Regeneration

Regen 66

Written submission from Accessible Retail

Summary

AR believes retail development including out of centre retailing, is a major means by which regeneration benefits, including economic, competitive and social advantages can be secured for deprived communities. It further believes that this potential is not fully appreciated by economic (Treasury) and land use policy makers (DCLG) as a result of which it is under-exploited. This missed opportunity is reinforced by current planning policy (PPS6) which is too protective of town centres (based on the wrong belief that out of centre retailing invariably leads to and is the prime cause of town centre decline) and fails as a consequence, to give sufficient weight to the regeneration benefits which can be secured from new retail provision outside town centres. AR’s views are lent support by two independent research projects commissioned by AR. The first in partnership with Business in the Community (1996) exemplified the significant regeneration benefits of retailing including out of centre provision and the second (2007 and 1011) looked at the real causes of town centre decline and the interaction between town centre retailing and out of centre provision.

Results of the 1996 Research (full copy attached)

The research consisted of three complementary surveys. Ipsos MORI looked at the attitudes and experiences of some 4000 adults over 15 years old to retail employment; Experian measured the contribution of retailing to the economy and employment including in the most deprived communities in the country; and third, a number of case studies were examined.

The findings of the Ipsos MORI survey are surprising. Some 19 main positive aspects were examined grouped under four headings: careers and communities; personal development; family and other commitments; and retail and regeneration. It reveals that, contrary to the negative view referred to earlier, the vast majority of people in the UK think that retailing has a positive impact on their communities. For many individuals who worked in the industry (nearly half of adults at some point in their life), it made an important contribution to developing their skills and employability. Working in the industry was though to be particularly advantageous for family commitments, providing much needed flexibility to cope with children and other dependent family members.

Key results included: 76% of those who had worked in the retail sector in the previous five years said ‘working in the retail sector has helped improve my skills and employability’, 68% that ‘working in the retail sector is a good way of starting a career or work life’ and 65% said ‘working in the retail sector allows you to fit your working life around your home life commitments’. Regarding personal development, 33% said working in retail ‘increased their self-confidence’ and 30% that it ‘provided them with skills’; regarding family and other commitments, 42% said it allowed them to ‘work close where you live’, 33% that it provided ‘flexible working hours and 15% that it ‘enabled them to fit it around looking after children’.

All of these are valuable attributes for people living in deprived communities, but it was in response to questions about the impact of retail on regeneration that produced some of the most significant results. 90% of respondents who had worked in retail said ‘the sector makes an important contribution to employment in the communities in which it operates’ and 74% that ‘retail companies generally have a positive impact on the local communities in which they operate’.

The Experian research is similarly revealing. Retailing is the third largest employment sector in the UK economy (some 3 million jobs), with 16% of all new jobs created in the last 20 years provided in the industry (especially in areas where there has been a loss of manufacturing). The industry accounts for a disproportionately high number of the small businesses in the UK (13% or 240,000 firms). In terms of combating social exclusion, it scores highly as well. In the most deprived areas, it accounts for 1.1 million jobs or 10% of the workforce. Of the industry’s 3 million employees, the majority are women (1.89 million) and the majority (1.75 million) are employed part-time of which 1.3 million are women. Some 95% of the part-time jobs are permanent and a higher percentage of retail employees compared with employment generally are educated to NVQ3, exploding two further myths.

The case studies, drawn from Leeds, Sheffield, Birmingham and Bolton underline these findings with practical examples of how retailing and training have addressed the ‘welfare to work’ agenda taking people off the long term unemployment register.

In summary, the surveys show that in virtually every key social policy area, retail is a positive force engaged in bringing lasting benefits to individuals and their communities. Their findings need consideration by policy makers in all areas concerned with reducing social exclusion, improving economic performance and achieving regeneration. They echo the findings of other reports which have begun to explode some of the myths about retail jobs. The community perception that retail jobs were ‘good’ was very strong and policy planners need to understand this and change their widespread belief that such jobs are of low worth.

Results of the 2007 and 2011 Research (full copies attached)

Reference has already been made to the fact that one of main obstacles to retail development playing an enhanced role in regeneration is current planning policy (PPS4) which restricts new out of centre retailing in the belief that per se it is damaging to town centres. Independent research commissioned by AR and undertaken by GVA) in 2007 (Part 1) and 2011 (Part 2) into the causes of town centre decline and prosperity shows that this is not invariably the case and greater flexibility in planning policy could be allowed without compromising the protection of town centres.

A second obstacle, which has also been identified above, is that the economic contribution of our sector is not well understood with the result that little weight is given to nurturing it when the competing aims and consequences of planning policy are considered. A third piece of new independent research commissioned by AR (Economic Review of the Retail Warehouse and Parks Sector – 2010 – copy attached) undertaken by CBRE demonstrates the significance of this omission. In brief, out of town retailing accounts for some 30% of total retail spend and constitutes the largest part of investment grade retail commercial property with a value in 2010 of some £39.1billion (compared with £37.9 billion for shopping malls and £30.9 billion for high street shops). Regarding competitiveness, retail productivity in out of town locations (including superstores), was 27% higher than in town centres in 2003, a percentage forecast to increase further by 2010. Planning policy does not give weight to retail development appropriate to it6s economic importance.

In the present circumstances of low economic growth, the increased opportunity greater planning flexibility would create has its own merit, but with major retail growth in town centres become largely unviable for the next 5-10 years, enabling the market’s willingness to continue investing in the retail park and warehouse sector assumes even more importance. In areas where the economy needs regenerating, new retail development represents a real and possibly one of the few opportunities to make a real difference.

Alongside its view that retail development is an effective driver of regeneration, AR has long believed that the causes of town centre decline or prosperity are manifold and complex and that the per se reasoning in planning policy linking it principally to out of town retailing provision is too simplistic. Consequently, it asked GVA to independently examine whether there was indeed such an attributable cause and effect. The research was undertaken in two parts.

Part 1 (2007), revealed that a large variety of factors affect the vitality and viability of town centres and out-of-centre development alone cannot be blamed for all of the problems faced by town centres. Nor will it necessarily have an adverse effect on town centres and where there is, it will vary according to the size and nature of the development and the size of the town and its retail function. Further, out-of-centre development has been necessary to lessen the disruption to town centres (especially historic ones and the larger towns) and to provide the large display areas required by many bulky goods retailers. These differences are not recognised in planning policy. .

Part 1 showed, also, that successful town centres are much more than just shopping centres. They have broadened their appeal by expanding leisure uses to create an evening economy and growth in residential, employment and mixed uses has increased local spending and improved general vitality. What has produced successful town centres is not blanket protection from out-of-town retailing, but pro-active management which plans for them to grow, diversify and respond to change.

In more detail, it is clear from the case studies, the literature review and other analysis that the vitality and viability of town centres is a complex issue and the factors that affect town centres are not solely confined to the effects of out-of-centre retailing. Whilst the PPS6 indicators (e.g. rental values/growth, retailer demand, vacancy rates, representation of multiple retailers etc) are important, they are no more than indicators and can only tell part of the story. They could easily be misinterpreted and incorrect conclusions could be derived from their use, if considered in isolation and not within the local context.

The analysis in Section 6 and the case studies in Section 10 show that the new retail floorspace needed as a result of the huge growth in expenditure over the last 30 – 40 years, coupled with the changes in the design and size of stores sought by retailers, could not realistically all have been accommodated in town centres without massive change to town centres that would have been physically very difficult to achieve and often entailed undesirable change. Some edge or out-of-centre development has, therefore, been necessary and desirable to lessen the disruption to town centres and to provide the large display areas required by many bulky goods retailers, freeing up space for more intensive retail uses in town centres. This capability could be utilised to promote regeneration aims as well as satisfying retail demand.

The study shows that a large variety of factors affect the vitality and viability of town centres and not all town centres will be affected equally. Edge and out-of-centre development will affect some town centres more than others and it is only one of many factors that potentially affect town centres. Out-of-centre development alone cannot be blamed for all of the problems faced by town centres. Not all will necessarily have an adverse effect on town centres, any effect varying according to the size and nature of the development. An open A1 scheme full of clothing retailers (a fashion park) is likely to have a very different impact on a town centre than a bulky goods scheme of the same size. This is not specifically recognised in planning policy, although should be clear in an impact assessment. Similarly, out-of-centre schemes affect town centres differently depending on the size of the town and its retail function. For larger towns and historic towns edge or out-of-centre provision may be the best solution, providing there is a quantitative need justification for additional development.

Another trend that is clear from the study is that successful town centres have evolved – they have broadened their appeal and become more than just shopping centres. Service and leisure uses have expanded to make retailing more enjoyable and so extend the length of a shopping trip (and the amount spent) and created an evening economy as well as a daytime economy. Growth of town and city centre residential accommodation and employment uses and the growing realisation of the benefits of mixed use development to the success of town centres has also helped to increase local spending and the general vitality and viability of centres. The successful town centres of the future will be much more than just shopping centres.

It is clear, also, that town centres face competition from each other, not only from out-of-centre development leading to a need for pro-active positive planning/management of town centres to allow them to grow and respond to change and be as attractive to shoppers as possible. Active town centre management should encompass a wide range of factors including new development, the consideration of mixed uses and recognition of the importance of leisure, the types of shops, physical condition of buildings, urban design and last but not least the location, accessibility, cost and amount of car parking and public transport. Town centres must react to change, but they should also anticipate change and plan for change accordingly.

Part 2 (2011), explored these issues in detail examining the retail performance over the last 20-30 years of eight medium to large towns where a variety (type and scale) of out-of-centre comparison goods floor space potentially competes with the town centre. The conclusions confirm the findings of the first report. Lesser performing towns are not solely due to out-of-town competition and the two formats often complement each other. The key to town centre success is active management and improvement in the retail offer. The need for PPS4 is not wholly dismissed as it found that some town centres at some periods may require a degree of protection - although it notes that this may well be from other town centres or large out-of-town supermarkets rather than retail parks and warehouses). In more detail:-

· There are many underlying influential trends including economic factors, retailer trends and trends within the property market which affect town centres. A key factor in the future is that the exceptional retail expenditure growth of the last two decades will not be repeated so there will be a lower overall demand for new floorspace.

· The case studies confirm that numerous factors affect town centre vitality and viability with out-of-centre development just one of these. The effects of such development are varied depending on its scale, type, composition and location, and edge/out-of-centre development does not affect all towns equally. It is just one contributory factor to the overall performance of a town centre, not the sole factor.

· No clear correlation was found between the scale of out-of-centre development and the vitality and viability of the nearest town. It is the scale, combined with the type, composition and location of non-central development which is important. Some case studies illustrated how out-of-centre developments have contributed to or exacerbated the decline of a nearby town centre whereas in other examples, where managed appropriately, edge/out-of-centre development can fulfil a need and be complimentary to the town centre retail offer.

· It was also evident from the research that town centres not only face competition from out-of-centre developments, but from each other, with polarisation in the hierarchy as larger centres grow at the expense of smaller centres.

· The research found that past population and expenditure growth led to huge demand for new retail floor space. If all new retail development had taken place in town centres the degree of change would have been enormous and probably unacceptable, particularly in historic town centres, as it was not only the retail space but the additional support/ancillary services and infrastructure that would have been required to facilitate such development. There was a need for some edge and out-of-centre development and this will continue to be true in the future, although as expenditure growth will be less over the next 10 years than over the last 20 years the need for new development will be less.

· Town centres need to respond to change but also plan for change and proactive town centre management is key to maintaining healthy, vibrant towns.

In summary, the consequence of a restrictive planning policy has been to reduce investment in the modernisation and enhancement of existing out of town centre retail assets (qualitative improvement) and the prevention of new out of town provision (quantitative improvement) even where accommodating retail growth in town centres was clearly impossible or it was not the best approach such in the case of bulky goods and services. The outcome has been loss of potential GDP, employment and productivity increases and customer choice and the high level of delivery on regeneration projects exemplified in the 1996 study.

April 2011