High streets in towns and small cities

What people want from the high street, and the businesses found upon them, has constantly evolved and will continue to evolve. Therefore, towns and small cities should avoid conforming to a fixed vision and monolithic approach to the high street as this leads to a greater risk of systemic high street failures. Instead they should plan positively for a resilient future by ensuring diversity and adaptability.

Safe and easy access is crucial to a thriving high street. Better public transport connectivity, particularly through improved bus networks, would help support local high streets.

Car access and available parking are still necessary to sustain many high streets. This is especially true in areas with poor public transport links where pedestrianisation may harm the high street through lack of accessibility. Car parking should be designed so that it makes most efficient use of the space available and is accessible to people with disabilities.

It is vital that members of the community of all ages and conditions feel safe and welcome on their local high street. Adequate street lighting, clear sightlines and “eyes on the street,” as well as a mix of uses including residential and those open into the night, can help to contribute to safer-feeling spaces.

Celebrating the local history of a place and conserving and repurposing historic buildings on the high street wherever possible celebrates the character and heritage of the high street, encourages a greater sense of pride in place and could draw more people in and potentially increase footfall.

Local markets can boost footfall on high streets and contribute to the unique character of towns and small cities across the country. Markets not only contribute to local economies but can also act as catalysts for the high street brands of tomorrow. Local authorities and other market operators should continue to support market traders .

More green space and an improved public realm alone cannot restore the prospects of a high street, but they should be a key consideration in any proposed regeneration programme. Ensuring that a high street has places for young people to socialise and is clean and well maintained may contribute to ensuring that the space is used by a greater proportion of the community, in turn improving footfall and the ability to sustain local businesses and public services in the area.

Public toilets make it possible for everyone to use the local high street with confidence and comfort. They are particularly critical for elderly people and families with young children who might otherwise be reluctant to leave home. There are many ways to ensure decent public toilets are available and maintained on high streets and local authorities should be proactive in pursuing these options. This could include working with local businesses to provice more choice and availability.

Thriving businesses are essential for a busy and successful local high street and business owners should be actively involved in the management of their high street.

Ensuring that local businesses support and are involved in high street regeneration projects is vital. Local authorities should empower and enable local business leaders to drive forward high street regeneration projects .

Business Improvement Districts are a useful tool for coordinating business involvement in their local areas. The Government should support Business Improvement Districts, but they should not be mandated.

The decisions of landlords about whom they are willing to rent to, on what terms, and what level of profit they need or are willing to accept, will impact the mix of businesses operating on a high street. This approach risks increased vacancies or an overprovision of specific types of business.

Reflecting on the potential of Community Improvement Districts, but acknowledging that the framework for these remains unclear, the Government should explore whether the Business Improvement District model should be expanded to require the participation of community representatives beyond local business owners.

High streets are at their most vibrant when they are used by the whole community. Local authorities should ensure that their residents are involved in decision-making about their area through both formal consultations and partnership working.

We are pleased to hear that Ministers are seeking to learn from previous successful programmes. The Government should ensure that accountability mechanisms involving members of the local community, such as Towns Boards , are part of any new programmes to support local regeneration .

Local authorities have a central role to play in the revitalisation of high streets and town centres. This can range from intervening directly to curate mixed use spaces or acting to convene and support local residents and businesses.

Local authorities are not the only organisations able to drive change on the high street, but they are central to the process.

Anyone looking to reform high streets should involve the local authority at an early stage and develop a shared vision. Where a local authority is seeking to lead change it must work in partnership with landlords, business owners and the local community.

Although there is a range of views, the introduction of Use Class E in the planning system has made high streets more adaptable to changing consumer trends. The Government should explore expanding the scope of Use Class E, or expanding another Use Class, to support the renewal of large shopping centres for other leisure purposes.

The expansion of permitted development rights to convert Use Class E properties into homes risks damaging the vitality of high streets and reduces local control over the design and development of high streets. The Government should undertake a review of the policy to examine the impact it is having on high streets relative to the number and quality of new homes delivered.

Where it is necessary to ensure the vitality of the area, local authorities should make use of Article 4 directions to remove permitted development rights for ground floor retail units in high streets and major retail centres designated within their local plan. Such directions can be used as a targeted tool to allow for the concentration of retail on high streets.

High streets do not function in isolation and the introduction of new out-of-town retail and leisure centres can have a significant negative impact on the vitality of a local high street.

When approving new developments and considering how to regenerate their high streets, local authorities should ensure that they are complementary to and optimise the unique offering that high streets can bring to a community. New retail centres must be considered in the wider strategic context of what else is available and accessible in the local area.

The Government should maintain its town-centre-first retail policy within the National Planning Policy Framework. Local planning authorities should clearly set out in their Local Plan in what circumstances out-of-town developments would be permitted, and they should robustly apply the sequential test set out in the National Planning Policy Framework.

We welcome the Government’ s commitment to reconsidering the business rates system. The conclusions of this work should be announced by the end of

The Government should seek to legislate to allow markets operated by local authorities outside London access to the same level of business rates relief available to those markets operated by local authorities within London.

The Government should provide funding to local authorities to maintain an ownership and occupier database for commercial properties within areas designated a high street or major retail centre in their local plan.

The Government should support local authorities to make use of the new High Street Rental Auction powers and should confirm if it will follow the pilot approach set out by the previous Government. If it is not taking this approach, the Government should explain why this is the case, how it will support local authorities instead, and what steps will be taken to review the impact of these new powers.

Owning property on the high street can give local authorities greater influence over the make-up of a town centre and provides opportunities to deliver wider social and economic aims for their local area.

Local authorities that already own assets on their local high street should ensure that they are being utilised to deliver the range of services and businesses wanted by local communities. This could include exploring innovative styles of lease, operating with reduced profit margins, or delivering public services on the high street.

Whilst commercial property acquisition can present exciting opportunities for local authorities, there are risks if insufficient expertise is accessed or held within the authority. The Government should ensure that local authorities seeking to acquire new commercial properties in their local area have accessed the appropriate expertise and are able to effectively manage a commercial development portfolio.

Local authorities should have community asset transfer policies to ensure transfers of ownership to a community group are possible where it is in the best interests of the local community.

People wish to have a mix of provisions on the high street. The provision of public services, including health services, is increasingly seen by local authorities, the NHS and communities as having a role on the high street.

As well as boosting NHS capacity and meeting the needs of local communities, health centres could act as new ‘anchor’ sites for high streets and bring in more people to the local high street.

The Government should set out whether they intend to encourage moving more NHS health services to the high street, including the new mental health crisis centres announced in the Autumn 2024 Budget, and, if so, how they will do so.

In reviewing business cases for the building, or opening, of new government services (such as health care centres, libraries and sport centres) the Government should ensure that wider public benefits are included in its assessment, including those supporting the ambitions held within other Government departments.

New public services including libraries, diagnostic centres and local government buildings should be located on the high street in the first instance, with the same sequential test applied to retail being applied to these services. The Government should amend the National Planning Policy Framework to reflect this.

The range of different Government programmes which provide funding to local authorities, with similar but slightly different purposes, is confusing and indicates a historic lack of policy clarity.

The previous Government’s ‘funding simplification doctrine’ is a sensible approach and should be expanded to all local authorities in receipt of more than one funding stream seeking to revive high streets and town centres. This should be introduced for the next financial year and be a core tenet of any local growth funding reform.

Whilst it is too early to assess the outcomes of the Government ’s Long-Term Plan for Towns, the inclusion of resource funding is an improvement to the previous funding programmes. We are supportive of the Government’s plans to continue the Long-Term Plan for Towns and thus provide stability to local authorities. Any amendments to the programme should ensure that resource funding remains a core feature of the programme.

We note the Minister’s optimism that empowering local authorities will make them a desirable place to work and therefore address the capacity and skills gaps within such organisations. However, this is a long-term, indirect and unguaranteed solution to an immediate issue. Local authorities do not currently have adequate resources and skills to support high streets. Not addressing this proactively and at pace risks undermining the viability of the Government’s plans.

Each local authority should have an active town centre manager to support the development of their high streets and town centres. Town centre managers across the country should share experiences and best practice to benefit from cohort-based learning.

The Government should invest in training and educating town centre managers , or other appropriate local authority staff, to ensure that every local authority has the required skills and expertise to provide tailored support to its own high streets. This could be commissioned from the private sector or coordinated through existing structures.

The bidding system for awarding funding to local authorities for regeneration projects has historically been inefficient and costly for local authorities applying for funding.

We appreciate that the allocative approach taken in the Long-Term Plan for Towns and the UK Shared Prosperity Fund has helped to overcome the costs and burden of bidding; however, bidding processes can serve to ensure that areas in receipt of funding are actively engaged in local projects and able to deliver value for money to the taxpayer.

We consider there is still an appropriate role for bidding processes in allocating funding to local authorities, where it is not overly onerous and serves a clear purpose.

Any future programmes created as part of the local growth funding reforms should have a highly simplified bidding process. The Government should clearly identify the maximum appropriate time and cost of bidding required from local authorities and design the processes accordingly. The Government could consider implementing a two-stage bidding process with a cursory first stage to ensure that only those projects most likely to be chosen within a programme have to undertake the full assessment process.

Parish and town councils that can demonstrate appropriate maturity in their financial management should be eligible to bid for Government funding directly.

Just as each high street faces its own challenges, the question of who takes responsibility for finding solutions and driving change will vary from place to place. In this chapter we set out how landlords, business owners, local community members and local authorities interact to manage successful high streets, and what the key roles and responsibilities are for each group. Businesses and commercial enterprises

Retail and local businesses are central to high streets, as demonstrated by the first formal definition by the Ordnance Survey defining a high street as “a minimum of 15 retail units within 150 metres of each other”. 97 This definition emphasises the key role that businesses and, by extension, business owners have on the high street. Even those such as Mr Rudlin, who suggested that a focus purely on retail is too narrow a definition, acknowledged that the purpose of a high street is to serve a community including through retail and businesses. 98

Whilst the benefit of being on the high street is clear for service businesses, such as hairdressers, which cannot deliver their services online, research has shown that a presence on the high street can also boost the online sales for a brand within the area surrounding the shop’s location by an average of 6.9 per cent in the weeks following the opening. 99 Having a well-maintained and busy high street with a variety of uses supports local businesses: greater footfall for any reason is likely to lead to more customers, even in the case where the person did not travel to the high street to initially visit the store. 100 In contrast, an unappealing high street and a series of vacant units can deter visitors and risks beginning a spiral of decline for the remaining businesses. 101 Considering this, business owners (whether of private or community-owned companies) operating on high streets in towns and small cities have a vested interest in wider measures that lead to popular and busy high streets.

However, the scale of responsibility and opportunity for business owners to influence their local high streets can vary. Andrew Tighe, Strategy and Policy Director at the British Beer and Pub Association, noted: “When you take into account things such as planning, licensing and local infrastructure, an awful lot of levers are outside the control of pubs and wider hospitality.” 102 Paragraph 65 provides further details on the statutory functions of local authorities which can impact on business activity.

Thriving businesses are essential for a busy and successful local high street and business owners should be actively involved in the management of their high street.

Ensuring that local businesses support and are involved in high street regeneration projects is vital. Local authorities should empower and enable local business leaders to drive forward high street regeneration projects. Business Improvement Districts

Business Improvement Districts (BIDs) are bodies (either private companies or in partnership with the local authority) that are funded by a levy on business rate payers in the area. 103 BID boards consist of local business owners and are established through a ballot which takes place every five years. Multiple BIDs with different specific focuses may operate in the same area. For example, in Liverpool there are Accommodation, Culture and Commerce, and Retail and Leisure BIDs, all of which are balloted for separately and will have different relevant levy payers. 104 In BIDs, the funding is ring-fenced for use in that area and can be used for improvements such as cleaning services, safety measures and transport incentives. BIDs may replace functions traditionally considered to be the responsibility of the local authority where it is under financial strain. 105

Since their creation in 2004, the number of BIDs has continually grown and there are currently over 330 in Britain. 106 There are 60 per cent more BIDs per person in Scotland than England, likely owing to the provision of Government funding to support their establishment. 107 When discussing the benefits of BIDs and whether they should be mandated, Ms Nicholls, the CEO of UKHospitality, suggested that BIDs work specifically because they are “grass roots up and organic” and that they provide a useful formal vehicle for bringing groups together. 108

Members of the BID are involved in prioritising activity for their areas, giving retailers a sense of “taking their fate rather more into their own hands; it is something they can do about the area outside their front door”. 109 We heard that BIDs are crucial to creating successful places and in facilitating strong networks in a local place. 110 BIDs have invested over £1 billion in levies into their local areas since 2004, with Brighton and Hove City Council saying that the Brilliant Brighton BID had delivered over £450,000 of additional benefits to the city centre since 2021 by funding street dressing and decoration in the summer, light shows, a dedicated marketing campaign and a security officer. 111 BIDs may take on responsibility for running regular or seasonal local markets as a way to increase footfall, although the majority remain managed by local authorities. 112

Mr Weedon argued that BIDs do improve outcomes for businesses and that “the evidence is that they keep voting them back in”. 113 However, the Royal Institute of Chartered Surveyors said that their members involved in multiple BIDs found them to be inconsistent in effectiveness and Mr Dransfield suggested that “we are tinkering around the edges with BIDs”. 114 BID levies are a further cost for business owners, on top of business rates, a potential service charge and rent. 115 Furthermore, BIDs were criticised by Power to Change for the lack of community involvement, in contrast with Community Improvement Districts (discussed in more detail in paragraph 60), which are positioned specifically to represent the views of local community members. 116 Ultimately, businesses will be focused on their business needs. 117

Business Improvement Districts are a useful tool for coordinating business involvement in their local areas. The Government should support Business Improvement Districts , but they should not be mandated. Landlords, property owners and developers

An analysis by Estates Gazette of properties on 22 British high streets found that just 5.3 per cent of retail and leisure units were owned by their current occupiers. 118 Real Estate Investment Trusts and property companies are the largest landlords on the high street, with overseas owners and UK-based institutions such as pension funds also holding significant amounts of property. 119 Individuals and local authorities also act as landlords on the high street.

Whether a business can find a space to rent, and at a suitable price, dictates its presence on the high street. Since the introduction of Use Class E (explained in more detail in paragraph 77), landlords have had a wider range of options for whom they rent to, and it has opened competition between different types of high street use. 120 Permitted development rights for Use Class E properties also present landlords with the opportunity to convert high street units into residential properties more easily than was previously possible. We heard this may be preferable for landlords faced with paying business rates on an empty property or where a residential property yields greater returns than a business let. 121

The wider economic circumstances, consumer preferences and the rent levels landlords seek to remain financially viable may result in the dominance of certain business types. For example, charity shops, owing to business rates relief and low to no staff costs, “can often afford more competitive rent rates than some of the retailers wanting to take over some space”. 122 Fast food businesses, such as chicken shops, were also cited as being able to afford tenancies as a result of their significant profit margins from high turnover and minimal labour and capital costs. 123

We heard that the issue of vacant properties and “neglectful” landlords could negatively impact the look and feel of a high street and could be a particular issue in disadvantaged areas. 124 Professor Tomaney told us that the issue of vacant properties was related to absentee landlords and an inability to identify who owns specific property, so “even if you want to bring a derelict building back into use, there is a major effort involved in identifying who owns the property”. 125 Historic England identified the role of building owners as the “key obstacle preventing more effective use of property on the high street”, saying that owners too often did not have a direct interest in the success of the wider area and were not incentivised to use properties more effectively. 126 We also heard that some landlords may choose to keep properties empty if reducing the rent would impact the capital value of their portfolio. 127 In Chapter 4 we consider some of the policy proposals to resolve the challenges presented by absent landlords.

Whilst not the typical ownership structure of a high street, landlords who own an extensive area within a town centre can curate and maintain successful high streets with a variety of businesses and services on offer. In Staines-upon-Thames, the CEO of Spelthorne Borough Council highlighted to us that owning the Elmsleigh Shopping Centre not only created a financial return for the authority but also allowed the council to make choices about whom to rent space to based on what would stimulate local vitality and support the community. 128 Councillor Slade gave the example of Poole Town Centre, where the landlord owns the shopping centre and surrounding streets and had “been able completely to reimagine the town centre”. 129 Another example we heard was Catherine Hill in Frome (see Box 4). In contrast, in the more common circumstance where many landlords were operating on one high street it could be difficult to work towards a single vision. 130 Mr Dransfield acknowledged that owning the entire shopping centre gave him the ability to curate their offer, but that: “If you have hundreds or thousands of landlords on one street, they do not have the same agenda.” 131 Box 4: Catherine Hill, Frome Frome is a traditional market town in eastern Somerset, situated 12 miles from Bath and 25 miles from Bristol. Frome Town Council is one of the 279 towns and parishes of Somerset Council, which has been the unitary authority for the area since 2021. Frome is characterised by a large number of local, independent shops and markets, with roughly 75 per cent of retailers being independents and 17 per cent chains. There is a relatively small proportion of vacant properties on the high street. In the 2010s, the town centre manager, employed by Somerset Council, and responsible for managing Frome, established a vacant property schedule and sought to build up good relationships with landlords, who were themselves willing to put together flexible leases and reduce rents. Peter Wheelhouse, Deputy Town Clerk at Frome Town Council, highlighted to us the vital role of local entrepreneur Gavin Eddy, whose decision to offer lower rents on Catherine Hill “[gave] birth to a new artisan shopping quarter”. Frome Town Council supported him and other relevant landlords and enabled a series of local events to help increase footfall to Catherine Hill. One example of this was the council’s early investment in The Frome Independent, a monthly artisan street market, of which the landlord was a founding member. Source: Q 161 (Peter Wheelhouse); Frome Town Council, [Homepage]: https://www. frometowncouncil.gov.uk/ [accessed 4 November 2024]

The decisions of landlords about whom they are willing to rent to, on what terms, and what level of profit they need or are willing to accept, will impact the mix of businesses operating on a high street. This approach risks increased vacancies or an overprovision of specific types of business. Local communities

Whilst some centres may thrive because of seasonal tourist trade, we heard that high streets primarily exist to serve their local communities. 132 Professor Tomaney suggested that the future of successful high streets and town centres “lies in creating a partnership between communities and enabling communities to solve their own problems”. 133 Furthermore, members of local communities may work together to open a community-owned business through organisations such as community benefit societies or social enterprises.

In reviewing its work with 67 high streets across the country to deliver the Heritage Action Zones programme, Historic England identified that local governance structures that gave local communities a say in decisions were key in ensuring that places met the needs of their users, and were therefore ultimately successful. 134 Community Improvement Districts (CIDs) are an example and aim explicitly to provide opportunities for community stakeholders to participate in high street redevelopment. 135 CIDs build on the Business Improvement District (BID) concept (discussed in paragraph 55) and seek to address the criticism that BIDs do not include non-business members of a local area. 136 The High Streets Research Network described the role of “local champions”, particularly for successful community businesses. 137 Power to Change provided funding support for pilots of the CID approach and found that whilst CIDs may not be necessary, they could potentially lead to successful high street redevelopment. 138 The success of the pilots tended to rely on individuals who already had credibility as local leaders and who could use an established network to foster more extensive community connections. 139

Community groups have also argued for community ownership of properties on high streets and have proposed initiatives backed by the private sector to help communities raise money to purchase vacant high street properties. They have argued that the lack of capital, fragmented ownership of assets on the high street and the lack of transparency from landlords are key barriers to communities driving change and bringing about the types of places they would like to see on their high streets. 140 Recognising the role that community ownership can play on the high street, the Government has committed to legislating for the community right to buy in the English Devolution Bill. 141

Reflecting on the potential of Community Improvement Districts , but that acknowledging the framework for these remains unclear, the Government should explore whether the Business Improvement District model should be expanded to require the participation of community representatives beyond local business owners.

Ministers from the new Government emphasised to us that they believe local communities are central to any future work to improve high streets and town centres. The Lords Minister for Housing and Local Government, Parliamentary Under-Secretary Baroness Taylor of Stevenage, emphasised the importance of engaging with young people, to ensure that future town centres will work for them. 142 We were told that any future programmes would seek to empower local authorities and, through them, local communities to take decisions about what their area needs for the future: 143 “There is a great value in local communities being able to determine whether the priorities that they set when they were consulted about their town centres and high streets have been delivered by local leaders.” 144

Former Government programmes, such as the New Deal for Communities, incorporated this approach by establishing a number of local partnerships to oversee local regeneration projects. 145 The Long-Term Plan for Towns, established by the previous Government, also sought to actively involve local communities and business in project oversight through the establishment of Town Boards. 146 Town Boards are made up of local community leaders and employers and the chair must be an independent figure who “is a respected figure in the community with an obvious passion for the place.” 147 Examples given include the leader of a local charitable organisation, a director of a local football club or the head of a further education college.

High streets are at their most vibrant when they are used by the whole community. Local authorities should ensure that their residents are involved in decision-making about their area through both formal consultations and partnership working.

We are pleased to hear that Ministers are seeking to learn from previous successful programmes. The Government should ensure that accountability mechanisms involving members of the local community, such as Towns Boards, are part of any new programmes to support local regeneration. Local Authorities

The structure of local government varies between towns and small cities. 148 Two-tier areas consist of county councils and district councils. In this structure, the county council administers whole county matters such as public transport and highways. District councils handle more local services such as planning and leisure facilities. In unitary authorities, one organisation holds responsibility for all these matters. Unitary areas may be a whole county, part of a county or a single large town or city. Combined authorities are formed when councils within a specific area agree to work together, and each area has a unique settlement and policy powers. Alongside these structures some places have town or parish councils. These are generally responsible for local amenities such as recreational areas, footpaths or cemeteries. Statutory duties

Local authorities have a statutory duty to deliver a range of services which have an impact on high streets. Of these, we received evidence regarding the following areas. Strategic planning

Local planning authorities are responsible for producing strategic policies for their areas and for granting planning permission for new buildings on the high street or other regeneration projects. As part of this role, the National Planning Policy Framework requires Local Plans, which ensure the vitality of town centres by “taking a positive approach to their growth, management and adaptation”. 149 These plans were described as being a central part of the vision for an area and “often at the heart of discussions between and bringing together multiple stakeholder groups”. 150 Data from January 2024 found that only 21 per cent of Local Planning Authorities had adopted a new Local Plan within the last five years; of those without an up-to-date plan, 78 per cent were in the process of creating one. 151 Planning approvals

Local planning authorities are also responsible for approving individual planning applications. This is a reactive process. For example, they are involved in approving pubs and new buildings on high streets as well as retail parks and out-of-town shopping centres. The impact and extent of these planning powers can be varied by central Government policies. In Staines-upon-Thames local business leaders told us about the impact of the local authority’s planning decisions on the high street, suggesting that the decision to restrict out-of-town shopping centres and require an in-town shopping centre to integrate with the existing town centre had been vital to its success. 152 Licensing

Local authorities can provide outdoor trading licences to encourage street activity and markets. Under the Licensing Act 2003, businesses that sell or supply alcohol must obtain a licence from a licensing authority including for late-night activity. 153 Budweiser emphasised that “alongside planning, licensing decisions also have a real impact on the hospitality sector”. 154 For example, Spelthorne Borough Council had used its licensing powers to shape its night-time economy. 155 Discretionary functions

In addition to statutory powers, local authorities have discretionary functions and can play a role in the strategic coordination and facilitation of economic development with local partners, including businesses and community groups. Local authorities can also act in the role of businesses or landlords as described above.

Local authorities can, for example, own or take over units and shopping centres within their high streets to let out or host public services. Through this, a local authority can curate the mix of businesses and services in the town centre on a larger scale. We also heard that local authorities could take over the tenancies for vacant properties and sublet them where the landlords are unwilling to risk directly leasing to independent shops or startups. 156 Local authorities may also have businesses on a high street which pay levies to a BID or are directly involved in establishing a BID. Local authorities currently operate 82 per cent of local markets. 157 Additionally, councillors are members of, and representatives for, the local community. All these activities give local authorities a vested interest in the success of, and active role in supporting, a high street in a similar way to those experienced by private businesses.

Local authorities have a central role to play in the revitalisation of high streets and town centres. This can range from intervening directly to curate mixed use spaces or acting to convene and support local residents and businesses. Agents for change

Whilst we heard that local authorities can, and do, take significant steps and be entrepreneurial to deliver change in their local areas, the Institute for Place Management argued that “local authorities should not be the only agent for change in a place”. 158 Local authorities were criticised for the level of bureaucracy that can be involved in projects and we were told that they might potentially be seen as “part of the problem rather than the solution”. 159

Reflecting on the Heritage Action Zone programme, Historic England noted its success in working with local trusts who were better able to understand local needs and had fewer restrictions to how they work, compared with local authorities. 160 Mark Robinson, Chair of the High Streets Task Force (HSTF), noted that anyone who was a local leader, including people representing businesses and community groups, should be empowered and that successful place-based partnerships were often established by local leaders. 161 Mr Wheelhouse also told us: “It is not always necessary for the public sector to take the lead.” 162

Nevertheless, there was a consensus amongst our witnesses that even where change was being driven by others within the community, local authorities had “an absolutely critical role” 163 and that, owing to their statutory functions, they would always be involved in matters related to the high street. 164 We heard that Ashton-in-Makerfield provided a good example of this working well (see Box 5). Box 5: Ashton-in-Makerfield Ashton is a market town of 29,000 people in the Metropolitan Borough of Wigan which struggles with traffic congestion on the narrow high street, exacerbated by HGVs exiting the M6 nearby. Local people previously described the high street as lacking identity, being largely composed of chain stores without many independent shops or a market square despite a strong local business community. Local residents expressed frustration that although the marketplace was used as a car park, the high street still experienced low footfall and there was a lack of a ‘heart’ to the town. In response to these challenges, in 2022 the council took the lead in building partnerships with the local community and supported the local voluntary sector and businesses. With the support of the High Streets Task Force, it set up the Ashton Innovation Board in 2023 and called for people to join, in order to provide a structure for local people to give their input and to build extra capacity from the bottom up. After being awarded £6.6 million from the Capital Regeneration Programme in the spring budget in 2023, the board has recruited further members from faith groups, schools and emergency services to ensure it is fully representative of the community. 165 It is now working in partnership with the council to shape the funding priorities and plans to improve the town in the future. Source: HSTF, Press Release: Ashton-in-Makerfield: Leading in Partnership on 6 October 2023: https://www.highstreetstaskforce.org.uk/latest-case-studies/ashton-in- makerfield-leading-in-partnership/ ; supplementary written evidence from the HSTF ( HSC0063 )

Local authorities are not the only organisations able to drive change on the high street, but they are central to the process.

Anyone looking to reform high streets should involve the local authority at an early stage and develop a shared vision. Where a local authority is seeking to lead change it must work in partnership with landlords, business owners and the local community. Government

High streets often face local issues and require local solutions; however, the Government still has a vital role in their success. The overall policy framework within which local authorities operate is largely set at a national level. This is particularly true for planning policy where the National Planning Policy Framework and associated Planning Policy Guidance sets out the Government’s economic, environmental and social planning policies for England and forms the basis of more detailed plans and decisions taken by local authorities. 166 Beyond policy decisions, the Government provides substantial capital and resource funding to local authorities for the purposes of high street and town centre renewal. Chapters 4 and 5 discuss in greater detail the role of the Government and the impact its policy and funding decisions can have on high streets.

Multiple Government departments are involved in work on the country’s high streets. The funding programmes we heard about during the course of this inquiry included a range delivered by the now Ministry of Housing, Communities and Local Government (MHCLG) and the Department for Culture, Media and Sport and are detailed in Appendix 4. The majority of these are managed by MHCLG. The Department of Business and Trade and the Treasury all manage policy areas, including taxation, which influence the retail sector, and wider high street, as well. 167 The Association of Town and City Management emphasised a need for “breaking down silos between different Government departments to develop holistic strategies that address the various multifaceted challenges” facing high streets. 168 97 Ordnance Survey, ‘The geography of Britain’s high streets’ (3 January 2023): https://www. ordnancesurvey.co.uk/insights/the-geography-of-britains-high-streets [accessed 9 September 2024] 98 Q 130 (David Rudlin) 99 ‘Physical retail fights back: how high streets are regaining their purpose’, Savills Impacts (July 2023): https://www.savills.com/impacts/ market-trends/physical-retail-fights-back-how-high-streets-are- regaining-their-purpose.html [accessed 9 September 2024] 100 Oral evidence taken before the Housing, Communities and Local Government Committee, inquiry on High streets and town centres in 2030 , 9 October 2018 (Session 2017–19), QQ 40–120 (Tom Ironside et al); High streets in towns and small cities: Staines-upon-Thames visit note (22 August 2024): https://committees.parliament.uk/publications/ 45285/documents/224326/default/ ; written evidence from the Charity Retail Association ( HSC0050 ) 101 Written evidence from Frome Town Council ( HSC0065 ); Charity Retail Association ( HSC0050 ) 102 Q 87 (Andrew Tighe) 103 Ministry of Housing, Communities and Local Government, Business Improvement Districts (November 2014): https://www.gov.uk/guidance/business-improvement-districts [accessed 23 August 2024] 104 Liverpool BID Company, ‘About’: https://liverpoolbidcompany.com /about/ [accessed 9 September 2024] 105 Written evidence from Brighton & Hove City Council, the Brighton & Hove Economic Partnership and the Brilliant Brighton BID ( HSC0029 ) 106 ACS, ‘Local Economy—Business Improvement Districts (BIDs) and Town Teams’: https://www.acs.org. uk/local-economy-business-improvement-districts-bids-and-town-teams . [accessed 12 September 2024] 107 HSTF, ‘A state-of-the-art review of Business Improvement Districts in the UK: Setting the agenda for policy, practice, and research’: https://www.highstreetstaskforce. org.uk/resources/details/?id=a5ba7044–0747-4ff9-87f2-906383994275 [accessed 12 September 2024] 108 Q 78 (Kate Nicholls) 109 Q 53 (Michael Weedon) 110 Written evidence from the Institute of Place Management ( HSC0020 ) and Historic England ( HSC0053 ) 111 Written evidence from Brighton & Hove City Council, the Brighton & Hove Economic Partnership and the Brilliant Brighton BID ( HSC0029 ); ‘Business Improvement Districts celebrate 20 years and £1 billion invested in UK towns and cities’, Institute of Place Management (9 February 2024): https://www.placemanagement.org/news/posts/2024/ february/business-improvement-districts-celebrate-20-years-and-1billion-invested- in-uk-towns-and-cities/ [accessed 12 September 2024] 112 Q 55 (Graham Wilson); NABMA, ‘Markets First—Securing the Future for UK Markets’: https://nabma.com/markets-first-securing-the -future-for-uk-markets/ [accessed 25 September 2024] 113 Q 53 (Michael Weedon) 114 Written evidence from RICS ( HSC0033 ); Q 195 (Mark Dransfield) 115 Q 195 (Amanda Holmes) 116 Q 77 (Josh Westerling) 117 Q 75 (Josh Westerling); supplementary written evidence from Power to Change ( HSC0035 ; HSC0052 ) 118 ‘Who owns the high street?’, EG (16 May 2019): https://www. egi.co.uk/news/who-owns-the-high-street/ [accessed 9 September 2024] 119 Ibid. 120 Q 105 (Councillor Vikki Slade) 121 Written evidence from the Shopkeepers’ Campaign ( HSC0023 ) and Richmond Society ( HSC0044 ); Q 50 (Michael Weedon) 122 Q 42 (Laura Onita) 123 ‘The economics of chicken-shop Britain’, Financial Times (8 December 2023), available at: https://www.ft.com/content/ 1c973989-c44f-4062–88c4-53e7fba0baaa [accessed 9 September 2024] 124 Q 5 (Professor John Tomaney) 125 Ibid. 126 Written evidence from Historic England ( HSC0053 ) 127 Written evidence from Vicky Payne and David Rudlin ( HSC0026 ); High Streets Research Network ( HSC0014 ) 128 High streets in towns and small cities: Staines-upon-Thames visit note (22 August 2024): https://committees. parliament.uk/publications/45285/documents/224326/default/ 129 Q 96 (Councillor Vikki Slade) 130 Q 94 (Councillor Vikki Slade) 131 Q 195 (Mark Dransfield) 132 HSTF, 2020–21: Review of High Street Footfall in England (2021): https ://www.highstreetstaskforce.org.uk/media/opcelyp1/footfall-report-2021-final -for-publication.pdf [accessed 12 September 2024] 133 Q 15 (Professor John Tomaney) 134 Written evidence from Historic England ( HSC0053 ) 135 Supplementary written evidence from Power to Change ( HSC0035 ); the High Streets Research Network ( HSC0014 ); Civic Voice ( HSC0024 ) 136 Q 75 (Josh Westerling) 137 Written evidence from High Streets Research Network ( HSC0014 ) 138 Power to Change, Community Improvement Districts pilot programme: Final report (July 2023): https://www.powertochange.org.uk/wp- content/uploads/2023/07/88-PTC-CID-report-V4-1.pdf [accessed 12 September 2024] 139 Q 70 (David Moynihan, Josh Westerling) 140 Written evidence from Love Wavertree CIC ( HSC0022 ); Civic Voice ( HSC0024 ) and supplementary written evidence from Power to Change ( HSC0035 ; HSC0052 ) 141 Q 212 (Alex Norris MP) 142 Q 210 (Baroness Taylor of Stevenage) 143 Q 207 (Baroness Taylor of Stevenage) 144 Q 204 (Baroness Taylor of Stevenage) 145 Department for Communities and Local Government, The New Deal for Communities Experience: A final assessment—The New Deal for Communities Evaluation—Final report—Volume 7 (March 2010): https://extra.shu.ac.uk/ ndc/downloads/general/A%20final%20assessment%20-%20Executive%20summary.pdf [accessed 4 November 2024] 146 Ministry of Housing Communities and Local Governemnt, Department for Levelling Up, Housing and Communities, Long- Term Plan for Towns: guidance for local authorities and Town Boards (18 December 2023): https://www.gov.uk/government/publications/ long-term-plan-for-towns-guidance-for-local-authorities-and- town-boards/long-term-plan-for-towns-guidance-for-local- authorities-and-town-boards#long-term-plan-for-towns-summary [accessed 4 November 2024] 147 Ibid . 148 LGA, ‘How is local government organised?’: https://www.local.gov.uk/our-support/councillor-and-officer-development/councillor-hub/introduction-local-government/how [accessed 12 September 2024] 149 Ministry of Housing, Communities and Local Government, National Planning Policy Framework (December 2023) para 90: https://assets.publishing.service.gov. uk/media/669a25e9a3c2a28abb50d2b4/NPPF_December_2023.pdf [accessed 12 September 2024] 150 Written evidence from Dr Cath Jackson et al ( HSC0032 ) 151 ‘Planning Data Update 2024’, Savills (15 January 2024): https://research.euro.savills.co.uk/ united-kingdom/to-publish/planning-data-update-2024.aspx [accessed 20 September 2024] 152 High streets in towns and small cities: Staines-upon-Thames visit note (22 August 2024): https:// committees.parliament.uk/publications/45285/documents/224326/default/ [accessed 20 September 2024] 153 Local Government Association, Licensing Act 2003—Councillor ’s handbook (England and Wales) (30 July 2021): https:// www.local.gov.uk/publications/licensing-act-2003-councillors-handbook- england-and-wales-0 [accessed 12 September 2024] 154 Written evidence from the Budweiser Brewing Group UK & Ireland ( HSC0039 ) 155 High streets in towns and small cities: Staines-upon-Thames visit note (22 August 2024): https://committees.parliament.uk/ publications/45285/documents/224326/default/ 156 David Rudlin et al, High Street: How Our Town Centres Can Bounce Back from the Retail Crisis (London: RIBA Publishing, 2023), p 217 157 Q 47 (Graham Wilson) 158 Supplementary written evidence from the Institute of Place Management ( HSC0062 ); see also Q 13 (Professor John Tomaney) 159 Q 13 (Professor John Tomaney) 160 Written evidence from Historic England ( HSC0053 ) 161 Q 147 (Mark Robinson) 162 Q 161 (Peter Wheelhouse) 163 Q 89 (Kate Nicholls) 164 For example: written evidence from Primark ( HSC0047 ); the LGA ( HSC0019 ); Professor Matthew Carmona ( HSC0006 ) Graham Galpin ( HSC0009 ); supplementary written evidence from Power to Change ( HSC0035 ); supplementary written evidence from the BBPA ( HSC0018 ) 165 Department for Levelling Up, Housing and Communities, Capital regeneration projects: accounting officer assessment (updated 30 October 2024): https://www.gov.uk/government/publications /dluhc-accounting-officer-assessments/capital-regeneration-projects-accounting-officer-assessment [accessed 23 August 2024] 166 Ministry of Housing, Communities and Local Government, National Planning Policy Framewor k (updated 20 December 2023): https://www.gov.uk/government/publications/national-planning-policy-framework --2 [accessed 23 August 2024] 167 Written evidence from Primark ( HSC0047 ) 168 Written evidence from the Association of Town and City Management ( HSC0057 ) < Back Next > © Parliamentary copyright 2024 A-Z index Glossary Contact us Freedom of Information Jobs Using this website Copyright Privacy notice Cookie policy Cookie Manager House of Lords - High Streets: Life beyond retail? - Built Environment Committee Accessibility Email alerts RSS feeds Contact us Home Parliamentary business MPs, Lords & offices About Parliament Get involved Visiting Education House of Commons House of Lords What's on Bills & legislation Committees Publications & records Parliament TV News Topics High Streets: Life beyond retail? Contents Chapter 4: What policy levers can be pulled?

This chapter considers the role of local and national policy choices in shaping high streets. Funding programmes that support specific high street renewal activity are considered in Chapter 5. Planning

Local planning policy impacts where and how developers build new retail developments. Through the planning system, Local Planning Authorities (LPAs) can influence the mix of businesses on the high street and to some extent support certain businesses over others to meet wider societal goals. Local authorities have a more reactive rather than propositional role with regards to planning applications, in that if they reject an application, require revisions or impose conditions, the developer or business may move on to another location, and they cannot actively force a company or sector to exist in their area. Use Class E

In September 2020, the then Government amalgamated a number of ‘Use Classes’ within the planning system into a single Use Class E to increase flexibility in building usage and revitalise city centres. Use Class E is a broad category of commercial, business and service uses and allows change in use across these areas without the need to apply for planning permission. For example, a retail shop could be converted into a café. Pubs and bars are not included.

We heard concerns, including from Lords Minister for Housing and Local Government, that the introduction of such a broad Use Class has made it more difficult for local authorities to apply frontage policies to their high streets and has “resulted in lots of the same types of occupants in small areas”. 169 One student told us that the replacement of empty units with offices in their home town meant that “it doesn’t have a high street anymore”. 170 In Epsom, the introduction of Use Class E undermined its town centre planning policy which was protecting retail frontages and had been credited with helping to regenerate the town centre. 171 The council had been maintaining a specific mix of uses on the high street to ensure retail vibrancy, but it concluded this was not possible following the introduction of the new Use Class. 172 Furthermore, RICS and Brighton and Hove City Council noted that the introduction of a single Use Class could inadvertently lead to out-of-town commercial centres such as offices being converted into retail outlets, which compete with the high streets and are not subject to the sequential tests required for new out-of-town retail development. 173

However, many witnesses suggested that introducing a broader Use Class has allowed high streets to adapt more quickly to changing consumer preferences and the closure of major high street chains. 174 Mr Wheelhouse said: “It has kept things moving at a pace that can only be positive for the town centre.” 175 The Shopkeepers’ Campaign also said it had reduced the bureaucratic burden associated with reallocating property use and had given more autonomy to the local economy to respond swiftly to market forces. 176 With regards to controlling the types of businesses on the high street, Sir John stated that he was open to different types of uses if it made the high street busy and full, stating: “I would not turn my nose up at anyone next door.” 177 Dr Cath Jackson et al suggested that this, or another, new Use Class could have an even greater impact if expanded to include cinemas, concert halls and other leisure uses that are perhaps better suited to taking space in large shopping centres. 178

Although there is a range of views, the introduction of Use Class E in the planning system has made high streets more adaptable to changing consumer trends. The Government should explore expanding the scope of Use Class E, or expanding another U se Class, to support the renewal of large shopping centres for other leisure purposes. Permitted development rights

Permitted development rights (PDRs) allow certain building works and changes of use to take place without having to submit a planning application. The Government’s policy on PDRs for converting Use Class E properties to housing has changed regularly over the last four years, alternately expanding, retracting and again expanding access to PDRs. Most recently, in February 2024, the then Government extended PDRs and lowered the threshold for converting Use Class E properties to housing so that commercial buildings of any size could be converted. 179 It also removed the requirement for a property to have been empty for three months. These changes were expected to deliver an additional 1,700 residential units by 2029–30. 180

A mix of uses on the high street, including housing, can help to ensure resilience; however, we heard that allowing conversion through PDRs removes the ability for local authorities to curate their spaces. 181 Councillor Slade told us: “… permitted development rights have caused huge problems. They are also creating a lot of community tension. Residents feel completely disempowered when councils have to tell them that there is nothing they can do.” 182

This inability to control the loss of retail frontages altogether could result in ‘gap-toothed’ high streets. . 183 Interspersing town centres with “dead” retail frontages “may actually reduce the attractiveness and retail footfall rather than enliven it.” 184 The then Government was aware of these risks when expanding PDRs in February 2024. In July 2021, the then Secretary of State for Housing, Communities and Local Government announced a higher threshold for converting commercial units to residential use, describing the “loss of the essential core of a primary shopping area which would seriously undermine its vitality and viability” as “unacceptable”. 185

It was acknowledged amongst our witnesses that “there is a need for a mechanism to enable conversion of surplus retail space to other uses” 186 and RICS suggested that the conversion of long-vacant units into residential properties prevented buildings falling into disrepair and revitalised high streets. 187 In particular, introducing housing on the upper stories of retail premises could serve to make high streets feel safer and livelier, especially in evenings. However, PDRs, especially with no vacancy requirement before the conversion, were said to “cut across any attempt at joined-up thinking”. 188 We also heard that the approach was likely to be unnecessary, as the planning system was willing to allow a high street to flex and change but would deliver this in a more coherent and effective way. 189 For example, Professor Matthew Carmona suggested that more proactive planning could see the densification of retail in specific priority areas and allow the controlled shrinkage of retail and conversion to housing: “planned shrinkage can encourage an intensification in the frontage that remains—including by building residential over and behind retail and thus avoiding the problem of permanent holes appearing in frontages”. 190

The expansion of permitted development rights to convert Use Class E properties into homes risks damaging the vitality of high streets and reduces local control over the design and development of high streets. The Government should undertake a review of the policy to examine the impact it is having on high streets relative to the number and quality of new homes delivered .

Where it is necessary to ensure the vitality of the area, Local Planning Authorities should make use of Article 4 directions to remove permitted development rights for ground floor retail units in high streets and major retail centres designated within their local plan. Such directions can be used as a targeted tool to allow for the concentration of retail on high streets. Local plans and out-of-town shopping

Local planning policy impacts where and how developers build new retail developments. Patrick Melia, CEO of Sunderland City Council, emphasised to us that a key requirement for success in town centre renewal was a vision that is backed up by Supplementary Planning Guidance. 191 Through this, LPAs can influence the mix of businesses on the high street and seek to meet wider societal goals such as promoting public health or ensuring that the community is suitably served. Whilst plans for high streets and town centres may be spread between multiple frameworks or masterplans, the Local Plan and its associated Supplementary Planning Guidance remains the central strategic tool for setting out the framework for an area and providing clarity to stakeholders. 192 In particular, local plans can help to balance a place’s long-term vision with short-term pressures across a broader geographic area, understanding how developments in different parts of a local authority will impact on towns, villages and cities in the area. 193 Local authorities must designate high streets and major retail centres within their plans. 194

We were told that the presence of out-of-town retail and leisure centres could have a significant impact on the success of a local high street. In Staines-upon-Thames local business owners were clear that one reason the town centre continued to thrive in comparison with other local high streets was because of a “uniquely tight planning policy” that restricted out-of-town shopping centres. 195 Moreover, Professor Tomaney cited the introduction of an out-of-town shopping centre in Bishop Auckland as having caused the high street to go into “precipitous decline”. 196 Andrew Malley, then Retail Property Director at Dransfield Properties, agreed with this sentiment, suggesting that one of the main things that would disincentivise Dransfield Properties from investing in a town centre would be an established out-of-town retail centre, or plans to introduce one. 197 The Institute for Place Management was also clear that “the vitality and viability of town centres is impacted by edge-of-town and out-of-town development”. 198

The balance between in- and out-of-town retail and leisure spaces has shifted over the last half-century. During the 1980s and early 1990s there was a rise in approval of new out-of-town or edge-of-town shopping centres, with national planning guidance encouraging their development. 199 Subsequently, the introduction in 1996 of a strengthened Planning Policy Guidance 6, introduced a strong town-centre-first planning policy, reversed this trend and led to far greater investment in high streets that “effectively put a stop to out-of-town development”. 200

Under the previous Government, the Department for Levelling Up, Housing and Communities provided guidance on “planning policy for town centre vitality and viability”, specifically on assessing proposals for out-of-centre development. 201 The guidance is in line with Section 7 of the National Planning Policy Framework (NPPF) and states that out-of-town centre sites should be considered only if suitable sites within the town centre or on the edge of the town centre are unavailable. 202 Local authorities assessing planning proposals for uses that are considered by the NPPF as “main town centre uses” 203 must subject the proposals to a sequential test. The test asks whether the applicant has considered sites within the town centre; if the proposed use can be accommodated on town centre sites; and if not, what sites closest to the centre have been considered. If the proposal has multiple options that are at the edge of or out of the centre, preference should be given to sites most well connected to the centre. Morecambe Town Council stated that a town-centre-first approach to planning had “encouraged a focus on town centres and high streets as the primary locations for retail, commercial and leisure activities”. 204 Primark agreed that the NPPF and guidance had provided a long-established town-centre-first framework for the location of retail. 205

The success of these policies is dependent on the capacity of local planning departments and the willingness of developers in the private sector to submit planning applications for the relevant sites. We heard that the sequential test had acted as “a deterrent where it was a weak case” but that there had been less stringent application of these tests. 206 This was attributed to a potential focus on seeking local jobs and regeneration from local authorities and precedent which had been set by successful planning appeals. 207 The Design Council told us that “the discretionary nature of the planning system also means that policy compliance often ends up in a ‘horse-trading’ negotiation, exploited by the biggest and most well-resourced developers”. 208 Local authorities are in competition with each other to attract development: they are faced with balancing the challenges of needing to attract businesses and greater economic activity whilst considering broader public objectives and maintaining the characteristics of a particular area. The issues of both capacity and skills within local planning authorities were raised as factors limiting the ability to deliver successful high street projects. 209

Ministers told us that the new Government views the balance between out-of-town and high street retail as a local decision and optimistically suggested that, with enough growth, both types of retail centre would be able to thrive. 210

High streets do not function in isolation and the introduction of new out-of-town retail and leisure centres can have a significant negative impact on the vitality of a local high street.

When approving new developments and considering how to regenerate their high streets, local authorities should ensure that they are complementary to and optimise the unique offering that high streets can bring to a community. New retail centres must be considered in the wider strategic context of what else is available and accessible in the local area .

The Government should maintain its town-centre-first retail policy within the National Planning Policy Framework. Local planning Authorities should clearly set out in their Local Plan in what circumstances out-of-town developments would be permitted, and they should robustly apply the sequential test set out in the National Planning Policy Framework. Taxation Business rates

Business rates are levied on all commercial properties and are the product of each property’s rateable value (assigned based on the annual rent of the property) and the ‘multiplier’ (set by the Government). Following the Non-Domestic Rating Act 2023, a revaluation process will take place every three years. 211 In 2022/23, local authorities retained 62 per cent of business rates which accounted for around a quarter of all council spending. 212

Businesses have been critical of the scale of rates, with the Shopkeepers ’ Campaign describing them as “unsustainably high”, 213 and RICS told us their members “consistently tell us that high levels of business rates are the number one barrier to the reoccupation of empty retail property”. 214 The scale of rates was particularly noted as prohibitive in comparison to the tax burden faced by online retailers. 215 There are currently 13 different types of business rates relief including a £4.3 billion package announced at the 2023 autumn statement for a five-year extension to the Retail, Hospitality and Leisure Business Rates Relief. 216 Beyond this, local authorities are able to offer discretionary rates relief schemes, but Artspace Lifespace noted that the schemes may be halted by councils owing to financial pressures. 217 These relief schemes were described by witnesses as “invaluable” 218 and “a critical lifeline”. 219

The Local Government Association criticised the current centralised approach to relief schemes, suggesting that it is “not targeted” and that “if local authorities had more discretion … They would be able to help local and independent businesses”. 220 Businesses in receipt of relief schemes were also critical of the current approach, deeming it “too complicated and unpredictable”. 221 In particular, the short-term basis of some relief schemes drives short-term decision-making and introduces tipping points in specific sectors. 222 The Retail, Hospitality and Leisure Business Rates Relief provides 75 per cent off business rates bills for the 2024/25 financial year up to a maximum of £110,000, which can be difficult for larger businesses such as Wilko and The Body Shop which have faced high profile financial difficulties. 223

Regarding the specific impact on high streets, we heard that the business rates system “penalises town centre uses compared with out-of-town premises” as rateable values (used to calculate the amount of business rates owed) are often far lower in out-of-town centres. 224 Furthermore, Mr Weedon highlighted that the targeting of reliefs can change what types of stores are more likely to be present on a high street, saying that the increase in charity shops in towns “shows that low business rates can definitely produce a large market of small businesses … in towns”. 225 Charity shops receive exemptions from business rates alongside often having lower staff costs owing to the use of volunteers. 226 Another specific example was the permanent Empty Property Relief for listed buildings, which the National Association of Local Councils (NALC) suggested may encourage owners to keep them empty. The process for rates revaluation and time limits on the Empty Property Relief were also cited as barriers to converting the upper floors of retail space to housing and repurposing large retail units. 227 Finally, local markets, the majority of which are run by local authorities, are subject to business rates. Outside the Greater London Authority, legislation governing local authority finances prevents a local authority from providing business rates relief to a market it owns and operates. 228 Mr Wilson argued that this disparity was unjustified and that “some sort of consideration [should be] given to the position of markets, given their role in the local community”. 229

We received a wide range of suggestions for reforming the business rates system. This included introducing a dedicated hospitality sector multiplier, 230 extending relief and removing the cap on access to reliefs, 231 extending empty rates relief, 232 a reduction in all baseline rates, 233 and altering valuation processes to give a better reflection of profitability or turnover. 234 Overall, witnesses were consistent in their views that the current approach to business rates was causing challenges for retailers on high streets and favouring out-of-town retail parks, but there was little consensus on a solution to these concerns or how these changes would interact with the role business rates play in funding local authorities.

In the Labour Party Manifesto, published ahead of the 2024 General Election, it committed to reviewing the business rates system, identifying that the current approach “disincentivises investment, creates uncertainty and places an undue burden on our high streets.” 235 In the October 2024 budget the Chancellor of the Exchequer announced: a continuation of the retail, hospitality and leisure properties business rates relief and the introduction of a permanent lower tax for such properties with rateable values under £500,000 from 2026/27; an intention to introduce a higher multiplier for properties with a rateable value above this threshold; and, a freezing of the small business multiplier for 2025/26. 236 Alongside this a discussion paper, ‘Transforming business rates’, was published setting out the Government’s priorities for changing the system over the course of the Parliament. The intention of any changes would be to protect the high street, encourage investment and “creating a fairer system.” 237 The proposals set out in the paper reflect a number of the concerns we heard during the course of this inquiry. 238 The paper sets out an initial consultation timeline until March 2025.

We welcome the Government’s commitment to reconsidering the business rates system. The conclusions of this work should be announced by the end of 2025. As part of the review , the Government should consider and simplify the range of business rates relief schemes available to ensure that they are effectively supporting successful high streets.

The Government should seek to legislate to allow markets operated by local authorities outside London access to the same level of business rates relief available to those markets operated by local authorities within London. Ownership and tenancies Who owns the high street?

We heard that difficulties in identifying or contacting landlords is an obstacle to reopening empty units, especially considering their role in delivering a successful high street (described in Chapter 2). The High Streets Research Network was highly critical of what it described as “dysfunctional property ownership”. 239 It said some owners are unwilling to be contacted, which is a claim supported by the British Independent Retailers Association and David Moynihan, Head of Services at Locality. 240 Brighton and Hove City Council suggested that coordinating efforts to bring underused properties back into use are hampered by the myriad of property ownership types and interests on its high street. 241

In his oral evidence to the committee, Mr Robinson advocated for a “deep dive into who owns the high street” to effect better policies and understand owner motivations. 242 The High Streets Research Network, Power to Change and Locality all emphasised that greater transparency of ownership would also benefit community groups seeking to purchase property to open community-led businesses. 243 This would likely also benefit any other privately-owned businesses looking to open in the area. 244 Councillor Brown told us that these challenges were also limiting local authorities’ abilities to undertake compulsory purchase orders and other interventions on the high street. 245

The Government should provide funding to local authorities to maintain an ownership and occupier database for commercial properties within areas designated a high street or major retail centre in their Local Plan . High street rental auctions

Looking to address the issue of long-term vacant units on local high streets, the Levelling Up and Regeneration Act 2023 introduced High Street Rental Auctions (HSRA). 246 These are intended to give local authorities the power to require landlords to auction out the rental rights of vacant units in a designated high street or town centre via an auction mechanism.

We heard that the proposal could help to tackle persistent vacancies but that it may be unsuccessful if local authority resources are not available to undertake the auction effectively. 247 Both the Local Government Association and the Institute for Place Management added that the powers would need to be considered within the wider context of why there are persistent vacancies in a space, rather than being treated in isolation. 248 Mr Robinson suggested that, when enacted, the powers were unlikely to see an immediate step change in the number of vacant properties being brought back into use. However, he thought they would provide place leaders with the ability to engage with obstructive property owners and would be “a welcome extra tool”. 249 He also advocated for considering giving local authorities more powers to compel landlords to bring properties back into use or the levying of fines on long term vacant properties on high streets. 250

In March 2023, the then Government launched a detailed consultation to inform the design of the HSRA policy. 251 In its May 2024 consultation response, the then Government anticipated the legislation coming into force in mid-2024 following the release of detailed guidance; however, progress on this was presumably impacted by the July 2024 General Election. 252 Alongside the enactment of these powers, it was proposed that eight local authorities (‘trailblazers’) would work with the Government to implement the policy so that strategic feedback could be gathered. On 11 November 2024, the Government laid the statutory instruments necessary to introduce the HSRA powers; the powers will come into force on 2 December. 253 The announcements makes no reference to ‘trailblazer’ authorities committed to under the previous Government. 254

The Government should support local authorities to make use of the new High Street Rental Auction powers and should confirm if it will follow the pilot approach set out by the previous Government. If it is not taking this approach, the Government should explain why this is the case, how it will support local authorities instead, and what steps will be taken to review the impact of these new powers. Local authority services and direct intervention

It is common for local authorities to own property on their high streets including commercial units, mixed-use buildings and other civic and heritage assets. In its analysis of 3,200 retail premises, conducted in 2019, the Estates Gazette found that the public sector was the third-largest owner of UK high street properties, at around 16.6 per cent. 255 In some areas, such as the city of Bristol, this rose to over 90 per cent. 256 When acting as landlords, local authorities can take a “proactive” and more interventionist approach to managing their local high streets. 257

As major retailers have exited high streets and town centres, some local authorities have chosen to purchase their local shopping centres seeking to ensure continued vitality for centres. For example, Spelthorne Borough Council took back the long lease on the Elmsleigh shopping centre in Staines-upon-Thames and successfully created a social hub for the community. 258 In Stockton-on-Tees the council acquired the Castlegate Shopping Centre in order to replace it with a park. 259 Similarly, in Barnsley, the local authority oversaw the successful development of a central shopping centre (see Box 6). Local authorities can also use their compulsory purchase powers to acquire empty properties on the high street, but Mr Moynihan noted that opaque property ownership (as described above) could make this challenging. 260

Taking ownership of a wider number of assets on a high street can allow local authorities to curate spaces with a masterplan designed to deliver a longer-term ambition. In some instances, local authorities could choose to minimise profits on rents or introduce more flexible leases than the private sector in order to shape the range of businesses on a high street. 261 Pop-up shops and ‘meanwhile use’ were cited frequently as valued short-term occupants of empty units that could benefit from such initiatives. 262 The LGA’s post-pandemic study on creating resilient high streets argued that local authorities should use publicly-owned buildings to host events such as health, leisure and arts activities for the community. 263 Whilst these actions could equally be taken by a private landlord (as described in Chapter 3), we heard that local authorities were more likely to do so in order to achieve wider social or economic aims for the area. Box 6: Barnsley The council in Barnsley purchased its shopping centre, including the covered market, office building and multistorey car park in the early 2000s. It developed ambitious recovery plans modelled on the Tuscan city of Lucca. After these did not progress, the council then went into partnership to develop a new, and more conventional, shopping centre anchored by Debenhams. This was hampered by the financial crisis and never commenced. Eventually, the council decided to take the lead and redevelop the centre alone with a more diverse range of uses. The masterplan included the creation of a new public open space and the extension and refurbishment of the market, a refurbishment of the metropolitan centre, a cinema, a shopping arcade and new parking. The £220 million Glass Works redevelopment project transformed the market, with the public square opening in 2021, and was funded using a combination of reserve funds and borrowing. The council’s approach to financing included an acceptance that it would need to pay an ongoing subsidy to cover running costs, as an investment in the local economy and community. It also opened a new library and an NHS diagnostics centre on the site. More recently, Barnsley received £10.2 million from the Levelling Up Fund to create cultural and wellbeing facilities for young people in the town centre. Source: Written evidence from the Institute of Place Management and the HSTF ( HSC0063 , HSC0064 ); David Rudlin et al, High Street: How Our Town Centres Can Bounce Back from the Retail Crisis (London: RIBA Publishing, 2023), p 173–174

Successfully managing or regenerating commercial properties requires a specific set of skills. Representatives from Spelthorne Borough Council emphasised the need for internal experts with commercial expertise and mindset. 264 We heard concerns about the skills and capacity within local authorities, although this was mostly focused on placemaking and planning skill sets. 265 Last year, research by Public Practice found that 66 per cent of local government placemaking professionals felt they lacked sufficient time and skills to deliver on their authority’s strategic objectives and that this limited the ability to develop effective partnership working. 266

Owning property on the high street can give local authorities greater influence over the make-up of a town centre and provides opportunities to deliver wider social and economic aims for their local area.

Local authorities that already own assets on their local high street should ensure that they are being utilised to deliver the range of services and businesses wanted by local communities. This could include exploring innovative styles of lease, operating with reduced profit margins, or delivering public services on the high street.

Whilst commercial property acquisition can present exciting opportunities for local authorities, there are risks if insufficient expertise is accessed or held within the authority. The Government should ensure that local authorities seeking to acquire new commercial properties in their local area have accessed the appropriate expertise and are able to effectively manage a commercial development portfolio.

Local authorities can also work with local communities and local businesses to regenerate their area, but this may be hampered by a lack of the necessary policies. If a local authority deems a property that it owns surplus to requirements it can transfer the ownership to a community group through a Community Asset Transfer. Sites could also be acquired with this specific intention; for example, Coventry City Council used a compulsory purchase order to buy 27 buildings and sites in its town centre in order to preserve the city’s heritage and regenerate its high streets. 267 As part of its work the council has transferred a number of assets to the Historic Coventry Trust, which was created by Coventry residents in 2011, and the buildings are being converted to workspaces, galleries and affordable housing. 268 However, Mr Moynihan noted that 55 per cent of local authorities do not have a community asset transfer policy. 269 This limits the ability of local communities to step in and take over empty or underused properties on the high street. 270

Local authorities should have community asset transfer policies to ensure transfers of ownership to a community group are possible where it is in the best interests of the local community. Public service delivery

Public services, including libraries and health services, can draw people onto their local high street: “They may go to the doctors and then maybe to the library, they may do some shopping and buy some food, and then they go home. It is a multiple shop.” 271

We heard that relocating public services with a high number of regular visitors to a town centre could increase footfall in that area and was likely to have knock-on benefits for local businesses. 272 For example, redirecting some journeys to work or health care settings to local high streets could have a positive knock-on effect for businesses in the area. In Poole, the town centre, which has been curated by a single landlord, has an NHS outpatients centre as well as a library and charity spaces. Councillor Slade said that this had “completely reinvigorated the town, despite the fact that only about a third of the space is retail”. 273

As well as boosting footfall to the benefit of local businesses, high streets are also a practical location for the delivery of the services themselves as they are often more accessible to local communities. 274 In 2021, the Stockport NHS Foundation Trust proposed relocating some of the services delivered at the Stepping Hill Hospital to the site of a vacant department store in the town centre. 275 A motion from the local council at the time supported these proposals in part because the town centre location would “be more accessible, close to public transport interchanges, and potentially contribute to levelling up and regenerating the Town Centre” 276 . The same is true of other council services: young people living in Lancaster told us that they would like to see greater library study provision in the town centre. 277

Where a local authority owns sites on a high street it may be able to relocate some services more easily 278 . For example, following regaining control of the Elmsleigh Shopping Centre in Staines-upon-Thames, Spelthorne Borough Council is building a new library and museum on the site. It argues this will help to maintain footfall in the shopping centre, as well as draw shoppers towards the council services. 279 This is also providing a viable use for a large empty unit in the shopping centre, which would have been difficult to repurpose or re-let. Vacant stalls in a local market can also be used to provide public services such as face-to-face banking, especially in places that may not be able to sustain a permanent presence. Mr Wilson told us: “In many places, markets are taking on a more significant community role, from health team visits and mental health provision to providing a police facility. There is a long list of markets taking on a non-retail responsibility and filling a vacuum that is being left by banks and other providers in the town centre.” 280

The relocation of NHS services requires partnership working and capital investment from the Government, which is not always straightforward. The previous Government’s Cavell Centre programme supported six pilot projects to build NHS centres designed to bring together health and social care services alongside GP practices and other services such as pharmacies and mental health support. In 2021 NHS Surrey Heartlands was successful in a bid to build one of these six NHS Cavell Centres, bringing together health and social care services in the town centre of Staines-upon-Thames. 281 We heard that the town centre site was chosen because it is both accessible to the local population and would help local businesses. After investment of several million pounds to prepare a planning application for the project, in 2023 the then Government announced that capital funding was no longer available. 282 Those involved felt that “the machinery of the state is obstructive” and the Department for Health and Social Care did not care about, or engage with, the wider benefits of the project despite the project supporting wider Government objectives. 283 Similarly, the Stockport example of moving health services into a vacant department store has not received a decision on funding and the Council has now signed a five-year lease with a furniture store to ensure that the property does not remain vacant in the medium term. 284

The new Government expressed support for the principle of health care, and other public services, moving to the high street suggesting that it “could only be a good thing” and that they expected for it to be a more regular occurence. 285 No information was provided on how the Government would actively be supporting this transition. As part of the Autumn 2024 Budget, the Government announced £26 million to open new mental health crisis centres and the creation of a dedicated fund for upgrading GP surgeries.

People wish to have a mix of provisions on the high street. The provision of public services, including health services, is increasingly seen by local authorities, the NHS and communities as having a role on the high street.

As well as boosting NHS capacity and meeting the needs of local communities, health centres could act as new ‘anchor’ sites for high streets and bring in more people to the local high street.

The Government should set out whether they intend to encourage moving more NHS health services to the high street, including the new mental health crisis centres announced in the Autumn 2024 B udget, and, if so, how they will do so.

In reviewing business cases for the building, or opening, of new government services (such as health care centres, libraries and sport centres) the Government should ensure that wider public benefits are included in its assessment, including those supporting the ambitions held within other Government departments.

New public services including libraries, diagnostic centres and local government buildings should be located on the high street in the first instance, with the same sequential test applied to retail being applied to these services. The Government should amend the National Planning Policy Framework to reflect this. 169 Written evidence from Brighton & Hove City Council, the Brighton & Hove Economic Partnership and the Brilliant Brighton BID ( HSC0029 ), and Vicky Payne and David Rudlin ( HSC0026 ); Q 220 (Baroness Taylor of Stevenage) 170 High streets in towns and small cities: Engagement note (20 May 2024): https://committees .parliament.uk/publications/44828/documents/222719/default/ 171 Written evidence from Vicky Payne and David Rudlin ( HSC0026 ) 172 David Rudlin et al, High Street: How Our Town Centres Can Bounce Back from the Retail Crisis (London: RIBA Publishing, 2023) p 214 173 Written evidence from RICS ( HSC0033 ) and Brighton & Hove City Council, the Brighton & Hove Economic Partnership and the Brilliant Brighton BID ( HSC0029 ) 174 Written evidence from the Shopkeepers’ Campaign ( HSC0023 ); Dr Cath Jackson et al University of Sheffield ( HSC0032 ); UWE Bristol ( HSC0046 ) 175 Q 172 (Peter Wheelhouse) 176 Written evidence from the Shopkeepers’ Campaign ( HSC0023 ) 177 Q 22 (Sir John Timpson) 178 Written evidence from Dr Cath Jackson et al University of Sheffield ( HSC0032 ) 179 Explanatory Memorandum to the Town and Country Planning (General Permitted Development) (England) (Amendment) Order 2024 (SI 2015/596) 180 Secondary Legislation Scrutiny Committee, Drawn to the special attention of the House: Statement of changes in Immigration Rules (HC 556) Correspondence: Letters from DESNZ and DLUHC (16th Report, Session 2023–24, HL Paper 78), pp 8–9 181 Q 50 (Michael Weedon) and Q 103 (Councillor Vikki Slade) 182 Q 105 (Councillor Vikki Slade) 183 Written evidence from Professor Matthew Carmona ( HSC0006 ) 184 Written evidence from Vicky Payne and David Rudlin ( HSC0026 ) 185 Written statement HCWS145 , Session 2021–22 186 Written evidence from Vicky Payne and David Rudlin ( HSC0026 ) 187 Written evidence from RICS ( HSC0033 ) 188 Written evidence from NALC ( HSC0045 ) 189 Q 139 (David Rudlin) 190 Written evidence from Professor Matthew Carmona ( HSC0006 ) 191 Q 173 (Patrick Melia) 192 Written evidence from the University of Sheffield ( HSC0049 ) 193 Written evidence from the Design Council ( HSC0043 ); Artspace Lifespace ( HSC0011 ); the British Property Federation ( HSC0037 ) 194 Written evidence from the LGA ( HSC0019 ) 195 High streets in towns and small cities: Staines-upon-Thames visit note (22 August 2024): https://committees.parliament. uk/publications/45285/documents/224326/default/ 196 Q 5 (Professor John Tomaney) 197 Q 189 (Andrew Malley) 198 Written evidence from the Institute of Place Management ( HSC0020 ) 199 Department for Business Innovation & Skills, Understanding High Street Performance (December 2021) : https://assets.publishing.service.gov.uk/media/5a797e8140f0b63d72fc64c5/11-1402-understanding-high-street-performance.pdf [accessed 22 November 2024] 200 Written evidence from Vicky Payne and David Rudlin ( HSC0026 ); see also Q 185 (Mark Dransfield) 201 Ministry of Housing, Communities and Local Government and Department for Levelling up,Housing and Communities, Town centres and retail (updated 18 September 2020): https://www.gov.uk/guidance/ ensuring-the-vitality-of-town-centres [accessed 23 August 2024] 202 Ministry of Housing, Communities and Local Government, and Department for Levelling up,Housing and Communities National Planning Policy Framework (updated 20 December 2023): https://www.gov.uk/government/publications/ national-planning-policy-framework--2 [accessed 23 August 2024] 203 Ibid. 204 Written evidence from Morecambe Town Council ( HSC0048 ) 205 Written evidence from Primark ( HSC0047 ) 206 Q 191 (Andrew Malley) 207 Ibid. 208 Written evidence from the Design Council ( HSC0043 ) 209 Written evidence from the LGA ( HSC0019 ) and the British Property Federation ( HSC0037 ) 210 Q 208 (Baroness Taylor of Stevenage) 211 Non-Domestic Rating Act 2023 212 Written evidence from the LGA ( HSC0019 ) 213 Written evidence from the Shopkeepers’ Campaign ( HSC0023 ) 214 Written evidence from RICS ( HSC0033 ) 215 Q 87 (Kate Nicholls), QQ 29–30 (Sir John Timpson), Q 53 (Michael Weedon); written evidence from the National Hair and Beauty Federation ( HSC0017 ); the LGA ( HSC0019 ) UKHospitality ( HSC0040 ); NALC ( HSC0045 ) 216 HM Government, ‘Business rates relief’: https://www.gov. uk/apply-for-business-rate-relief/retail-discount [accessed 12 September 2024] 217 Written evidence from Artspace Lifespace ( HSC0011 ) 218 Written evidence from National Hair & Beauty Federation ( HSC0017 ) 219 Written evidence from British Beer and Pub Association ( HSC0018 ) 220 Written evidence from the LGA ( HSC0019 ) 221 Written evidence from the Shopkeepers’ Campaign ( HSC0023 ) and UKHospitality ( HSC0040 ) 222 Written evidence from UKHospitality ( HSC0040 ) 223 HM Government, ‘Business rates relief’: https:// www.gov.uk/apply-for-business-rate-relief/retail-discount [accessed 23 August 2024]; written evidence from the Shopkeepers’ Campaign ( HSC0023 ) 224 Q 189 (Mark Dransfield); written evidence from the Shopkeepers’ Campaign ( HSC0023 ) and the High Streets Research Network ( HSC0014 ) 225 Q 43 (Michael Weedon) 226 HM Government, ‘Business rates relief’: https://www.gov.uk/apply-for-business-rate-relief/ retail-discount [accessed 23 August 2024]; Q 43 (Michael Weedon, Laura Onita) 227 Written evidence from NALC ( HSC0045 ); Graham Galpin ( HSC0009 ); the British Property Federation ( HSC0037 ) 228 Q 52 (Graham Wilson); supplementary written evidence from Graham Wilson ( HSC0005 ) 229 Q 52 (Graham Wilson) 230 Written evidence from British Beer and Pub Association ( HSC0018 ) 231 Written evidence from the Shopkeepers’ Campaign ( HSC0023 ) and British Retail Consortium ( HSC0027 ) 232 Written evidence from Colliers ( HSC0028) 233 Written evidence from the Royal Borough of Kensington and Chelsea ( HSC0051 ) 234 Q 52 (Michael Weedon) 235 Labour Party, Change: Labour Party Manifesto 2024 (June 2024): https:// labour.org.uk/wp-content/uploads/2024/06/Labour-Party-manifesto-

The Government provides funding support to local authorities across the country seeking to revive and regenerate their high streets and town centres. This funding is split between a range of different projects and programmes and across departments. Appendix 4 details a list of those programmes announced by the previous Government that we have identified during the course of this inquiry.

The National Audit Office (NAO) published a report considering the value for money of three of these funding programmes in November 2023. 286 The report focused on the Towns Fund, the Levelling Up Fund and the UK Shared Prosperity Fund, and it considered the expenditure and progress of projects for each fund up to 31 March 2023. On 15 March 2024, the House of Commons Public Accounts Committee (PAC) published the report from its inquiry into the issues raised by the NAO. 287 The NAO concluded that the Department for Levelling Up, Housing and Communities (DLUHC) had “a poor understanding of what had worked in its previous local growth programmes and was not well placed to manage the increase in grant-making required by the programmes.” 288 It also concluded that the department was “slow to agree funding” which “led to many projects needing to be adjusted or rescoped” 289 and the PAC echoed those views. 290 Both concluded that the application processes were inefficient and that the reporting requirements imposed a disproportionately large burden on local authorities. We received evidence on the programmes considered by the NAO and a number of other Government programmes. Witnesses raised similar concerns to those found by the NAO and PAC.

After we had completed taking evidence for this inquiry, the Government announced the Autumn 2024 Budget. Whilst the budget included confirmation that core Levelling Up Fund projects would be supported and the Long-Term Plan for Towns would be retained in some form, it confirmed that there would be wider local growth funding reform. 291 As well as building on the conclusions of the NAO and PAC, this chapter is intended to capture the key lessons to be learned from previous programmes. A patchy and uncoordinated landscape of multiple funds

We heard that the multiple funding programmes were uncoordinated and had overlapping objectives: “Each [programme] is a well-meant bit of public investments … but our [the new Government’s] analysis is that it is less than the sum of its parts.” 292 This was making it confusing for local authorities and difficult for them to plan their applications to secure the best value. Although many of these funds had similar aims, they were not designed in a coherent manner and the programmes were announced separately. 293 According to the NAO, this meant that “local authorities could not plan their bids across the funding streams to secure the most value”. 294 Councillor Slade told the Committee: “Every day, there is one or more bit of funding about which I have to think, ‘I wonder whether my officers are aware of this’. I send it to the relevant officer and ask, ‘Have we bid for this? Is it relevant to us?’ That creates a huge amount of work with people having to respond to me.” 295

Beyond the sheer number of programmes, many local authorities said they needed to continue to bid for multiple funding pots because the application deadlines for one funding scheme closed before they had heard the outcome of an earlier one. For example, the deadline for submitting bids for Levelling Up Fund Round 1 was before the local authorities knew if their bids for the Town Deals programme were successful. 296 Furthermore, being successful in securing funding could be contingent on also being successful in a separate bid. Mr Melia said: “Sometimes if you get funding from one pot, you have to go to another pot to try to get match funding to help the project get across the line. Just give us a single pot of money.” 297 The complexities of the funding system have been demonstrated in Sunderland, as we heard from Mr Melia (see Box 7). Box 7: Sunderland funding In the centre of Sunderland several closures of high-profile retailers took place, including the Debenhams department store and Arcadia shops in the Bridges Shopping Centre in 2021. The vacancy rate rose to 23 per cent in 2022, putting Sunderland in a vulnerable position. Sunderland City Council has bid for various central Government funding schemes for regenerating its high streets. Mr Melia told the committee that navigating the numerous funding programmes “is really time consuming. Practically, on the ground for us, it creates bureaucracy, it slows the pace of investment, and makes it harder to secure private sector investment because of the complexity and bureaucracy of dealing with various government departments and various funding streams. ” 298 Below is a list of the central Government funding programmes from which Sunderland has received support. £25 million from the Future High Street Fund, to be used for five projects within the Riverside Sunderland new urban quarter in the city centre, spanning both sides of the River Wear. £20 million from Levelling Up Funding Round 1, to be used for housing-led redevelopment to increase city-centre living. £14.9 million of core funding from the UK Shared Prosperity Fund, of which £5.9 million is dedicated to supporting local businesses and £4.2 million to investment in communities and place. Sources: Department for Levelling Up, Housing and Communities, ‘Future High Streets Fund: successful and unsuccessful applications’ (3 December 2021): https://www.gov.uk/government/publications/future- high-streets-fund-successful-and-unsuccessful-bids/future-high-streets- fund-successful-and-unsuccessful-applications ; Sunderland City Council, Riverside Sunderland: Masterplan (October 2020): https://www.riversidesunderland.com/sites/default/files/ 2020–10/sunderland_masterplan_relaunch_RevU_spreads.pdf ; Sunderland City Council, ‘Cabinet meeting—11 January 2022: Executive summary sheet—part I’: capital programme 98/99 (sunderland.gov.uk) [accessed 12 September 2024]; Sunderland City Council, ‘UK Shared Prosperity Fund (UKSPF) in Sunderland’: https://www.sunderland.gov.uk/UKSPF [accessed 12 September 2024]

Following criticisms of the complexity in this funding structure, the then DLUHC took steps to simplify the funding landscape for local authorities. It published a funding simplification plan in July 2023, which included simplifying the process for local authorities to change their agreed plans. 299 As part of this simplification plan, 10 local authorities already in receipt of multiple funding streams were invited in July 2023 to participate in ‘pathfinder simplification pilots’ in which money received from multiple funds could be pooled. 300 The selected local authorities were then required to submit investment plans to the department and were able to commence the pilot after their plans were approved. The Government has yet to draw conclusions from the pathfinder simplification pilots.

In January 2024, the then Government announced further steps to simplify funding over three stages: streamlining existing processes and simplifying funds into larger pots; establishing a new ‘funding simplification doctrine’ across Government; and then implementing reforms at the next spending review. 301 The simplification plan is expected to take place across Government departments. 302 Councillor Slade told the committee that “a simplification, a removal of the bidding and a longer-term view would be a lot easier for the council.” 303

We heard from the new Government that they agreed with both our evidence, and the direction of travel from the previous Government, that fewer funding programmes with rationalised expectations on local government was a more appropriate approach: 304 “Our concern is that multiple funding streams mean that real industry is needed from local authorities and local communities in the monitoring that they need to satisfy, and that often the priorities were reflective of central priorities rather than local need. The model that we want to move to through our local growth funding models, our local growth plans, is a more allocative, longer-term, single-pot settlement with greater local discretion and lighter-touch central direction.” 305

Regarding the simplification programme, Alex Norris MP, Parliamentary Under-Secretary of State for Local Growth and Building Safety, suggested the Government would progress beyond the pilots and bring the simplification and integration of funding pots to all communities “as quickly as we can.” 306

The range of different Government programmes which provide funding to local authorities, with similar but slightly different purposes, is confusing and indicates a historic lack of policy clarity.

The previous Government’s ‘funding simplification doctrine’ is a sensible approach and should be expanded to all local authorities in receipt of more than one funding stream seeking to revive high streets and town centres. This should be introduced for the next financial year and be a core tenet of any local growth funding reform. Resource funding and expertise

Witnesses criticised the previous Government’s programmes for focusing on capital funding support and argued that greater access to revenue funding would have been useful. Brighton & Hove City Council stated that revenue-funded initiatives “typically have a quicker impact on high street vitality than large capital investments” and the emphasis on capital funding had restricted the benefits for high streets. 307 The Institute of Place Management told the Committee that “capital funding is just one aspect of place revitalisation and should sit alongside other measures”. 308 Power to Change recommended flexibility between capital and revenue funding to allow local authority expenditure on community-endorsed projects rather than large scale capital projects which may not have local community support. 309

In general, we heard that local authorities face substantial resource and skills shortages in supporting high streets. 310 The British Property Federation stated that “many local authorities no longer have anyone skilled in the disciplines necessary for successful placemaking.” 311 In order to help boost local authority capacity and help local leaders revitalise high streets, the previous Government established the High Street Task Force (HSTF), a consortium of experts and partners which was commissioned for five years (2019–June 2024). It provided consultancy services to local authorities and engagement with stakeholders alongside research and data gathering. Most witnesses who had experience with it viewed the HSTF as having been a valuable source of support. 312 Brighton and Hove City Council told us that it had received expert support from the HSTF to inform a future design code and found their recommendations useful to unlock the potential of a key street in the centre. 313

The previous Government’s Long-Term Plan for Towns (LTPT), published in October 2023, responded to the criticisms about a lack of resource funding. In total, the LTPT provides £1.5 billion of endowment style funding over 10 years to 75 towns across Great Britain to invest in local priorities including supporting high streets. 25 per cent of the funding provided to local authorities under the LTPT is for resource spending. 314 As well as financial investment, the LTPT includes dedicated support to help guide the Town Boards (responsible for developing the area’s long-term plan) and local authorities through the process. In October 2023, the then Prime Minister Rishi Sunak also announced that a Towns Taskforce would be created, which would report directly to the Secretary of State and the Prime Minister and be based in DLUHC. 315 Its purpose was to advise those towns in receipt of LTPT funding on how to develop their plans and take advantage of Government policies, private investment and work with communities. In January 2024, the then Prime Minister Rishi Sunak appointed Adam Hawksbee as the interim Chair for the new Towns Unit, the delivery body for the Long-Term Plan for Towns. 316

The new Government intends to reflect on the taskforce models of the previous Government as it finalises its approach to support local authorities. 317 When reflecting on his time as chair of the HSTF, Mr Robinson emphasised to us that the Government should not miss the opportunity post-election to establish a better approach. 318 Witnesses argued that town centre management and economic development teams within local authorities could play an important role in placemaking. 319 Local authority staff could be provided with training to gain the necessary skills and expertise to deliver effective placemaking initiatives and strategies. Mr Malley told us there was a need to “bring the expertise back into the local authority, rather than have it outsourced.” 320 We heard that future support for local authorities should prioritise “tailored assistance, knowledge sharing, capacity building and long-term strategic planning” 321 as well as “more practical support (for example on planning, convening stakeholders, engaging with the community)”. 322

Throughout their evidence session with us, the new Ministers emphasised the central role of local authorities and local communities in deciding the spending priorities for their area and managing their spending in line with this. 323 When questioned about how this may be impacted by the resource and expertise gaps in local government, the Minister for Democracy and Local Growth suggested that the act of empowering local authorities will make local government a more attractive place to work. He suggested that this in turn would support the recruitment and development of problem solvers with specialist skills within the local community. 324

Whilst it is too early to assess the outcomes of the Government’s Long-Term Plan for Towns, the inclusion of revenue funding is an improvement to the previous funding programmes. We are supportive of the Government’s plans to continue the Long- Term Plan for Towns and thus provide stability to local authorities. Any amendments to the programme should ensure that resource funding remains a core feature of the programme.

We note the Minister’s optimism that empowering local authorities will make them a desirable place to work and therefore address the capacity and skills gaps within such organisations. However, this is a long-term, indirect and unguaranteed solution to an immediate issue. Local authorities do not currently have adequate resources and skills to support high streets. Not addressing this proactively and at pace risks undermining the viability of the Government’s plans.

Each local authority should have an active town centre manager to support the development of their high streets and town centres. Town centre managers across the country should share experiences and best practice to benefit from cohort-based learning.

The Government should invest in training and educating town centre managers, or other appropriate local authority staff, to ensure that every local authority has the required skills and expertise to provide tailored support to its own high streets. This could be commissioned from the private sector or coordinated through existing structures. Inefficient and costly bidding system

Local authority witnesses told the committee that having to bid for multiple pots of funding was time consuming and a strain on already limited resources. Councillor Brown stated: “It is unaffordable on a regular basis for many local authorities to continue constantly to be bidding, particularly if they are not likely to succeed.” 325 According to the LGA, local authorities have historically spent £30,000 on average pursuing each competitive grant. 326

This process also carries a risk that Government funding may be directed towards projects which may not have the greatest impact on high street and town centre renewal. Councillor Slade stated: “if you do not bid, you are not looked at as being ambitious” and that “your MPs quite rightly get cross because they think you should be bidding for everything” but that “you sometimes get money for things that are not seen by your communities as the biggest priority” 327 . The then Government preferred “shovel-ready” 328 bids but the NAO reported that this did not result in quick delivery on the ground, nor did those projects necessarily address the greatest needs of the community. 329 Councillor Brown suggested that councils might find themselves bidding for lower-priority projects if they were the only ones that could satisfy specific criteria; which may not help to deliver coherent placemaking in line with the wishes of local residents. 330 Power to Change was also critical, saying the Government’s approach had “led to the prioritisation of ‘shovel ready’ projects over creating an inclusive and long-term approach to regenerating high streets.” 331 However, Mr Melia noted that with planning it was possible to strike the right balance in designing projects that were ’shovel-ready’ to apply for funding whilst still being meaningful for the community. 332 He said: “We have been very careful in Sunderland to make sure that the projects that are “shovel-ready” align with our vision and what we are trying to achieve at a strategic level for the local authority and for our population.” 333

We also heard that some parish and town councils would benefit from being able to bid directly for Government funding instead of relying on the local authority to submit bids. Mr Wheelhouse told the committee that: “Recognising the professionalism, expertise and track record of town councils in regeneration and acknowledging the intimate knowledge that they hold of their communities’ needs” would be beneficial. 334 Morecambe Town Council echoed this sentiment and expressed frustration in having to rely solely on bids submitted by the city council on its behalf, which were unsuccessful. 335 Lancaster City Council in part attributed its lack of success in bidding for funding to failing to involve stakeholders such as the Town Council in the process. 336

It was also noted that bids could be more effective and successful if they were developed, at least in part, by individuals operating outside local government who may have a better understanding of the needs of the community. Morecambe Town Council cited the example of Southampton BID which worked with Southampton City Council on a successful funding bid. 337

Under the LTPT, the previous Government shifted to an allocation-based funding system in response to the criticisms of the competitive bidding process. The LTPT allocated funding to 75 towns according to levelling-up need, based on an assessment of population size, geographic spread and deprivation metrics, and put “the onus on the Government to present clear and transparent methodological justifications for the determination of allocations.” 338 Whilst witnesses said that it was too early to assess the success of the LTPT, they were supportive of the new approach. 339 Civic Voice praised the allocative approach and the 10-year timeframe of the programme, which provides greater certainty. 340

Ministers from the new Government agreed with the conclusions of Adam Hawksbee, the former Towns Tsar that competitive bidding processes may not be useful for “places that have the lowest level of capacity or the lowest level of leadership, because they will always be least able to put together bids”. 341 The Government told us that it, in line with the previous Government’s conclusions, felt the bidding approach to funding “has had its day” and it would pursuing a more allocative approach for future funding. 342 Whilst it was acknowledged that bidding processes can help to ensure value for money from Government investment, the Minister suggested that programmes such as the UK Shared Prosperity Fund, which provide funding to all local authorities with themes and parameters on which it should be spent, could provide the inspiration for future programmes. 343 It was suggested that improved local authority auditing practice, local democracy and measures potentially introduced through the English Devolution Bill would provide appropriate accountability for local authority spending associated with more loosely defined programmes. 344

The bidding system for awarding funding to local authorities for regeneration projects has historically been inefficient and costly for local authorities applying for funding.

We appreciate that the allocative approach taken in the Long-Term Plan for Towns and the UK Shared Prosperity Fund has helped to overcome the costs and burden of bidding; however, bidding processes can serve to ensure that areas in receipt of funding are actively engaged in local projects and able to deliver value for money to the taxpayer.

We consider there is still an appropriate role for bidding processes in allocating funding to local authorities, where it is not overly onerous and serves a clear purpose.

Any future programmes created as part of the local growth funding reforms should have a highly simplified bidding process. The Government should clearly identify the maximum appropriate time and cost of bidding required from local authorities and design the processes accordingly. The Government could consider implementing a two-stage bidding process with a cursory first stage to ensure that only those projects most likely to be chosen within a programme have to undertake the full assessment process.

Parish and town councils that can demonstrate appropriate maturity in their financial management should be eligible to bid for Government funding directly. 286 National Audit Office, Levelling up funding to local government , HC 191, Session 2023–24 (17 November 2023): https:// www.nao.org.uk/wp-content/uploads/2023/11/levelling-up- funding-to-local-government.pdf [accessed 20 November 2024] 287 Commiteee of Public Accounts, Levelling up funding to local government (Twenty-First Report, Session 2023–24, HC 424) 288 National Audit Office, Levelling up funding to local government , HC 191, Session 2023–24 (17 November 2023): https:// www.nao.org.uk/wp-content/uploads/2023/11/levelling-up- funding-to-local-government.pdf [accessed 20 November 2024] 289 Ibid. 290 Commiteee of Public Accounts, Levelling up funding to local government (Twenty-First Report, Session 2023–24, HC 424) 291 National Audit Office, Levelling up funding to local government , HC 191, Session 2023–24 (17 November 2023): https:// www.nao.org.uk/wp-content/uploads/2023/11/levelling-up- funding-to-local-government.pdf [accessed 20 November 2024] 292 Q 201 (Alex Norris MP) 293 National Audit Office, Levelling up funding to local government , HC 191, Session 2023–24 (17 November 2023): https://www.nao.org.uk/wp-content/ uploads/2023/11/levelling-up-funding-to-local-government.pdf [accessed 20 November 2024] 294 Ibid. 295 Q 101 (Councillor Vikki Slade) 296 National Audit Office, Levelling up funding to local government , HC 191, Session 2023–24 (17 November 2023): https://www.nao.org. uk/wp-content/uploads/2023/11/levelling-up-funding-to-local- government.pdf [accessed 20 November 2024] 297 Q 178 (Patrick Melia) 298 Q 178 (Patrick Melia) 299 Department for Levelling Up, Housing and Communities, Simplifying the funding landscape for local authorities (updated 10 January 2024): https://www.gov.uk/government /publications/simplifying-the-funding-landscape-for-local-authorities/simplifying-the -funding-landscape-for-local-authorities [accessed 23 August 2024] 300 Ibid. 301 Department for Levelling Up, Housing and Communities, Simplifying the funding landscape for local authorities (updated 10 January 2024): https://www.gov.uk/government/publications /simplifying-the-funding-landscape-for-local-authorities/simplifying-the-funding -landscape-for-local-authorities [accessed 23 August 2024] 302 Ibid. 303 Q 98 (Councillor Vikki Slade) 304 Q 201 and Q 206 (Alex Norris MP) 305 Q 201 (Alex Norris MP) 306 Q 206 (Alex Norris MP) 307 Written evidence from Brighton & Hove City Council, the Brighton & Hove Economic Partnership and the Brilliant Brighton BID ( HSC0029 ) 308 Written evidence from the Institute of Place Management ( HSC0062 ) 309 Supplementary written evidence from Power to Change ( HSC0035 ) 310 Q 191 (Andrew Malley), Q 94 (Councillor Vikki Slade), Q 16 (Professor John Tomaney) 311 Written evidence from the British Property Federation ( HSC0037 ) 312 Written evidence from the British Retail Consortium ( HSC0027 ); the British Property Federation ( HSC0037 ); Primark ( HSC0047 ); supplementary written evidence from Power to Change ( HSC0035 ; HSC0052 ) 313 Written evidence from Brighton & Hove City Council, the Brighton & Hove Economic Partnership and the Brilliant Brighton BID ( HSC0029 ) 314 Department for Levelling Up, Housing and Communities, Our Long-Term Plan for Towns (1 October 2023): https:// www.gov.uk/government/publications/our-long-term-plan-for- towns/our-long-term-plan-for-towns [accessed 12 September 2024] 315 Ibid. 316 Department for Levelling Up, Housing and Communities and Jacob Young, Press release: PM appoints Towns Tsar on 25 January 2024: https://www.gov.uk/government/news/ pm-appoints-towns-tsar [accessed 20 November 2024] 317 Q 211 (Alex Norris MP) 318 Supplementary written evidence from HSTF ( HSC0064 ) 319 Written evidence from NALC ( HSC0045 ); British Property Federation ( HSC0037 ); Association of Town and City Management ( HSC0057 ), British Chambers of Commerce ( HSC0002 ); Morecambe Town Council ( HSC0048 ); Q 94 (Councillor Vikki Slade) 320 Q 191 (Andrew Malley) 321 Written evidence from Andrew Grinter ( HSC0001 ) 322 Written evidence from Bill Grimsey ( HSC0036 ) 323 Q 204 (Baroness Taylor of Stevenage) 324 Q 218 (Alex Norris MP) 325 Q 98 (Councillor Susan Brown) 326 Written evidence from the LGA ( HSC0019 ) 327 Q 98 (Councillor Vikki Slade) 328 Ministry of Housing, Communities and Local Government and the Department for Business, Energy and Industrial Strategy, Press Release: £1.3 billion investment to deliver homes, infrastructure and jobs on 4 August 2020: https://www.gov.uk/government /news/1-3-billion-investment-to-deliver-homes-infrastructure-and-jobs [accessed 20 November 2024] 329 National Audit Office, Levelling up funding to local government , HC 191, Session 2023–24 (17 November 2023) p 28: https://www.nao.org.uk/wp-content/uploads/2023/11 /levelling-up-funding-to-local-government.pdf [accessed 20 November 2024] 330 Q 96 (Councillor Susan Brown) 331 Supplementary written evidence from Power to Change ( HSC0035 ) 332 Q 180 (Patrick Melia) 333 Ibid. 334 Q 170 (Peter Wheelhouse) 335 Written evidence from Morecambe Town Council ( HSC0048 ) 336 Ibid. 337 Ibid. 338 Department for Levelling Up, Housing and Communities, Simplifying the funding landscape for local authorities (updated 10 January 2024): https://www.gov.uk/government /publications/simplifying-the-funding-landscape-for-local-authorities/simplifying-the -funding-landscape-for-local-authorities [accessed 23 August 2024] 339 Supplementary written evidence from Power to Change ( HSC0052 ); written evidence from Civic Voice ( HSC0024 ) 340 Written evidence from Civic Voice ( HSC0024 ) 341 ‘The town plagued by dirt bikes that shows why levelling up needs to change’, iNews (19 May 2024): https://inews.co.uk/news/politics/town-dirt-bikes-levelling -up-change-3063511 [accessed 20 November 2024] and Q 205 (Alex Norris MP). 342 Q 205 (Alex Norris MP) 343 Q 207 (Alex Norris MP) 344 Q 204 and Q 207 (Baroness Taylor of Stevenage) < Back Next > © Parliamentary copyright 2024 A-Z index Glossary Contact us Freedom of Information Jobs Using this website Copyright Privacy notice Cookie policy Cookie Manager House of Lords - High Streets: Life beyond retail? - Built Environment Committee Accessibility Email alerts RSS feeds Contact us Home Parliamentary business MPs, Lords & offices About Parliament Get involved Visiting Education House of Commons House of Lords What's on Bills & legislation Committees Publications & records Parliament TV News Topics High Streets: Life beyond retail? 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