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

Memorandum by City of Westminster Council (MARKETS 18)

  City of Westminster Council is pleased to offer evidence to the Communities and Local Government Select Committee enquiry on Traditional Retail Markets. Our response is structured around the question set out in the original notice of the inquiry and call for evidence.

  Main Points:

    — Markets play a vital role within our communities.

    — The rise of specialist markets is a good sign of the continued vitality of markets, especially in Westminster.

    — The City of Westminster Bill is a vital piece of legislation in order to rebalance the relationship between the local authority and traders.

    — City of Westminster Council is happy to facilitate any visit to its local markets the committee would like to see.


How has the picture changed over the last 10 years?

  Westminster's experience is that following a period of quite rapid decline in the previous 20-30 years, the position for traditional markets has stabilised over the last 10 years. What markets offer has become more diverse, as has the background mix of market traders. Although held less frequently, growth has been seen in the demand for, and provision of specialist, leisure and farmers markets.

Are the number and types of markets in decline? If so, why?

  In Westminster traditional markets and street trading is relatively stable, with operator and consumer demand for specialist markets growing. However, variations are evident depending on the location and immediate environment of the markets, and the demographics of the surrounding area.

Are their obstacles preventing the creation of more markets?

  In Westminster, physical infrastructure restrictions, particularly on the highway and in the public realm, can create barriers to the creation, expansion and maintenance of markets, because of the competing demands on highway use. However, other obstacles in play presently include the economic climate and local competition, lack of available investment, and policies seeking to balance the viability of existing markets and retail premises against new market proposals or opportunities.

Are their obstacles hindering the successful business of existing market operators and traders?

  The major difficulty for the City of Westminster, as a market operator, is the inflexibility and prescriptive nature of the legislation under which street trading and markets operates. Prescriptive rights held by individual traders as licence holders, and restrictions in re-siting and developing pitches, limits the ability of the City Council to implement improvement plans for markets. The value of these rights, and the fact that they are not time extinguished, is such that traders are reluctant to risk their rights in order to commit to proposed changes.

  A recent consultant study of street trading in the Oxford Street/Regent Street/Bond Street area demonstrated a real lack of retail expertise amongst many street traders, and the need to provide research and training to inform business decisions.

What has been the impact of specialist markets eg continental and farmers markets, and do such markets integrate successfully with older markets?

  Specialist markets have had a positive influence both for existing traditional markets and for communities when operating in isolation. They tend to operate for a limited duration, either on a single day per week or for three or four days at infrequent intervals. They have integrated well in Westminster with existing markets under these operating conditions.


What social and economic effects do traditional retail markets have on their local communities?

  Markets, on the whole, do have a valuable social and economic effect on local communities. They do this in a number of ways. They provide retail opportunities and support complementary retail premises in the area by increasing footfall on market days. They provide low-start-up-cost employment opportunities. They provide a physical focus and activity within a community, which can be enhanced by associated leisure and cultural activities. This contributes to a sense of place for all the community.

What qualities contribute to a successful market delivering social and economic benefits, and are their examples of best practice that have a wider application?

  Markets need to be relevant to the community, who ideally should at least be stakeholders in them. In the largest traditional market operated by the City Council arrangements to devolve the governance of the market have been implemented to the local community, which involves local residents, market traders, and community representatives. This has allowed relevant priorities to be set and focussed local interest in the management and operation of the market.

  A local innovation has been the allocation of Ward member budgets, which some members have earmarked as additional investment in local markets.


Does local government support markets effectively?

  Support in Westminster is provided in line with other corporate priorities and resource constraints. Feedback suggests support is effective but can be improved.

What are the advantages and disadvantages of local authorities having powers to operate markets?

  One advantage of local authorities operating markets relates to the integration of market development into the wider management and improvement of the public realm. This includes physical, economic, and social development strategies.

  Another advantage is the ability of the local authority to take a long-term view, and support markets through challenging financial times or periods of change. Local authorities may also prioritise markets for other than purely financial reasons.

  Some potential disadvantages are that some local authorities may not have relevant organisational structures or dedicated expertise to maximise business opportunities, or may not have the necessary freedoms to implement innovation.

Does central government support markets effectively? If not, what additional support should be provided?

  Not known. Very little knowledge of any cohesive market strategy or support currently provided in the Westminster area, which suggests very little is given.

Could central government make better use of markets to achieve national goals, particularly with regard to social cohesion, health and regeneration?

  The possibilities here seem endless. Direct support to market operators, traders, and sharing of best practice would obviously assist, not just the traders but Local Authorities.


Do local and national planning regulations support or hinder the development of markets?

  Westminster finds the planning regulations have a neutral effect on the development of markets.

Do licensing regulations support or hinder the development of markets?

  Licensing regimes vary and markets can be established by a number of statutory and non-statutory means. Existing legislation, unique in Westminster, which regulates markets and street trading has proved to significantly restrict the City Council in achieving change in market operations, or integrate street trading provision into a wider vision for the public realm. The City Council has deposited a Bill (City of Westminster Bill 2008-09, to relax some of these constraints, although a balance will still exist between trader's rights and local authority powers, even if it brought into force.

What improvements could be made to the planning and licensing regimes to aid the development of markets?

  The Bill deposited by the City Council would go some way to make amendments to the licensing regime under which markets operate. Further amendments promoted in a public Bill would make more fundamental changes to existing regimes to give greater flexibility in managing markets for the wider benefit of local communities.

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Prepared 23 July 2009