Written evidence from Centrefor Cities
High streets and town centres in 2030
Introduction
Centre for Cities is dedicated to improving the economic performance of UKcities. We analyse data on the 63 largest urban areas, including some that are not
traditionally called cities such as Mansfield, Ipswich and Worthing. City centres
play a big role in these places and in the lives of people who live there. They areplaces where people work, shop, eat, drink and live. While we develop our recommendations looking at this specific set of cities, many smaller urban centres ofboth employment and leisure activity are likely to benefit from them.
We welcome this timely inquiry and we would be very happy to give oral evidence
to the committee on this important issue if that would help inform your investigation and recommendations.

High streets are barometers of local economies
more widelyHigh streets are made up of businesses that serve their local market, which
includes independent shops, chain stores, restaurants, hairdressers and services
like solicitors. So when we talk about the state of our high streets, we tend to betalking about the visible health of this wide range of local service businesses thatcluster in the centre of cities. But our urban centres consist of more than this.
The local services on high streets depend on demand in the local economy,
which in city centres is increasingly driven by the incomes of local people employed in highly skilled jobs in business sectors like communications, marketing,digital and technology, consulting and financial services. These types of firmsthat sell beyond their local market to the rest of their region, nationally and internationally, are referred to as ‘exporting businesses’.

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These businesses also prefer to locate in vibrant city centres, which are more
likely to have good transport and digital infrastructure, strong business networks,
and many skilled workers within commuting distance. As firms of this type cluster
in dense urban cores, nearby high street services benefit from footfall across thecity centre – whether for food, drinks or shopping, during and after work.
So, rather than driving local growth themselves, high street services reflect
broader economic activity driven by exporters located in their city centres. Past
attempts to support high streets, such as the Portas Pilots, have therefore focused on the wrong aspect of the local economy. Rather, the best way to create
resilient town and city centres with strong demand for local services is to encourage growth in high skilled exporting businesses.

Empty shops and office blocks
As well as empty shops, a number of other factors offer insight into the healthof a local economy. Recent research from the Centre for Cities on the types ofcommercial property available in urban centres has shown that the proportionof office, retail and other commercial space varies in different cities, and clear
patterns emerge in relation to how strong the local economy is more generally.
Overall, a quarter of commercial space in city centres is retail, while 50 per centis offices. However, weaker city centres, such as Blackpool and Newport, havemuch more retail as a share of their commercial space than those with stronger
economies such as Manchester and Leeds (source: Valuation Office Agency(VOA)).
In city centres with a relatively large high-skilled business services sector such asLondon and Bristol, only 18 per centre of space is dedicated to retail, while 63 percent is offices. In city centres with fewer of these types of jobs such as Sunderland and Portsmouth, 42 per cent is retail and just 24 per cent is offices (source:VOA).
These figures reflect the balance of commercial property that stronger urban
economies can offer firms. They tend to have more high-quality office space,supporting high skilled businesses alongside a proportion of retail space, as wellas leisure space such as cafes and restaurants, that serves the needs of workers
and residents. This also means they tend to have fewer vacant shops.
Vacant shops are much more likely to dominate in weaker cities with fewer
exporting businesses, which also have proportionately more retail space in theircity centre and fewer high quality offices. Once again, both the lack of quality
office space, and fewer people working in and around the city centre to create ademand for high street shops and restaurants, becomes visible in the life of thehigh street.
Looking at data for 58 city centres in England and Wales, we see that the proportion of high street space (retail and other services such as leisure, food anddrink) that is vacant is generally between around 10 per cent and around 20 percent (source Local Data Company). Leeds has a lower high street vacancy rate of
14 per cent. Its centre has more office space (52 per cent) than retail space (21per cent) and around a third of these offices are of high quality. In Doncaster, thevacancy rate is higher at 18 per cent. Its centre is 39 per cent retail and 19 percent offices of which 12 per cent are considered to be high quality (sources: Local
Data Company, Non-Domestic Energy Perfomance Register and VOA).

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4. Reviving and sustaining our high streets
Just as there is no national high street, there can be no single one-size-fits-all policy response. City centres with more exporting businesses such as Milton Keynes
and Oxford will be better placed to weather the storm and adapt, while those withfewer exporting firms such as Peterborough and Derby will be more vulnerable.
But for many places, any hope of reviving high streets through the creation ofhigh-value economic activity will be a long way off, because of wider and more
fundamental economic challenges – such as educational attainment and skills
levels. That is why policy to support high street services should come from policy
to support the local economy more broadly whether through local industrial strategies, local economic development plans or local planning decisions.

Reviving weaker cities
For weaker cities, policy will need to respond to both physical needs, and theneeds of communities, and it must be acknowledged that change can only happen over the longer term:
1. Skills and the future of the economy: there are strong links between
dying high streets and low skills levels. Productive, high knowledge firms locate
in cities with many highly skilled people. Any government seeking to spur on highstreets will need to acknowledge that they are a barometer of more fundamental
issues.
As the economy develops and as more jobs are automated, these challenges will
become more pronounced. Making headway through the industrial strategy into
improving skills and ensuring more people are equipped for a high knowledge
service economy, across more cities, will be fundamental to the country’s economic success in future.
2. Planning for the future: while any firm will need access to skilled workers,
supporting cities to create the right environment for those firms is important.
Weak city centres with fewer exporting businesses also have a lack of goodquality office space. Any reform of business rates to help the high street should
encourage more office development in city centres.
Similarly, repurposing or refitting low-quality office space to create visible investment opportunities, could spur on activity. For these places, it may be justified forcities to lead construction of new high-quality space in their urban core. Given
the previous role of EU funding, the Government should clarify if its Shared Prosperity Fund would be available to finance future schemes.
Similarly, cities should have access to the National Productivity Investment Fundto support interventions in their centres that will help support the location andgrowth of high-skill business, which help to grow national productivity and tosupport local services.
3. Improving the public realm: in the meantime, the high street does not live
or die by its retail offer, and as shown in stronger places, there has been a shift
towards restaurants and cafes in high streets, rather than shops. Weaker cities with fewer exporting businesses lack the kind of demand from locals that arestaurant might need, but cities should be supported to revive their centres andempty space with different amenities to attract footfall, whether libraries, leisurecentres, playgrounds or parkland.

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Sustaining strong cities
While stronger cities have succeeded in keeping their high streets vibrant, policy
will need to acknowledge their specific challenges and needs:
Demand for space: these cities, such as Reading and Crawley, have high demand for high value city centre land for residential and commercial activity alike.
Recent policy such as Permitted Development Rights (PDR) which has allowed
developers to convert offices to homes (but not the other way round) without any
involvement from local planners has had an adverse effect on commercial activity, which could put the local economy at risk in the future.
While cities will want to provide housing to suit local needs as well, they will needto maintain a level of control over planning. We recommend all cities are given
the option to create exemption zones where competition for land is at its fiercest.
Public transport networks: all cities need adequate public transport in place,currently vibrant city centres will lose out to bad air quality and congestion.
Cities need to be equipped with the tools and funding to develop well-run public
transport systems to link people to the jobs and shops that high streets and city
centres can offer. At the national scale, policy should offer an adequate framework for places to deliver the right transport systems for their commuters andcommunities.

A planning framework that has cities at its centre
In the same way that high street businesses depend on the health of their local
city economy and particularly exporting firms, national economic health depends
on the vibrancy and productivity of UK cities. That means decisions about how
land is used locally can have implications for both the high street and UK GDP.
That is why we believe the National Planning Policy Framework (NPPF) should
include a specific section of guidance for urban areas on how planning can assist
economic growth in cities by, for example, making sure that high knowledge businesses have the space they need in city centres.
The largest cities with devolved institutions should have full control over theirplanning policy. That means the Government should devolve spatial powers to
those metro mayors that do not have them already (Sheffield City Region, Tees
Valley, West Midlands, and the forthcoming North of Tyne authority). At the sametime, the NPPF needs to acknowledge the changes in the way cities are run since
it was last finalised in 2012 and make clear that metro mayors have full control
over planning in their areas.

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Contact
Tom Flude, Director of External Relations, Centre for Cities
t.flude@centreforcities.org | 020 7803 4308

About Centre for Cities
Centre for Cities is a research and policy institute, dedicated to improving theeconomic success of UK cities.
We are a charity that works with cities, business and Whitehall to develop andimplement policy that supports the performance of urban economies. We do thisthrough impartial research and knowledge exchange.
For more information, please visit www.centreforcities.org/about

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As a registered charity (no. 1119841) we rely on external support to deliver ourprogramme of quality research and events.
To find out more please visit: www.centreforcities.org/about/partnership© Centre for Cities 2018
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