Towns and Cities: Local Power is the Path to Recovery Contents

Towns and Cities: Local Power is the Path to Recovery

Chapter 1: Introduction

The Committee, its remit and previous work

1.Following its appointment in June 2020, to consider the long-term implications of the pandemic on the economic and social wellbeing of the UK, the COVID-19 Committee invited individuals and organisations from across the country to share their hopes and fears about what the pandemic might mean in the long-term for their daily lives.3 We asked people to look several years into the future, and tell us about the challenges that we will need to overcome and the opportunities to do things better post-pandemic.

2.Eight broad themes emerged from our work:

3.During our first substantive inquiry, we explored how our rapidly increasing reliance on digital technology, accelerated by the pandemic, may have a long-term impact on our economic and social wellbeing.4 This work was followed by a short inquiry considering how issues such as school closures, reduced opportunities for social and leisure activities outside the home and home working or furlough had impacted parents and families.5

Towns and cities

4.Many towns and cities were already struggling before the COVID-19 pandemic, unable to attract higher-skilled, higher-paid work, with increasing numbers of empty retail units, and decreasing footfall. On average, town and city centres lost 8% of their shops between 2013–2018. Some towns and cities, such as Stoke on Trent and Blackpool, lost 20% of their shops, while major cities, such as Sheffield and Southampton, were also amongst the worst affected (17.8% and 15.8% of shops closing, respectively).6

5.In 2018, almost 85,000 retail jobs were lost in the UK, and in the first half of 2019, almost 12% of shopping locations—high street shops, shopping centres and retail parks—were empty.7 In 2019, 25,700 shops closed their doors, leaving high streets with the highest number of empty retail outlets in five years.8 This was part of a longer-term decline, with 50,000 fewer shops on our high streets in 2019, compared to 2009, and a 20% drop in the number of visitors to our high streets in the same period. 9

6.This decline in our towns and cities was severely exacerbated by the COVID-19 pandemic, with lockdown restrictions leading to a decrease of over 80% in footfall in towns and cities,10 and over 17,500 chain stores and other venues closing in Great Britain in 2020.11 Towns and cities have also suffered as online retail sales have grown during the pandemic, with online sales reaching 30% of total sales in April 2020. Even in July 2021, when restrictions had been relaxed, online retail spending sales were at 27.9% of total sales, significantly higher than the pre-pandemic figure for February 2020 (19.8%).12

7.As we heard in our Beyond Digital inquiry, towns and cities have also been impacted by significant job losses in retail and hospitality, with the retail sector, for example, seeing nearly 180,000 jobs lost in 202013 and the Centre for Retail Research estimating that there could be up to 200,000 jobs lost in 2021.14

8.The decline in town and city centre retail businesses, decreasing footfall and increasing online sales have exacerbated the number of empty retail units on our high streets. Taken together, these trends risk the future of our town and city centres unless we take urgent action to give our urban areas a new purpose.

9.This need for urgent action to regenerate, renew and revive our town and cities is why we decided to explore the impact of the COVID-19 pandemic on urban areas, and suggest a proposal for the future of these areas. While we acknowledge that towns, smaller cities and larger cities will all require a different approach, we trust that this report, and its recommendations, will enable all local authority leaders to reimagine their towns and cities to create sustainable local communities.

10.Towns and cities are vital to the social and economic wellbeing of the UK, as they provide many of us with the building blocks for our lives—housing, public transport, green spaces, workspaces, public services, leisure opportunities. If towns and cities become dilapidated, with poor housing and green spaces, limited public transport, public services, and leisure opportunities, it is inevitable that people’s wellbeing will suffer. If towns and cities are vibrant, with a plentiful supply of high-quality housing and green spaces, reliable and affordable public transport, and a wide range of public services, workspaces and leisure opportunities, people’s wellbeing will improve and people will feel better about themselves and their lives.

11.As Councillor Susan Hinchcliffe, leader of Bradford Metropolitan District Council, explained:

“High streets are an important barometer of how people feel about their lives. If the high street looks prosperous, they feel okay about the place. If it does not, it is like an indictment of where and how they live their life. Therefore, we all have a duty to do our best by our high streets.”15

12.Andrew Carter, Chief Executive of the Centre for Cities, agreed, noting that “whenever you ask people you find that the state of their high street really matters.”16

The future of towns and cities

13.The importance of towns and cities to re-building and reimaging our country in light of the pandemic, is fundamental. Our aim with this report is to create a proposal for the vibrant, sustainable towns and cities of the future that can help improve social and economic wellbeing.

14.A vital first step towards implementing our plans for the future of towns and cities, and for improving the future of our urban areas, is empowering town and city leadership. We believe that a new relationship between central government and local government is crucial, to allow local authorities to take the decisions and actions needed to allow their towns and cities to flourish. For too long local authorities have been held back—lacking the resources, powers, finances, and ultimately the freedom—to take the lead in regenerating their urban areas.

15.We want to see the UK Government outlining—in its Levelling Up White Paper—its plans for further financial and legislative devolution of powers, to enable local authority leaders to deliver regeneration policies tailored to the needs of their specific areas. Beyond the need for further legislative devolution, we believe that the existing general power of competence provides local authority leaders with the potential to take on additional responsibilities, and the power to implement far-reaching regeneration projects in their towns and cities. As such, we want to see the UK Government actively encouraging local authority leaders to use the general power of competence, and providing comprehensive guidance for its operation.

16.Throughout our inquiry, we have been focusing on the long-term impacts of the pandemic on towns and cities, and have asked local authority leaders to concentrate on their plans for the long-term recovery of their urban areas. However, as local authorities have already seen significant cuts to their budgets since 2010, we cannot expect them to continue to accomplish more and more, with ever decreasing budgets. Rather, we believe that the regeneration agenda necessitates a comprehensive re-examination of the local government settlement. We want to see central government take this opportunity to introduce a three-year rolling local government financial settlement, at an increased level. An increased three-year settlement would balance local authority leaders’ need for flexibility, with a sense of the urgency required in implementing regeneration projects.

17.Local authority leaders have stated time and again that the current competitive bidding process for additional funding from central government is unsatisfactory. Local authorities are often expected to submit funding bids to very tight deadlines, with equally tight deadlines for spending those funds. We believe that local government leaders should be given the opportunity to focus on the long-term regeneration plans and projects for their areas, rather than having to find short-term projects that fit specific funding criteria, but not the needs of their local area. As such, we want to see the UK Government agreeing with the Local Government Association to create an improved resource equalisation scheme, to ensure that additional central government funding is targeted at the towns and cities in most need.

18.We believe that it will be impossible to bring about the recovery of our towns and cities without a complete overhaul of the current business rates system. Our declining high streets, alongside the falling demand for office space, cannot continue funding the local government settlement. And without a sufficient local government settlement, local authority leaders’ efforts to regenerate their towns and cities will struggle to succeed. However, we acknowledge that business rates are a large part of a business’s costs, and businesses in towns and cities across the country are already struggling, and will continue to struggle, without long-term business rates relief, or a restructuring of the current system to charge small businesses a nominal amount.

19.Under the current system of local authority finances, it is impossible to both decrease the business rates collected from small businesses on our high streets, and also provide local authority leaders with extra revenue, through an increased local government settlement to fund the recovery of our towns and cities. As such, we believe that the only realistic solution is to explore options for reforming the current business rates system. Any reform of the business rates system must also level the playing field between online and offline retail sales, ensuring that online sales also contribute to the local government settlement.

20.Following its inquiry on the impact of businesses rates on business,17 we would encourage the Treasury Select Committee to update this work in light of the pandemic, as well as encouraging it and the Lords Economic Affairs Committee to undertake a detailed exploration of the potential for introducing an increased VAT rate on online sales or a hypothecated online sales tax. Such a tax would be paid by the consumer and would apply to all digital initiated sales. We believe that even a small, single percentage, increase in VAT on online sales could fill the gap in local government finances resulting from decreasing business rates collected. A slightly larger increase could provide local authorities with the funds to attract, and keep, sole traders, repair shops and micro-businesses in town and city centres by offering business premises with zero business rates.

21.While we believe that the regeneration of town and city centres is vital to the wider recovery of towns and cities, we want to see this matched by a commitment to, and investment in, those neighbourhoods most in need. As such, we want to see the UK Government work with local authorities to develop a two-pronged, blended approach to urban regeneration and renewal. The first part of this approach will focus on developing new opportunities—pop-up retail units, work hubs and arts and culture—in towns and cities, while the second part will concentrate on investing in housing, public services, public transport and green spaces in town and city centres, as well as in those neighbourhoods that risk being left behind.

22.Underlying this blended approach to the regeneration of our towns and cities, we want to see local authorities developing a new approach to tackling inequalities, where those who are most vulnerable in our communities are active partners in developing the investment plans, and projects, that will change their lives. We believe that vulnerable groups, communities and neighbourhoods should be supported to take a lead in shaping their future, rather than having regeneration plans imposed upon them. It is only by engaging fully with specific groups and communities that we can hope to develop the services and practices that could prove to be of most help to them.

23.Working with vulnerable groups, communities and neighbourhoods, we want to see local authorities using our proposed blended approach to the regeneration of our towns and cities as a vital first step to tackling inequalities, and ensuring that no communities are left behind. We want to see investment in town and city centres matched by a commitment to, and investment in, those neighbourhoods most in need. We believe that focusing funding on those neighbourhoods most in need is a vital step to tackling inequalities between different areas and communities within towns and cities, and putting right the historical wrong of under-investment in these neighbourhoods.

24.In addition, we believe that more must be done to show that we value our local authority leaders. Throughout the pandemic, local authority leaders have acted swiftly and decisively to support their communities, proving the value of local government, and it is now time to give them the support to develop as leaders, to safeguard the long-term future of those same communities. We would encourage local authorities to invest in their current, and future, leadership by providing additional training, support and mentoring. We want to see local authority leaders having the time, resources and support to become the very best leaders, as “good leaders create followers, but great leaders create leaders”.18 We want to see a culture develop whereby investing in leaders is valued in and of itself, but also as a vital step to creating the leaders of the future.

25.Beyond providing training and support for current, and future, leaders, we want to see local authorities take decisive action to improve diversity amongst their leadership. We were impressed by the local authority leaders that gave evidence to us, and our call for improved diversity is in no way a criticism of current local authority leaders. Rather, we believe that improved diversity amongst local authority representatives, and leaders, will improve the representation of all communities within towns and cities, and strengthen the belief amongst all groups and communities that local authorities represent, and work for the benefit, of all their constituents. As such, we would urge local authorities to revise their frameworks for encouraging diversity amongst local authority members, particularly given that the pandemic has highlighted inequalities, meaning that increasing diversity amongst local authority leadership is more urgent than ever.

26.Action to tackle inequalities must not only be targeted at specific neighbourhoods, but must be mainstreamed throughout local authorities’ regeneration agenda. When local authority leaders are developing their plans for improved housing, increased green spaces, increased public services, and improved public transport provision it is vital that they ensure that they are accessible to, and meet the needs of, different groups and communities within their towns and cities. Different groups and communities, such as older people, disabled people and people from minority ethnic communities, in different areas will have different needs, and there is no one-size fits all approach to creating open and accessible town and cities.

27.Local authority leaders should also use their regeneration plans as a chance to introduce specific schemes to ensure that the new opportunities in towns and cities—work hubs, pop-up retail units, arts and culture opportunities—are targeted at the needs of specific groups and communities. The exact projects most suitable to meet the differing needs of specific groups and communities will be different in different areas, and there is no one-size fits all approach for all towns and cities.


3 COVID-19 Committee, ‘New Committee asks people to share their views on life beyond COVID-19’(1 July 2020): https://committees.parliament.uk/committee/460/covid19-committee/news/115318/new-committee-asks-people-to-share-their-views-on-life-beyond-covid19/

4 COVID-19 Committee, ‘Living online: the long-term impact on wellbeing’: https://committees.parliament.uk/work/742/living-online-the-longterm-impact-on-wellbeing/

5 COVID-19 Committee, ‘The long-term impact of the pandemic on parents and families’: https://committees.parliament.uk/work/1121/the-longterm-impact-of-the-pandemic-on-parents-and-families/

6 ‘High street crisis deepens: 1 in 2 shops closed in five years’, The Guardian (30 January 2019): https://www.theguardian.com/cities/ng-interactive/2019/jan/30/high-street-crisis-town-centres-lose-8-of-shops-in-five-years/ [accessed 18 October 20210]

7 ‘What is driving the collapse of high street shops’, The Week (7 November 2019): https://www.theweek.co.uk/104224/what-is-driving-the-collapse-of-high-street-shops [accessed 21 October 2021]

8 Ibid.

9 BBC News, ‘How to save the UK’s crisis-hit High Streets’, (13 January 2020): https://www.bbc.co.uk/news/business-51094109 [accessed 21 October]

10 Retail Gazette, ‘UK footfall drops to lowest level on record’, (15 April 2020): https://www.retailgazette.co.uk/blog/2020/04/uk-footfall-drops-to-lowest-level-on-record/ [accessed 4 October 2021]

11 BBC News, ‘Pandemic impact ‘yet to be felt’ on High Streets’, (14 March 2020): https://www.bbc.co.uk/news/business-56378667 [accessed 4 October 2021]

12 ONS, ‘Retail sales, Great Britain: July 2021’, (20 August 2021): https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/july2021 [accessed 4 October 201]

13 BBC News, ‘Worst year for High Street job losses in 25 years’, (1 January 2021): https://www.bbc.co.uk/news/business-55501049 [accessed 25 November 2021]

14 Ibid.

15 Q 59 (Councillor Susan Hinchcliffe)

16 Q 8 (Andrew Carter)

17 Treasury Committee, Impact of business rates on business (First Report, Session 2019–20, HC 222)

18 Rabbi Jonathan Sacks, Lessons in Leadership: A Weekly Reading of the Jewish Bible (Oxford University Press, 2015)




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