In our latest series of viewpoints, we will be getting under the skin of our recent research into the future of our towns, high streets and shopping centres. In this article, Vivienne King, Board Member at Revo details the business rates agenda and the need for reform to support retailers.
Last week, we launched our annual research findings into the future of our towns, high streets and shopping centres. In partnership with Revo, and now in its fourth year, the survey posed the question: From recession to renaissance: what is the future for our towns, high streets and shopping centres?
The survey elicited responses from over 250 industry professionals with a vetted interest in the future of our centres. The research was centred around four key themes:
- Issues & Challenges
- Opportunities for Intervention & Reform
- Leadership & Investment
- Environmental, Social & Governance (ESG)
Over the next few weeks, we will be picking out key points from our research, getting under the skin of the practical implications of the findings. Hearing from leading professionals from across the industry, we continue to be focussed on delivery as we enter one of the most exciting and creative periods in the long and turbulent history of our town centres.
Respondents to our survey were asked to rank their top three challenges facing Britain’s high streets and town centres over the next five years. As you can see from the table below, the economic pressures and challenges of the last 12 months have clearly impacted on the top five challenges concerning respondents.
|Top Five Key Challenges||2023||2022||2021||Change in Rank|
|Oversupply of retail floorspace / rising vacancy rates||43%||36%||43%||↑|
|High inflation and prospect of recession||40%||6%||n/a*||↑|
|Growth of online shopping||37%||52%||70%||↓|
|High / rising occupancy costs||28%||12%||n/a*||
Source: Lambert Smith Hampton & Revo 2023
* not identified in 2021 survey
Business rates remains a key challenge and was once again identified as a top three priority challenge for town centre stakeholders despite the changes to transition relief announced by the Chancellor in the 2022 Autumn Statement. Vivienne King, Board Member at Revo details her thoughts on the need for further reform of business rates, below:
Calling for reform – Vivienne King, Board Member at Revo
With over a third of respondents continuing to place it in the top 3 challenges and the most pressing action for Government intervention, that is a clear signal of the scale of the challenge the system represents and a shout-out for urgent reform. So why is more not being done to reform it?
- The Conservatives were elected in 2019 on a promise to “cut the burden of tax by reducing business rates.
- We are now one year away from the next General Election and there has been no giant leap to change.
- The Government has taken baby steps in terms of reform to keep the system from collapsing in on itself.
The announcements from the Autumn Statement were positive ones from a business rates perspective, but while a £13.6bn Exchequer-funded scheme was certainly welcome, it can be easy to forget that all this has done is correct a punitive relief that never should have existed in the ﬁrst place.
At 51p in the pound, the Uniform Business Rate (UBR) is far too high a tax. Instead of reducing it as promised, the Government has opted to employ a series of sticking plaster reliefs to prop up a shuddering house of cards.
What Central Government initiatives/interventions do you think will be most effective in supporting our towns, high streets, and shopping centres over the next five years?
|Top Five Key Initiatives||All||Private||Public||2022 (all)|
|Further fundamental reform of business rates||69%||71%||62%||77%|
|Support and investment in town centre strategic visions, masterplans and regeneration frameworks||46%||46%||45%||41%|
|Future High Street and / or Towns Deals Funds||36%||33%||45%||38%|
|Online shopping sales tax||33%||37%||23%||40%|
|Other government backed funds / tax incentives for infrastructure / regeneration projects||26%||20%||38%||34%|
Source: Lambert Smith Hampton & Revo 2023
Revo supports the Shopkeepers’ Campaign call for the UBR to be lowered to 30p for retail. This would help reduce the barriers to entry, expansion and innovation for retailers, encouraging growth and broadening the tax base.
It will also eliminate the need for the complex system of reliefs which are so hard to navigate, because bills would no longer penalise rate-paying businesses - particularly those on moderate performance.
If more bricks-and-mortar businesses were encouraged onto our high streets, without the risk of a penal level of property tax, it would support their renaissance and increase the tax pool for the Treasury.
Everyone’s a winner!
Vivienne King - Board Member - Revo
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