Declining birth rates

Since the early 2010s, birth rates have steadily declined across most parts of the UK. Latest information is shown in recently released ONS data. The UK’s birth rate has fallen to its lowest level in nearly a century. The fertility rate, i.e. the average number of children a woman is expected to have in her lifetime, now stands at just 1.44 in both England alone and in England and Wales combined. That’s down from 1.94 in 2010 and well below the replacement level of 2.1 required to sustain population levels without migration. This means that on average, women are having fewer than two children. The implications for long-term education demand are significant.

The drop in the number of live births in England over the past decade is shown in the figure below.

The impact on school places and new residential development

The demographic shift means that in many areas there will be fewer school-age children in the future. Yet some local authorities’ education needs assessments are still benchmarked against past peak demand, inflating estimates of the number of school places that will be required by the occupants of new housing developments, and understating potential future spare capacity in existing schools.

As a result, these assessments are often baked in to be inaccurate as we already know, for example, that there will be fewer 11-year-olds in ten years' time because there are currently fewer 1-year-olds than 10-year-olds.

Consequently, developers can be expected to fund or safeguard land for education infrastructure that may not be needed. For example, as reported in the media, a new primary school was built in Nottinghamshire to accommodate 350 homes constructed as part of the nearby Trent Basin development, only for it to be confirmed later that the school would not open due to low pupil demand.

This has tangible implications:

• Costly Section 106 contributions – developers are being asked to contribute to the costs of education infrastructure based on overestimated need
• Land use opportunity cost – land reserved for schools that are no longer needed could instead be used more productively, e.g. delivering more homes or employment uses
• Impact on scheme viability – particularly in complex sites, unnecessary education infrastructure requests can tip the balance

Another implication of these demographic changes is that schemes with a high proportion of family housing can help keep local schools open. In areas where schools are at risk due to falling pupil numbers, new development can help boost demand and ensure services are sustained.

It is therefore important to rethink how we assess and negotiate education contributions. We recommend:

• Factoring long-term demographic trends, including localised birth rate projections, into need assessments
• Assessing existing school capacity more rigorously, rather than assuming it is already or will be filled
• Establishing flexible planning agreements with review mechanisms that allow for the release or reallocation of safeguarded school land if demand doesn’t materialise

By doing so, we can ensure planning obligations are proportionate, evidence-led and responsive to change.

The Savills Economics team is currently carrying out a range of analysis and helping assess appropriate strategies and contributions. This work covers pre-school, primary, secondary, post-16 and Special Educational Needs and Disabilities (SEND).

Further information

Contact Jake Ash or Rory Brooke