Market Failure?: Can the traditional market survive? - Communities and Local Government Committee Contents

Memorandum by the National Association of British Market Authorities (NABMA) (MARKETS 15)


    — The National Association of British Market Authorities (NABMA) represents local authority market operators and also a number of private market operators.

    — NABMA has also contributed to the response from the Retail Markets Association and would want to endorse the content of that submission.

    — NABMA welcomes the opportunity to respond to the Select Committee and ask that the Select Committee considers the following recommendations:

    — NABMA will be pleased to provide further support on any of the issues referred to in this submission.


  1.  To encourage local authorities to recognise the importance of markets in delivering the wider policy agenda, particularly in terms of social and economic benefits.

  2.  To encourage business start up opportunities on markets as part of a national scheme in partnership with local authorities.

  3.  To encourage the appointment of a Minister with responsibility for markets to help in the provision of a co-ordinated approach.

  4.  To encourage local authorities to appoint a "Champion" for markets to ensure they receive appropriate recognition.

  5.  To encourage local authorities to invest in their markets, particularly where markets currently produce a surplus.

  6.  To encourage local authorities to consider the most effective way of providing a markets service, particularly through some of the innovative schemes already in existence.

  7.  To encourage partnership working to ensure that markets are not seen as a "stand alone" service but as part of an integrated service to the local and business communities.

  8.  To encourage a co-ordinated approach to retail and wholesale issues so that both sectors of the markets industry can play effective roles.

  9.  To promote effective use of the current licensing arrangements in partnership with local planning guidance.


    "Markets represent our oldest and most successful form of exchange. They are the reason why many towns exist ………. nothing can beat the bustle of a market to get you into a place."

    Producing The Goods—Markets and Market Places (Common Ground)

  Markets offer a host of benefits to a local community including:

    (a) Access to affordable local and fresh produce.

    (b) Support for health agendas.

    (c) Support for the local economy as most traders live within a short distance of the market.

    (d) Money collected and retained within the local economy.

    (e) Local employment.

    (f) Opportunities for new business start ups.

    (g) Unique retail offer.

  1.  Markets have been an important local authority service for many years. Almost local authorities have the powers to operate markets. While some local authorities use powers they have derived from Charters many rely on provisions which are currently found in Part III of the Food Act 1984 which provide for the establishment and operation of markets. Reference is made in the submission of the Retail Markets Alliance to the recent history and current position of retail markets. While it is right to acknowledge that there has been an overall decline in the number of stalls occupied on traditional retail markets there has been a significant growth in farmers and other specialist markets. However, it is also right to acknowledge that the decline evidenced by the "Rhodes Study" is not widespread throughout the country. There are examples of markets continuing to be successful and are full on market days. Bury Market is an excellent example of a successful market which regularly operates at full capacity. It has won a host of national awards and during 2008 it attracted nearly 1,200 coaches and twelve million visitors. On a smaller scale Hinckley in the Midlands has seen growth in the operation of its markets. Over the last year the number of stalls occupied at Hinckley Market has grown by an average of 8.2% and the market has grown from an average of 40 stalls to over 50 stalls.

  2.  Many markets still operate with a profit margin. In Bury's case the net profit over the last two years has been £872,000 and £901,000 respectively. In Leicester there was a profit of £585,000 in the last financial year and while the profit shown in Nuneaton and Bedworth was significantly reduced, largely because of change in accounting procedures, a profit of £41,500 was still produced last year.

  3.  However it is important to look at this issue in the context of where the profit is actually spent. Many local authorities have chosen to divert the profits from their markets to other local authority services and this has produced a significant problem of under investment in many markets. Bradford has adopted a "ring fenced" approach to profits generated through its markets allowing reinvestment of the profits back into the markets. This has been responsible for Bradford having a number of innovative and large scale market projects.

  4.  While the examples given above indicate that substantial profits are still being earned by some local authorities it is also the case that other local authorities are currently running markets on a break even and also subsidy basis. This is particularly the case in relation to a number of small markets which probably cannot be justified on a purely economic basis.

  5.  However the issue of lack of investment in markets is merely symptomatic of a much wider problem of the way in which many local authorities treat their markets. While it is acknowledged that in a current local authority structure of a small number of mixed portfolios there will be management responsibility of a number of different areas it is sad to note that in many instances the calibre of the markets management can vary considerably. Many local authorities treat markets in a purely regulatory role and do not embrace the wider benefit that markets can bring. This is responsible for markets management often being reactive rather than proactive. There is also a general lack of effective marketing and promotion of markets which prevents markets having the profile they deserve.

  6.  While it is important that markets operate on a sound economic basis it is vitally important that markets are seen in a wider context because seen in this way markets assume a much more significant role within the local authority structure.

  7.  In 2007 the All Party Parliamentary Markets Group endorsed a Markets Policy Framework which highlighted a number of key areas to which markets contribute significantly. Among these areas are:

    (i) Regeneration/economy.

    (ii) Food and health.

    (iii) Culture and tourism.

    (iv) Community cohesion.

    (v) Environment.

  8.  It is therefore important that local authorities support markets in the context of this wider agenda. Some markets will continue to make a profit but many others will struggle in the years to come if the only basis for their continuance is a financial return. While it is accepted that there will be need for some rationalisation there is a fundamental need for local authorities generally to move away from the regulatory approach which sees markets simply as an economic enterprise to a situation where markets have a role to play in the delivery of a number of important local and national policies.

  9.  The Government's Planning Policy Statement (PPS6) states, at Section 2.27: "Streets and Covered Markets ( including Farmers' Markets) can make a valuable contribution to local choice and diversity in shopping as well as the vitality of town centres and to the rural economy. As an integral part of the vision for their town centres, local authorities should seek to retain and enhance existing markets and, where appropriate, reintroduce or create new ones. Local authorities should ensure that their markets remain attractive and competitive by investing in their improvement."

  10.  NABMA would urge the Select Committee to re-emphasise the importance of this encouragement to local authorities and particularly to view markets within the wider policy framework.

  11.  There is an important job to do in changing the attitude within many local authorities towards markets. Where this is already happening there are visible signs of the benefits that markets bring to the wider community.

  12.  Darlington is an excellent example of how markets are a vital part of the local community. Darlington has a wide range of markets including general markets, farmers' markets, craft markets and special event markets. Darlington's markets aim to provide something for everyone and with an increase in Eastern European residents in the Borough the markets now attract a different ethnic mix of customers. As a result new ranges of foodstuffs are available at the markets. The markets in Darlington have made a conscious effort to embrace the green agenda and recently Darlington Markets won the NMTF Regional Trophy in the UK's Greenest Markets Awards 2008. The market is a perfect fit within Darlington's town centre and adds to the general vibrancy of the activities of the town centre.

  13.  Bristol is another example of a local authority that takes its markets seriously. In addition to the St. Nicholas Market, located in the historic medieval centre of Bristol there are also a range of other markets which include the Bristol Farmers' Market and the Bristol Slow Food Market. Bristol City Council has spent considerable resources in the development of a "markets quarter" within the City and this has become a prominent landmark.

  There is an emphasis on food sales within the markets and the standards that are observed promote high quality in the different product ranges. There are also high standards of environmental care in respect of the operation and welfare of the markets.

  14.  Bradford City Council decided to undertake a substantial investment in the development of Bingley town centre which resulted in the creation of a new market square at the heart of the town centre. The creation of the new market square enabled the weekly market to relocate from its current position and also provided an impetus with the introduction of a Food Festival over the Easter weekend 2008. This event was extremely successful and attracted over 30,000 people. All other retailers in Bingley reported increased sales over the two days of the Food Festival. The revamped market is now at the heart of Bingley town centre and has the support of all sections of the community. Bingley Chamber of Trade have reported increased footfall in the town as a result of the local community returning to make regular purchases on the market.

  15.  Many local authorities promote special events as part of their markets offer and also combine market activities with theatre, cultural festivals and other events. The added importance of such events to the markets scene was highlighted in 2006 by the Joseph Rowntree Foundation and the publication of research on Markets as Social Spaces. This report concluded that markets were important sites of social interaction for all groups in the community but most significantly for older people, especially women. Markets already represent important social spaces for mothers with young children, young people and families with children, particularly at weekends. The report also went on to acknowledge that markets had an important social inclusion role.

Realising the potential of traditional retail markets

  16.  Against the background that has already been provided it is clear that there is a mixed picture. Where local authorities support markets in an effective way there is evidence of success but there are also many examples of markets that are the subject of neglect and under investment. In 2005 NABMA commissioned a research paper from the Retail Enterprise Network on the present status and future prospects for Retail Markets. This work was undertaken by Dr Alan Hallsworth, University of Surrey and Kathy Parker, Director of the Retail Enterprise Network, Manchester Metropolitan University.

  17.  In determining the support for markets in the future the report highlighted a number of key factors:

    — The need for Champions.

    — The need for pro-active management.

    — A recognition that one size does not fit all.

    — The need to be able to reinvest profit and benefit from the regeneration that good markets can spur.

    — The recognition that to do nothing is not an option.

    — The need for a source of financial investment that is hypothecated by local authorities in order to action the good intentions of PPS6.

  18.  The submission by the Retail Markets Alliance raises the issue of where markets fit within the Government structure. There are a number of Government Departments who have responsibilities for different aspects of markets. While it is accepted that there will always be some overlap between different Government Departments it is important that there is a Markets Champion. In the context of the value of markets to the national economy and also the policy value that markets generate the Select Committee is invited to recommend that a Government Minister should be appointed with responsibility for markets to ensure that markets have an effective voice within Government. The same situation should be mirrored within local authorities where an appropriate Portfolio Holder should have specific responsibility for the operation of the market service within a wider policy framework.

  19.  Effective management is vital to the success of any operation. It is clear that markets have suffered in recent years from a failure in many local authorities to invest in adequate management systems. Given that markets fulfil the wider policy agenda staff should be expected to widen their horizons from simply viewing markets as an economic entity to an operation that embraces all the issues that have been identified in the Policy Framework. Proactive management will mean that the market service will have to link effectively with other town centre organisations and community groups. Markets must not be seen as a stand alone service but as an important cog in the overall delivery of a local authority's service to its community.

  20.  In the report issued by the Retail Enterprise Network it was acknowledged that "it may indeed be time to leave some locations behind". There needs to be realistic appraisals of whether markets continue to be situated in the right location to serve the community. There must also be new thinking on the way markets are delivered with flexibility in operating times and a new approach by traders. Local authorities should be encouraged to look at the locations they currently use and determine where a market will effectively deliver their policy agenda.

  21.  Central Government has a role to play in supporting markets by assisting with the provision of business support. New start opportunities for traders and investment in the running of markets are vital to the future success of market activities. Currently there a number of local schemes which have been piloted to bring new traders into the markets but these local schemes need to be embraced within a national framework. Warrington Borough Council is one of a number of local authorities that encourage new market traders with help from the North West Regional Development Agency. This has provided new traders with training, mentoring, business support and financial help. The scheme operated by Warrington has been successful in attracting new traders into the market. Currently a national scheme, sponsored by "Make Your Mark" is being operated throughout the country with the intention of identifying new traders. This is being done in collaboration with the National Association of British Market Authorities, National Market Traders' Federation and Association of Town Centre Management.

  22.  Reference has already been made to the encouragement given by PPS6. There is evidence of substantial investment by some local authorities in their markets. Stockport covered Market Hall is a wonderful example of how investment can act as a catalyst to the market. In 2003 the market hall was identified as being in need of refurbishment and by the end of last year a major scheme of refurbishment had been completed which had involved expenditure of almost £2 million. The result is that the market hall has been restored to its former glory and is now part of a retail and heritage section of the town.

  23.  Since 2002 £3 million has been spent in the redevelopment of the Granger Market at Newcastle upon Tyne. In April 2008 the Guardian described this market as "one of those brilliant, old indoor markets some towns are lucky enough still to have. It is full of independent traders and craft people and folk selling stuff for less than you think possible."

  24.  Liverpool is currently considering substantial investment in its St. Johns Market and the new market is likely to be the anchor point of the new shopping centre.

  25.  These are examples of local authorities recognising the value of markets but there are many others who have failed to respond to the encouragement in PPS6. In this respect some additional encouragement to local authorities identifying financial assistance that might be available to invest in markets would help in the further regeneration of markets.

  26.  In the same way that local authorities need to understand the greater significance of markets in terms of delivery of a wider agenda to their community so the Government need to understand that markets can make an effective contribution to achieving national goals. The Select Committee have particularly identified social cohesion, health and regeneration. The Policy Framework Document, highlighted in this submission and also in more detail in the submission from the Retail Markets Alliance, details the areas covered by the Policy Framework. This all adds weight for the appointment of a Government Minister with responsibility for markets.

Future provision of markets

  27.  Markets have always been a key local authority activity but there are increasing signs that a number of local authorities are looking at the provision of market services by using different structures.

  28.  Glasgow have become the first local authority to operate their markets through an arms length limited company. This new structure enables the markets to operate independently of the local authority and attracts investment on its own terms.

  29.  Other local authorities have considered public/private partnerships in different formats.

  30.  Liverpool have entered into a partnership agreement to provide investment and a new approach to the St. John's Market in the centre of the city.

  31.  NABMA have a number of private market operators within its membership and these private operators have contributed significantly to the markets industry over many years.

  32.  There is a need for all local authorities to consider how markets can be most effectively provided in their areas. Many will choose to continue operating themselves but others may find it helpful to contemplate new arrangements. Whatever provision is contemplated the future must be considered against criteria which embraces the wider agenda for markets.

The need for an integrated approach across retail and wholesale sectors

  33.  It is vital that retail and wholesale markets work together towards common objectives.

  34.  NABMA have a number of wholesale market operators within its membership and one of NABMA's key objectives is to promote an integrated approach.

  35.  This is particularly the case in terms of delivering one of the key objectives of the Policy Framework.

  36.  The policy on food and health recognises the significant role that wholesale and retail markets can play in delivering this agenda. This includes promoting and supporting business opportunities at wholesale level in relation to improved supply-chain efficiency; accessing new markets for regional and local food (including local food hubs), public procurement and the fruit and vegetables into schools scheme.

  37.  NABMA seeks to encourage interaction between wholesalers and their retail market customers. This helps to ensure that wholesalers acknowledge their responsibility to be part of an effective supply chain which provides consumers with what they want to eat.

Planning and Licensing Legislation

  38.  The submission by the Retail Markets Alliance covers the main issues that NABMA would want to support.

  39.  Local authorities through their existing market rights have the opportunity to license markets and car boot sales in their area.

  40.  Leeds and Leicester are examples of two local authorities who do this in an effective way and NABMA supports a similar approach in more authorities.

  41.  It is important that standards in markets are raised and local authorities are in the best position to regulate the quality and number of markets being held.

  42.  This licensing approach must be undertaken within a clear planning framework and NABMA also supports the provision of local planning guidance on the holding of markets as described in the submission of the Retail Markets Alliance.

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