COVID-19 has left many local businesses in a perilous financial state. More than ever local businesses and communities will be looking towards their local council to support, nurture and strengthen local high streets. Paul O’Brien, APSE Chief Executive, argues councils need to step up to their role as place-shapers, stepping in where developers have withdrawn and looking much more pragmatically at actions to improve local town centres.
Large scale crises – such as the one we currently find ourselves in the thick of – are often regarded as hugely disruptive events. Of course, in one sense they are, as the millions furloughed across the UK can attest to, but these kinds of generation-defining crises can also serve to accelerate pre-existing trends; speeding up the process by which older institutions, technologies and patterns of behaviour lose their popular appeal.
Before COVID, one trend that was depressingly familiar to local authorities was the decline of our high streets. Changing shopping habits driven mainly by the growth of ecommerce has meant boarded-up, empty shops are now a common feature in many of our town centres. A poll from last year revealed that almost every town centre in England and Wales has declined since 2013, with some losing over a fifth of stores.
Another poll found that, in 2019 alone, the number of empty shops in the UK increased by 7,500. With a big-name high-street retailer seemingly facing collapse every day now, one worries what the figure will be for 2020.
This worry is particularly acute for local councils. For generations our high streets and town centres have acted as the lifeblood to our local areas. As well as instilling a strong sense of civic pride amongst communities and contributing enormously to the local economy, the health of the high street has in recent years become increasingly entwined with the health of local government finances.
As of 2020, councils are faced with a system where they have very little central government grants with a shift to self financing. As an example, shire county budgets are made up of 75% council tax, 19% business rates, 4% other grants and just 2% revenue support grant. Therefore, for councils there is an ever greater need to focus on local economic growth and an enlarged council tax base.
Any discussion of local government finance also needs to contend with the giant elephant in the room - COVID. The response to the virus has stripped away 21% of local government’s spending power. At present we wait to see whether this sum – estimated to be in excess of £10bn – will be reimbursed to local government in full or partially.
What with a beleaguered high street and the COVID response draining council resources, one doesn’t need to be an economist to appreciate that this spells trouble for local government finances.
So how can local government respond?
Though it has been said that crises act as accelerators of pre-existing trends, we also know that throughout history necessity has been the mother of invention. And that is exactly how local authorities need to approach this challenge – with inventiveness.
Easier said than done you may say. But it has been done and done successfully. There are many examples of councils across the UK stepping up to their role of place-maker and steward of the local area by intervening, investing and co-ordinating a transformation in their town centres. Key to their success a long-term strategy move beyond a purely retail-oriented high street to one that is more multi-dimensional.
For some years now many councils have been directly intervening and trying to shift from a purely retail driven high street to one that is a mix of retail, residential and recreational; strategically deploying and utilising council assets to drive footfall back into the area and stimulate the local economy.
Creative community groups and artists are hugely important and local government needs to find ways of working with them. Places like Hull, Stockton, Durham and Liverpool have used culture, arts and festivals to bring hundreds of thousands of visitors to the city and town centres to spend in the local economy. Councils have also looked to property investments as a potential means of securing an additional, sustainable source of revenue, whilst also promoting local employment or regeneration activities. Notable examples include:
So long as any portfolio is balanced, riskmanaged and is about the long term, then this kind of borrowing for investment can be both an important source of revenue for authorities and a steer for regeneration efforts.
Time for leadership
The current situation demands that local government has to step up the plate when it comes to repurposing and revitalising town centres and high streets. Whereas developers can sometimes be sclerotic in making decisions - waiting on the right time maximise return on profit rather than weighing up the long-term needs of local communities – councils can act with greater urgency and their decision-making can be much more joined-up.
With more people shopping local as a result of the pandemic, now is the time for councils to accelerate their efforts and energy in delivering more multi-functional town centres, stemming the deterioration of community wealth. The message to town halls across the UK is this: It’s time to be bold and forge a new municipalism; putting town centres at the heart of community life. Councils need to embrace entrepreneurialism and innovation if they are to deliver for struggling communities. •
On 9 and 10 July, APSE held its policy seminar “Loving the Local: The role of councils in our High Streets and Town Centres.” You can read a summary of the event here.
In “Bricks – Mortar – Money”, APSE and CIPFA explore the impact of property investment as a potential means of securing an additional and sustainable source of revenue for local authorities. You can download it for free here.