Bill Grimsey doesn’t mince his words. We must accept that “there is already too much retail space in the UK and that bricks and mortar retailing can no longer be the anchor to create thriving high streets and town centres.”
And we should “repopulate high streets and town centres as community hubs encompassing: more housing, education, arts, entertainment, business / office space, health and leisure – and some shops.”
But his new, independent and “alternative” review of the future of the high street, launched this week (see my summary of its recommendations and a link to the full Review here) aspires to “put the UK back on top by revitalising and re-structuring the micro economies that are our towns and high streets.”
There are many ideas to be welcomed here which resonate with work that my client Towns Alive are already doing in towns, towns’ own experiences, and suggestions we have made. I wrote the following reaction on behalf of Towns Alive – and am reproducing it here.
First though, let’s put the squabbling aside
This week MPs grilled Mary Portas, author of the Government-commissioned Portas Review of the future of the high street published nearly two years ago; Portas has also been heavily criticised by Grimsey.
It’s justifiable to critique the “game-show-isation” (I made that word up) and celebrat-isation of high street regeneration, and a lack of depth to the television treatment of the attempts to get town teams going in Portas Pilot towns. However, it may be easy and convenient for many to make Portas a scapegoat.
Towns Alive reported in April 2012 that the Government only appeared willing or able to deliver 7 out of Portas’ recommendations in the short term (since then, other action did take place; but Portas herself has appeared frustrated that many of her ideas were not being implemented, and this week when giving evidence to MPs at a Communities and Local Government Select committee she criticised the Government for failing to provide enough support to her work).
The Times’ columnist Alice Thomson this week suggested that grandstanding MPs should stop criticising Portas and start questioning government policy and inaction. And Warwick’s Todd has written a passionate ‘open letter’ describing how, despite not becoming a Pilot, the process has been beneficial for the town.
That said, Portas’ review had little to say about the integration of the ‘virtual’ online world with the physical. This is one area in which the Grimsey review provides new ideas and more depth.
The Grimsey Review
Multifunctional
Grimsey’s review reflects the size and importance of the retail sector, but offers a “realistic” call for town centres and high streets to aspire to become multifunctional town centres “where the shops are just part of the plan”. Other organisations including Towns Alive have long supported this. The aspiration that “complete solutions encompassing housing, health, education, entertainment and culture, as well as some shopping, are needed to future proof our town centres” is welcomed.
Public realm
Whilst the review is clear about the importance of public realm and wellbeing to thriving towns, there are more real examples of reanimating public space than the review gives credit for when it “found little evidence of an urban design strategy or plan for the future wellbeing of the town centre.”
Technology and hubs
The review has much to say about what it calls the Networked High Street: using technology to integrate the online and physical worlds, and giving a new role to libraries as community hubs. I’ve seen and praised the success of the Wooler Hub; the review is sensible in its considerations about harnessing emergent technology for the benefit of the high street.
Parking
Parking is of course a critical issue for many towns and high streets; retailers feel they can’t compete with out-of-town shopping centres offering free parking. Grimsey’s review comments “it is not surprising that our towns are suffering when parking is viewed as an income generator and not part of an overall economic plan from a welcoming brand known as a town.”
But it adds realism too: “it is important to recognise that local authority funding has been cut by 33 per cent in recent years and the June 2013 Spending Round sets out a further 10% cut to local government in 2015-16. This means the only part of the public sector that has a responsibility to promote growth in every single local economy in the country will once again absorb the biggest funding cuts. It is not surprising, therefore, that local councils see parking as an income stream rather than an asset to be used to stimulate economic growth.”
So the recommendation of freezing parking charges and of “building in a two hour free high street and town centre car-parking system to the overall business plan for the location,” may be a difficult pill for local authorities to swallow. But with parking mentioned by every single town that we work with, experimentation in temporary free parking is needed (alongside better public transport and incentives and discounts for pedestrian and cycle users, which I was pleased to see). Towns Alive’s Mike King has also found that ‘pay on exit’ car parking can be of benefit to towns, meaning people often stay for longer.
Business rates
Business rates are, unsurprisingly, covered in depth. Business rate receipts will overtake council tax receipts by 2015/16, and increase to £31.2bn by 2017/18. The Review projects that bricks and mortar retailers will pay around £6.005bn in business rates this year, and that bricks and mortar retailers account for approximately 23.34% of the total business rate yield.
It’s scathing about the “epidemic abuse of Empty Property Relief” and doesn’t believe that discretionary relief has had a great effect: “the total discretionary relief available to businesses across England has reached just £2.5m,” and is concerned that mandatory relief for charities, and a 30% increase in charity shops since 2008, means that small independent businesses are “increasingly sharing a bigger proportion of the business rates burden.” It therefore calls for a cap on mandatory rate relief.
Data in the report suggests that changing the basis for business rates inflation from RPI to CPI (one of Portas’ recommendations) would make little difference to have any meaningful effect at all. “The switch to CPI from RPI is essentially a smokescreen.”
But what the report authors believe will have an effect is
- a reintroduction of the 2015 rates revaluation – they show how the delay in the revaluation creates unfairness by requiring struggling businesses to subsidise those that have fared relatively better.
- a fundamental change in thinking, for business rates to become a variable form of taxation. “Can business rates be used to stimulate economic prosperity and, therefore, generate more income from other taxes for the Treasury?”
Evidence in the report commends one local authority, Wyre DC, for bringing 10 shops back into use by using £12,000 of its High Street Innovation Grant to discount business rates. Discounted rent schemes have been highly effective in bringing empty property back into use, but business rates are in many cases as big a burden as rates – so this idea of flexibility – and root and branch reform, can be welcomed.
Effective partnerships; effective accountable plans; local multiplier
Business Improvement Districts, regeneration and public / private partnerships, and neighbourhood and town planning issues are covered too.
“There are many examples of the benefits that a clear strategy and positive plan have delivered in establishing and retaining a vibrant town centre.”
I was also pleased to find reflections on Transition Towns and the ‘Local Multiplier Effect’:
“On average local shops support more than three times the number of jobs as supermarkets for the same level of retail spend, the ‘local multiplier’ effect is greater (money spent in local shops spent locally again by shop-keepers and their staff ): a study by the New Economics Foundation calculated that £1 spent with a local independent supplier is worth £1.76 to the local economy, and only 36 pence if it is spent with non-local suppliers.”
But the report found that “over 50% of local authorities that responded to FOI requests have no town centre plan of any description…this is a recipe for disaster.”
I agree. How can town centres and high streets plan for success without, er, a plan?! Effective local and town plans are vital. And so are effective partnerships: Towns Alive has long found that strong local partnerships have hugely positive effects.
The report calls for transparency and accountability: local authorities producing 20-year visions and 5 year business plans; and reporting against key performance indicators and demonstrating progress annually. Great idea – which, of course, those hundred or so towns which use Towns Alive’s Town Benchmarking system do already have in place – and research has shown that ‘benchmarked towns do better.’
Town Teams with Teeth
I don’t view the Town Centre Commissions that the report recommends as a critical replacement of town teams, but as “town teams with teeth” – the suggestion would give town teams more power, responsibility and cash.
Joined-up thinking
The suggested Government High Street Unit, Minister for the High Street, and “designated High Street Task Force” make sense: I would expect the Government to say that the Future High Streets Forum is doing what the proposed “High Street Task Force” would do. It would be great though to see more cross-departmental thinking about town centres.
Living in towns
Towns Alive is very positive about ideas to get more people living in town centres (and routes to create affordable housing) but has previously expressed concern about the suggestion that retail property could be converted to residential use without planning permission. The Review, though, “wholly welcomes” this idea, but does urge that any conversion programme must be carried out carefully within the context of a strategic Town Centre Plan. This really does reinforce how critical a Town Centre Plan is. It’s worth looking at the report’s suggestions on flats over shops though.
Flow of credit
Some good content about how initiatives like the “Bank of Dave” get credit flowing to small businesses and recognition that “there is clearly a huge gap in the market for alternative sources of finance for small businesses.”
The Review suggests that local authorities start to “take a lead on getting credit flowing to boost local economic activity” and even use some of their reserves / pension funds to “provide a much more substantial alternative funding solution for established business within their catchment area.”
This may seem a radical idea but the review flags up that some local authorities do already provide mortgages (and could have mentioned the recent partnership between Lancashire County Council and Funding Circle).
The suggestion that new funds “should be administered by local banks in conjunction with a local business community investment committee” will resonate with the Community Development Finance Association (CDFA) – their members, often described as the “unsung heroes” of the banking sector, are already providing (responsible) credit to businesses and social enterprises that can’t secure funding from traditional sources. It would be good if the report had more explicitly recognised the Community Development Finance sector, whose umbrella organisation CDFA has been calling for more action to enable its members to support more businesses.
When the Levy breaks (get it?!)
So how should the government finance the change that the Review calls for? Headlines this week trailing the Review have focused on the recommendation that national retail and leisure chains should compulsorily invest 0.25% of one year’s sales (2014) into a local economic development fund. And the report is gung-ho here:
“to deliver the kind of change needed will require a major commitment from all sides. That means the big high street chains that have enjoyed years of plenty putting something back into their high street through a one-off levy. Together, with tax changes to mandatory business rate relief we estimate a fighting fund of over £800 million could be raised to support a wave of new start-ups and community enterprises.”
A bold plan indeed; is it feasible? I’ve left this point to the end because otherwise the idea of a levy becomes a distraction. The review is crammed with ideas; many will welcome them; many will not. And the review has to, of course, suggest how to finance these ideas.
The levy has already been (predictably) slammed by large retailers. Senior figures from John Lewis, Waterstones, Carphone Warehouse and other chains, as well as The British Retail Consortium are critical; and a Department of Communities and Local Government spokesperson told Retail Week magazine that Government would not implement the idea.
It would be a great shame if arguments about the proposed levy sideline the rest of the Grimsey Review’s ideas. Some of the suggestions are bold, some controversial, some may be dismissed. But many resonate with Towns Alive’s own experience on the ground of what really does work to revitalise towns.
I asked Towns Alive’s chief executive Chris Wade, who attended the launch of the review, for his comments,
“We welcome this review for the way it looks at big issues with a fresh perspective and resonates with the need for our towns to plan ahead and think about a future based on much more than retail.”
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