2 The Portas Review and the BIS Retail
Strategy
The High Street still has a massive value to
companies, which we should not underestimate.
[Brandon Lewis MP, Minister for DCLG][10]
The Portas Review
6. The Prime Minister commissioned Mary Portas, a
retail expert and broadcaster, to carry out an independent review
of the retail sector, with specific reference to the High Street.
The Portas Review: an independent review into the future of
our high streets was published in December 2011, and contained
28 recommendations.[11]
The recommendations covered various issues concerning retail in
the High Street, including: the setting up of Town Teams; the
proper management of High Streets; the empowering of Business
Improvement Districts (BIDs) to take on more responsibilities;
and the setting up of pilots to test out the different strategies
for High Street regeneration. The Portas Review also had three
recommendations concerning Business Rates:
Government should consider whether business
rates can better support small businesses and independent retailers;
Local authorities should use their new discretionary
powers to give business rate concessions to new local businesses;
- Government should make business rates work for
business by reviewing the use of the RPI as the means of uprating
the business rates multiplier each year, with a view to changing
the calculation to CPI.[12]
7. According to the Government's evidence, all bar
one of the recommendations in the Portas Review were accepted
by the Government in its document High Streets at the Heart
of our Communities: the Government's response to the Mary Portas
Review, published in March 2012.[13]
They did not accept the linking of Business Rates to CPI. In evidence
to the Communities and Local Government Committee, it was obvious
that Mary Portas had wanted the Government to go further:
[…] if we are going to get businesses back
on to the High Street, whether they are new businesses or some
of the bigger businesses, we need to have some incentives, and
Business Rates seem to be the biggest stop for growth at the moment.
[…] If nothing is done about Business Rates, we will not
see the development of new and exciting ideas. If we look at this
country, one of the things that we are about is great innovation.
If you look at the history of retail even, so much came from this
country, and I think we would be suppressing the new green shoots
that would come into it. Also, some of the bigger businesses that
would look to come back onto it will not be coming back.[14]
PORTAS PILOTS
8. Evidence submitted to our inquiry both supported
the intentions of the Portas Review and the resulting 27 Portas
Pilots that benefitted from Government money. However, the majority
of evidence we received argued that the review did not go far
enough. Intu Properties plc wrote that it did not think that the
Portas Pilot generated significant results.[15]
F Hinds, a family-owned and run jewellers, wrote that "the
Portas Review and other initiatives are welcome and helpful, but
it is hard cash and profit and loss which will dictate what happens".[16]
The Association of Town and City Management (ATCM) wrote of the
need to go beyond the Portas Review:
The Portas Review is likely to be seen as a watershed
moment in town centre retailing, taking problems and solutions
which have been well rehearsed from within the industry and communicating
them to a wider audience. However, the UK Government, Parliament,
and indeed, the BIS Select Committee, must ensure the focus is
wider than the solutions offered in the Portas Review alone.[17]
9. Brandon Lewis, Minister for DCLG, said that the
"whole point" of the Portas Pilots was that they bid
for money for specific projects and that the funding delivers
those projects.[18] The
DCLG's paper The Future of High Streets: Progress since the
Portas Review, published in July 2013, highlighted the amount
of money allocated to the Pilots:
27 Portas Pilots were set up last summer, 24
supported by Government and a further 3 backed by the Mayor of
London. Government gave £2.3 million to the areas involved
in the programme as well as a package of support.[19]
10. The British Property Federation (BPF) welcomed
the Portas Review, but wrote that "much of the initial focus
has been on the short-term and arresting decline but we feel a
lot more work is needed to realise the long term aspirations of
the pilots and town teams".[20]
It described the work that it had done with the Portas Pilots,
and highlighted the lack of preparedness on the part of town teams:
As a key industry stakeholder, the BPF has been
engaged with the pilots from the early stages and has worked with
other industry bodies, including the British Council of Shopping
Centres, to provide pilots with free support and advice. However,
take up of advice has been sporadic largely due in part to the
unpreparedness of the town teams and a lack of understanding on
how to translate their ideas into a strategic business plan which
considers the short, medium and long term vision of the area.
A freedom of information request by the Independent newspaper
indicated that only a small proportion of the £1.2 million
awarded to the pilots has been spent and whilst we agree that
the emphasis should be placed on communities harnessing and combining
their energies, we do feel that it highlights a lack of clear
planning and support.[21]
11. Supplementary evidence sent in March 2013 from
Paul Turner-Mitchell, a retail expert, also highlighted the low
percentage of money that had been spent to date:
Funding was awarded for pilots that demonstrated
a 'transformational vision', but a breakdown of the money spent
shows that authorities have spent very little of their award on
delivery and the bulk of it on bureaucracy and administrative
costs. Examples include travel and hospitality for DCLG meetings,
project coordinator salaries, charges for business representatives
attending town team meetings and backdated claims for putting
together Portas Pilot bids including video production.[22]
Paul Turner-Mitchell submitted the results of his
Freedom of Information requests, stating "Freedom of Information
requests reveal that of £1 million awarded to the first 12
pilots last May only £135,000 has been spent".[23]
These figures are no longer current, but they are the most up-to-date
figures which are publically available:
| Pilot | Amount Received
| Amount Spent |
| Dartford | £79,500 |
£17,251.04 |
| Liskeard | £100,000 |
£5,195.72 |
| Market Rasen | £98,599
| £32,520.00 |
| Stockton | £92,000 |
£4,755.00 |
| Bedford | £51,260 |
£2,346.40 |
| Bedminster | £100,000 |
£37,678.71 |
| Stockport | £100,000 |
£0.00 |
| Croydon | £100,000 |
£4,950.00 |
| Newbiggin | £94,300 |
£7,870.18 |
| Margate | £100,000 |
£111.47 |
| Wolverhampton | £100,000
| £11,817.00 |
| Nelson | £100,000 |
£11,477.00 |
Total |
£1,115,659
|
£135,972.52 |
Ev w83 Paul Turner-Mitchell, as of March
2013
12. In September 2013, when Members of the Communities
and Local Government Committee questioned Mary Portas on the fact
that only 13% of the Portas Pilot money had been spent, she replied:
There should have been real guidance from Government
on what a Town Team should be and the mix that would create a
really powerful Town Team. There should have been clear guidance
on what that was—where you pull together councils with trade
associations with landlords with retailers with people who are
all the stakeholders and residents. […] There should have
also been guidance on where and how was the best way to spend
money. A lot of these people are just apprehensive on what to
do with it. For some of them, in hindsight, when I visited the
towns, it took about six months for the money to come through.[24]
13. We questioned the DCLG and BIS Ministers in October
2013, on how much of the Portas money had been spent by local
authorities, and who was auditing the funds. Brandon Lewis MP
replied that all the money has been allocated but "if you
do not mind, I will come back to you to make sure you get exactly
the correct figure for that. I will get a note to the Committee".[25]
As of February 2014, we had not received a note from the Minister.
14. The Government allocated £2.3 million
to fund the Portas Pilots, yet has not been able to provide evidence
of how or indeed whether that money has been spent by local authorities.
In its response to this Report, the Government should include
how much of that money has been spent, as was promised to us by
the DCLG Minister in October 2013. There is no readily-available
data on the allocation of the funds, and, as far as we are aware,
no organisation is auditing the funds. While we appreciate the
fact that the Department for Communities and Local Government
is responsible for this funding, the Department for Business,
Innovation and Skills has the policy lead for retail and must
ensure that data is made available on whether and how the Portas
Pilot funding has been spent. These are public funds and, therefore,
the use of this money needs to be assessed for value for money,
and effectiveness. Together, the BIS and CLG Departments must
decide how this assessment is carried out.
BIS Retail strategy
15. Just under a year after publication of the Portas
Review, the Department for Business, Innovation and Skills outlined
its approach to the retail sector in the BIS Retail Strategy,
published in October 2012, followed by A Strategy for Future
Retail, published in October 2013. The Strategy outlined the
contribution that the UK retail sector brings not only to the
economy, but to the wider community, stating that:
The UK retail sector is big, complex and very
diverse. It includes world class international companies, innovative
independents, and many retailers struggling to survive in an extremely
competitive environment with rapidly changing consumer habits.
[…] Beyond its purely economic value as a sector in itself,
retail underpins local economies and plays a vital role in delivering
public policy (and providing social value) in areas such as public
health, employment and skills, environmental sustainability and
community cohesion. Retail is often considered to be a sector
in need of less attention than other parts of industry: it 'just
happens'; is not mobile; does not participate in overseas activity;
and is not subject to foreign competition. None of this is true.[26]
16. It also highlighted the need for better regulation
at a national level, by disseminating knowledge transfer of the
retail sector and by undertaking a retail STEM skills gap analysis.
It focussed on local issues, stating that the Government will:
Work with local partners to better understand
market conditions and challenges and to undertake activities that
maximise retail's contribution to growth in local economies through
identifying opportunities and sharing best practice.[27]
17. The first paper, although only 10 pages long,
had the ambitious aim of describing what the Department was doing
to "support retail growth in the short term at international,
European, national and local levels". The succinctness of
this paper was not lost on the Association of Licenced Multiple
Retailers:
The BIS retail sector is an extremely concise
framework document outlining five workstreams through which the
Government aims to support the retail sector. Given the economic
importance of the retail industry—and the role of eating
and drinking out within it—we are surprised at the brevity
of the document.[28]
18. The National Federation of Retail Newsagents
welcomed the Strategy, but were disappointed that it featured
few of the practical proposals set out in its own submission,
such as Business Rates, competition, planning, and alcohol pricing:
Working with stakeholders to 'disseminate findings'
or 'share best practice' or promoting other policies, such as
the Local Enterprise Partnerships, does nothing in itself to tackle
the genuine issues faced by those who literally work on the shop
floor.[29]
19. In the retail strategies, the Government's answer
to tackling the demise of the High Street is to shift responsibility
onto local areas, local authorities and local communities to use
their powers as they see fit to revitalise their local High Streets.
Some help is given from Government funds—such as funding
for the Portas Pilots—but the majority of help is from local
government. When confronted with issues concerning local retailers
suffering under the crippling effects of Business Rates, Brandon
Lewis, the Minister for DCLG, replied that local authorities already
have the power to offer Business Rate relief, if they feel that
businesses need to go into a particular part of their town, and
need an extra boost to get it going.[30]
20. However, local authorities are suffering from
reduced income and greater expenditure. In such straitened times,
local authorities are far less likely to give Business Rate relief.
Indeed, when questioned on the fact that Great Yarmouth local
authority, in his parliamentary constituency, has not offered
Business Rate Relief, Mr Lewis replied that "if the council
in Great Yarmouth, like any other, wants to see its town centre
really flying, they should look carefully". But later, he
qualified his answer, by saying that "we do have one big
issue there that the council is trying to deal with at the moment,
but that is linked to the cost of dealing with asbestos".[31]
The Minister recognised the fact that local authorities have competing
claims on their reduced budget, and the granting of Business Rate
Relief might not be considered a greater priority than dealing
with asbestos.
21. We recognise the good intentions behind the
Portas Review and the brief Government retail strategies of 2012
and 2013, and the documents have resulted in useful national discussions
about the retail sector and, specifically, the demise or otherwise
of the High Street. However, the Portas Review stressed the need
for a review of Business Rates, while the Government strategies
mentioned Business Rates only in passing. Furthermore, the strategies
demonstrate a deliberate 'hands-off' approach to many of the issues
facing the retail sector, and instead encourage local communities,
including local authorities, businesses and organisations, to
boost their own local areas. However, this encouragement comes
without any meaningful finance or any coherent and effective plan.
22. The BIS Retail Strategy had no mention of the
possibility of retail being included within BIS's Industrial Strategy
programme. Our evidence highlighted this fact, stating that the
retail sector suffered as a result of the removal of funding from
the Sector Skills Council coupled with the fact that there was
no industry partnership for retail. Martin-Christian Kent, representing
the National Skills Academy, told us:
We are in a no-man's land since last April [2013]
when the core funding went from the Sector Skills Councils to
the vision for industrial partnerships and the roll-out of industry
partnerships. We really are in a sort of no-man's land as to what
happens. […] It is really a critical time for the industry,
as for others, but given the size of it and its dependence on
things like apprenticeships, I really do think it is going to
be quite critical.
A lot of industry is slightly dumbfounded by
the fact that, given the size of the tourism and visitor economy—with
hospitality, retail, and passenger transport—it is not part
of that industrial strategy, given it employs one in five people.
I think they feel, at one extreme, disappointed, dumbfounded and
highly frustrated.[32]
23. Michael Fallon, Minister for BIS, justified the
Government's decision not to have an industrial strategy for retail:
[Retail] is not a sector that requires an enormous
amount of government expenditure in terms of capital support for
very high-cost research and development. It is not a sector where
there are very high barriers of entry into the sector. It is,
at the moment, a very successful sector, growing strongly, extremely
competitive and not in need of the kind of long-term framework
that we have put in place for aerospace or life sciences or some
of the other major industries.[33]
24. We are not convinced that the success of
the Retail Sector should be given as a reason for it not needing
an industrial strategy. As with other sectors where Industrial
Strategies are proposed to build on areas of strength, there is
an opportunity to use policy to support even greater success in
the future. The Government should include the retail sector in
its Industrial Strategy programme, and we recommend that the Government
rectifies this omission at the earliest opportunity.
10 Q394 Back
11
Mary Portas, The Portas Review: an independent review into
the future of our high streets, December 2011 Back
12
ibid Back
13
Ev 118 Back
14
Oral evidence taken before the Communities and Local Government
Committee on 2 September 2013, HC 612-i, Qq 46 and 48 Back
15
Ev w54 Back
16
Ev w45 Back
17
Ev 158 Back
18
Q417 Back
19
DCLG paper, The Future of High Streets: Progress since the
Portas Review, October 2013, page 5 Back
20
Ev 170 Back
21
Ev 170 Back
22
Ev w82 Back
23
Ev w82 Back
24
Communities and Local Government, Committee, High Streets and
Town Centres, Monday 2 September 2013; Q6 Back
25
Q417 Back
26
Department for Business, Innovation and Skills, BIS Retail
Strategy, October 2012, page 1 Back
27
BIS Retail Strategy, page 7 Back
28
Ev w12 Back
29
Ev w67 Back
30
Q398 Back
31
Q399 Back
32
Qq309 and 310 Back
33
Q430 Back
|
