By Nicola Gooch, Planning partner at Irwin Mitchell
It feels a very dim and distant past in which the British high street was thriving-footfall was high and, for many, a trip into town on a Saturday for a little retail therapy was something of a highlight.
Even before COVID-19 led to the government closing all non-essential retail outlets, the British high street was in trouble. The increasing popularity of online shopping, rising business rates, and declining footfall created a challenging retail environment, which hit the country's high streets particularly hard.
The current pandemic response, however, has tipped the situation over into a potential crisis.
Non-essential shops have been hit hard as they were forced to close their doors in late March. Administrators for fashion outlets Oasis and Warehouse said last week that the two brands will permanently close their stores. Other chains including Debenhams, Cath Kidston and Laura Ashley have all fallen into administration in recent months. Helen Dickinson, the chief executive of the British Retail Consortium (BRC), said that seven in 10 non-food retailers had been “significantly” impacted by the virus. She added that shops will not be able to ramp up sales for some time after restrictions end, meaning the disruption could last for longer.
And on Thursday (April 30th), the British Independent Retailers Association warned the Government that as many as 20% of retailers surveyed by the trade body do not intend to reopen after the lockdown. They are fearful that the on-going social distancing requirements may make trading conditions untenable - with footfall remaining far too low for reopening to be commercially viable.
Our high streets are going to change- they have to change - but Planning can have a vital role in helping retailers weather this change. It is going to be important to provide retailers with as much flexibility as possible to allow them to adapt to life after lockdown. The planning system will need to enable the rapid changes that are likely to occur- rather than inhibit them.
One area of planning long overdue is an overhaul of the use classes order, particularly when looking at the retail classes, which have not been adjusted for some time. We are still working within the parameters of:
• Class A1: shops
• Class A2: Financial and professional services
• Class A3: Food and Drink
• Class A4: Drinking Establishments; and
• Class A5: Hot Food Takeaways
Despite the lines between these becoming increasingly blurred.
In particular, the lines between restaurants, takeaways and pubs were increasingly blurred even in our pre-COVID world, with street food restaurants, home delivery services and pop up pubs becoming more and more common. This trend is likely to increase when lockdown is lifted, with businesses looking for ways to continue to trade within the restrictions of social distancing.
Whilst efforts have been made to compensate for this, through the general permitted development order, the results have been patchy and inconsistent. At present, there are PD Rights covering the following changes:
- Restaurants, cafes, or takeaways to retail or financial and professional services
- Drinking establishments to Drinking establishment with expanded food provision
- Drinking establishment with expanded food provision to drinking establishments
- Takeaways to restaurants, cafes
- Shops, financial and professional services, casinos, pay day loan and betting shops to restaurants, cafes
- Shops to financial and professional services
- Financial & professional services, pay day loans and betting shops to shops
- Pay day loans & betting shops to financial and professional services
- Retail, takeaway, betting office, pay day loan shop, and launderette uses to offices
- Casinos to assembly and leisure
As well as a significant number of permitted development rights which allow the conversion of various high street uses to residential uses.
The General Permitted Development Order however is not particularly user friendly. Many permitted development rights are subject to restrictions or conditions limiting the amount of floor space that can be moved between uses or making use of the rights subject to prior approval procedures. As such, trying to figure out whether to make use of them can be complicated, and often highly technical.
The current formation of retail permitted development rights also, somewhat bizarrely given recent trends in consumer behavior, largely overlook the role that assembly and leisure uses can play in increasing footfall on our local high streets. Gyms, art galleries, soft play and other 'experience' - led facilities have become increasingly important part of the retail mix; drawing people to high streets in a world where traditional retailers are struggling to attract customers.
They also do not cope well with 'hybrid' uses. Between the light side and the dark are many shades of grey, and it is in these 'grey areas' between uses classes that many retailers are likely find their coping strategies. From cafes offering soft play, to sports shops hosting yoga classes and music shops acting as live music venues, diversifying away from a pure retail offer is becoming a vital tool for survival – but one that is not well catered for by the planning system. The case law around ancillary uses is notoriously murky so it can be hard for businesses to know whether they need to engage with local planning authorities over these types of projects ahead of time.
If we are going to ensure that the current crisis does not finish off the traditional high street entirely, it is perhaps time to embrace “life in the grey areas” and leisure uses on the high street more fully.
There have been calls for Councils to rethink their business rates for some time. However, this may also be an opportune time for local planning authorities to review their CIL rates - particularly relating to retail schemes. As a rule, the two types of development most likely to attract CIL in England are residential and retail schemes. Whilst many authorities apply differential rates to different types of retail - with supermarkets and retail warehouses attracting a higher rate than smaller scale operations - even nominal CIL charges are likely to discourage new developments coming forward, or the repurposing of units that have been vacant for some time, given the current uncertainties.
Any further intervention to help the high street get back on its feet needs to happen soon. MHCLG would need to double its efforts to get the new rules are in place for when lockdown begins to ease.
It will take imagination and a wide-ranging packet of reforms- encompassing everything from licensing to parking charges. From a planning perspective, however, the following would at least give retail a chance to strike back:
• Reviewing the Use Classes Order so that it maps more neatly onto the modern retail environment;
• Amending and simplifying the Retail Provisions of the GDPO to allow more flexibility around the incorporation of home delivery services, leisure uses and 'hybrid' retail environments on the high street;
• a pragmatic and sympathetic approach taken by council enforcement officers in the event that businesses get the balance wrong, and
• reviewing local authority CIL charges to make sure that are not unduly impacting on the viability of new retail developments in the current climate.
Ensuring the future of the high street is important for all of us. It’s going to be essential that If retailers are to survive, then agility will be crucial, and the planning system needs to do its part in encouraging this.
This article first appeared in CoStar on 4 May 2020.