Challenge of town centre regeneration after pandemic ‘unerringly similar’ to post-war recovery says report
Town centres across Wales are facing challenges similar to the regeneration of 1945 post-War Britain, a new report has found.
Research carried out by Audit Wales discovered that one in seven shops on Welsh high streets are vacant and that over the last eight years the number of banks and building society branches has dropped from 695 to 495.
The number of ATMs has fallen by 18 per cent, while post office branches have decreased by 3.9 per cent over the last 10 years.
Between 1950 and 1980 local authorities prioritised regeneration of town centres creating new and greater retail space.
However, past policy choices, changing consumer expectations, technological advances and the pandemic are now adversely affecting many Welsh town centres, the report found.
Although £892.6m has been invested and leveraged by the Welsh Government into town centres over the last seven years, the report says across Wales the number of empty shops currently stands at one in seven.
Adrian Crompton, auditor general, has now called on national and local government to deliver integrated solutions, make brave decisions and provide bold, ambitious leadership.
“COVID-19 created challenges for local government and central government, but overall, they’ve responded well to keep people safe and businesses working,” he said.
“However, one in seven shops on Welsh high streets are now empty, despite Welsh Government investing and levering in £892.6m in the last seven years. Local authorities don’t have the capacity to respond to this situation and are not always using the powers they have to help regenerate towns.
“Our review found that there’s optimism for the future of town centres, but to be successful councils must focus on the four I’s (Intention, Involvement, Informed, Intervention) that we discuss in our report. In addition, the Welsh Government have prioritised town centre regeneration going forward through a national programme of change.
“Whilst there are many stakeholders who have a role in regenerating towns centres, local authorities are key. Their 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.”
Changes in shopping habits
The survey found since the start of the pandemic, 89 per cent of citizens have used online services more than previously and 74 per cent of town-centre retail businesses introduced online services for the first time.
During the pandemic three-quarters of businesses diversified their offer to provide an online service, with 35 per cent offering home delivery and take away services; 21 per cent introduced mobile services including pop ups; and 12 per cent converted premises for alternative use or trade.
The Audit Wales report highlights how online shopping has caused “a more subtle change in other aspects of shopper behaviours”, noting the shift of “shop local” in terms of essential goods such as food and clothing.
Instead the report states that retail has adapted to offer “luxury” items – such as smart phones and computers – which are predominantly purchased in out of town centres.
Shopping is described as less ‘functional’ and as something that has become a favourite hobby – something which is centred on ‘experience’ and built around dining out, socialising, entertainment, meeting up with family and friends and attending event.
The report comments: “In a digitally dominated world, investing in digital infrastructure and basic skills can play a vital role in revitalising high streets. However, at this time, the offer in most of Wales’ town centres is not strong.
“Our citizen survey found that towns mostly lack an effective digital offer with poor connectivity, limited free and effective Wi-Fi. This puts people, especially younger people, off from visiting.”
A contentious issue which many see out as out being date and more in line with shopping habits and retail occupancy levels from several years ago is the rating system, that is only collected locally – with the issue being devolved since 2015.
Physical businesses are also disproportionately affected when compared to some online retailers.
The report states: “Despite rents falling, rateable values remain at 2017 levels, and many noted that they do not reflect the reality and cost of trading on the high street today.
“To put it simply, high street retailers have historically paid more for something that is worth less, and the cost model no longer works for many retailers.
“Non-domestic rates account for a disproportionately high percentage of total occupancy costs and are seen as a deterrent to new businesses and start-ups. Non-domestic rates are also disproportionately high for most retail businesses, which places them at a disadvantage compared to the e-commerce retail sector.
“The Centre for Retail Research estimates that store and shop-based retailers paid £7.168 billion in non-domestic rates in 2018-19, equivalent to 2.3 per cent of their retail sales, whilst online retailers paid £0.457 billion, around 0.6 per cent of online traders’ sales.”
Town centres are primarily configured for daytime services and the nighttime offer is mostly under-utilised – although locally we are hearing feedback that Wrexham is perhaps seeing that reversed recently, with some local success stories operating bigger and better with evening trade compared to daytime.
The research carried out by Audit Wales found: “Two-thirds of businesses operate both in the working week and at weekends. Just over a third during the working week only (34 per cent) and two per cent at weekends only. Most businesses (90 per cent) work standard core hours – 9 am to 5 pm. Two-thirds of people regularly visited their town centres in the morning, just over half at lunchtimes, and just over half in the afternoons.
“Roughly a third of businesses work into the early evening (35 per cent) and a smaller proportion later than 8 pm (15 per cent). Less than a third of people visit town centres in the early evening and just over 10 per cent after 8 pm (12 per cent).
“Overwhelmingly, survey feedback notes that local town centres do not have a good night-time offer.
“Town centres across Wales offer little in the way of community use (defined as educational, institutional or religious buildings) and leisure (defined as indoor or outdoor recreation) services and facilities. No local authority has more than five per cent of its high street with community buildings, and less than one per cent of all Welsh town centres is turned over to leisure and recreation usage.
“With less demand for retail, community, leisure and recreation are obvious areas for growth.”
The survey found that despite a push from Welsh Government for people to utilise public transport, issues with access and provision have meant that just 20 per cent of people travel to town centres in such a way.
The report states: “Survey respondents noted issues of concern with the availability of car parking, its cost and poor public transport alternatives as key barriers to visiting their town centres more frequently.
“Transport infrastructure – cycle ways, pavements and roads – were all identified as being in generally poor condition and in need of investment and upgrade.”
The full extent the shift to a more flexible working system and a less office based presence is not yet known.
Although there is evidence that the shift to home working has benefited the local high streets, with less people commuting out of town, this could mean less demand for town centre office spaces in the future.
The Welsh Government’s ‘long-term’ ambition is to see around 30 percent of the workforce in Wales working from home or near from home.
However the report states that “whilst people working from home could have a positive multiplier impact in some communities, they will also result in falling demand in the place from which they have relocated, because these jobs are not new, but employment displaced from elsewhere as a result of the pandemic.”
It adds: “This will be particularly challenging for struggling places, because office jobs – unlike retail jobs – are more likely to be higher-salaried jobs that contribute to places thriving and growing because of their ‘multiplier effects’: that they create additional jobs because employees use the shops and services in a high street or town centre.
“Research shows that skilled jobs or jobs in high-tech industries generate larger multipliers: an additional high skilled job creates an average of 2.5 jobs in the non-tradable sector; an additional tech sector job creates, on average, 1.9 jobs in the non-tradable sector.”
A series of recommendations to help town centres recover from the pandemic and to become more sustainable have been put forward. They include:
- The Welsh Government review Non-domestic Rates (business rates) to ensure the system better reflects town centre conditions when the payments holiday ends in March 2022.
- Town-centre businesses are impacted adversely by charging for car parking, access to public transport and poor transport infrastructure. It is recommended that the Welsh Government work with local authorities to review transport challenges facing town centres and agree how best to address these.
- The Welsh Government consolidate funding to reduce bureaucracy by streamlining processes and grant conditions and keeping requests for information and supporting materials to a minimum, moves away from annual bidding cycles to multi-year allocations and rebalance investment from capital to revenue to help local authorities address staff capacity and skills shortages.
- Local authorities take appropriate action, using these existing powers and resources available to achieve the best possible outcome for town centres
- The Welsh Government set out how it plans to deliver its ‘Towns First Approach’ in practice, its expectations of partners and the practical steps it will take to make this ambition a reality.
- Local authorities use Audit Wales regeneration tool to self-assess their current approaches to identify where they need to improve their work on town-centre regeneration
Mr Crompton added: “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.”
You can find the full report here on the Audit Wales website.
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