Memorandum by Urban Space Management Ltd
(MARKETS 33)
Urban Space Management Ltd (USM) is glad of
the opportunity to add our comments to the Communities and Local
Government Committee Enquiry on Retail Markets.
USM is an urban regeneration specialist with over
35 years experience, both in providing a consultancy service on
retail markets to many local authorities and developers throughout
the UK, and in the practical management of a wide variety of existing
and new markets, including both traditional street and covered
general markets (eg Elephant & Castle Market, Gravesend Charter
Market, Swindon Market Hall), and specialist arts and crafts markets
(Camden Lock, Old Spitalfields Fruit and Vegetable Market, Greenwich
Charter Market, Merton Abbey Mills). Our mission from the start
has been the sustainable revival of run-down spaces by the creation
and promotion of attractive centres for small retail and/or arts-based
business, of which a market is often the essential ingredient.
We are in broad agreement with many of the points
made in the memoranda so far submitted, many of which we have
found both constructive and encouragingly consistent. Against
this background, from our own experience we should like to emphasise
and develop a number of practical points for the Committee's consideration:
1. A main issue discussed has been whether markets
are better operated by local authorities or private operators.
No one market is the same, and one form of management may suit
some, the other the rest. In general, however, (and there are
honourable exceptions) local authority management will always
tend to be characterised by regulation and enforcement, rather
than a flexible entrepreneurial approach which is constantly on
the lookout for new opportunities and prepared to invest in them.
2. This is especially true in London where the
provisions of the London Local Authority Act 1990 require the
fees levied on traders to be sufficient only to cover the market's
running costs. In effect there can be no surplus generated, which
means nothing can be reinvested in entrepreneurial activity and,
while London boroughs differ in their interpretation of the LLA
Act's detail, many take the view that promotion is specifically
forbidden. The inevitable result is that a market covered by the
LLA Act simply cannot be regarded as a business at all, merely
a service—and therefore is no match for its ever-keener
retail competitors. The Act, set up for good reasons (eg when
the rights of long-established family-run small businesses needed
protection), reflects an outmoded view of the trading climate
and suffers from the law of unintended consequences. Normal healthy
business activity cannot but be stultified.
Outside London the situation is not much better.
While Councils are allowed to make a profit from running street
markets, this is seldom ring-fenced for reinvestment in their
improvement or promotion, but instead disappears into general
council funds. The result is all too often that a market plays
a Cinderella role in an area's retail mix.
3. Private operators (while some respondents
to the Forum naturally view them with suspicion) are altogether
less inhibited, with greater flexibility in recruitment of stallholders
(for example without pressure to keep a stall franchise within
succeeding generations of a family), and are likely to have a
better understanding of small business, of working day by day
with their traders, and of cashflow and the relationship of the
cash coming in to the true costs of the operation (for example,
items like rubbish collection can often be hidden or taken for
granted in council-run markets). They invariably benefit from
less complex layers of management than a local authority, where
several departments may be involved, finance (again for unimpeachable
reasons) is divorced from the day-to-day operation, and officers
are in any case directly answerable to elected members. The latter
may naturally be very supportive of a market as a public service,
but we have often found this can produce tensions, typically when
traders affected by officers' decisions appeal directly to their
elected councillor, in effect disempowering the on-the-ground
management. This can have a very negative effect on the effective
management of a market.
As stated, there are exceptions; an example
we have recently found is the very large traditional market in
Chesterfield. Here the preservation and healthy growth of the
market is a strategic priority, and entrepreneurial management
by the local authority itself is clearly evident from its inclusion
within the remit of the Council's own Marketing and Tourism Development
Officer, as well as from a close and active relationship between
management and traders. The contrast could not be more marked
with a London market (which we do not name) where the day-to-day
management is constantly undermined by a committee of elected
members reacting to traders' complaints, with predictable effects
on officer morale and trader discipline.
4. Most markets co-exist with shops, and
when push comes to shove we believe that either group has to agree
that it benefits from its relationship with the other. (Indeed
at least one submission to the Forum states that market day is
the best day for the surrounding shops—possibly circumstantial,
but a fair conclusion). In our experience, where there is a thriving
market alongside shops, the market is the main attraction and
footfall draw, and the shops should relate to it as complementary
to their business rather than competitive. (We have even heard
of a local branch of a national multiple which gives a Christmas
party for the neighbouring stall traders!). There have always
been cases where shops have felt undercut by adjacent stalls,
but these are generally resolved by a sensitive management relationship
and entrepreneurial approach (and ironically the reverse is now
happening, that stalls are complaining they are being undercut
by shops).
5. Several submissions have stated that
markets are underrated as assets, whether by local authorities,
national government or developers. In our experience markets do
generally represent a missed local development opportunity. A
market is a business driver, a positive start-up for traders who,
while typically they tend to remain as stallholders, in many cases
can and do graduate up the retail hierarchy to a shop and thence
to a successful business and local employer. There are many examples
of market traders becoming successful shopkeepers, and often multiple
retailers. We believe local authorities ignore this potential
at their peril, especially in the present climate where new business
start-ups have once again become a priority. USM's experience
of previous recessions has been that markets are well equipped
to survive, not least because their offer is essentially one of
bargain price, and the rediscovery of the pleasure of a more personal,
community-based relationship in shopping.
6. The issue of the fees levied by local
authorities within the area of a Charter Market has been touched
upon. We believe this time-honoured penalty needs urgent review,
as it is not only entirely illogical and irrelevant to the twenty
first century, but is unfair and can be very damaging to a neighbouring
market's viability.
A vivid example from our experience (which we
do not name) has been a popular and successful market originated
by USM in a location six miles from a Charter Market, where the
bizarre results of the ancient legislation were (a) that in effect
the business rate was doubled, making the market itself virtually
unprofitable, (b) that a regeneration project highly prized by
the borough in which it is situated was financially penalised
by the borough next door, (c) that this fee, quite forgiveably
described as "money for old rope", was being levied
in return for no municipal service whatever, and (d) that the
specialist nature of the market (an arts, crafts and cultural
visitor centre) was patently not the kind of operation the original
legislation had in mind!
We would urge the Committee to address the question
of a review of the legislation covering a Charter Market's right
to levy fees, which while no doubt sensible and justifiable in
its day some four hundred years ago is surely past its sell-by
date in this day and age.
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