Labour s Policy Review. Housing. Helping our High Streets: Empowering Local Communities

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1 Labour s Policy Review Housing Helping our High Streets: Empowering Local Communities

2 Labour s Policy Review Helping our High Streets: empowering local communities Our high streets matter For generations high streets have been at the heart of British communities; wellloved economic and social hubs offering jobs, convenience and entertainment. But now the high street is under pressure from a flat-lining economy. Our high streets are changing and some of them are in crisis, becoming disconnected from the character of the community around them, blighted by empty shops and oversaturated with certain types of outlet. In the face of this there is a growing feeling of powerlessness and a sense that communities have lost control of their own high streets. Democratically elected representatives have found that the rules that determine the nature of high streets are inflexible and incapable of allowing for the type of change local people and businesses are calling for them to make. Labour s Policy Review is looking at what we can do to help make high streets vibrant places at the heart of our communities. We want to empower people to take back their high streets and work in partnership with businesses and landlords to build town centres that people want to live, shop, work and invest in. Real localism should give people the power to shape what their high streets look like and determine the balance of shops, entertainment, leisure and housing in their area. 76 per cent of people support new powers for local councils to shape the high street 63 per cent of people support the Government giving new powers to local councils to help them prevent clustering of premises Healthy high streets offer something that shopping centres and internet sites, though quick and convenient, cannot; a sense of character and individuality that reflects the people that live there and makes them proud of their area. We want to give communities the tools they need to create these kinds of sustainable places that will keep people coming back week after week and attract investment and jobs 1

3 to the centre of our towns and cities. That s why Labour wants to give communities greater powers to stop the clustering of certain types of premises, such as payday loan companies, and support locally-led diversification of high streets and town centres. We believe communities have the local knowledge necessary to shape high streets that attract people for more than convenience, bringing in business and investment both now and in the long run. These proposals will form part of a wider assessment of how Labour can support both the high street and real localism. Hilary Benn MP, Labour s Shadow Communities and Local Government Secretary: "Many people feel increasingly powerless as they see payday loan companies and betting shops taking over their local high street. That's why Labour would give local communities new planning freedoms so they can prevent clustering of certain types of premises and breathe new life into places. Local people are best placed to decide the kind of high street they want for them and their families to live, socialise and shop." Roberta Blackman-Woods MP, Shadow Planning Minister: High Streets can be real hubs for local community leisure and cultural activities as well as locations for business and retail. We want to give communities and local councils the tools they need to reshape their high street. This will help ensure high streets are vibrant community centres will support their long term economic sustainability. 2

4 State of our high streets The global economic downturn can be felt in local high streets up and down the country. The Tory-led Government has choked off the economic recovery and our flat-lining economy has hit town centres and high streets hard. Consumer spending has been constrained by high inflation and stagnant wages leading to a 6 per cent fall in real disposable income since This has had a devastating impact on our high streets. One in seven shops now lie empty (14.2 per cent) a threefold rise since 2008 and households names such as HMV, JJB sports, and many others have been forced to close a large number of stores or shut up shop entirely. 1,800 shops closed last year - a staggering 10 fold increase on the year before 1. In this economic climate there is growing concern about the clustering and proliferation of specific kinds of premises, 1,800 shops closed last year such as betting shops, payday loan companies and fast food outlets. In many places across the country the change on our high streets has been striking. Nationally there are 20 per cent more payday loan shops than a year ago and 3.3 per cent more betting shops 2. These are taking the place of independent retailers, clothes shops and health food shops. There are now more than twice as many betting shops on British high streets as all the cinemas, bingo halls, museums, bowling alleys, arcades, galleries and snooker halls combined. 3 This trend further threatens the long term sustainability and attractiveness of high streets by undermining their ability to attract a wider customer base and other businesses. Currently communities can do very little about the problem of overconcentration of these types of premises even when they are deterring people from shopping in the area Ibid 3 Local Data Company 3

5 Cause for hope There is a future for the high street and one of the most striking trends is the increasing importance of shopping as an experience. Studies have shown that many people want to spend their time shopping in attractive places, with a good mix of retail and leisure. For instance, the Association of Town Centre Management has indentified the importance of the mix of leisure, entertainment and cultural facilities alongside shops as one of the key characteristics of a successful town centre. The increasing importance of entertainment, service and leisure outlets is reflected by the relatively strong performance of these uses which have markedly lower vacancy rates than traditional retail outlets. The most recent Local Data Company report found that whilst 14.2 per cent of shops are empty, the total vacancy rate (including empty shops, restaurants, banks and other service and leisure uses) is around 2 per cent lower 4, as retail makes up around 70 per cent of our high streets, these other uses have a vacancy rate of around 8 per cent 5. Due to the rise of well managed shopping centres and competition from the internet, high streets and town centres must be places people want to spend time if they are to survive. They need to work harder to attract visitors and investment; the type and balance of shops is central in this. In her review of the high street, Mary Portas states that when a high street has too much of one thing it tips the balance of the location and inevitably puts off potential retailers and investors 6. She cites betting shops and fast food outlets as particularly worrying when they cluster together. An opinion poll from the LGA reached a similar conclusion showing that 37 per cent of people actively identify that the over-concentration of certain types of shops puts them off shopping in an area 7. Where there is a vibrant mix of retail, entertainment, leisure and other uses in an attractive environment the high street can thrive. We want to give local councils greater powers to create and promote such a balance. 4 Local Data Company End year shop vacancy report 2012 February Calculated at though shops account for 70% of high street

6 Case studies: success stories Didsbury: Didsbury, in Greater Manchester, has a vacancy rate of just 3.5 per cent. This has fallen from a high of 11.5 per cent 3 years ago. Part of this success is due to the mix of shops; Didsbury has a higher percentage of leisure venues, bars, cafes and services like banking and hairdressing than the national average. Bookmakers and fast food shops are still present but are not clustered together, with only 1 bookmaker in the area and 4 fast food restaurants. Partly as a result of this success Didsbury is a sought after place to live. Cheshire Life in their article Why you should move to Didsbury states rather than get swallowed up by the city, Didsbury has a personality and character all of its own. The main shopping streets are packed with independent shops and boutiques which sit remarkably well with the bigger name high street giants. 8 York: This success has been mirrored on a much larger scale in York which has one of the lowest vacancy rates of any large town centre in the country with 8.4% of shops empty, which although higher than desired is markedly better than many other areas. There is clear evidence that the success of York is in part due to its portraying itself as a destination shopping centre. This is shown in the number of independent shops, which make up a greater proportion of the high street than is usual. It is also reflected in the high number of entertainment venues; there are many more cinemas, concert venues and other entertainment venues even once tourist attractions have been discounted. At the same time, the attractiveness of the City centre has been supported by the absence of clustering. There are 10 bookmakers in the area, almost half the national average accounting for only 0.89 per cent of all units and of these no two are on the same street. Similarly, there are 14 fast food restaurants spread throughout the City centre

7 Supporting localism and empowering communities Places like Didsbury and York are few and far between and this is often because people, businesses and local representatives do not have the tools to be able to encourage the diversity that has allowed the most successful places to thrive. Our high streets need to adapt and evolve to a new world but communities should not be left as powerless bystanders who feel they can do nothing about the nature of their local high street. Communities need to take on responsibility for shaping, developing and promoting their area and getting actively involved in creating places they and their neighbours will shop. In One Nation everyone should be given real power over, and a real stake in the places they live wherever that may be and however much they earn. The Government s conception of planning as a little more than a brake on growth is misplaced. They have failed to listen to what businesses, retail experts and communities are telling them; that good high street planning, with communities at the heart, can be a powerful tool in shaping successful places and resilient local economies. Proposals Labour wants to give communities greater powers to stop the clustering of certain types of premises and support locally-led diversification of high streets and town centres. Therefore, as part of our policy review, we a looking at ways to: 1. Allow local authorities to put some types of business into a separate use class or use classes. 2. Give local authorities powers to locally determine permitted development rights. 3. Strengthen neighbourhood planning and look at retail diversity schemes to allow communities to encourage diversity on their high streets. Proposal 1: Preventing clustering; a new use class Use classes play a central role in the planning system by defining the potential uses of buildings. For instance, the system distinguishes between residential, industrial, retail and office space with each use being assigned a letter (from A to D). It also distinguishes between different types of businesses and residential property etc i.e. shops are A1 whilst financial institutions are A2. 6

8 This system not only protects certain uses but also streamlines the system by allowing for some changes without the need to apply for planning permission and with a small amount of reform we can maintain the strength of the current system but give local authorities more power to adapt it to suit local needs. We are considering the creation of an additional 68% of people do not think umbrella use class. This approach would retain all the that it should be possible current use classes but add one more which could be for a bank to be turned into used to separate specific types of premises from a betting shop without others currently in the same use class, according to planning permission. local circumstances and concerns. This would be an immediately available way of allowing councils to control the over-concentration of certain types of premise and at the same time ensure minimal upheaval to the rest of the system. It would ensure that communities are empowered to stop their high streets being taken over by one or two types of shop and prevent a downward spiral in the area's appeal to potential investors and businesses. Currently, the use classes system, which works well in so many other areas, renders councils unable to stop betting shops, fast food shops or payday loan companies from taking over high streets and town centres because these fall into use classes alongside much wanted outlets like banks and restaurants. As a result planning permission does not have to be sought to set up one of these premises in a unit that was used for a related use previously. For example, banks and estate agents come under the A2 use class order as financial institutions. If a bank closes down, then a payday loan company or betting shop can set up in the same premises without having to apply for planning permission because it is in the same A2 use class. Further, permitted development rights allow cafes and restaurants (A3) to be changed into A2 premises like pay day loan companies without planning permission. A new use class would allow councils to stop this where necessary and ensure that these cheque cashing outlets and bookmakers would have to apply for planning permission in the way that other outlets would. Similar rules apply to fast food restaurants and the regulations take no account of the type of food sold 9. Mary Portas has recommended that Government should Address the restrictive aspects of the Use Class system to make it easier to change the uses of key properties on the high street. The Government has repeatedly been called on to act to address this but has failed to do so. In their response to the Portas Review s recommendation to give betting 9 7

9 shops their own use class the Government claimed that Article 4 directions could already be used to control the proliferation of bookmakers. They stated: The planning system also provides a tool (Article 4 directions), to help local authorities and communities control certain uses, such as betting shops, by removing permitted development rights, and requiring a planning application to be made. 10 Article 4 directions remove permitted development rights and so could be used to stop cafes becoming bookmakers. However, they are incredibly burdensome and inflexible; councils have to give 12 months notice for such a direction, creating a perverse incentive to set up shops immediately, and councils have to pay compensation to businesses that are unable to set up shop as a result. Furthermore, they do not address the problems that arise when a premise in the same use class. In this instance, there are no permitted development rights to be removed. We want to empower councils, not increase the bureaucratic hoops they have to jump through or force them to pay compensation. Businesses regularly complain that local authorities can take too long to reach decisions and act on them. This is time that struggling retailers cannot afford. We need quick and effective action. Partly due to the Government s failure to act there are now growing calls for local authorities to be given greater power over use classes and allow them to place specific types of shop, food outlet or other use into a separate class. Research from the LGA has shown that; 76% of people support Government giving new powers to local councils to help them shape the High Street in line with the wishes of the community. 68% of people do not think that it should be possible for a bank to be turned into a betting shop without planning permission. 63% of people support the Government giving new powers to local councils to help them prevent clustering of premises. 11 Such a change would not only be beneficial to the people living close to high streets affected by the over-concentration of certain premises, such as betting shops, but to other businesses and landlords in the area who may see footfall decrease or property values fall as the area becomes oversaturated with one or two types of premise and loses appeal. This is why our Policy Review is considering giving local authorities more power over the use classes system by introducing a new separate umbrella class into which problem premises can be put, as they see fit. We are looking at helping local authorities to include evidence based policies in the Local Plan which show that the

10 over-concentration of a specific type of premise or premises is becoming an issue and then set planning policies based upon which applications for change of use would be judged. We are consulting on how best to do this quickly and effectively without increasing burdens on local authorities or businesses. Case studies: the challenge Payday loan shops, Chatham: There are 23 payday loan companies within a mile of Chatham High Street 12. This proliferation is not only an issue because, as with other clustering, it puts off potential customers and investors but it also creates a problem for regulation as people turning to pay day loan companies can go from shop to shop taking out loans without the other businesses having any knowledge that they have done so. Last August Medway Councillors, like Labour s Vince Maple, called on Eric Pickles, the Secretary of State for Communities and Local Government, to change planning laws to allow payday loan companies to be given a separate use class 13. This request was ignored and councillors have been left powerless to tackle the impact of an oversaturation of these shops on the high street and the community. Fast food shops, Tower Hamlets: A paper from Town Hamlets Council Tackling the Takeaways cites a City University study showing there are 42 junk food outlets (including fast-food restaurants and cold food outlets) per school in Tower Hamlets. This compares to 25 per school in inner London as a whole. 14 The paper, produced in partnership with the NHS, goes on to show the links between the availability of fast food and public health issues such as obesity and concludes that action needs to be taken to limit the future number of hot-food takeaways. We want to ensure that the council is able to take this action quickly and effectively. Betting shops, Tottenham and Haringey: There are now over 40 bookmakers in Tottenham, many clustered along certain roads; there a 6 on a single street alone. Tottenham s local MP David Lammy states The pupils of John Loughbrough school may pass as many as 5 bookmakers on the 300m walk from the school gates to the bus stop on the High Road. 15 Mr Lammy has campaigned against this proliferation but without a change in the law he, his constituents and communities facing a similar situation are powerless

11 Proposal 2: Adaptation and locally set permitted development rights The case studies detailed above demonstrate the importance of a well planned, diverse high street. In the longer run we want to look at how to enable high streets to adapt to changing consumer habits and do so in a way that is in tune with their own strengths and weaknesses. This is vital in encouraging the sense of character and place that draws people in to town centres. It is therefore important that we empower local authorities to plan for and allow flexibility on the high street, in a way which suits the community they represent. One way of doing this is through the use of permitted development rights which allow changes between use classes without planning permission. Reform is urgently needed in this area following the Government s recent interventions to extend permitted development rights from the centre without taking into account local considerations. For example, the top down change to permitted development from office to residential property from which 75% of London councils have already said they will seek exemption 16. We are proposing the radically different approach of handing councils the power to determine their own permitted development rights. For instance, in some places it is thought that there is an oversupply of retail space in a town centre and that life could be injected back into the community by allowing some of these shops to be converted into much-needed homes for young couples and families, or it may be that there are too many offices and not enough restaurants. This approach is supported by many retail experts. Bill Grimsey, former chief Executive of Wickes and Iceland said "The challenges that face our town centres will go on well into the future and these towns need to find other community-based solutions to make use of these assets and regenerate the area" 17. And Justin King, Chief Executive of Sainsbury s, said we need to be brave enough to shrink the high street and allow empty shops to be converted for other uses such as residential where there is overcapacity. 18 The Local Government Association state that allowing permitted development to be set at a local authority level would allow for the consideration of individual local issues, and could lead to a boost in development overall. This would be a truly localist measure, further empowering democratically elected representatives Growth and Infrastructure Bill LGA briefing for House of Lords Committee Day 3 30/01/13 10

12 We are not suggesting whole town centres just change from shops to housing but turning some empty shops on the periphery into homes, restaurants, galleries and community spaces could help to promote increased house building, help push up footfall for remaining businesses and encourage the sense of community necessary to vibrant town centres. This could also be extended to some town centre shopping centres where appropriate. In some of these centres as many as three-quarters of shops are lying empty making town centres less attractive and driving away both customers and the types of anchor tenants whose presence encourages people to visit. For this reason the British Council of Shopping Centres recommended to the Portas Reviews that Local authorities should proactively plan for and manage the transition of some secondary retail into other uses, making it easier to change use without the need for planning permission. BCSC argue that this is essential in ensuring that we can create high streets and town centres that people want to visit. This would need to be done within a strategic framework and a long term plan for the future of a town s high street or centre. We want to encourage this long term thinking and partnerships between Councils, Town Teams, Neighbourhood Planning Forums, Business Neighbourhood Areas and Business Improvement Districts to ensure that long term goals are set which reflect residents, businesses and landlords. Case Study: empty shops Winsford, Cheshire: In Winsford the Town Council has undertaken a survey into what residents see as the Town s key strengths and weaknesses. The report found that a key issue was the number of empty shops in both the town centre and the shopping centre that the lack of leisure activities and facilities for all age groups. The report also showed that many people in Winsford recommended that these vacant properties should be reused and that housing provision should be improved 20. Clearly, the community want their elected representatives to address these issues, but the current planning system leave them restricted in what they can achieve. 11

13 Proposal 3: Neighbourhood Planning and a Retail Diversity Scheme Finally, we are looking at how communities can actively encourage the retail, leisure and entertainment mix that makes the best high streets so successful. In the past a large part of the British high street s success was the convenience it offered by having everything you needed for a weekly shop in one place; grocer, butcher, baker and so on. While the way in which we shop has changed diversity is as important now as it was then. Except now we want restaurants, cafes, hairdresser, banks and other public service providers alongside our favourite shops. Mary Portas has said those who see high streets purely as a commercial retail mix need to think again and we have seen from the case studies above that a good mix of retail, leisure and other facilities on the high street contributes greatly towards the health of the high street by driving up footfall. However, in many towns this diversity is lacking. Communities can already influence diversity in their area through neighbourhood planning. However, too few are doing so at the moment and we want to look at how we can encourage more communities to make use of these powers and ensure that their views are listened to. We also want to ensure that in those areas not covered by a neighbourhood plan, these issues and local views are still taken into account. In the Localism Act Labour argued for a Retail Diversity Clause which would call on local planning authorities to make a plan for all the retail centres in their area and identify areas for development and key priorities. We are considering how this could be broadened to include other uses alongside retail to ensure there is an overall approach to planning for town centres and high streets. 12