Mary Mary quite contrary?

Retail guru and TV personality Mary “Queen of Shops” Portas was asked by the UK Government in 2011 to come up with ideas for saving the “high street”. In December she presented her report. Although Portas’ report considered England & Wales only, the content is worth reviewing, as many of her ideas could apply north of the border, if the Scottish Government and/or local authorities decide to adopt them. If so, Mary Queen of Shops might also be known as Mary Queen of Scots.

Impact of the report

The Portas report is full of ideas, but most of them are not new. The property industry’s reponse to the report has been mixed. The general consensus seems to be that whilst many of Portas’ suggestions are sensible, the report also makes a number of proposals which are either contradictory or just not viable. The report reads well as a “wish list” of ideas, but behind all the straplines and media interest there have been some accusations that it lacks real substance.

Portas identified that high streets must be “vibrant places that people choose to visit. They must be destinations”. In that one comment she has struck the nail on the head. Yet it is hardly groundbreaking stuff.

One of the key criticisms of the report is its lack of cohesion – on one hand Portas wants to abandon red tape, while simultaneously proposing a localism agenda which creates new groups, new powers and even a new register of high street owners and parking league tables. She wants to cut down on betting shops, while asking “Why can’t we encourage more bingo nights on our high streets?” She berates the number of vacant shops left languishing, but proposes a national market day to encourage would-be shopkeepers to try their hands at running market stalls.

Vision required

Our shopping habits have changed radically, but the report does not address the threat of multichannel retailing. Today, the high street must compete with shopping centres and out-of-town retail as well as the internet, and while Portas carries a fair amount of clout, clearly she cannot halt the natural evolution of the way we choose to shop.

She identifies that “if the high street was in single ownership it would have a vision, a strategy and direction”.

The high street is a collection of shops that share a location but not much else. A shopping centre on the other hand will have a management committee, a service charge to fund actions that will benefit all retailers, and direction from an owner. Promoting a clear vision, leadership to deliver this, and establishing a credible high street brand could help some town centres establish their own identities, which in turn would attract tenants to fill empty stores. But this would take commitment and joined-up working from a range of separate landlords, most of whom are used to acting independently and without liaising with their neighbours.

With this in mind, Portas has suggested creating “town teams” to provide direction for high street shops. But who will pay for these? There is no central owner, there is no service charge, and change costs money. At a time when local authorities are strapped for cash and resources are at an all-time low, the town team could well end up being nothing more than a talking shop.

“The high street should become places where we go to engage with other people in our communities, where shopping is just one small part of a rich mix of activities”, she says. Social interaction is key. Yet another welcome idea, but it’s hardly a new one. The Federation of Small Businesses in Scotland has long been calling for Scottish local authorities to provide suitable and affordable non-retail business space in town centres, particularly in the run-up to Christmas, and they have been pressing the case for affordable town centre parking for some time.

Planning and business rates

Portas calls for greater local government and central government control, through changes to planning and business rates regimes. But whether local authorities have the resources and willpower to take on this responsibility in these austere times remains to be seen. In England & Wales, some planned developments have stalled due to uncertainty over the Government’s planning policies. On top of this, the UK Government abolished empty property relief in 2008, meaning that landlords in England & Wales must pay 100% of business rates after three months. The rates position north of the border is slightly better. However, the Scottish Government recently announced it would reduce the 50% relief to just 10% from 2013-14.

The fact that Scotland will retain 10% rates relief instead of suffering the zero relief which applies in England is seen by the Scottish Government as allowing stores north of the border to retain an element of competitive advantage. But the reality is that other property costs, particularly energy costs, are usually higher here than in the sunnier climes of the south of England. In addition to vacant rates, the Scottish Government operates a Small Business Bonus Scheme, granting relief on non-domestic rates for properties with a combined rateable value of less than £25,000. Any further changes to planning and rates in Scotland to enhance attractiveness for occupiers would be a good start, but these are unlikely to provide the immediate boost that many struggling retailers would like to see.

Rights to empty property

Empty shops blight high streets. But what is the solution? Portas would like banks who own repossessed property to be forced to sell empty shops to local groups. But shops are empty for a reason.

It may be that there is no demand from tenants, or the owner may have other plans which require the property to remain vacant temporarily.

While local groups may have an idea of what may work for a particular unit, it would be naïve to think that owners have not and do not try everything they can to help generate value from their properties. By introducing a compulsory right to purchase in favour of local groups south of the border, Portas will generate yet more red tape and costs.

Here in Scotland, the community right-to-buy has been available since 2004, and contrary to popular belief it can be used for non-domestic property, provided the community in which the property is located consists of fewer than 10,000 people. So this would rule out purchasing empty shops on Sauchiehall Street in Glasgow, but it could allow remoter communities to take control of their town centre. Yet the instances of this right actually being used are few and far between.

Does Portas really think that people love the high street enough to consider buying the shops as well as the products? The Scottish Government has already been promoting the appropriate use of compulsory purchase powers to aid regeneration, but site assembly is just one part of the process – viable occupiers are needed to breathe life into regenerated areas. Statistics on successful use of these powers are hard to come by, and the extent to which these have enhanced regeneration is not yet known.

Business improvement districts

One of the key recommendations in the report is establishing super business improvement districts. We currently have 11 business improvement districts operating in Scotland, including Falkirk and Kirkcaldy, and a further 16 are in the pipeline. The aim of these BIDs is to aid regeneration and asset management of our towns and villages. The theory is that improving the trading environment for the businesses involved in the BIDs contributes to local communities’ wider regeneration aspirations. It is not feasible to give super BIDs the compulsory purchase powers which Portas suggested, given their private company status, but the UK Government has committed to investing £500,000 to ensure that prospective new BIDs can access loans to support their setting up.

Translating into action

As with most Whitehall task forces, the Portas review is English-focused, so many of the recommendations are not directly applicable here in Scotland.

But Scotland is already ahead of the game in the fight to save our ailing high streets. The proposals that have the best chance of success are likely to be those which remove some regulatory and red tape burdens. The UK Government appears to be moving fast to address some of the issues raised by Portas.

All in all, the Portas review is to be welcomed. Yes, it contains a number of paradoxes, but that is only to be expected in a wish list of ideas, many of which are borrowed from what is already working in shopping centres. Having Queen Mary’s name attached to the report has certainly generated a lot more interest that would otherwise have been the case. The real challenge now is translating these ideas to the volatile landscape of the high street.