A lifeline to local authorities and retailers?
Simon Underwood – Business Recovery Specialist
The Government has decided to provide funding to support the regeneration of High Streets in towns all over the UK, creating an opportunity for nimble retailers and local authorities looking for an increase in footfall and inward investment. The increased availability of flexible leasing arrangements and the mounting pressure to improve business rates, has meant that some retailers might contemplate whether now is a good time to open a new shop.
The Government has announced it will be providing funding of approximately £25m to 14 towns to kick-off their High Street Renewal initiatives. In the future, more towns are expected to also reap the benefits.
How does the High Street Renewal initiative work?
For towns hoping to receive a share of the fund, they have been requested to submit their own Town investment plans with input from a Board of local representatives to take responsibility for its delivery and agree it’s objectives.
The Town’s fund proves to be a big opportunity for local authorities after witnessing the fall of local highstreets, with a rise in vacant properties and reduced footfall. Its likely that just a cash injection won’t be enough, but a strategic plan which considers land use and planning, with retailer worries about restrictive tenancy agreements and business rates. High Streets fail for numerous reasons and the Town’s Fund recognises this. Plenty of residential towns have diminishing populations, which end up reducing the quality of local jobs and social mobility. This is exacerbated by business and shop closures, which create a feel of abandonment.
Towns will normally have their own characteristics and issues that need addressing, meaning their regeneration will need a custom approach. For instance, occasionally the location will be key to existing businesses and there could be room to enhance this advantage as part of a sustainable development plan. It could be possible to encourage businesses to remain in the local area and grow by helping their supply chains. They can do this by improving transport infrastructure and connectivity or investing in skills development. By acting to improve land use and planning, local authorities can enable urban regeneration and deliver changes that excite investors and reinforce the local economy. These benefits will of course also trickle down to retailers too.
Bolton: A regeneration success story
Bolton has been recognised as an evolving regeneration success story in the prospectus. A strategic town centre masterplan was put in place by the town, aimed at four key areas of investment – retail, tourism, office space and housing. The 15-year plan has attained private sector investment, along with the £100m provided by Bolton Council to get the project started. Early signs have shown that the plans are drawing in retailers and businesses back to the town centre. Other areas should follow their lead and use public sector funding to entice private sector investment.
How can local authorities apply?
To be considered for Government funding of up to £25m, every local board has to implement a Town Deal Investment Plan, that has a clear business case supported by financial data. Its important that the plan’s strategic objectives and plans vision are in line with those laid out in the Government’s Town Funds prospectus, to improve its chance to secure funding.
Even so some Boards will be better armed than others to submit and prepare these plans, showing virtuous governance and a strong approach to developing a bespoke investment plan will bring sustainable benefits to the local economy, which will be critical to its success. The prospectus states that the plan should deliver a well-evidenced case for any suggested interventions; an idea for the town that adds existing or growing economic strategies and a description of any priority areas to be addressed over time.
Such funding, from a retail perspective, could give the motivation needed to reinvent local High Streets and introduce new ideas that appeal to today’s consumer. High Streets can try to launch more civic spaces, that can be shared by pop-ups and other retailers, rather than department stores who can no longer attract the footfall needed to justify the use of floor space. The drag effect on the tenant’s business model could be reduced by these spaces as they offer a range of temporary and short-term lease options rather than 10 or 20 years. Alternative solutions may be to create environments that combine experiential entertainment and retail, with facilities for live music events or other attractions.
The first 14 towns to receive up to £25m of funding from the Government under the Town’s Fund programme are:
- Salford – Swinton Town centre
- Croydon – Thornton Heath
- Staffordshire Moorlands – Cheadle
- Rushmoor – Aldershot Town Centre
- Birmingham – Stirchley
- Hyndburn – Accrington Town Centre
- South Lakeland – Kendal
- Preston – Friargate
- Coventry – Coventry City Centre
- Hartlepool – Hartlepool Town Centre
- Cheshire West and Chester – Ellesmere Port Town Centre
- Sandwell – West Bromwich Town Centre
- Knowsley – Huyton Town Centre
- Manchester – Withington District Centre
These towns could present the opportunity to take advantage on the flow of inward investment, for retailers thinking of opening stores or starting new ventures in 2020. Before taking this leap though, they should mature a business plan, focused on a clear understanding of their cost base, accurate cashflow forecasts and a well-tested pricing strategy. Making contact with local authorities at the beginning to investigate possible locations and discover more about the leasing options and business rates, might also help to make sure their proposal is well received.