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Seven per cent – that’s how much of the £10 million High Street Innovation Fund, set up last year to bring empty shops back into use, has been spent to date.
Even in London, the high street is struggling. But I’m not talking about Regent Street or Oxford Street. I’m referring to the decline of the main high streets in many outer London boroughs. But policy needs to embrace this change, rather than fight it, if it is to support these areas.
The London Assembly published a report highlighting the plight of outer London high streets in March. In it the Assembly made a series of recommendations, all focused on supporting high street retail, ranging from powers to limit the spread of betting shops to the expansion of business rate relief for small (retail) businesses. But in aiming to return high street retail to its former glories these recommendations are unlikely to help high streets in the way intended because they’re not responding to the changing economic geography of London.
As we have shown in Size Matters and Beyond the High Street, high value businesses want to locate in Central London. This is because they benefit from the proximity of being close to other businesses, be those competitors, clients or collaborators. And locating in central London has been becoming increasingly important: between 1998 and 2011, central London’s share of the capital’s private sector jobs has increased from 28 per cent to 33 per cent. This has made employment even more centralised in London’s already densely packed central economy.
More jobs in central London means more commuting from Enfield to Bank or Ealing to Soho. This commuting swells the daytime population of central London by many hundreds of thousands of people each day, which in turn swells the size of the market that retailers can sell to. And they’re not slow about exploiting this opportunity either: almost 60 per cent of Pret’s 200 plus outlets are packed into Westminster, Camden and the City of London alone.
The implication of these patterns is that outer London boroughs are losing an increasing amount of their residents to London during working hours. In other words, there’s a reason why there isn’t a Pret in East Finchley.
So how can policy respond to these trends in a way that makes the most of local economies? First, by focusing on one of the other big challenges facing London: helping to tackle the housing crisis. Instead of attempting to hark back to days gone by, the London Assembly should instead consider how struggling high streets can be adapted to help address this crisis. Conversions of shops to evening economy activities such as restaurants should also be simplified. While the economic geography of London means that outer London high streets have fewer residents to serve by day, they should be supported so that they can better serve their ever increasing number of residents in the evening. And an ever growing population increases the size of the market that restaurateurs and other evening enterprises can serve.
Second, as is the case elsewhere in the country, the obsession with high street retail has to end. Outer London’s high streets are suffering for the same reason as the high streets in many of our medium and small sized cities are: through a lack of footfall, caused by fewer jobs in and around those local high streets. Only by recognising this fact can policy effectively support their futures.
Previous blog in the series: Sense at last
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