I’ve only caught one episode of BBC2′s Robert Peston Goes Shopping, but I’m glad I did. It sharpened my unease about the much vaunted “death” of the High Street.
There are two facts that tend to get lost in this debate.
Fact one: High Streets have always been places of change. The speed of that change may have varied over time; but who’s to say it’s any quicker now than when David I granted trading rights to the new Scottish burghs in the twelth century?
Fact two: High Streets are not, and have never been, only about shops. Yes, shops are a critical element of our High Streets, the economy and the labour market. But so are hairdressers, coffee shops, pubs, banks, markets, festivals and a host of other things .
As the historian Lewis Mumford wrote in his seminal 1961 book The City in History, the earliest settlements were places of exchange – of ideas as much as trade. That is still true today. Some of that exchange happens in shops. Some of it happens in cafes, pubs and banks. Some in temporary settings like markets or festivals. The point is, all of these uses and activities combine to make up the High Street. They all enable people to meet and exchange goods, services, ideas or creativity.
Why is all this important? Because I believe we should ditch our national obsession that an increase in vacant shops equates to the “death” of the High Street. What it actually means is that one ingredient is suffering. Make no mistake, empty shops are unattractive and disastrous for those who lose their jobs. But they are part of a process of change on our High Streets.
What we, collectively, need to do is allow that process of change to happen. Many people say it’s pointless to try and recreate High Streets as they were 50 years ago. I agree. We need to allow High Streets to regenerate naturally. That means allowing business, social enterprises, community groups and public agencies to do what they do best: re-use town centre buildings and spaces, subject to some basic controls like not damaging people’s health and safety, not creating noise and smell nuisances for neighbours, and not damaging historic buildings.
How we encourage our High Streets to regenerate ‘naturally’ in this way is challenging. There are dozens of things we could do, as the Fraser Review of town centres highlights, such as easing planning restrictions that prohibit non-retail uses on High Streets, prioritising ‘Town Centres First’ in public investment and policy decisions, and making it easier to get into and around our High Streets on foot or by other means of transport. All these things are important.
There is another set of issues which receive too little popular attention: the impact of rates and property value. Robert Peston touched on them very briefly in his TV programme, but did not explain why they are so important.
The story, as I understand it, is this.
Business rates on non-domestic properties on our High Streets are too high. They are generally based on property valuations undertaken before the credit crunch in 2008. As Robert Peston demonstrated in his programme, business turnover and profits on the High Street have dropped significantly since then. But shops and town centre businesses still have to pay rates based on pre-2008 financial circumstances. Unfortunately business rates won’t be reviewed in Scotland until 2017.
The Scottish Government announced in early September that it would introduce powers to allow local authorities to set their own local business rates relief (see BBC news story and the Scottish Government’s own announcement). This is a welcome step. Time will tell how many cash-strapped local authorities will choose to offer local rates relief, which of course has the unwanted impact of reducing their income.
Over-valued High Street property is a blockage in another way, too. Unlike renting a house or a flat, leases of High Street business premises involve commitments measured in years, typically with ‘upwards-only’ rent reviews. Even today, many annual rentals were set before 2008, when businesses’ higher profits allowed them to pay higher rents that many of them can no longer support. Property owners are often unwilling to drop their rents to fill empty units, either because they’re happy to ‘sit it out’ in the expectation of eventually getting tenants at higher rentals or (if they have a mortgage) because the banks don’t want to devalue their security. The consequence is that too many properties stay empty when businesses close.
The basic point is that rates, and in many cases rents, are too high – simply because they are based on valuations from a different economic age. That’s why the recent (and influential) Grimsey Review places such emphasis on reforming them – see the Review here and a summary article about it here.
I’m a planner, not an economist or a surveyor. I wish I knew the solution to these complex issues around rates and rents, but I don’t. What I do know is that they need to be tackled nationally. The Scottish Government has made a good start, but more effort is needed at Scottish and UK levels. It’s critical to release the potential that local businesses and communities have to regenerate High Streets – a message that was at the heart of the Fraser Review, and which also comes across loud and clear in the Grimsey Review and the Portas Review.
The government’s response to the Fraser Review is due out in early October. I’m looking forward to it.