To boost the high street, cities should invest in offices

Offices in Northampton. Image: Getty.

Access to cheap borrowing has encouraged local authorities to proactively invest in commercial property. These assets can be a valuable tool for cities looking to improve the built environment they offer businesses and residents.

Councils are estimated to have spent £3.8bn on property between 2013 and 2017, funded through the government’s Public Works Loan Board (PWLB) at very low interest rates. Offices accounted for half of this investment, and roughly a third (£1.2bn) has been spent on retail properties. And local authorities were the biggest investor group for UK shopping centres in the first quarter of 2018.

Why are cities investing? There are two major motivations.

First, at a time when cuts are squeezing council revenue budgets, property investments can provide a long-term revenue stream to keep quality public services up and running. Second, ownership of buildings in areas marked for redevelopment allows councils to assemble land more easily and gives them more influence over the changes taking place, allowing them to make sure the space evolves to meet their objectives.

But how exactly can cities turn property ownership into successful place-making? How should they adapt the buildings they invest in to improve the performance of the economies?

Cities need workers

When developing the city’s property offer, the aim should be to get jobs back into the city centre while reducing the dominance of retail space. For councils who have invested in existing retail space and shopping centres, in particular, the temptation may be to try and retain their existing use, with new retail strategies designed to reduce vacancies.

But as the Centre for Cities’ recent Building Blocks report illustrates, the evidence points to this being a dead-end. Instead, cities may need to convert the properties they own so they house a more diverse group of businesses.

Many city centres already have a lot of retail – and this has not offered significant economic benefit. Almost half (43 per cent) of city centre space in the weakest city economies is taken up by shops, while retail only accounts for 18 per cent of space in strong city centre economies. And many of these shops lie empty: in weaker city centres vacancy rates of high-street services (retail, food and leisure) are on average 16 per cent, compared with 9 per cent in stronger city economies. In Newport, nearly a quarter of these premises are empty, as the map below shows.

The big issue in these city centres is the lack of office jobs – which are an important contributor to footfall for retailers. This means that, in order to improve the fortunes of the high street, policy will need to tackle the barriers that deter those businesses from moving to their city centres.

One of these barriers is the quality of office space. In a number of struggling city centres, the quality of office space on offer is poor. But the low returns available for private investors mean that some form of public sector involvement will be required.


Ownership of buildings gives cities the opportunity to reshape the type of commercial space on offer. Some of this will involve improving the existing office stock available, some will involve converting retail to office, and some of will require demolishing part of the space without replacing it, in the short term at least. Without ownership of the land and buildings on it, this task becomes very difficult to do but will be a fundamental part of turning the fortunes of a city centre around.

Cheap borrowing has provided a way not only for local authorities to generate an income stream through property investment. but also opens up the opportunity to have greater control over the development of their city centres. For those choosing to invest, the focus must be on using ownership to make the city centre a more attractive place for all businesses to invest, rather than hoping to revive retail alone.

Rebecca McDonald is an analyst at the Centre for Cities, on whose blog this article first appeared.

 
 
 
 

The mountain in North Wales that tried to stop the UK’s blackout

Elidir Fawr, the mountain in question. Image: Jem Collins.

Last Friday, the UK’s National Grid turned to mush. Not the official term perhaps, but an accurate one after nearly one million people were left without power across the country, with hundreds more stranded at train stations – or even on trains (which isn’t nearly as fun as it might immediately sound). 

Traffic lights stopped working, back-up power failed in hospitals, and business secretary Andrea Leadsom launched an investigation into exactly what happened. So far though, the long and short of it is that a gas-fired power station in Bedfordshire failed just before 5 o’clock, followed just two minutes later by Hornsea offshore wind farm. 

However, amid the resulting chaos and inevitable search to find someone to blame for the outage, a set of mountains (yes, mountains) in North Wales were working extremely hard to keep the lights on.

From the outside, Elidir Fawr, doesn’t scream power generation. Sitting across from the slightly better known Mount Snowdon, it actually seems quite passive. After all, it is a mountain, and the last slate quarry in the area closed in 1969.

At a push, you’d probably guess the buildings at the base of the mountain were something to do with the area’s industrial past, mostly thanks to the blasting scars on its side, as I did when I first walked past last Saturday. 

But, buried deep into Elidir Fawr is the ability to generate an astounding 1,728 megawatts of electricity – enough to power 2.5 million homes, more than the entire population of the Liverpool region. And the plant is capable of running for five hours.

Dubbed by locals at the ‘Electric Mountain’, Dinorwig Power Station, is made up of 16km of underground tunnels (complete with their own traffic light system), in an excavation which could easily house St Paul’s Cathedral.

Instead, it’s home to six reversible pumps/turbines which are capable of reaching full capacity in just 16 seconds. Which is probably best, as Londoners would miss the view.

‘A Back-Up Facility for The National Grid’

And, just as it often is, the Electric Mountain was called into action on Friday. A spokesperson for First Hydro Company, which owns the generators at Dinorwig, and the slightly smaller Ffestiniog, both in Snowdonia, confirmed that last Friday they’d been asked to start generating by the National Grid.

But just how does a mountain help to ease the effects of a blackout? Or as it’s more regularly used, when there’s a surge in demand for electricity – most commonly when we all pop the kettle on at half-time during the World Cup, scientifically known as TV pick-up.

The answer lies in the lakes at both the top and bottom of Elidir Fawr. Marchlyn Mawr, at the top of the mountain, houses an incredible 7 million tonnes of water, which can be fed down through the mountain to the lake at the bottom, Llyn Peris, generating electricity as it goes.


“Pumped storage technology enables dynamic response electricity production – ofering a critical back-up facility during periods of mismatched supply and demand on the national grid system,” First Hydro Company explains.

The tech works essentially the same way as conventional hydro power – or if you want to be retro, a spruced up waterwheel. When the plant releases water from the upper reservoir, as well as having gravity on their side (the lakes are half a kilometre apart vertically) the water shafts become smaller and smaller, further ramping up the pressure. 

This, in turn, spins the turbines which are linked to the generators, with valves regulating the water flow. Unlike traditional UK power stations, which can take hours to get to full capacity, at Dinorwig it’s a matter of 16 seconds from a cold start, or as little as five if the plant is on standby.

And, designed with the UK’s 50hz frequency in mind, the generator is also built to shut off quickly and avoid overloading the network. Despite the immense water pressure, the valves are able to close off the supply within just 20 seconds. 

At night, the same thing simply happens in reverse, as low-cost, surplus energy from the grid is used to pump the water back up to where it came from, ready for another day of hectic TV scheduling. Or blackouts, take your pick.

Completed in 1984, the power station was the product of a decade of work, and the largest civil engineering project commissioned at the time – and it remains one of Europe’s largest manmade caverns. Not that you’d know it from the outside. And really, if we’ve learned anything from this, it’s that looks can be deceiving, and that mountains can actually be really damn good at making electricity. 

Jem Collins is a digital journalist and editor whose work focuses on human rights, rural stories and careers. She’s the founder and editor of Journo Resources, and you can also find her tweeting @Jem_Collins.