Pandemic worsens town centre crisis despite more funding
AN AUDIT WALES report claims that the challenges facing many town centres in Wales are similar to the regeneration of 1945 post-War Britain.
The report, published on Thursday (Sept 2) states: “Town centres are at the heart of Welsh life and high street sustainability requires joined up delivery, brave decision-making, and ambitious leadership.”
However, the report goes on to say that spending public money to retain them as centres for retail could well be throwing good money after bad.
A HISTORY OF FAILURE
Between 1950 and 1980 local authorities prioritised regeneration of town centres creating new and greater retail space.
However, past policy choices, changing consumer expectations and technological advances are now adversely affecting many Welsh town centres.
Those decisions were not taken by current councils but by their predecessors and even the predecessors to their predecessors.
While Pembrokeshire has been a unitary authority since 1996, many of the policies that shaped town centres were taken in previous decades by other councils.
The Audit Wales report finds that: “Many of the challenges facing today’s high street are rooted in planning policy decisions of the Post World War II period.
Town centres were seen as the most valuable area because of footfall, infrastructure, business activity, land and real estate values, services, and non-domestic rates.
And within town centres, it was shopping that had the greatest value on the high street.
Consequently, retail became a key driver of town-centre regeneration.
By expanding central shopping districts, local authorities were able to generate more income through non-domestic rates and create wealth in towns by attracting more shoppers.
However, the drive to redevelop and raise property values left town centres heavily dependent upon shopping.
It changed high streets from vibrant 24-hour places into areas that increasingly had a limited purpose outside trading hours.
The growth in retail generated higher property values and nondomestic rates, retailing as a business is a poor option for economic regeneration.
Jobs in the sector are generally low-skilled, low-paid, and often insecure.
Innovations and new technologies are mostly used to minimise the numbers employed and drive down costs.
And ultimately, retailing is about ‘absorbing’ disposable incomes in an area rather than ‘creating’ new wealth.
By loading town centres with shops, local authorities made short-to-medium term gains but did not foresee a time when high non-domestic rates and out of town shopping would make town centres based solely on retail both too expensive to do business in and obsolete as shopping destinations.
Ironically, local authorities’ decisions – including Pembrokeshire’s – to greenlight supermarket developments killed their golden geese.
Out of town developments and the presence of certain supermarkets in key locations became a retail arms race between councils.
“You have a Tesco? Pah! We have a Sainsbury’s!”
The presence of retail giants was seen as a mark of prestige for local authorities. Sweetheart deals, free parking, new transport links, clustering of brands on one location (a Debenhams and a Marks and Spencer, posh!) served to drive councils’ hubris.
Previously thriving high streets experienced increasing numbers of shop closures.
Empty premises (for example Ocky White, in Haverfordwest) often became derelict and an eyesore, attracting anti-social behaviour.
The businesses that remained often struggled and before long town centres were both unappealing places to trade from and visit.
THE HIGH STREET’S DECLINE
Since January 2020, 64 retail companies have failed in Great Britain resulting in 6,882 stores closing and affecting 133,600 employees by May 2021.
Shopping centres have been particularly exposed to the effects of the pandemic, principally having a lower proportion of ‘essential’ retailing, more department stores and being exposed to greater levels of online competition.
Research suggests a net loss of 402 national chain stores ceasing to trade in Wales during 2020.
Between 2012 and 2020, bank and building society branches in Wales reduced by 28.8%, falling from 695 to 495.
The number of ATMs has also fallen by 18% in the last three years down from 3,189 machines in July 2018 to 2,616 in February 2021.
Both businesses (79%) and citizens (68%) surveyed by Audit Wales overwhelmingly noted that their local town centre lacked these essential services.
The loss of physical banking services directly affects businesses.
Fewer people visit town centres with no banks, building societies or post offices.
Research shows that town-centre businesses have 20% greater profit when there is a bank and post office in their town centre.
Small businesses are significant users of branches and a lack of access to branches can create problems for some micro-businesses.
Most businesses in Pembrokeshire are either Small Medium Sized or micro-businesses.
And the pandemic has now added to these problems.
THE IMPACT OF THE WEB
Since the start of the pandemic, 89% of citizens have used online services more than previously and 74% of town-centre retail businesses introduced online services for the first time.
The UK shops online more and uses mobile devices to shop more than any other European country.
Online shopping is well embedded in UK consumer behaviour and is anticipated to continue to grow, although in some areas of Wales (Powys, the Valleys, Gwent), quite large numbers of adults remain ‘offline’ rather than ‘online’.
1 in 7 shops on Welsh high streets are now empty, despite Welsh Government investing and levering in £892.6m in the last 7 years.
Local authorities don’t have the capacity to respond to this situation.
CLEARER VISION NEEDED
Audit Wales says councils are not always using the powers they have to help regenerate towns.
The Audit Wales review found that there’s optimism for the future of town centres, but local authorities need to be clearer on what their aims are for them.
In addition, the Welsh Government have prioritised town centre regeneration going forward through a national programme of change.
Although there are many stakeholders who have a role in regenerating towns centres, local authorities are key.
Councils’ wide range of statutory powers can determine the shape and environment of town centres from planning and transport, to housing and tourism, for example.
To deliver the best local outcomes policies and joint working need to be aligned and integrated, and resources prioritised on town centres.
Audit Wales recommends that Welsh Government works with local authorities to review and address transport challenges facing town centres and suggests they consolidate funding to reduce bureaucracy.
For local authorities, Audit Wales recommends they use their existing powers and resources available, and work in collaboration with other councils, to achieve the best possible outcome for town centres.
The audit body also recommends that local authorities use its regeneration tool to self-assess their current approaches and identify improvements.
Auditor General, Adrian Crompton said: “Rapid change is taking place in our town centres and the full impact of COVID-19 is yet to be felt.
“Priorities for action that appeared reasonable 18 months ago no longer reflect the changes that are taking place and the challenges that now need to be addressed.
“National and local government need to deliver integrated solutions, make brave decisions and provide bold, ambitious leadership if we are to address the challenges facing our town centres.”
But here is the bottom line.
Almost £900m spent since 2014 and the chief criticism of the funding mechanism is that too many different funding streams for too many purposes have diluted that investment’s effectiveness.
And that’s only Welsh Government Funding.
European funding administered before 2014 spent towards regenerating town centres achieved even less for Pembrokeshire.
In Pembroke Dock, for example, an Oxford Brookes University study examined the claims made for one town regeneration scheme that began in 2010. It found that jobs claimed to have been created were non-existent and that the inward investment had reduced the town’s economic activity by encouraging the conversion of formerly commercial buildings into bedsits and flats while milking the scheme by claiming those residential developments were of commercial benefit.
In Carmarthenshire, a coastal communities regeneration fund was used to supplement that Council’s social services budget instead of spending on regenerating impoverished communities.
Both instances were tantamount to fraud.
When cornered, the bureaucrats concerned pointed to the confused and unclear wording of the regulation and, like squid, made their escapes behind a cloud of ink.
The opportunities for graft, misuse of funds, and pork-barrelling proved hard to resist.
While the Welsh Government acknowledges that funding streams must be simplified, councils still want leeway within the rules to spend on local priorities.
How that spending is monitored and the additional value it adds to town centres is measured will be a particular challenge for town centres’ futures.
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