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Portas Review

by NBS Information Specialist Michael Smith

The wide-ranging Portas Review makes 28 recommendations including turning defunct stores into gyms, creches and bingo halls to kick start community regeneration as well as a ‘National Market Day’ to drive footfall on to local high streets. The report states that, outside central London, visitors to local high streets had fallen by around 10% over the last three years.

Expansion of the major supermarkets is considered one of the biggest factors behind high street decline. For every 1 spent in UK shops nearly 50p is spent on food and groceries, with the country's 8,000 supermarkets taking more than 97% of this plus a growing percentage of non-food sales. The review highlights concerns about the ‘progressive sprawl’ of supermarkets into areas such as doctor surgeries and opticians that were once the exclusive preserve of the high street. "These critical high street and town centre services must not simply be gobbled up by major supermarkets," says the review.

The supermarket business model relies on high sales volumes to cut prices but the review says that: "We need a more sophisticated understanding of what is a good deal for consumers looking beyond price."

Background

On 17 May 2011 the Prime Minister announced that he had asked Mary Portas, leading retail marketing consultant, to undertake a review of the English high street. The report, The Portas Review – an independent review into the future of our high streets, was published on 13 December 2011.

The purpose of the Portas Review was to identify what the government, local authorities, businesses and others can do together to promote the development of new models of prosperous and diverse high streets. It forms part of the government’s work on the Growth Agenda.

The main aims of the review were to:

  • Examine the case for developing town centres that contribute to promoting economic growth, creating jobs and improving quality of life in local areas
  • Explore new business models for high streets relevant to the modern consumer
  • Recommend what action government, businesses and other organisations should take to create diverse, sustainable high streets where small businesses and independent retailers are able to thrive.

The recent recession has had a significant negative impact on a number of high streets throughout England. The government would like to reverse this trend, working with retailers, local government and others to improve the prosperity and the social and economic contribution of the high street to our lives.

Recommendations

The following list is a summary of the Portas Review’s 28 recommendations to government:

  1. Put in place a ‘Town Team’: a visionary, strategic operational management team for high streets
  2. Empower successful Business Improvement Districts (BID) to take on more responsibilities and powers
  3. Legislate to allow landlords to become high street investors by contributing to their Business Improvement District
  4. Establish a new ‘National Market Day’ where budding shopkeepers can try their hand at operating a low-cost retail business
  5. Make it easier for people to become market traders by removing unnecessary regulations
  6. Government should consider whether business rates can better support small businesses and independent retailers
  7. Local authorities should use their new discretionary powers to give business rate concessions to new local businesses
  8. Make business rates work for business by reviewing the use of the RPI [Retail Prices Index] with a view to changing the calculation to CPI [Consumer Prices Index]
  9. Local areas should implement free controlled parking schemes that work for their town centres
  10. Town Teams should focus on making high streets accessible, attractive and safe
  11. Government should include high street deregulation as part of their ongoing work on freeing up red tape
  12. Address the restrictive aspects of the ‘use class’ system to make it easier to change the uses of key properties on the high street
  13. Put betting shops into a separate ‘use class’ of their own
  14. Make explicit a presumption in favour of town centre development in the wording of the National Planning Policy Framework
  15. Introduce secretary of state ‘exceptional sign off’ for all new out-of-town developments and require these to have an ‘affordable shops’ quota
  16. Large retailers should support and mentor local businesses and independent retailers
  17. Retailers should report on their support of local high streets in their annual report
  18. Encourage a contract of care between landlords and their commercial tenants by promoting the Leasing Code, especially for small businesses
  19. Explore further disincentives to prevent landlords from leaving units vacant
  20. Banks who own empty property on the high street should either administer these assets well or be required to sell them
  21. Local authorities should make more proactive use of Compulsory Purchase Order (CPO) powers to encourage the redevelopment of key high street retail space
  22. Empower local authorities to step in when landlords are negligent with new ‘Empty Shop Management Orders’
  23. Introduce a public register of high street landlords
  24. Run a high profile campaign to get people involved in neighbourhood plans
  25. Promote the inclusion of the high street in neighbourhood plans
  26. Developers should make a financial contribution to ensure that the local community has a strong voice in the planning system
  27. Support imaginative community use of empty properties through ‘Community Right to Buy’ and a new ‘Community Right to Try’
  28. Run a number of high street pilots to test proof of concept.

While some of the recommendations promote a little of the TV drama Mary Portas is famous for, the review succeeds in putting focus on a crisis facing our high streets and sets out a blueprint for government action. Customers want to use their local high street and are increasingly doing so, but rising costs and competition with out-of-town retail parks are skewing the market and making it harder for retailers in town centres.

Comments on the Portas Review

Local councils

Council leaders have generally criticised the High Street Review for failing to consult with them, raising concerns the review could even compound some of the problems on our high streets, including anti-social behaviour.

In the absence of effective consultation, council leaders have outlined their own five point plan which they believe can help towards the government's goal of improving our high streets:

  1. Retail shops alone are no longer enough to encourage people to visit high streets. Councils believe that cultural and community driven plans are needed to revitalise local town centres
  2. Give communities new powers to decide the shops on their high street
  3. Plans to encourage closer working between councils and local businesses
  4. Cut red tape to help councils use their resources better to keep streets clean and safe
  5. Greater local control over transport, such as bus routes.

Councils say they have already been taking action on their high streets. In preparation for the busy Christmas shopping period, they have been improving shop fronts, encouraging late night opening of shops and holding numerous festive events, such as traditional markets.

Local Government Association

The Local Government Association (LGA) has also issued a response to the High Street Review, which states local government is up to the challenge of town centres. The response details how councils are developing town centres, not just as retail outlets, but as community and cultural hubs. The LGA also highlights some of the barriers to this effort, and makes some recommendations of its own on what government can do to help. This will steer government in helping councils to provide a:

  • Unique sense of place within a retail, cultural and community hub
  • Accessible centre
  • Locally responsive planning system
  • Safe, clean and attractive public space
  • Thriving economic hub.

The LGA response quotes recent riot clean-up activity which has shown, that in the face of adversity, residents, businesses and councils up and down the country have a sense of spirit and pride in their community, and in their place.

Planning officers

The Planning Officers Society (POS) has generally welcomed the Portas Review; however, it issued several scathing comments on some of the key findings in the final report. The Society said: "Whilst the report provides a visionary approach to town centre management, all in all the review does not suggest anything significantly to the array of powers already available to a local authority. What authorities do need to do is rigorously apply what they've already got in a coordinated manner in the context of a town centre strategy."

Some of the planning recommendations the POS has commented on are:

  • Address the 'use class' system to make it easier to change the uses of key properties on the high street - POS does not believe a major upheaval of the use classes system is warranted
  • Put betting shops into a separate 'use class' of their own - POS is in favour making betting shops sui generis to at least allow some community input and local control of them
  • Local authorities should make more proactive use of Compulsory Purchase Order powers – POS says that CPO powers are readily available if an authority wants to use them
  • Promote the inclusion of the high street in neighbourhood plans - POS believes that in urban areas neighbourhoods may be more difficult to define, but council wards, housing estates, residents' associations, or town centres and other clear land use or physical features may provide suitable boundaries, depending on the purposes of the proposed plan
  • Developers should make a financial contribution to ensure that the local community has a strong voice in the planning system – POS says, if an authority sets out regeneration of its high street as a priority in its Community Infrastructure Levy (CIL) tariff then developers will be required to make financial contributions
  • Introduce secretary of state ‘exceptional sign off’ for all new out-of-town developments – POS say the secretary of state already has intervention powers if they choose to use them; however, what would be wrong is a blanket approach all such proposals.
Association of Convenience Stores (ACS)

We will work to make sure these recommendations are implemented as fast as possible.

A robust ‘Town Centre First’ planning policy is the most important part of securing the future of Britain's high streets. As a result of this recommendation the ACS expects government to toughen the rules and reverse this trend.

The introduction of ‘exceptional sign off’ must act as a veto on out-of-town schemes that cut across the more complex and sustainable in-town regeneration schemes. This recommendation can and should drive new investment in town centre regeneration.

Business rates are the biggest barrier to market entry and growth for businesses on the high street. ASC welcomes the Portas recommendations and will work with government and councils to identify the means for these changes to be funded.

ACS also welcomes the call for more free parking; the challenge will be finding a means for councils to pay for this.

British Property Federation (BPF)

Business Improvement Districts are the embodiment of the 'big society', with local businesses giving time and money, often voluntarily, to make their high street special. BPF are delighted to see a recommendation for greater landlord involvement in BIDs, and also suggesting how they can be further enhanced with new powers, such as on planning.

In today's retail environment it is essential for landlords and retailers to understand each others' needs inside out, and we have long supported the use of the Leasing Code. However, in reality, only a fraction of new leases are signed with upwards only rent reviews.

No landlord would deliberately leave a property empty, the government's existing tax on empty shops means it makes no economic sense. Empty Shop Management Orders therefore need to be carefully constructed so they only affect those that won't bring an empty back into use, and not those that can't.

BPF acknowledges that out of town shopping has some impact on trade in our town centres. However, we also want retail goods that are cheap and a sector that is efficient. Town Centre First is therefore supported in our sector as something which helps to guide that balance.

Labour party view

As well as the longer-term problems identified in the Portas Review, the government's decision to cut too far too fast is hurting the high street and the wider economy. If the recommendations in the Portas Review are to bear fruit in revitalising the country’s high streets, the current government must wake up to the damage their economic policy is causing families and traders alike.

Labour has called for action on empty shops, a competition test to help consumers and a retail diversity plan. In the short term, to boost the high street, government should consider Labour's five-point plan for growth and jobs, including a temporary cut in VAT to help local shops.

Further Information

The Portas Review – an independent review into the future of our high streets
http://www.maryportas.com/news/2011/12/12/the-portas-review/

LGA response to the High Street Review
http://www.local.gov.uk/web/10161/economy-and-transport/-/journal_content/56/10161/2851932/

February 2012

 

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