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.

 
 
 
 

Community-powered policies should be at the top of Westminster’s to do list

A generic election picture. Image: Getty.

Over the past five decades, political and economic power has become increasingly concentrated in the UK’s capital. Communities feel ignored or alienated by a politics that feels distant and unrepresentative of their daily experiences.

Since the EU referendum result it has become something of a cliché to talk about how to respond to the sense of powerlessness felt by too many people. The foundations of our economy have been shifted by Brexit, technology and deindustrialisation – and these have shone a light on a growing divergence in views and values across geographies and generations. They are both a symptom and cause of the breakdown of the ties that traditionally brought people together.

As the country goes through seismic changes in its outlook, politics and economy, it is clear that a new way of doing politics is needed. Empowering people to take control over the things that affect their daily lives cannot be done from the top down.

Last week, the Co-operative Party launched our policy platform for the General Election – the ideas and priorities we hope to see at the top of the next Parliament’s to do list. We have been the voice for co-operative values and principles in the places where decisions are made and laws are made. As co-operators, we believe that the principles that lie behind successful co‑operatives – democratic control by customers and workers, and a fair share of the wealth we create together – ought to extend to the wider economy and our society. As Labour’s sister party, we campaign for a government that puts these shared values into practice.

Our policy platform has community power at its heart, because the co-operative movement, founded on shop floors and factory production lines, knows that power should flow from the bottom up. Today, this principle holds strong – decisions are best made by the people impacted the most by them, and services work best when the service users have a voice. Our policy platform is clear: this means shifting power from Whitehall to local government, but it also means looking beyond the town hall. Co-operative approaches are about placing power directly in the hands of people and communities.


There are many great examples of Co-operative councillors and local communities taking the lead on this. Co-operative councils like Oldham and Plymouth have pioneered new working relationships with residents, underpinned by a genuine commitment to working with communities rather than merely doing things to them.

Building a fairer future is, by definition, a bottom-up endeavour. Oldham, Plymouth and examples like the Elephant Project in Greater Manchester, where people with experience of disadvantage are involved in decision-making, or buses in Witney run by Co-operative councillors and the local community – are the building blocks of creating a better politics and a fairer economy.

This thread runs through our work over the last few years on community wealth building too – keeping wealth circulating in local economies through growing the local co-operative sector. Worker-owned businesses thriving at the expense of global corporate giants and private outsourcers. Assets owned by communities – from pubs to post offices to rooftop solar panels.

And it runs through our work in Westminster too – with Co-operative MPs and peers calling for parents, not private business, to own and run nurseries; for the stewards of our countryside to be farmers rather than big landowners; and for workers to have a stake in their workplaces and a share of the profit.

Far from being ignored, as suggested in last week’s article on community power, our work has never been more relevant and our co-operative voice is louder than ever.

Anna Birley is policy offer at the Co-operative party.