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Why do we forecast? Why do we forecast?

Why do we forecast? - PowerPoint Presentation

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Why do we forecast? - PPT Presentation

Ludi Simpson University of Manchester 21112014 The survey reveals widespread and growing interest in demographic prospects particularly strong in the Health Service and Local Government Only a minority of users looked very far ahead ID: 429298

housing national projections local national housing local projections population planning control migration projection plan extra based plans planners uncertainty

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Slide1

Why do we forecast?

Ludi Simpson, University of Manchester, 21/11/2014

“The survey reveals widespread and growing interest in demographic prospects, particularly strong in the Health Service and Local Government. Only a minority of users looked very far ahead.

“While customers are on the whole satisfied with official projections, the need for better local projections was a recurrent theme. Information on internal migration, and variant assumptions about its course were in strong demand, as were better and more up-to-date baseline data on the present.

“Improved methodology for local projections and training in it is called for.”Slide2

Summary

3 case studies“Predict what you cannot control, plan what is under your control”

Which plans need forecasts?

What is it about population that is not under the planner’s control?

Planning scenarios – what is possible?

How to deal with intrinsic uncertainty in the prediction?Slide3

Case Study: National Parks in Britain

Zero total net migration, but young adults replaced by older families

Cairngorms National Park

Peak District National Park

(Source: Marshall and Simpson, 2009)Slide4

Peak District National Park

A reduced and elderly population, fewer of working age, requiring more housing, Slide5

Case Study: South East Wales

Welsh government 2011-based population projections

Greater growth

National centre Cardiff attracts from de-industrialised valleysSlide6

Case Study: South East Wales

OAN is based on satisfying the continuation of recent trendsAlternative scenarios envisage more balanced development

Welsh government 2011-based household projections with variant population assumptions - CardiffSlide7

Case study: Birmingham ethnic composition

Population change 2001-2026

Change can be decomposed into each

component

A young age structure has intrinsic momentum

for increase

Increasing ethnic diversity outside the control of planners

Source: BCC report 2006Slide8

“Predict what you cannot control, plan what is under your control” RJS Baker

Why do we forecast?Which plans need forecasts?What is it about population that is not under the planner’s control?

Planning scenarios – what is possible?

What if the prediction is uncertain? Slide9

Which plans need forecasts?

(source: Joshi and Diamond, 1990)

% of sector using forecasts for each reason (column=100%)

Central

govt

Local Govt

Health

Consult/ Market

Res

PrivateRecruitment/ personnel33223318

60Marketing

11

14

6

47

52

Investment

17

15

10

24

31

Location

11

19

27

41

38

Transport

28

63

2

53

6

Planning

56

97

59

65

2

Housing

28

78

4

41

10

Education

22

73

0

18

10

Welfare/Health

28

71

100

18

4

Elderly

39

75

41

6

4

Children

33

75

41

12

2

Research

39

54

51

53

21

Teaching

6

10

14

6

2

Other uses

44

31

20

29

8Slide10

What is it about population that is not under the (

local) planner’s control, and therefore should be predicted?

Fertility and mortality?

Almost always considered not locally plannable

Therefore a ‘trend’, or ‘business as usual’ projection is used as a prediction, informed by expected long-term national trend

Usually predicted locally by applying trends from national projection

The official projection is usually used

Occasionally local data establish the recent experience

International migration?

Debatable influence of planners at national scaleTaken as not under planners’ control at local scale (?)The official projection is usually used: ‘trend’, or ‘business as usual’Slide11

Can planners control internal migration (within UK)?

National town planning policy assumes that internal migration is affected by the local strategic plan

Extra (or restricted) housing brings extra (or fewer) residents

Extra (or restricted) jobs bring extra (or fewer) residents

For other planners (adult care, schools, youth service, store location, recruitment and personnel, ...), internal migration is not under their influence

Accept the ‘business as usual’ projection

Or the local plan once adopted

For the projectionist, a tale of many

guvnorsScenarios, projections, forecasts, predictionsSlide12

Planning scenarios – what is possible?

Extra (or restricted) housing brings extra (or fewer) residents

How many extra or fewer residents?

Answer not provided by the official projections (“business-as-usual”)

Software provides answers (POPGROUP,

Chelmer

, ...)

How do households translate into need for housing?

Vacant housing, second or holiday homesHow does the labour force translate into filling jobsCommuting, unemployment

Migration flows are adjusted to fill the extra housing or jobs

www.ccsr.ac.uk/popgroupSlide13
Slide14

Current National Planning Framework Policy (NPPF)

Objectively assessed housing needBased on the official projection of population and households (trend, business as usual)

updated with the most recent demographic information

Various possible upward adjustments (See PAS June 2014)

Suppressed housing supply in past; special circumstances; expected jobs development

Disputed at examinationsSlide15

Current National Planning Framework Policy (NPPF)... continued

Housing targetsPlanning adjustments to Objectively Assessed Housing Need

To achieve national policies such as Green Belt, environmental protection and local aspirational additional jobs growth

To achieve local policies that may increase housing provision

All downward adjustments must be compensated for in other (usually neighbouring) districts

Duty to co-operate

“At the heart of the National Planning Policy Framework is a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan-making and decision-taking” Slide16

What if the prediction is uncertain?

The prediction is intrinsically uncertainSNPP average error measured against 2006 MYE:

ONS 2008

Subnational population projections accuracy report

For LAs, average error about 0.5% per year of projection

But it does not show the error for different sizes and characteristics of LA

Years ahead projected: 2 2 3 6 8 10Slide17

Recommendation to local projectionists: sensitivity test for plausible uncertainty

Penultimate extreme values from past decadeFertility

Mortality

Migration within UK

Migration with overseas

Other plausible alternatives to the prediction

ONS high and low fertility and mortality variants

Migration from early 2000sSlide18

ONS 2010-based NPP, publication on variants (2012)Slide19

ONS 2012-based NPP: variantsSlide20

Dealing with uncertainty

Policy managers won’t like youCost analysis of errorsOver-projections and under-projections have different costs

Wasted idle resources

vs

poorer quality of provision

These costs may be assessed differently by different people

School staff

vs educational finance officer

Developer vs resident vs planner

Political assessment of costs is necessaryThe point of considering uncertainty is to affect a planWeigh costs of over- and under-projection: affect the planContingency plans for alternative plausible predictionsSlide21

Summary

Many different planners require demographic projectionsDissemination to suit many guvnors

Some things not under the planner’s control

Predict the firm trends that all plans need to cater to

Measure the prediction’s uncertainty and declare it

Planners have responsibility

To plan

To cope with uncertaintySlide22

So what?

What could help? (collaboration/ government statistics offices/ LGA etc / LARIA / University research)Databank of indicatorsProjection scenarios

Accuracy studies

Training in demographic modelling

Authoritative research on key debates

An end to ever-smaller households: a new long-term trend or a short pause?

OAN and housing plans: creating a common language

Unattributable Population Change: monitoring the 2010s