Dominic Nutt: Reaping benefits from privatising our high streets

Or is it dull, grey, gritty, noisy, and stuffed full of chicken, phone and betting shops? Do you jostle with traffic and have to steer your children around overflowing bins and dog mess? Is it crying out for major refurbishment and investment from the council – investment that, in these times of austerity, is never going to happen?

There is a way to change your high street, at no cost to you, the council tax payer – a way to get the shops you want and to banish the shops you don’t, to keep the streets clean and even to rebuild your town centre, to make it beautiful again.

As a Londoner, when I think of wonderful town centres, my mind’s eye is drawn to places like Skipton. But perhaps you like something more urban, more vigorous, with top designer brands, high-end restaurants and a glorious nightlife. For many years in towns and cities in Germany, owners of retail properties, fed up with decaying streets, overflowing rubbish, low rents and poor council services, have banded together into ‘Business Improvement Districts (BIDs)’ to pay for the improvements they – and their communities and customers – want to see.

We already have them here in England – the Leeds BID was set up just a few months ago and Otley has had one for more than a year. The Yorkshire BIDs, funded by a small levy on business rates of the tenants who occupy the commercial properties in the BID zone, have limited powers.

Bid4Leeds, which covers the city centre, has an annual income of around £2m, which it can spend on better signs and information points, for example.

It’s all good stuff. But it could do so much more, more than litter picking, town centre ambassadors, hanging baskets and signage – important as all that undoubtedly is.

I have written a policy paper for the think-tank the Centre for Policy Studies called How to Privatise the High Street. Privatisation is a Marmite word that invokes strong reactions. But don’t panic. This is not about a hostile takeover of your town centres. It is about freeing businesses to work with their communities, customers and democratically-elected councillors to unleash new money to improvement grotty and failing high streets.

Business Improvement Districts (BIDs) are an internationally successful initiative which were introduced in the UK in 2003. They are business-led and business-funded bodies formed to improve a defined commercial area. They allow local regeneration to be directed by local interests, while costing the taxpayer little or nothing.

However, legally BIDs outside London cannot receive funding from property owners. Often the owners of a commercial building rent their properties to tenants who literally set up shops – and restaurants and the like – and pay rent to the landlord, in other words the actual property owner.

This is a problem, because tenants naturally tend to favour more short-term improvements to their local area. They do not generally want to invest in long term projects – because they might not be there for long – and this is why BIDs funded by tenants focus on hanging baskets rather than big ticket developments.

And councils cannot easily afford to fund investment either, not now when they are dealing with huge cuts and are struggling to run schools and vital social services. In Germany, BIDs funded by property owners rather than tenants, have undertaken huge schemes to improve their streets. Property-owner BIDs in Hamburg together refurbished the city centre, paving it with marble, restricting traffic, running street cleaning services and, crucially, picking and choosing which tenants could run their shops.

They have driven up footfall, increased profits, banished empty shops and they have thereby increased local tax revenue – which goes back to the council and is used for better services for residents. It’s a virtuous circle.

The big thing here is that the property owners can band together to make sure that there is a good balance of retail outlets – it’s called ‘curating the street’ – and it is a way of legally restricting less desirable outlets. Hamburg chose high-end designer shops. But others might choose niche independent retailers, organic food outlets and fine dining, a focus on shoe shops and farmers’ markets – the world is your oyster. And it all means excluding the shops people don’t want.

In summary, it means businesses, residents, customers and councilors can work together, to shape their high streets as they see fit, drive up profit, increase the tax yield for the local community and all without increasing taxes.

Dominic Nutt is a communications consultant and political lobbyist. He tweets via @DominicNutt