholders and a review of key development projects. Cambridge Econometrics' role were commissioned by the client to implement the alternative scenarios within updated versions of its LEFM software to provide detailed projections of output and employment by sector and employment by occupations or the districts within the LCR, and employment projections for the smaller Strategic Investment Areas and Local Transport Planning Areas in Merseyside. The quantified results also formed key inputs to strategic transport modelling for the sub-region using the Liverpool City Regional Transport Model.
Thames Gateway Programme - Study on the Impact of the Recession
Department for Communities and Local Government
A consortium led by PA Consulting and also comprising SQW Consulting and Cambridge Econometrics (CE), undertook this important strategic study to establish the impact to date of the recession on the regeneration ambtions for the Thames Gateway programme; plausible scenarios for how the recession might impact on the area over the short and medium term, and options for responding to these impacts so that the area emerges from the downturn in as strong a position as it can.
CE's role in the study, which was completed to a tight timetable over the course of a month, was to provide the baseline economic projections for the districts comprising the Gateway given CE's current view of national and regional prospects, and then to develop two alternative views for how the UK economy may emerge from the recession and to trace this through to the implications for district-level employment.
Working Neighbourhoods Fund Scoping Study
Department for Communities and Local Government
This project, led by the Department of Land Economy of the University of Cambridge, provided an initial evaluation of the actions to reduce worklessness carried out by local authorities with the support of the Working Neighbourhoods Fund (WNF), specified how the full-scale evaluation should be carried out in due course, and gathered baseline data to support that evaluation when it occurs. The WNF is jointly funded by the Department for Communities and Local Government and the Department for Work and Pensions and targets a reduction in worklessness in 65 local authorities in England. Cambridge Econometrics defined and gathered from published sources a range of indicators to monitor the progress towards reduced worklessness in these authorities, and also contextual data to interpret and evaluate these outcomes. The project clustered the 65 areas into groups based on their similarity to each other on these indicators, and a selection of 20 authorities was identified for in-depth qualitative investigation of the policies so far followed to reduce worklessness with the support of the WNF. The project set out recommendations for how the full-scale evaluation of the WNF should be carried out, including the use of statistical methods, and specified the quantitative data to be gathered to support that evaluation.
Provision of demographic services for the Regional Spatial Strategy
South East England Partnership Board
Cambridge Econometrics (CE) were commissioned by South East England Partnership Board (SEEPB) to provide them with demographic services during the process of revising the Regional Spatial Strategy for the South East of England. Central to the support was the provision of a series of detailed demographic projections down to unitary authority level using the Chelmer population and housing model. CE took over the maintenance and application of the Chelmer model from the Housing Research
Group at Anglia Ruskin University towards the end of 2008. The Chelmer model was updated to incorporate the 2006-based household projections published by CLG in Spring 2009 and the following scenarios run: zero net migration; continuation of recent short-term migration trends; dwellings-led scenario on assumptions for housing building provided by SEEPB.
Impact of the economic downturn on housing and population growth in Thames Water Area
Thames Water
Thames Water commissioned Cambridge Econometrics to assess the impact of the economic downturn on projections of housing completions and population for its Business Plan submission to the industry regulator, Ofwat, for the 2009 price review. The original projections had been developed by another consultancy before the potential size of the downturn had become apparent. CE assessed the impact by comparing its own projections for population and housebuilding in the Thames Water area under a 'credit crunch' scenario with its projections produced at a similar time to the original TWUL ones. CE provided a spreadsheet with adjustments that could be applied to the original projections, together with a report explaining the assumptions underlying the credit crunch scenario, a description of the adjusted projections, and descriptions/sources of tracking indicators that could be used to infer changes in population and housebuilding.