Industry figures have welcomed Bill Grimsey’s second report on how to revive the UK’s high streets. However, some say aspects of the report are “out of touch” and “too simplistic”.
Among its 25 guidelines, Grimsey’s task force called for a new town centre commission to develop a long-term strategy for local high streets and abolishing business rates.
Industry leaders have come down hard on some parts of the report, such as the suggestion to allow local authorities to fine landlords of shops left vacant for more than six-12 months.
Ed Cooke, chief executive of retail property organisation Revo, said: “Penalising property owners for keeping properties empty is pretty simplistic. Not one person in our organisation is in the business of keeping shops empty.
“As an industry we are working bloody hard to try and create vibrant and exciting places. The idea of further penalties on a shop that is not producing any income is perverse.”
Empty shops fine welcomed
Local authorities, on the other hand, welcomed the suggestion. Steve Curran, leader of Hounslow Council, said: “We have no control on this but I think we should be able to exert financial pressure on shops that are kept vacant deliberately. That would be helpful.
“We now charge full council tax on empty homes. The same should apply for shops. For example, if someone puts up rent on a dry cleaning shop, which forces the occupant to leave and then it sits there empty, the landlord should pay. More flexibility to charge landlords for empty properties would be an advantage.”
The report also suggested a moratorium on out-of-town development, which Cooke also flagged as “too simplistic”.
He noted: “There are cases where the right kind of development outside a town or city centre may well be right. That needs to be properly scrutinised and understood.
“Where it is not right and there is an oversupply of retail space, those sites should not be consented – we are not arguing for a free-for-all when it comes to out-of-town development, and we all support investment in towns and cities – but at the same time we recognise there may be cases for additional developments outside a town centre.
“Most developed nations recognise the need for a local property tax as a fair way of helping to pay for vital services, and throwing the baby out with the bathwater would have major repercussions throughout the UK economy.”
Nonetheless, Cooke was among the industry figures praising the review for adding a signal boost to the challenges the retail sector is facing.
“In truth it is time for less talk and more action,” he said. “The government must act now to reform the punitive business rates system, which is squeezing the life out of many town centres and high streets.
“Only then can we properly address the oversupply of retail space in many places, and create more diverse urban environments by adding homes, workspace, leisure uses and civic services.”
Paul Clement, head of retail place shaping at Savills, added: “We need to think seriously about how we secure a future for our high streets and inject life back into the heart of our communities, especially in this age of new technology.
Meanwhile, Jerry Schurder, head of business rates at Gerald Eve, lambasted the report’s rates proposals for being “out of touch with reality”.
He said: “There is much to be applauded in Grimsey’s review, and any attempt to revive the UK’s struggling town centres should be welcomed, but his business rates recommendations are out of touch with reality.
“Most developed nations recognise the need for a local property tax as a fair way of helping to pay for vital services, and throwing the baby out with the bathwater would have major repercussions throughout the UK economy.”
Reduced burden
He added: “Grimsey is right to point towards a reduced burden as an essential part of breathing life into our town centres. But to dismantle the system entirely, or base it on other measures such as turnover or land value, would be both counterproductive and unfair.
“Numerous reviews have looked at the alternatives and found them wanting, with business groups dismissing the concept of a land value tax, and turnover-based levies being simply a VAT increase in a different guise. To once again propose these as viable options is clutching at straws.”
Schurder said a better option would be to reduce the business rates burden for all businesses and find ways to make up the shortfall, such as a 2% online sales tax.
Other figures showing their support for the review included Melanie Leech, chief executive of the British Property Federation, who praised the way local leadership was placed at the centre of the debate.
She also backed the review’s call for the creation of a town centre commission, saying: “This is a commendable report that deserves serious attention by policymakers and politicians. A group of experts have said we need to reinvent our town centres and had the gumption to set out how we might go about it. Many of our towns are going to need significant adaptation.”
Critical role
The report rehearses well the powers, partnerships, and policies that will help. It recognises the critical role of local authorities as placemakers – and it also recognises that you cannot have a serious conversation about the challenges faced by high streets without considering the impact of business rates.
The review also gained support from Martin Tett, the economy spokesperson for the Local Government Authority, who said: “Many councils throughout the country are already leading the way in transforming the future potential of their town centres in the face of unprecedented changes in shopping habits and the retail landscape.
“We are pleased that the report backs our calls for councils to have more powers and flexibility, particularly in relation to planning, to help shape and deliver vibrant town centres.”
EG was a main data contributor to the Grimsey Review, supplying in-depth and complete analysis on the retail real estate market using Radius Data Exchange. To find out more about how Radius Data Exchange can help you, visit www.egi.co.uk/radiusdx or to speak to our specialist retail analyst, e-mail james.child@egi.co.uk.
To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette
