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Pilots offer no quick relief for struggling retailers

Mary Portas’s plan to breathe new life into high streets is good news, but will it come too late for some small businesses?

Last week’s much-anticipated Government response to the Portas Review has been broadly welcomed by the industry but there are some who feel its emphasis is on reviving high streets through start-ups, rather than helping struggling retailers.

The response comes after retail guru Mary Portas put forward 28 recommendations to the Government in December and while there is a raft of recommendations aimed at filling empty shops with start-ups and social enterprises, there aren’t enough measures to prevent existing businesses from going under, some experts say.

The Government has pledged a second round of Portas Pilots – another 12 towns that will become blueprints for Portas’s recommendations. The first 12, to be announced in May, will receive mentoring from the retail expert and share in a £1m pot. Further funds have also been made available, with £500,000 going to help Business Improvement Districts access loans for set-up costs. These are areas where businesses have voted to invest collectively in local improvements to enhance their trading environment.

A £10m High Street Innovation Fund will help 100 councils in areas most blighted by high vacancy rates fill empty shops with new businesses and a £1m Future High Street Fund will reward towns showing the most effective high street revival plans. 

The Government has also backed other recommendations, such as establishing a market day, by supporting a Love Your Local Market Fortnight and opening a consultation on relaxing regulations to make street trading easier.

Minister of state for communities and local government Grant Shapps tells Drapers that by making it easier for entrepreneurs to try out retailing, the fresh retail offer will help get people back into town centres. There is no prescriptive approach and the best place to judge its effect “is at local level”, he says.

However, Michael Weedon, deputy chief executive of trade body the British Independent Retailers Association (Bira), says some retailers may see this as unnecessary competition.

He says: “When it comes to markets, some indies will welcome town centre footfall but some will grumble about market stalls out front of their store.”

Roger Wade, founder of London pop-up mall Boxpark, who started out on a market stall, adds: “You can’t just go sticking a load of market stalls in front of some beautiful shops. Some indies just wouldn’t feel good about that.”

Retailers are also worried that the response did not include any further measures to ease the 5.6% business rates rise, set to hit retailers next month. For many, the Government’s promise to review business rates calculation against the Retail Prices Index rather than the Consumer Price Index and its pledge to double business rate relief to small businesses for the next two-and-a-half years does not go far enough.

Angela Stone, finance and operations director at Altrincham Town Centre Partnership (the town is a potential Portas Pilot) and a board member of Altrincham Forward, , says limitations in the valuation system mean businesses that should qualify for relief do not.

“The main issue is the business rates valuation system. Because they are based on old valuations, when things were better, there are businesses that now don’t fall into the small business category despite being small units,” she says.

Wade recommends that local government targets failing high streets and offers business rate relief to help fill  empty units. He says: “The problem is that the valuation office at a national level decides which businesses qualify for rate relief depending on rateable value. It’s not targeted at regenerating urban areas. It needs to be targeted at the high street, zoning off areas that will qualify for small business rate relief.”

Denise Potter, owner of contemporary womenswear indie Darcy B in Woodbridge, Suffolk, is one example. She applied for business rate relief after her business rates went up four years ago. The business didn’t qualify, however, because it had more than one shop.

She says: “If you’ve got more than one shop you can’t get relief, which is unfair. Charity shops get relief but it’s indies going out of business that need help.”

Despite concern over business rates and market trading, the announcement of further Portas Pilots and the High Street Innovation Fund have been strongly welcomed. A second round of bidding in 2012/13 will take place with a closing date of June 30, with unsuccessful bidders in round one automatically considered. The current round of 300 pilot bids will be judged in May.

Both Portas and Shapps tell Drapers they were “blown away” by the energy and spirit of local communities rallying together to come up with ideas on driving footfall, giving the public a reason to shop on local high streets.

Portas says: “There’s been real energy and commitment. It’s about us giving town centres the power.”

Town teams are also being asked how they can bridge the gap between a day and night time economy to avoid town centres becoming a no-go zone when shops close and pubs open, through later opening, providing services and holding events.

Shapps says: “There have been ideas that really show how people have had enough of their town centre going downhill. Putting on functions once a week in areas that just had a farmer’s market once a month is one of the things that will help bring the community together and drive footfall.”

Stone adds: “The £10m [High Street Innovation Fund] to help us engage landlords and encourage new entrants to the town and allow meanwhile use [temporary occupancy of empty shops] will be a help. A fund to develop new ideas will be great, especially in finding more alternative uses for units.”

Story in numbers

12 additional Portas Pilots will be chosen in 2012/13

£500k for Business Improvement Districts to help them access loans

£10m High Street Innovation Fund for councils in worst-hit areas

£1m Future High Street Fund to reward areas delivering most effective revival plans

£10 to rent a table in a two-week Love Your Local Market initiative

2.5 Number of years in which rate relief will be doubled for small businesses

        

 

Readers' comments (1)

  • There is very useful information on the website of the Association of Town Centre Management www.atcm.org

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