House of Commons debate, High street growth, innovation, and regeneration, December 2021

Councils are best placed to safeguard the future of high streets. As leaders of place, councils have shown innovation in repurposing their town centres and responding to longer-term trends in how our high streets are used.


Key messages

  • Local leaders have shown throughout the pandemic that they are well placed to deliver the best outcomes for local communities. They are also best placed to align the work of government departments and agencies with the assets and opportunities of different places. The future success of our high streets will depend on local leaders.
  • Challenges faced by the high streets are not new, and not solely caused by COVID-19 which has however accelerated existing trends. Advances in technology including online shopping; changes in consumer demand (such as for more experiential services), demand for housing and city centre living, rising business rates; and inflation have been some of the long-term causes of decline. 
  • Councils are best placed to safeguard the future of high streets. As leaders of place, councils have shown innovation in repurposing their town centres and responding to longer-term trends in how our high streets are used. For this to continue they must be empowered and the most effective way to do this is through the levelling up agenda.
  • The anticipated Levelling Up White Paper presents an opportunity to reset the relationship between central and local government and put councils at the heart of delivering the Government’s ambitious programme to improve opportunities in all parts of the country and make the right local decisions for their high streets. 
  • The LGA has argued that an English devolution taskforce should be established to enable discussion between national and local government on progress with devolution to councils. This will empower local government to take the decisions they need to ensure the regeneration of their communities.
  • The ability of local councils to ensure the futures of our high streets depends on the resources they have to carry out their work. We must move away from a pattern of piecemeal, competitive, and short-term interventions. We need to move towards a localist settlement that gives councils the powers and resources to drive green and inclusive growth that meets the needs of their communities.
  • We need a system that raises sufficient resources for local priorities in a way that is fair for residents and gives local politicians all the tools they need to be the leaders of their communities. The changing nature of business alongside the nature of demand pressures on councils means that we cannot look to Business Rates to form such a substantial part of local government funding in the future and alternative means of funding councils will be needed instead or as well as a reformed business rates system.
  • The Government’s expansion of Permitted Development Rights (PDR) has also undermined the ability of councils to bring about positive changes to their places by limiting their influence to repurpose town centre assets.

Further information: Levelling Up White Paper

  • The successful delivery of the Levelling Up agenda is inextricably linked to the future prosperity of our high streets and as both objectives are place based, councils with their democratic mandate will be the most important agent in ensuring a positive outcome. 
  • It is therefore critical that the Levelling Up White Paper is used as an opportunity to reset the relationship between central and local government and empower councils to deliver change. 
  • As we await the White Paper, now expected in 2022, the LGA has four key asks that we believe will lay the foundations for Levelling Up and facilitate high street growth and regeneration: 
    • Funding defragmentation: A priority in the Levelling Up White Paper should be further steps towards defragmenting all local funding arrangements to help maximise the strength of councils’ local leadership which was demonstrated so strongly during the pandemic.
    • Equal relationship: It is important that the White Paper is also utilised as an opportunity to reset the relationship between national and local government and put councils at the heart of delivering the Government’s ambitious programme to improve opportunities in all parts of the country.
    • Devolution Taskforce: An English devolution taskforce should be established to enable discussion between national and local government on progress with devolution to councils.
    • Devolution Baseline: The Government should also work with local government to set out a National Devolution Baseline for England, including a list of new powers available to every council.
  • Local government can provide the long-term vision, leadership and transparent accountable decision-making needed to support the government’s Levelling Up agenda. This must be supported through a multi-year funding settlement and greater flexibilities are needed to make the biggest impact and develop opportunities in local communities. This will need to be enabled by light touch national investment framework. All frameworks and processes must be developed in collaboration with local government to make them as effective as possible, creating processes that are streamlined, simplified and suitable for local decision making, and provide the assurance central government is seeking. 

Further information: Business rates

  • The Government announced interventions relevant to Business Rates in the Autumn Budget including a freeze on the multiplier for a second year; a new temporary business rates relief for eligible retail, hospitality, and leisure properties; announced the conclusions of the Business Rates Review, including an increase in the frequency of business rates revaluations so that they take place every three years; and a number of new reliefs.  A technical consultation setting out some of these measures in more detail has now been published. The LGA will be responding to this. 
  • We welcome the assurances given alongside these announcements that local government will be fully compensated for all the Business Rates measures announced. We note that the decision to freeze the multiplier once again removes buoyancy from the business rates system and without alternative means of funding, council income would reduce.
  • More broadly, local government needs a system that raises sufficient resources for local priorities in a way that is fair for residents and gives local politicians all the tools they need to be the leaders of their communities. For councils, it is important that the tax system, including business rates, provides as much certainty as possible. An income which keeps up with demand is also important given the pressures on local government especially at this time.
  • Property continues to provide a good basis for a local tax on business. Business Rates is efficient to collect and has been relatively predictable and buoyant in recent years. However, the changing nature of business alongside the nature of demand pressures on councils means that we cannot look to business rates to form such a substantial part of local government funding in the future and alternative means of funding councils will be needed instead or as well as a reformed business rates system.
  • Online businesses pose a challenge to traditional businesses and to Business Rates as a tax. If an activity can be carried out online without the requirement for premises this will reduce the yield of business rates which goes to both central and local government. However, it may lead to other activities that will pay Business Rates, such as distribution warehouses or businesses which start off online and then decide to open physical premises. Taxation should be fair for both physical and online businesses.  We look forward to responding to the forthcoming consultation on an online sales tax.

Further information: Growth funding

  • As we turn our attention to tackling the significant economic challenges ahead, it is more important than ever that the Government reconsiders the growth funding and policy landscape to ensure it is fit for purpose and able to drive green and inclusive growth that achieves the Government’s Levelling Up ambitions and meets local needs.
  • Reconsideration of funding arrangements is of paramount importance to local government. Our research found that £23 billion of public money was spent on growth, regeneration, and skills, fragmented across 70 different national funding streams and managed by 22 government departments and agencies.
  • Growth funding must be built on developing long term objectives under a clearly articulated and multi-year funding framework which is clearly understood by all. It is essential that there is maximum integration across people, business and place interventions to deliver the right support for residents and businesses, to make the funding system easier to navigate. Funding will need to avoid recreating institutional and operational silos by removing or reducing the ring fencing of funding and providing projects the flexibility to integrate people-based and place-based interventions into the same project.
  • There will shortly be three main growth funding schemes available to local economies and communities: the UK Shared Prosperity Fund (UKSPF), the Levelling Up Fund and the Towns Fund. It is positive that significant amounts of funding have been committed to support local places; we would however like to see a commitment to funding the UKSPF beyond three years to ensure the fund meets the quantum of European funding it is replacing. 
  • The LGA supports the findings of ‘A vision for urban growth and recovery’ report recommending a new 10-year Sustainable Urban Futures Fund worth up to £7 billion to support local leaders to invest in infrastructure improvements, new housing projects, local town centres and other measures to support economic growth. This would incorporate existing government funds, such as the Towns Fund.
  • Local government is keen to work with central government to co-design growth funding to ensure that can support the levelling up agenda and meet local aspirations for funding. The LGA are calling for the government to set up a member and officer level UKSPF taskforce to co-design the fund.

Further information: Permitted development rights

  • As the we set out in our response to the Government’s consultation into Supporting Housing Delivery and Public Service Infrastructure, the LGA is concerned about proposals for new permitted development rights (PDR).
  • The Government’s own research highlights how conversions to residential through change of use PDR can fail to meet adequate design standards, avoid contributing to local areas and create worse living environments. The report also found that PDR undermined the ability of councils to bring about positive changes to their places by limiting their influence to repurpose town centre assets. Councils and their communities have already been left with a long-term legacy of negative impacts resulting from some of the 19 amendments to the General Permitted Development Order since 2015.
  • Permitted development rights (PDR) are an ad hoc, disconnected approach that undermines councils’ and their communities’ strategic long-term decisions, and ability to make decisions that reflect local need and preserve and enhance the unique and distinctive character of their area including our high streets. 
  • Rather than making the temporary PDR arrangements permanent, the LGA recommends instead that councils could have local flexibility by enabling them to introduce, for example, a temporary extension until the end of 2022. It is important councils have the ability to make this decision together with their communities.