Failed town centre retail focus has added £1,000 a year to cost of living, study shows

The think tank, whose trustees include Next boss Lord Wolfson, claims that policies intended to revive Britain’s ailing high streets are actually raising the cost of living for hard working families by at least £1,000 a year.

The Policy Exchange claimed that Town Centre First, a policy introduced in the mid-1990s intended to support the high street by limiting out-of-town shopping centres, has in fact decreased competition between retailers and damaged the social fabric of many communities, especially outside the Southeast.

Despite the policy, 15,000 smaller town centre stores closed between 2000 and 2009, it highlighted.

The think tank said that discriminating against out-of-town outlets has also pushed up prices. Studies showed that Town Centre First caused productivity losses of between 25% and 45% due to restrictions on the size of a store, its configuration and its location. A 25% loss in productivity in just food and clothes alone cuts the average household income by at least 3%, or around £1,000 a year.

The report also cites the rise of the internet as the key factor in the decline of many high streets. The share of people shopping online has quadrupled in just six years and continues to grow rapidly. Analysing existing data on the performance of high streets, the report notes that retail destinations need to be attractive, well-run social hubs in order to retain customers.

The report proposes replacing Town Centre First with an access first policy that would focus on giving low income households access to social and retail hubs, but not restricting where these retail centres should be built.

The Policy Exchange wants councils that preside over poorly run high streets but which have the potential to flourish, to have their powers removed and transferred to management companies consisting of people with retail experience. These companies would effectively replicate the way large out-of-town or in-town outlets are run, taking over key decisions on issues such as parking, wi-fi facilities, change of use and the location of ATMs and public toilets.

It also recommends that high streets that are small, badly located and have little to no chance of competing with the internet and other retail destinations should be transformed into housing or office space.

Alex Morton, author of the report, said: “Politicians can show they support hard working people struggling with rising living costs by abandoning policies that push up the cost of the weekly shop. It is understandable politicians sometimes feel the pull of nostalgia but a focus on trying to revive the high street by limiting out-of-town outlets isn’t the answer. The results of this are boarded up high streets and higher prices.

“Some high streets are run by good local councils and are doing well. Others are not. High streets are struggling either due to poor council management, or simply because the high street is unable to meet the needs of 21^st century shoppers. Poor performing councils should lose their powers over the high street. For those high streets unable to compete with other retail outlets, boarded up shops should be converted into housing and office space.”