Published: 10/10/2022 By Ricky Sodha
The High Street, like all sectors of the economy, has been impacted by the COVID pandemic, Brexit and the conflict in Europe, which has led to lower footfall, higher prices, and staff shortages leading to an increase in the number of vacant shops.However, the High Street is more than simply retail - it provides restaurants and pubs, private sector housing, offices, and a wide variety of service-based businesses, such as banks and building societies, dentists and hairdressers.
The Government is tackling this ongoing problem through the creation of the Department for Levelling Up, Housing and Communities. There are examples of local initiatives being put in place by councils. For example, many local authorities have created Business Improvement District (BID) schemes, where a levy of between 1% and 4% of the rateable value of the business premises is charged to fund improvements in town centres.
The Decline of the High Street
Prior to the pandemic, there were ongoing systemic reasons for the increase in the number of vacancies in many UK high streets.- The increase in online shopping and banking. In May 2022, internet sales made up 26.6% of all official retail sales, compared with 19.7% in February 2020.
- Based on hypothetical rental values, higher business rates are a significant cost to the retailer and have not declined in line with the fall in rents.
- With inflation at a 40-year high, consumers are becoming more cautious about their spending.
- Many high streets have become unattractive and poorly maintained, with a lack of diversity in the shops on offer. Many high streets have lost independent retailers, banks and post offices, and are dominated by cafes and charity shops.
- The rise of ‘dark’ stores which are mini-satellite stockholding locations for online retailers.
What is the solution?
The Department for Levelling Up, Housing and Communities is responsible for turning round the decline in the high street. With the recent change in the prime minister and the Cabinet reshuffle, it is uncertain whether the proposals made in the Levelling Up White Paper will be kept in their entirety. The three main initiatives are:- The High Streets strategy which makes it easier to convert empty shops into new uses, such as homes, and grant the automatic right for restaurants, cafes and public houses to offer al fresco dining and takeaways.
- Temporary business rates relief of £1.7billion, covering 400,000 retails, leisure and hospitality properties until the end of 2023. This and the 5-year freeze in the business rates multiplier will ensure all ratepayers receive a tax cut.
- High Streets Task Force: initially, 84 local authorities will be helped with planning and design.
The regeneration of the high street is not only the remit of the government but also the local community. Power to Change, a not-for-profit organisation funded by the National Lottery in 2015, aims to “take back the high street” by:
- establishing a High Street Buyout Fund to purchase important empty buildings to hold until communities are ready to use them long-term.
- creating a Community Right to Buy, offering communities sufficient time to raise funds.
- expanding Community Improvement Districts.
The What Works Centre for Local Economic Growth provides evidence-based research to support the government, local authorities, communities and business owners so that any plans for improving the high street are effective.
In summary:
High streets are an essential part of economic growth; a thriving town centre which attracts visitors is good for the community. Ensuring vacant properties can be occupied by a variety of retailers, businesses and community groups is a challenge recognised by both the public and private sectors. There is the will to change, with plans and legislation in progress to support the goals, but only time will tell if these initiatives will make the differences that lead to a thriving local economy.