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

Chapter 2: Key risks to towns and cities

Town and city leadership

28.We were impressed by the local authority leaders that gave evidence to our inquiry. They demonstrated their personal visions—often inspiring—for their respective localities. Local government must be central to driving forward the recovery of our towns and cities, and at the heart of this must be the visions of the future articulated by local leaders. However, if local government leaders struggle to realise their vision, because of a lack of power, resources, time or money, this could have a catastrophic impact on the future of urban areas. Towns and cities can only ever be as good as their leaders, and those leaders can only work within the parameters given to local government by central government.

29.During our oral evidence sessions, we questioned local authority leaders whether they have had the time to consider the long-term implications of the pandemic for their towns and cities, given the need to keep on top of the constantly changing COVID-19 situation in their area over the last 18 months or so. While local government leaders have been planning for the longer-term future, Alderman Stephen Martin, Mayor of Lisburn and Castlereagh City Council, proposed that local leaders need more time. He noted that there is a pressure and:

“There is this focus at the present moment on time: “We need to do this; we need to do that. We have to make sure we get our quick wins”. Those are important in terms of building that confidence, but, if it takes a further period of time to bottom out where we are going to end up with Covid and the outworkings of it, it is time well spent. We should gather evidence and consider our next steps, as opposed to jumping in and making a commitment or rushing a programme out the door, only to find that was resource we could have used better in 12 months’ time”.19

30.Throughout the pandemic, local authorities have been required to act swiftly and decisively in extremely difficult circumstances. There is now a need to consider the long-term consequences for towns and cities. Local authority leaders must be given the opportunity to start to develop, and implement, policies that aim to rebuild their towns and cities in the long-term. There is a significant risk that in the rush to be seen to be reacting to the pandemic, and its impact on their area, local authorities will, because of funding deadlines, feel obliged to spend money and resources on projects that they will then come to regret. It is, therefore, vital that local government leaders are given the time, resources and support to determine what interventions are needed in their areas, without feeling under pressure to act immediately.

31.One size does not fit all and runs the risk of short-changing local communities all over the country because those at the centre do not and cannot understand their diversity. Central government cannot be expected to be the expert on each and every town and city across the country, and Whitehall civil servants cannot be expected to know what policies will work in Birkenhead or Brighton, Torquay or Tadcaster, Welling or Wolverhampton. As Andrew Carter described, we have a model:

“where everything turns towards Whitehall and we have to always look to Whitehall and to government for permission or funding in some form to do anything of any note in our places, which is debilitating for those places.”20

32.As such, the current system risks tying the hands of local government, with central government funding projects that may be suitable for some towns and cities, but not all urban areas. Or conversely, refusing funding applications for projects that may not be suitable for most towns and cities, but may be exactly what is needed in specific urban areas.

33.When local authority leaders have a clear plan for the future of their towns and cities the current funding model, in which local authorities are provided with annual settlements, does not allow, let alone encourage, strategic long-term planning and policy development. As Councillor Carl Smith, leader of Great Yarmouth Borough Council, stated:

“ … We keep getting one-year settlements. We need a four-year plan. You have asked us today about our plans three to five years forward. We need to know where our funding is coming from and how we are being funded.”21

The current system, therefore, risks encouraging local authorities to adopt a pattern of short-term planning, with no long-term strategic thinking about the future of their towns and cities.

34.Beyond the one-year local government settlement, the current additional competitive funding streams for local authorities are often launched with very tight deadlines, meaning that local authority leaders are expected to prepare bids at very short notice, as Councillor Hinchcliffe stated:

“I would like to see less of us being given a few weeks’ notice under the national levelling-up fund to bid for one project that everybody and his dog has to be involved with in terms of politicians. That just leads to more politics and less long-term thinking.”22

35.Lisburn and Castlereagh Council agreed, emphasising that local authorities should be given “more lead in time” as:

“developing large projects requires additional resource (both in terms of staff and finance) as well as upfront investment just to get to the stage where a viable bid can be made for funding.”23

36.The current bidding system for additional funding risks diverting limited local authority staff resources to work on bids that may or may not be successful, rather than working on projects to regenerate the specific town or city. Moreover, as the deadlines for submitting bids for competitive funding streams are often very tight, local authorities sometime have little choice but to submit an application for funding for a project that fits the required criteria, rather than the needs of their local area. Councillor Rob Stewart, leader of Swansea Council, explained:

“I am very keen that at a local level we get more powers to control our destiny in terms of knowing what it is our communities need to be successful, rather than bidding… In the recent community renewal fund process, the deadlines were so restrictive that we had to get the bids in by mid-June. They had to be projects that could be delivered by next March, so that constricts very deeply what you can do to be strategic, because then you have to find something that fits the criteria, rather than actually doing something that is the right thing to do.”24

37.The current competitive funding system also risks diverting funds to those local authorities who are most adept at submitting applications, rather than those towns and cities that need those funds most, or where those funds could make the biggest impact. Councillor Stewart also raised concerns that new government funding has a tendency to follow previous government funding:

“Often, as long as you have had funding, you get more funding; if you do not get it, you do not get it.”25

Any approach where those already benefitting from central government funding are likely to receive more funding, and those that have been unsuccessful will continue to be unsuccessful, risks creating a two-tier system of towns and cities. Those towns and cities that receive multiple funding packages will have opportunities to undertake regeneration projects, while those who are consistently unsuccessful will be left behind.

Accelerating trends

Retail

38.As with our inquiry exploring the impact of the pandemic on our reliance on digital technology,26 much of the evidence on the pandemic’s effect on towns and cities has reiterated that COVID-19 has accelerated existing trends, rather than necessarily creating new or unexpected changes.

39.Online retail sales have been growing steadily over the last 20 years or so, with online sales increasing from 2.8% of total sales in the UK in November 2006 to 18.9% of total sales in February 2020. As a result of the pandemic, by April 2020, online sales had reached 30% of total sales.27 While online sales levels have fluctuated throughout the pandemic, as restrictions have been tightened and relaxed, it is worth noting that the proportion of online retail spending sales was 27.9% in July 2021, significantly higher than the pre-pandemic figure for February 2020 (19.8%).28

40.As with online retail, the demise of national and international brands and increasing empty retail units on high streets, was already a problem pre-pandemic. Research by PwC showed that in the first half of 2019, there was a record net loss of 1,234 stores from Britain’s 500 top high streets. In the same period, there was a total of 2,868 store closures, the highest number in the preceding five years.29 PwC’s research for 2020 suggested that more than 17,500 chain stores and other venues had closed in Great Britain in 2020. The statistics, which include hospitality and leisure, but not independent retailers, recorded 17,532 closures and 7,665 store openings, resulting in a net loss of 9,877 outlets.30 This was the worst annual decline in more than a decade.

41.Exacerbating, and exacerbated by, the issues of declining high street retail businesses, increasing online sales, and increasing remote working (discussed below) is the current business rates system. Business rates are a large part of a business’s costs, and while the UK Government has announced a 50% reduction in business rates for pubs, cinemas, restaurants and hotels for 2022–23,31 this does not tackle the underlying concerns about the business rates system. Businesses in towns and cities across the country are struggling, and will continue to struggle without long-term business rates relief, or even a complete overhaul of the current system to charge small businesses a nominal amount.

42.However, as business rates fund a large part of the local government settlement, any reduction in business rates—because of the decline in the high street, the end of growth in office space, or business rates relief for small businesses—risks the recovery of our towns and cities. Local authority leaders are not miracle workers, and cannot be expected to regenerate and renew our towns and cities with insufficient funding.

43.Linked to both increasing online retail and increasing empty retail units in town and city centres is decreasing footfall within urban areas. Statistics show that during the first week of lockdown in March 2020, footfall on high streets in the UK fell by 84.4%, compared to the same week in March 2019.32 In April 2020, footfall on UK high streets decreased by 81.8%, compared to April 2019.33 Following the reintroduction of lockdown restrictions in England in November 2020, footfall levels fell by 75%, compared to November 2020.34

44.Councillor Margaret Davidson, leader of Highland Council, noted that for Inverness: “The biggest and immediate impact if you walk into our city at the moment is that the footfall around the city is 60% of what it was, and it will take some years to return to where it was.”35

45.It is almost impossible for any of us to accurately foretell what long-term impact the pandemic will have on footfall in our towns and cities, and it is only in the next five or ten years that we will learn if Councillor Davidson’s prediction will become a reality.

46.The decline in high street 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 not only the viability and vibrancy of our towns and cities, but their very future.

Work

47.As with the increase in online retail and increasing empty retail units in town and city centres, there was already a trend for increasing home working. Home working was relatively rare in 1981, when only 1.5% of those in employment reported working mainly at home. By 2019, the proportion of workers mainly working from home had trebled to 4.7%.36 The pandemic dramatically increased home working rates in the UK, with 46.6% of people in employment doing some work at home in April 2020.37

48.Of those who did some work from home, 86.0%, did so as a result of the pandemic. More than half of people living in London (57.2%) did some work at home, compared to just over a third in the West Midlands (35.3%) and Yorkshire and The Humber (37.6%)38. Wales, Scotland and Northern Ireland saw broadly similar proportions of home workers (approximately 40%).39

49.This varying geographical ability to work from home will mean that any increasing trend towards home working will also have a varying impact across towns and cities in the UK. Andrew Carter highlighted that:

“the obvious draw from that is that it will have a big implication for places like Brighton or Reading, but it will not have such a significant effect in places like Burnley and Blackburn simply because of the quantum of working from home and the ability to do so over time.”40

50.Despite the differing rates of home working in different towns and cities across the UK, even a relatively modest increase in the number of people working from home for part, or all, of their working week could have a significant impact on town and city centres. In our previous inquiry, Beyond Digital: Planning for a Hybrid World,41 we heard that increased home or hybrid working would have a knock-on impact on those cafes, shops and other businesses that depend on custom from commuters, with Josh Abey, a Researcher at the Fabian Society, stating that: “City centres have been a large source of concern over the pandemic because of service jobs that served commuters no longer being needed.”42

51.As such, even a relatively small increase in long-term home working risks the long-term viability of town and city centre businesses, such as cafes and coffee shops, that depend on a constant, consistent supply of commuters and office workers. Any further reduction in town and city centre businesses, alongside the reduction in footfall, could threaten towns, cities and high streets as we know them.

Public transport

52.The COVID-19 pandemic had a dramatic impact on public transport, with train use dropping to 5% of pre-pandemic numbers during the first lockdown.43 With many key workers and low-income groups reliant on bus travel, the proportion of bus journeys during the pandemic remained higher than rail, with bus journeys at 10% of pre-pandemic levels.44 While passenger numbers have increased as restrictions have eased, with train use being at 60–70% of pre-pandemic numbers in October 2021 and bus journeys at 64–88% of pre-pandemic levels throughout the same month, it is clear that passenger numbers will not automatically return to pre-pandemic levels.45

53.Those changes in retail and working habits described above, will have a knock-on impact on public transport use. As John Birtwistle, Head of Policy, UK Bus at FirstGroup, described:

“We are seeing passenger numbers return… we can see an easy route to 80% to 85%, and maybe as high as 90%, returning, but getting beyond that is looking very difficult. This is due not just to the change in the way that people are working, but to changes in shopping and leisure habits.”46

54.David Cowan, Director of Commercial Operations at Translink, agreed, emphasising the importance of commuters to the financial viability of public transport services:

“In Northern Ireland, we have got back to about 50% to 60% of our pre-Covid numbers. We can see a route, probably quite easily, back to around 80% if the social distancing issue is removed. The big question for us is what will happen with the commute. Our old model was based on high utilisation at the peak. That then cross-subsidised a lot of the other services that we run. The big question is how many people will come back on that morning commute.”47

55.While it is positive that public transport providers can see a relatively easy route back to 80–90% of pre-pandemic passenger levels, it is extremely concerning that both John Birtwistle and David Cowan have emphasised the difficulties in reaching 100% of pre-pandemic passenger levels. Even a small reduction of 5% or 10% in passenger levels will have a significant impact on the viability of public transport services.

56.John Birtwistle explained that any prolonged reduction in passenger numbers would lead to reduced incomes for public transport providers, limiting their ability to invest in new vehicles, new services and new technology. Norman Baker, Adviser to the CEO at the Campaign for Better Transport, suggested that:

“ … unless we see a return to numbers on public transport over a two-or-three-year period, we will unfortunately probably see… services being cut, subsidies being cut, and the reversal of what we have seen over the last 20 years as we have moved towards public transport.”48

57.Any long-term reduction in the number of public transport users risks the viability of public transport provision in our towns and cities, potentially leading to a further reduction in public transport services. Such a reduction in public transport services would inevitably lead to a further reduction in passengers, which would in turn to lead to further cuts to services, and create a vicious circle of decreasing passengers and decreasing services. While this, in itself, would be harmful to towns and cities, it would also exacerbate inequalities in urban areas, widening the gap between those with access to a car, and those without. Norman Baker noted that:

“Some 24% of people do not have a car, and 40% of those on low income do not have access to a car. Potentially, you are worsening societal outcomes by moving towards more car travel and less public transport travel.”49

Green spaces

58.One of the key findings of our first piece of work was that the pandemic had increased people’s appreciation of, and demand for, access to green spaces. Natural England’s People and Nature Survey shows that during the initial COVID lockdown, four in 10 adults reported spending more time in nature than before the pandemic, and some inner-city parks experienced an almost 300% increase in visits during the initial COVID-19 lockdown.50 Research undertaken for the National Trust shows that easy access to quality green space has become an essential need for urban dwellers, with almost two-thirds of people stating that they have appreciated local green spaces more due to COVID-19.51 Such an increase in demand for green spaces is to be welcomed, but risks creating a situation where urban green spaces struggle to cope with increasing visitors, without increasing funding and improved infrastructure.

59.The pandemic has also exposed deep inequalities in accessing green spaces. According to the National Trust, there are 295 deprived neighbourhoods, home to 440,000 people, that are grey deserts, with no trees or accessible green spaces. Its study found that Black and Asian people visit natural settings 60% less than White people.52 Natural England’s People and Nature Survey also showed clear inequalities in the opportunities to engage with nature, with one in three adults not having visited a natural space in a two-week period and one in five adults not having visited nature in a month. Those adults living in an area of high deprivation, those with low incomes, a lower level of education or those who are unemployed are less likely to access nature and green spaces. Older people, people from minority ethnic groups and those with a long-term illness or condition were also less likely to have visited a natural or green space.53

60.Access to green spaces is vital to the health and wellbeing of children and young people, with statistics showing that 83% of children believed that being in nature made them very happy. The same survey of children and young people showed that 60% of children had spent less time outdoors during the pandemic, more than double the proportion that had spent more time outside (25%). As with adult access to green spaces, children’s access to green spaces during the pandemic varied across the population, with 71% of children from minority ethnic communities reporting spending less time outside, compared with 57% of White children. 73% of children from households with annual incomes below £17,000 spent less time outdoors, compared with 57% from households with an annual income above £17,000.54

61.Unless specific action is taken to tackle unequal access to urban green spaces, any increasing demand for green spaces risks exacerbating these existing inequalities. People living in affluent areas with a plentiful supply of urban parks and green spaces will increase their use of these spaces, while people living in less affluent areas with a limited supply of urban parks and green spaces will be left behind.

Inequalities

62.There is a significant risk that the accelerating trends identified above will increase inequalities in our town and cities. Increasing empty retail units in our town and city centres risks limiting the services available to those who cannot access services beyond their local high street. Older people and those with mobility issues may struggle to access services dispersed across a large area, compared to the traditional cluster of services in a town or city centre. People with lower incomes may find it difficult to justify the cost of multiple journeys to access services, rather than a single journey to a town or city centre. Declining town and city centre services are an even greater risk for those who cannot access essential services and retail opportunities online. We explored digital inequality in detail in our report, Beyond Digital: Planning for a Hybrid World,55 and found that those who continue to rely solely on offline services risk being restricted to narrower and more expensive choices.

63.Varying rates of home working across the country risk creating inequalities, both between, and within, towns and cities. As stated by Andrew Carter above, there is already a two-tier system of home working in towns and cities, with the ability to work from home concentrated in more affluent areas. In less affluent towns and cities, such as Burnley, Blackpool and Stoke on Trent, far fewer people work in occupations where it is possible to undertake that work from home. While lower levels of home working may help to shore-up footfall and spending in town and city centres, it may also help to entrench levels of lower paid work. Affluent areas that already benefit from higher levels of higher paid, home working occupations are likely to continue to attract this kind of work, while those areas with lower paid, workplace-based occupations, will continue to see an increase in this kind of work. As such, any increase in home working risks entrenching the polarisation of affluent and less affluent towns and cities across the country.

64.Within towns and cities, increasing rates of home working also risk increasing existing inequalities. As we heard in our Beyond Digital: Planning for a Hybrid World report, increasing home working risks disadvantaging women and increasing gender inequalities.56 Increasing home working may also have an impact on socio-economic inequalities, as even when home working was mandated by the government, it was far more prevalent among higher earners, with more than 80% of workers in the top earning quintile working from home some or all of the time during the pandemic, compared to less than half in the bottom quintile.57

65.As discussed briefly above, any long-term reduction in public transport provision risks increasing inequalities between those who can and cannot access a car. As town and city centres decline, car drivers will continue to be able to access all retail opportunities and essential services regardless of location. Those dependent on public transport will only be able to use shops and services that are accessible by public transport, providing them with a far more limited choice of services and shops. Some groups in particular, such as those on lower incomes who cannot afford to run a car, those too old to drive confidently and those with disabilities or medical conditions that limit their ability to drive, will face potentially increasing inequality. As many of these groups already have lower incomes, it would be difficult to mitigate the impact of a reduction in public transport services by, for example, using more expensive transport methods, such as taxis.

66.There is a wealth of research that shows that some groups and communities struggle to access urban green spaces, with unemployed people, people with low incomes, older people, people with long-term health conditions and people from a minority ethnic group, being less likely to access these spaces. The current increasing demand for urban green spaces risks exacerbating these existing inequalities as people who already have access to urban green spaces will increase their use of these spaces, while people who cannot easily access urban parks and green spaces will continue to struggle to access these spaces, and risk being left behind.


19 Q 80 (Alderman Stephen Martin)

20 Q 17 (Andrew Carter)

21 Q 65 (Councillor Carl Smith)

22 Q 65 (Councillor Susan Hinchcliffe)

23 Written evidence from Lisburn and Castlereagh City Council (PTC0049)

24 80 (Councillor Rob Stewart)

25 Q 86 (Councillor Rob Stewart)

26 COVID-19 Committee, Beyond Digital: Planning for a Hybrid World (1st Report, Session 2019–21, HL Paper 263)

27 BBC, ‘The curious origins of online shopping’, (27 June 2020): https://www.bbc.com/worklife/article/20200722-the-curious-origins-of-online-shopping [accessed 4 October 2021]

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

29 PwC, ‘Store openings and Closures: H1 2019’: https://www.pwc.co.uk/industries/retail-consumer/insights/store-openings-and-closures-h1-2019.html [accessed 5 October 2021]

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

31 BBC News, ‘Budget 2021: Business rates cut for shops, restaurants and gyms’, (27 October 2021): https://www.bbc.co.uk/news/business-59061217 [accessed 15 November 2021]

32 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]

33 Insightdiy, ‘BRC Data Reveals Record Footfall Decline In April’, (18 May 2021): https://www.insightdiy.co.uk/news/brc-data-reveals-record-footfall-decline-in-april/8468.htm [accessed 4 November 2021]

34 ‘Footfall down 75% as England’s lockdown takes toll on retailers’, The Guardian (10 November 2020): https://www.theguardian.com/business/2020/nov/09/footfall-down-75-per-cent-as-england-lockdown-takes-toll-on-retailers-covid [accessed 4 October 2021]

35 Q 53 (Councillor Margaret Davidson)

36 Wiserd, Homeworking in the UK: Before and during the 2020 lockdown (August 2020): https://wiserd.ac.uk/sites/default/files/documents/Homeworking in the UK_Report_Final_3.pdf [accessed 4 October 2021]

37 ONS, ‘Coronavirus and homeworking in the UK: April 2021’, (8 July 2020): https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/coronavirusandhomeworkingintheuk/april2020 [accessed 4 October 2021]

38 Ibid.

39 Ibid.

40 Q 3 (Andrew Carter)

41 COVID-19 Committee, Beyond Digital: Planning for a Hybrid World, (1st Report, Session 2019–21, HL Paper 263)

42 Oral evidence taken as part of the Beyond Digital: Planning for a Hybrid World inquiry (Session 2019–21) Q 83 (Josh Abey)

43 ‘Mind the gaps: Will we go back to public transport after covid’, The Guardian (20 March 2021): https://www.theguardian.com/business/2021/mar/20/mind-the-gaps-will-we-go-back-to-public-transport-after-covid [accessed 4 October 2021]

44 Ibid.

45 Department for Transport, Transport use during the coronavirus (COVID-19) pandemic (updated 24 November 2021): https://www.gov.uk/government/statistics/transport-use-during-the-coronavirus-covid-19-pandemic [accessed 4 October 2021]

46 Q 40 (John Birtwistle)

47 Q 40 (David Cowan)

48 Q 39 (Norman Baker)

49 Q 42 (Norman Baker)

50 Nature England and Department for Environment, Food and Rural Affairs, ‘Public love for nature during Covid-19 highlighted by new survey’, (30 September 2021): https://www.gov.uk/government/news/public-love-for-nature-during-covid-19-highlighted-by-new-survey [accessed 4 October 2021]

51 National Trust, ‘New research shows the need for urban green space’,: https://www.nationaltrust.org.uk/features/new-research-shows-the-need-for-urban-green-space [accessed 4 October 2021]

52 Ibid.

53 Natural England and Department for Environment, Food & Rural Affairs, ‘Public love for nature during Covid-19 highlighted by new survey’, (30 September 2020): https://www.gov.uk/government/news/public-love-for-nature-during-covid-19-highlighted-by-new-survey [accessed 4 October 2021]

55 COVID-19 Committee, Beyond Digital: Planning for a Hybrid World (1st Report, Session 2019–21, HL Paper 263)

56 Ibid.

57 Ibid.




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