How to save our high streets before it is too late – Scott Corfe

In 2010, fewer than seven per cent of retail sales were made online. Last year, online accounted for close to a fifth of sales. And the latest sales data show that the internet now accounts for about one in every three pounds spent by consumers.

While some people will flock back to shops as social distancing eases, many consumers will never return on the same scale. For a significant number, recent months have made clearer the convenience and often lower prices that can be achieved from ordering goods online and having these delivered to the doorstep. No more going to the shops to find the item you wanted out of stock. No more queuing to pay. And no more challenges parking your car in town.

Retail vacancy rates therefore look set to rocket further. And that’s not the only challenge facing our town and city centres. Office workers across the country have developed an appetite for homeworking.

Many employers are discovering that remote working has had little impact on productivity, particularly in a world of Zoom and other videoconferencing tools.

Office space could become increasingly vacant as firms embrace a policy of at least partial-homeworking – limiting the amount of floorspace required by firms. Long leases on commercial property might fall out of favour, with flexible spaces such as co-working and serviced offices growing in popularity.

The rise of homeworking and shift to digital retail has knock-on impacts for other businesses. Without office workers and shoppers returning to cities such as Leeds, Sheffield and York, thousands of jobs in cafes, pubs, bars, cultural attractions and restaurants are at risk.

Workers in these jobs are typically lower-skilled in terms of formal qualifications and are likely to find it harder to get a new job in the event of unemployment.

There is a real risk that Covid-19 derails the process of urban regeneration which has seen many of the UK’s cities improve markedly in recent decades.

In a new report by the Social Market Foundation, we set out some recommendations for how policy-makers can save our town and city centres.

But this will require a rethink of how such spaces are used, rather than trying to “protect your high street”, as the Conservatives pledged in their 2019 election manifesto. Labour’s 2019 manifesto also said that “we will revive high streets by stopping bank branch closures, banning ATM charges and giving local government new powers to put empty shops to good use”.

Instead of clinging onto past concepts of the high street, we recommend a nationwide programme of replacing disused retail and office space with high quality, affordable housing. More housing could bring vibrancy to suffering high streets, and support a bustling cafe culture.

Replacing shops and offices with homes would also help tackle the housing affordability crisis which dogs so many parts of the UK, and create thousands of jobs in construction.

We estimate that an additional 800,000 homes could be made from replacing five per cent of commercial land with housing.

Secondly, we recommend empowering local government to invest in new community assets such as parks, sports facilities and adult education centres to help reskill those that have lost their job in sectors such as retail.

With local governments across the country under significant financial pressure, we recommend a write-off of local government debt – essentially transferring it into the hands of central government. This would be a one-off extraordinary measure, for extraordinary times. It is vital that local government finances are freed up to save our towns and cities.

Lastly, we recommend the creation of new “Economic Growth Areas” with tax incentives to encourage businesses to create new jobs in areas where unemployment is rising. This will help prevent a rise in economic inequality in the UK and bring good-paying work to deprived areas.

Without radical policy intervention we risk a future of ghost high streets, full of vacant shops and a dispiriting combination of bookmakers, charities and pound stores. Government needs to embrace a bold, new vision for our urban spaces – and fast.

Scott Corfe is research director at the Social Market Foundation which has just produced a report called A New Life for the High Street.

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