39.As we have highlighted in the preceding chapters, it is clear that high streets and town centres need to adapt, transform and find a new focus beyond retail in order to survive. To achieve this transformation, most will need to undergo large scale structural change. In the first part of this chapter, we consider how to bring this about. Against this, we assess the Future High Streets Fund, which the Government states will co-fund “transformative, structural changes” in local areas, and the sufficiency of the £675 million of funding that accompanies it.
40.There was a consensus that strong local leadership was needed to drive high street and town centre transformation. We heard very often that local authorities should provide that leadership and be the “catalyst” for change. Mark Williams, Director of the Hark Group, an asset management business which works with councils on town centre regeneration, said:
We are transient owners. We are there for a period of time, whereas the local authority represents people who are there forever […] Leadership must come from the local authority […] it is their town and it should give very clear direction as to what it wants.
Sometimes this leadership came from a particular individual within the local authority—the Leader of the Council, another councillor or an officer—who “takes hold of the issue […] and really drives forward a vision that can inspire others to get behind it”. Drawing an analogy with business, Mr Grimsey emphasised the role of the chief executive: “It is clearly [their] job to drive the strategy for the company, to present [it] to the board and have it scrutinised by the non-executive directors, who prod, poke, question, analyse and add to it”.
41.Most importantly, local authorities possess significant powers, including planning and compulsory purchase, which can be deployed to drive transformation in high streets and town centres. They also have other levers, like parking policy and provision of business rates discounts, which can be used to promote economic growth.
42.We heard that strong leadership needed to act in partnership with local stakeholders and that “partnerships and collaboration [were] essential components of any town centre or high street rejuvenation”. Professor Cathy Parker of the Institute of Place Management explained that insights from a wide range of people who understood the town were needed to ensure that the “right decisions get taken”, and Ed Cooke, Chief Executive of Revo, said that “the third sector, the private sector, the public sector and the community” all needed to be involved. Ojay McDonald, Chief Executive of the Association of Town and City Management, explained why a broad range of actors was so important in the high street and town centre context:
[Its] a very different location to most others, because you have this mix of activity and mix of uses. Lots of different stakeholders all have a vested interest […] whether it is different departments within a local authority, transport operators, police, the businesses, property owners, educational establishments or leisure operators. A whole range of different people have a vested interest in the town centre, but no one actually has control over that town centre.
43.Achieving large-scale structural change will require an intervention normally led by the local authority, backed by cross-sector collaboration. Mark Williams, Director of the Hark Group, said he would strongly advocate local authority intervention, particularly in the case of economically deprived places.
44.Such work will involve acquisition and assembly of land usually through compulsory and voluntary purchase, work on the public realm and supporting changes of use, all undertaken with a strategic vision for the future developed in partnership with the local community. In addition, use of compulsory and private purchase will allow local authorities to reduce the problem of fragmented ownership, which as we identified in chapter one, is a significant barrier to high street and town centre regeneration. As Mr Williams explained:
Where you have a failing town […] in fragmented ownership the reality is the private sector system has broken. Therefore, some form of intervention will be needed […] Ultimately, it may well need compulsory purchase to bring these assets into public ownership and to regenerate them.
45.We heard that such interventions were often being funded by a combination of public and private investment. Richard Roe of Trafford Council said that, in Altrincham, which is noted for its successful regeneration:
We have been successful in working with the private sector and other parts of the public and community sectors in the regeneration of Altrincham […] Where we can use our investment to leverage greater private sector investment, that is the approach we are trying to take. The public sector cannot do it on its own.
Similarly, we heard that the private sector alone could not be relied upon to kick-start regeneration. From a private investor’s point of view, Mark Williams told us that “The reality of delivering this is not that the public sector has to pay for all of it, but there has to be some form of intervention”.
46.Recently, we have seen several examples of local authorities purchasing shopping centres. Concerns have been raised at the use of public funds in this way given the current retail climate and whether local authorities have skills, knowledge and awareness of trends to make the most of this kind of investment. We note the Government is considering this issue. However, Mr Roe explained that, in the case of Altrincham, purchasing the shopping centre was an important intervention for two reasons:
We bought it as part of our investment strategy, so we make a financial return from it, but it was […] in the part of Altrincham that is in the greatest need of regeneration at this point, so we bought it deliberately. Whilst it provides an investment return to us, we would look to redevelop it on the basis that it is underutilised at the moment and is a poor part of the offer.
He also emphasised the importance of investing in the public realm, saying that it had been “really beneficial” to the regeneration of Altrincham, but highlighted the fact that there was no direct investment return on this, unlike investing in commercial property where the returns cover the costs of borrowing from the Public Works Loan Board.
47.As many of our inquiries in this and the preceding Parliament have highlighted, local authorities’ budgets are under significant pressure. The Local Government Association (LGA) said:
Local authority services face a funding gap in excess of £5 billion by 2019–20. Between 2010 and 2020, local authorities will have seen reductions of £16 billion to core Government funding. In the face of such financial pressures, the ability of councils to proactively support their town centres is constrained as they prioritise their resources on vital and statutory services.
Our local authority witnesses echoed this, saying that spending on high streets had to be balanced against “the investment, both revenue and capital, that we are putting into other front-line services”. We heard that staffing for this type of work was minimal: Trafford Council has two full-time staff members working across four town centres and East Riding of Yorkshire Council has seven staff covering six towns and other areas.
48.We heard that local authorities’ planning departments had been particularly affected by the spending reductions with the result that tasks involving national metrics, such as development control and speed of decision-making, were being prioritised over the “place-based intervention, partnership-building and land-assembly function”, integral to high street and town centre regeneration work. Peter Geraghty, Chair of the Planning, Housing and Regeneration Board at ADEPT, said that planning teams had reduced in size and the “specialist skills of regeneration, heritage and urban design expertise that would support the delivery of regeneration have tended to be lost, in numbers, quality and experience”. As discussed, compulsory purchase powers are an essential tool for local authorities to use in high street and town centre transformation. However, we were told that local authorities had neither the funds nor the staffing capacity to use them.
49.On 29 October 2018, on the recommendation of the Expert Panel on the High Street, the Government announced a £675 million Future High Streets Fund (the ‘Fund’). Although they had not seen the detail of the proposal, our witnesses welcomed the Fund, saying it was a “very positive step forward”, and “potentially exciting”, drawing favourable comparisons with the Coastal Communities Fund.
50.The call for proposals, published on 26 December 2018, gave us a clear sense of the aims of the Fund and the kind of work it is intended to support. It states that the Fund is aimed at helping places make “transformative, structural changes”, making it clear that “light touch interventions” or “surface level projects” were not envisaged and that the following types of structural work were expected:
51.Projects are expected to be co-funded by the public and private sector and the Fund will contribute up to a maximum of £25 million. Our witnesses raised doubts about the size of the Fund; for example, Richard Roe of Trafford Council said:
It is the scale of the funding against the scale of the challenge, so £675 million is a lot of money, but it is a maximum of £25 million per town centre. If everyone goes for the maximum, 27 town centres will get the financial benefit from it.
Ojay McDonald of the Association of Town and City Management said that it was “no alternative to adequately resourced local planning authorities that can help drive forward change in town centres”. When we asked Jake Berry, the MHCLG Minister, whether he was confident that the Fund would make a meaningful difference, he said that he hoped it would and that “obviously [it] cannot do everything everywhere at the same time, but it would be impossible for any Government to set that out as an ambition”. Sir John Timpson, the Chair of the Expert Panel said that the funding should be spent “much more on the planning stage, supporting [areas] to get it moving”. The Expert Panel’s report had stated that local authorities “do not have the resources to produce and finance a professional comprehensive plan that would achieve a step change and future-proof their town centres”.
52.The call for proposals is very clear that bids must cover town centre areas facing “significant challenges” and that, although local authorities are felt to be best-placed to bid for funding, proof of engagement with and support of community stakeholders is required.
53.We consider the Future High Streets Task Force, the second key part of the Government’s Our Plan for the High Street, in chapter eight. We consider the evidence explored in chapters four to seven to be relevant to the Future High Streets Task Force and therefore we have decided to cover it at the end of this report.
54.Achieving the large-scale structural change needed for our high streets and town centres to survive will require an intervention led by the local authority, using all its powers and backed by cross-sector collaboration. However, given the financial pressure faced by local authorities, central government funding will be needed for this, as well as significant private sector investment.
55.The Future High Streets Fund aims to kick-start this sort of intervention and, although the results have not yet been evaluated, based on the evidence we received, we believe it reflects the right approach. The requirement for bids to demonstrate local stakeholder support, strategic vision and, above all, transformative, structural change, as well as its focus on high streets and town centres that are facing the most significant challenges, are to be commended. We recommend that strong local leadership should be one of the key criteria by which bids are assessed.
56.However, given the scale of the challenge and the fact that local authorities are unlikely to able to contribute much of their own resources to this work, a total of £675 million with a maximum grant of £25 million per applicant will inevitably mean that the vast majority of high streets and town centres will miss out on the funding they need to adapt for the future. Funding for the next round of the Fund needs therefore to be enhanced and we recommend that the Government considers using revenue generated from the reforms that we recommend to business taxation for this purpose. We consider options for how this funding could be raised in chapter four.
57.Further, given that planning teams have been particularly affected by local authority spending reductions, we recommend that the funding is made available to resource the planning stages of the project which may require additional staff and expert help.
58.Successful applicants should be supported by the Future High Streets Task Force in bringing their vision to fruition. We recommend that the Task Force takes on a more proactive, ‘enabling’ role than is currently envisaged and set this out in more detail in chapter eight.
59.But the Future High Streets Fund is only one part of the solution. Local intervention, while essential, needs to be accompanied by further action by central government and at local level, as well as by retailers and landlords, to create the conditions for high streets and town centres to flourish in the future. We consider what action is needed in the remaining chapters of this report.
94 ; ; ;
100 Institute of Place Management ()
108 Institute of Place Management ()
121 MHCLG, , December 2018
126 Expert Panel on the High Street, , 20 December 2018
Published: 21 February 2019