Can Phillip Hammond’s Treasury really revive Britain’s high streets?

Dartford. Image: Getty.

The Chancellor spotted a great deal for Britain’s economy by making city centres a key focus of his recent budget. In among the tax and spending tweaks was the launch of a plan to save the high street. Philip Hammond offered high streets a 3-for-1 deal, announcing a trio of policies to help city and town centres adapt to changing consumer preferences, including a business rates holiday, a new Future High Streets Fund, and consultation on an extension to Permitted Development Rights (PDR).

The government’s acknowledgement that high streets must “adapt and diversify” is welcome. Past policy has focused too much on retail-led solutions which do not address wider economic issues – but as our recent research has shown, many city centres have far too many shops and need to remodel away from this dependence on retail. The government also recognises this, shown for instance in the announcement of a new pilot to facilitate meanwhile use for empty high street properties. In particular, having more office-based businesses in city centres will bring both more footfall into shops and boost customers’ spending power by providing them with better wages.

Here are three thoughts on the government’s high street policies.

1) The Future High Street Fund should focus on remodelling struggling city centres

The city centres most in need of reshaping will find it hard to attract private sector investors and developers given their low property prices and unproven markets, so remodelling may not happen without public sector involvement (and funds). In recent years the European Regional Development Funds (ERDF) have been a vital source of funds, allowing cities like Bradford and Huddersfield to develop new quality workspace in their city centres.

As ERDF support ends with Brexit, the announcement of a £650m Future High Streets Fund is a helpful first step toward its replacement. The new Fund should be directed at the city centres with the highest vacancy rates and aim to support them to diversify. This means repurposing empty retail stock to other commercial uses and housing and developing additional high-quality office space too.

The Chancellor should go further than this, though, by making the £38bn National Productivity Infrastructure Fund available to make struggling city centres more attractive to investment from high-productivity businesses.


2) A more flexible planning system could help high streets adapt, but PDR may not always be the right tool

In some cities, greater flexibility over a property’s use could encourage both a reduction in excess retail and address housing shortages. In Basildon, for example, average house prices are 10 times average household income, signalling an urgent need for more homes. And the city centre has far too many shops (62 per cent of commercial floor space is retail and 20 per cent lies empty). So it makes sense to convert some of these empty shops into homes, which also benefit from being within walking or cycling distance of workspaces, amenities and transport hubs.

But most cities are not like Basildon, and a combination of high housing demand and high vacancy rates is unusual. Introducing the proposed extension of PDR to retail – allowing change of use to office or residential without planning permission  – risks losing quality commercial space in city centres with healthy high streets, and is likely to be ineffective in city centres most in need of help. (We explored these issues ahead of the Budget, in an earlier blog.)

Take Brighton, for instance. The city also has high housing demand but a low high street vacancy rate of 8 per cent. If PDR made conversions easy in the city centre, successful shops which residents rely on could be discarded for new housing.

At the other end of the scale, weak city centres with struggling high streets have low demand for both housing and retail, so take-up of PDR would be rare even though repurposing the buildings would help the high street.

So while the policy could benefit a select few cities, for the majority it would need to be handled cautiously to make sure it works with, not against, the city centre’s economy. Given the lack of control, local authorities have over PDR conversions, this could be very difficult.

3) Business rates are a red herring – other factors are causing the high street’s struggles

The Chancellor yielded to pressure from retailers and offered smaller shops business rates relief. But placing the blame for the struggles of retail on a property tax (despite its flaws) is misleading and distracts from the underlying factors leading to the decline of high-street retailers. While the discounts provide some welcome short-term help, it is not an effective long-term fix.

Business rates are higher in city centres because they are attractive commercial locations, offering firms the benefits of density and access to many customers and workers. Rather than indicating that the tax burden is too high, the difficulties shops are having in paying the rates instead highlight the lack of footfall past their doors.

The most effective way for the government to support high streets is to help cities overcome their weak economic performance. An empty high street is a sign of a lack of economic activity, without the spending power and footfall to keep amenities open. So to help the high street, policy must focus on improving the performance of the broader city centre economy both directly through improving commercial space and public realm; and indirectly, by raising the skills of the cities’ workforces.

The authors are analysts 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.