Government policy threatens the future of our High Streets

The launch of the Grimsey report last week kept the spotlight of public debate firmly focused on the performance of the High Street yet again. As a result, policy continues to focus on retail; a policy that is not only holding our High Streets back, but the performance of our city economies as a whole.

Sluggish retail is merely an indication of an underperforming city centre, rather than the cause of it. Retailers rely on workers to make a significant contribution to High Street retail five days out of seven. So it should be the performance of our city centre economies that policy is concerned about, not just the fortunes of the High Street.

Centre for Cities’ new report, Beyond the High Street: Why our city centres really matter, shows that the city centres of our largest cities are increasingly the place of choice for business. Eight of our 10 largest cities have seen their city centres become increasingly important in recent years as places of employment. In Leeds, for example, half of all private sector jobs growth occurred in its city centre between 1998 and 2008, while three quarters of all jobs growth in Glasgow took place in its city centre.

But in our small and medium sized cities it’s the out of town sites that are the preferred location for business – their city centres have been playing an ever smaller role in their local economies. One third of our cities have been ‘hollowing out’, with their city centres losing jobs while out of town sites have seen growth.

The implication is that in many medium and small sized cities, an increasing number of workers have no need to go in to the city centre during the week, instead spending their nine-till-five on an out of town employment site. This reduces the size of the market that retailers can sell to, which in turn impacts upon their business.

The role of workers in the performance of the High Street has long been overlooked. Policy interventions to support the High Street, such as Town Centre First and the Government’s response to the Portas review, have all been retail focused. But at the same time these policies have been undermined by interventions to boost employment, such as enterprise zones and the subsidisation of business parks, which have pulled jobs out of city centres. So while policy has tried to support city centre retail on one hand, it has pulled the footfall that the High Street requires to out of town sites.

This confused thinking needs to end by treating city centres as one, in which they are places to live, shop and most importantly work. To do this the Government should make city centre development a key priority in its National Infrastructure Plan. And it also means that it should create a City Centre Growth Fund to finance this development, using a portion of the £3 billion projected underspend in the Government’s current infrastructure plans.

Too much attention has been focused on the High Street. If policymakers really want to support the High Street, they should instead focus on getting our city centre economies right, and High Street retail will benefit by having the customers it needs to thrive and grow.