The Covid-19 pandemic has put unprecedented pressure on the already waning high street. Major retailers like Monsoon Accessorize and Victoria Secret’s have entered administration in the last month, potentially joining a string of household names that disappeared from town centres last year, even before the global pandemic shook the industry.
The prospect of boarded-up shops will leave many already cash-strapped councils feeling uneasy. This is especially true for those who have themselves invested in retail property. The government’s spending watchdog, the National Audit Office, warned councils in February over their £6.6bn commercial property spending spree between 2017 and 2019, expressing concern over the risks that a 14-fold increase in investment compared with the previous three years would entail.
Buying commercial property has been popular among councils after a wave of spending cuts that has seen spending on local service drop by a fifth. Many have borrowed to invest outside of their boundaries in order to generate income – Spelthorne Council, for example, caught the headlines last year when it was revealed that it had over £1bn in property investments. But others have invested much closer to home, delivering innovative projects and local public-private partnerships that have brought life back to their own town centres.
In 2010, Market House in Altrincham, a town about 30 minutes drive from Manchester, was derelict and at risk of having its 130-year history forgotten. Sitting at the heart of the town centre, Market House encapsulated the destitution of Altrincham, where a third of the town’s shops lay empty – the highest rate in the UK.
But in 2014, the market closed for refurbishment and thanks to a £435,000 investment from Trafford council and a £200,000 investment from Market House’s operator Nick Johnson, it sprung to life six months later with an array of independent eateries and bars that have not only transformed the space, but sparked the opening of new kitchens, cafes and bars in the surrounding town centre.
The impact has been phenomenal. Shop vacancies are down by almost three-quarters while footfall has risen by more than 25 percent since 2010. The Market House success inspired a £3m regeneration project in Altrincham by Trafford council, and has become a blueprint for smaller suburban local authorities to follow.
Ashford borough council in Kent bought the town’s Park Mall for just £800,000 in 2015. With vacancy rates of 30 percent, it was in dire need of renovation. Following the introduction of a small business incubator and council funding to small local independents, Ashford has benefited from a steady climb in visitors to the town and income for the council.
Park Mall’s footfall was up one percent year-on-year between 2017-2018, and while that may not seem significant, against a national shopping centre decline of 3 percent pre-Covid, it is certainly not to be dismissed. And it’s proving valuable, with turnover up 13 percent over the same period.
Stockton in Durham has also benefited from a retail retrofit. The council invested £35m into a regeneration project focused around injecting a community-focus into public spaces, with new markets and events and the council-supported Enterprise Arcade at the Fountain Shopping Mall, where new businesses can take space for as little as £10-a-day.
Similarly to Altrincham, just under a third of Stockton’s retail space was empty, but thanks to the council’s investment and local entrepreneurialism, it became the only town in the North East to have more shops open than close in 2017.
Supporting new independent businesses offers a wider tenant range, bringing with it a more diverse and enhanced experience for consumers. Independent businesses have shown considerable resilience in recent times, with a net loss of 1,521 stores in 2019, against 7,648 shops occupied by larger retailers.
Of course this is not 2019. The route to economic recovery is still uncertain, and the true cost of thousands of small businesses spending three months on life support has yet to fully emerge.
But while the days of councils making multi-million pound investments into speculative assets may be long gone, the case for local authority investment in local areas, driven by public policy objectives, remains strong. The evidence shows that a little bit of cash and effective private sector partnerships can go a long way in boosting consumer interest, tourism and ultimately tax and rent.
And with the prospect of swathes of empty retail space coming to market, many may feel that now is the time to enter the market, and try to create attractive spaces that people will visit.
If shoppers prove keen to return to the high street, and consumers flock back to pubs and restaurants, councils will have done well to have invested in town centre assets now, while they’re cheap. The future of many town centres may soon be in the hands of local councils, and a little local knowledge and creativity may offer them their best chance of survival.
Feature image credit: Juan J. Martínez/Flickr