Urban Strategy Lab

Cities, decision-making and strategy

How to transform the UK’s high streets

Urban Strategy Lab - High Street

The UK’s troubled high streets are the subject of a recent government call for proposals by local leaders to access the £675m Future High Streets Fund, which wants to “see thriving places created where the community feels engaged, and vibrant town centres where people live, shop, use services, and spend their leisure time.”

In this post I argue that any such strategy to improve the high street needs to do four things:

  1. Employ the benefits of system diversification;
  2. Work towards a level playing field;
  3. Boost the local multiplier; whilst
  4. Avoiding the pitfalls of gentrification.

1. System diversification

The state of a community’s high street indicates the health of the community itself. Countless interrelated urban processes come together on the high street, and the latter’s decline can signify the break-down of multiple factors such as economic well-being, community cohesion, citizen engagement, identity and civic pride, demographic equilibrium, vitality of skills and enterprise, and incentives for investment.

Research shows that the more diversified an economy, the stronger its growth. Intuitively, therefore, if the system of urban processes that intersect on the high street is more diverse, the high street is more likely to enjoy long term growth and be more resilient to long term downturns. An exercise to improve the long term prospects of a High Street must start by identifying weakness across the full spectrum of factors including architectural, public realm, environmental, infrastructural, economic, legislative, political, town planning and demographic.

Overlooking contributing factors risks developing solutions that further reduce the diversity of the urban system, and reduce the high street’s long term resilience.

2. Levelling the playing field

Multinational internet retailers use legal loopholes to pay significantly less tax, enabling them to under-price most retailers on the high street. The internet currently accounts for 25%-30% of all retail sales, about 30%+ of which is through Amazon, and this share is growing. Long overdue changes to UK tax legislation are needed to level this very uneven playing field and rebalance the relative competitiveness of high street retail.

3. Boosting the local multiplier

A high local multiplier means more local spending is retained in the local economy. High local multiplier businesses’ profits are likely to be reinvested locally, which reduces dependence on investment by external parties who extract money from the local economy in the form of profits or cost of borrowing.

Supply-side

On the supply side, local plans should favour locally owned businesses over national or multinational retailers on the high street.

A land value tax is a much discussed ingredient of a fairer economy. If a land value tax on business premises is used to fund reductions in business rates, the tax burden is shifted from the occupiers of these premises – businesses generating local economic activity – to the property owners who are frequently situated outside the local economy. Reducing tax outflows from the local economy boosts the local multiplier.

Demand-side

Demand-side initiatives increase local spending by residents in the high street’s catchment area. The presence of full time owner-occupiers who see local spending as an investment in the value of their property must be encouraged through initiatives ranging from changes to council tax and other local initiatives to discourage empty second homes seen in places like St Ives in Cornwall, to legal reform to make residential property investment a far less attractive asset class.

4. Avoiding the pitfalls of gentrification

Success – whether it be for example sociodemographic or economic – brings the risk of changes associated with gentrification, making access to services on the high street less affordable for long-time residents, businesses and workers. Rather than discouraging such success, local policy must better channel development gains and business profitability to change the earning-power of long-time residents through e.g. education programmes, so that they are able to remain in, and not be priced out of, their neighbourhoods.