The government has increased the pot of cash available to struggling high streets to £1bn, a move that promises to pump extra money into 100 towns including Blackpool, Scarborough and Clacton.
Last year the then chancellor, Philip Hammond, announced a £675m fund as part of a wider package of measures designed to tackle the high street crisis that has left one in 10 shops in UK town centres lying empty. On Monday the Ministry for Housing, Communities and Local Government (MHCLG) said an additional £325m would increase the size of the fund’s size to £1bn.
A group of 50 towns had already been shortlisted to receive cash from the fund after submitting the outline for projects – such as new bus services and the conversion of empty retail units into homes – which local leaders think will help revitalise their centres.
Now that shortlist has doubled in length, with another 50 towns added, including Dover, Grimsby and Carlisle, in the latest in a series of election-friendly policy announcements from the government. All the towns are eligible to receive up to £150,000 to develop more detailed proposals.
Boris Johnson said the enlarged fund would help unlock growth. “Our high streets are right at the heart of our communities and I will do everything I can to make sure they remain vibrant places where people want to go, meet and spend their money,” he said. “This scheme is going to re-energise and transform even more of our high streets – helping them to attract new businesses, boost local growth and create new infrastructure and jobs.”
Launched in December 2018, the fund is part of a wider government plan to regenerate town centres and high streets as retail sales move online. Other announced initiatives include £900m in business rates relief for small retailers and a taskforce of experts to assist local officials in developing “innovative strategies to help high streets evolve”.
The document that sets out how the high-street fund will work says there is “no guarantee” that the shortlisted towns will receive the money they want at the end of the application process, and that the final decision will be based on the strength of their business plan. The maximum award under the scheme is £25m, but most projects are expected to be in the region of £5m-£10m. The government wants projects to be co-funded by the local authority or private firms.
In February, an inquiry by MPs had concluded that the high street fund was not big enough to meet the scale of the challenge faced by Britain’s tow centres. More government funding and private sector investment were required if “meaningful change is to be achieved”, according to the select committee report, which advocated taxing online sales and cutting property taxes for retailers.
Retailers want the government to reform the “broken” business rates system, which, they argue, penalises chains with networks of large stores at a time when retail sales are moving line. Close to a fifth of all retail sales are online, and the rates burden – made worse by the 2017 revaluation – is seen to be contributing to the high rate of store closures.
This month a a group of 50 large UK retailers, including Marks & Spencer, Sainsbury’s, Boots and Greggs, wrote to the chancellor, Sajid Javid, calling for action on the property tax, which, they argued, held back investment, threatened jobs and harmed high streets. Digital retailers tend to face lower taxes because they occupy less physical space. Amazon pays £63.4m in business rates, almost £40m less than Next, despite UK sales that are more than than double those of the clothing retailer.
