Westminster Hall Debate: Regeneration of city and town centres

Councils are leaders of place and need the resources and flexibility to work with local partners to invest in local infrastructure and support local growth in a way that recognises the unique challenges and opportunities each place faces. 

Councils recognise how market forces and other factors out of their hands requires them to work with their high street partners. There are many people and organisations that are potentially involved in the revitalisation and regeneration of our high streets and town centres. 

From an internal local authority perspective, stakeholders will be drawn in from across planning, economic growth, culture and leisure services, environmental, health, transport and highways, amongst others. 

Council powers 

Current council powers to act are either very difficult to use or are new to councils:

• Compulsory Purchase Order (CPO) is an important tool available to councils to assemble land and develop infrastructure needed to help deliver vital regeneration that helps local areas to prosper and grow. It should be made easier for councils to use compulsory purchase powers to acquire stalled sites or sites where developers do not build out to timescales contractually agreed with a local planning authority. 
• Further opportunities should be brought forward to utilise CPOs to facilitate land assembly and expedite the delivery of approved regeneration schemes, as well as providing the necessary resources to facilitate a higher pace and volume of CPOs.
• The Levelling Up and Regeneration Act introduced a new power for local authorities to require landlords to rent out persistently vacant commercial properties to new tenants. This is a new power, awaiting secondary legislation, which most councils will require time to familiarise themselves with. In practice it could be challenging for councils to know when or how to effectively use such powers and how best to repurpose empty units, unless they are proactively tackling high street vacancies on a regular basis and have the resources, skills and capacity to do so.
• Use of high street rental auctions needs to be considered within the wider context of why there are vacant units on our high streets in the first place, calling for a wider strategy to tackle vacant shops.

Councils will also not look at a high street in isolation, sometimes it will not always be the case that a single high street can serve the needs of all communities, but that this may be accomplished over a set of town centres/ high streets.

Whilst important to councils, the future of high streets and town centres is a discretionary issue for councils. In the face of significant spending and funding pressures, spending is increasingly focused on statutory services, such as adult social care and children’s services.

Councils need well-resourced planning and licensing teams so that they can work more proactively with the private sector and other partners to support high streets. The LGA will continue to call for councils to be allowed to set their own planning fees to reflect the costs and demands placed on these services from dealing with a changing town centre.

Local Plans

Succinct and up-to-date local plans should provide a positive vision for the future of each area and a framework for addressing housing needs and other economic, social and environmental priorities such as high street and town centre regeneration, which may include strategic positions on appropriate provision, scale and type of retail in response to evidence around vacancy.

Chapter 7 of the National Planning Policy Framework sets out how local planning authorities, when preparing their Local Plans and determining planning applications, must ensure the vitality of town centres by supporting “the role that town centres play at the heart of local communities, by taking a positive approach to their growth, management and adaptation”.

Some local authorities may, working with other key partners such as local businesses and landowners, seek to revitalise an area through holistic master-planning to make their town centres or high streets more attractive and to garner greater footfall.

We would highlight our concerns about the resourcing of local plans’ teams within councils – both the number and capacity of officers as well as the team’s and local plan’s funding.

Planning is about creating communities linked with the right economic activity and public services, whilst conserving and enhancing the natural and local environment. Critically, local authorities must be empowered to take their residents along with them on this journey. That is because it is not just homes that are required to create thriving, attractive and desirable places and communities in which to live but the accompanying local and national infrastructure, to be developed both now and phased at early and timely stages alongside the development of new homes, which is of primary concern for residents.

Community Asset Registers

Since the Localism Act 2011, councils are obliged to review nominations and will do their best to implement, review and keep registers up to date. It is worth recognising that the capacity and resource pressures that councils currently face may be impacting this. 

It is difficult for the LGA to say how successful specific programmes have been, however councils have generally welcomed the additional funding in recent years from the Future High Streets Fund, the Town Centres Fund, Levelling Up Fund and the UK Shared Prosperity Fund (UKSPF). These funds have helped to renew many of our high streets and town centres. 

UKSPF has been very helpful for many councils in supporting their capacity and capability to help their high streets. UKSPF has offered local authorities the flexibility to use funding between the priorities of communities and places, business support and people and skills. This has enabled local authorities to priorities investments that benefit local high streets – this includes investment in culture facilities, street scene, shop fronts, public green spaces and community safety measures. There is also some flexibility for capital and revenue investments. However, the short time frames and the single year allocations make some high street investment decisions challenging. 

With UKSPF ending in March 2025, there is a cliff edge emerging which is having a detrimental impact on some projects, delivery organisations and councils. For the future design of the UKSPF or replacement growth and skills funding, the LGA are calling on the government to ensure future growth funding cycles are allocated on a six-to-eight year basis as consolidated pots for councils to invest in local need. This should be informed by collaborating with the local government sector to learn from our experiences of the UKSPF and other place-based funding. 

The LGA is urging the Government to use the upcoming Autumn Budget to remove this cliff edge and provide fully flexible one-year additional funding, equal to the third and final year of the current UKSPF.

• The government should take immediate action to stabilise the growth funding landscape and to build capacity to develop an integrated multi-year growth fund.
• To remove the financial cliff edge and provide this stability, the LGA is calling for a one-year additional revenue, fully flexible funding that equates to the value of year 3 of UKSPF and is revenue.
• In the long-term the LGA is calling for the government to ensure future growth funding cycles are allocated on a six-to-eight-year basis as consolidated pots for councils to invest according to local need.

This should be underpinned by: 

• A clear, long-term and place led economic strategy that builds on local enterprise partnership integration and wider devolution to set out a joint vision for inclusive growth and prosperity across England. 
• Joint work to deliver a place-based employment and skills offer to improve outcomes for young people and adults that need to secure and progress into work, supporting employers with their skills need and develop a culture of lifelong learning. Our Work Local model sets out how this can be done. 
• A much stronger focus on data to inform local and national strategies around growth and prosperity. 
• Investment in local economic development capabilities to boost council capacity and expertise. 

Overall, funding needs to be simplified and made more certain, moving away from bidding rounds which often require a disproportionate amount of staff time and revenue spend with no guarantee of funding success. Councils need access to a single, flexible funding pot for local growth, not a myriad of pots, each with different rules and timelines.

Each Spending Round typically lasts only three years and it can be well into the first year before the government has put the funding architecture in place, thereby reducing the duration of spending to not much more than two years. Under the present system a specific sum is also set for each financial year, with only ad hoc and limited provision for transfers between years. The LGA believes this structure:

• Presents an obstacle to longer-term projects, including those of a transformative nature, that need to run on beyond the end of a Spending Round.
• Renders the funding of capital projects especially difficult, since these often require significant lead-in time to work up specifications, secure permissions and put contracts out to tender.
• Undermines revenue-funded schemes, which typically require an up-front period to recruit staff who then find that they need to prioritise looking for alternative work or funding in the final year of a project.
• Requires local spending plans to be put together in a rush to satisfy deadlines, often with inadequate input from stakeholders.

The LGA’s latest report, ‘The Future of Growth Funding’, recommends a 10-point plan to successfully overcome these challenges and kickstart inclusive economic growth.

These include calling on government to produce a clear national economic policy involving greater devolution of powers; an increase in resources to tackle regional inequalities, including a long-term funding commitment of at least 20 years with funding cycles of 6 to 8 years; building capacity and capability in local and central government; and a single, simpler process for applying for funding, monitoring and reporting back to government.

There is also no place in the current or future planning system for unfettered permitted development (PD) rights, in particular those which permit the creation of new homes without contributions towards affordable housing and requirements to ensure the new housing is high-quality. These rights represent a deregulated approach to development which undermines the Government’s own and local authorities planning policies and place-making ambitions, both in urban and rural settings. Only a locally-led planning system in which councils and the communities they represent have a say over the way places develop will ensure the delivery of high-quality affordable homes with the necessary infrastructure to create sustainable, resilient places for current and future generations.

Of greatest concern is the right to change use between commercial, business or service properties (Use Class E) to residential. While the change of use to residential may be seen as a way of alleviating empty shops on high streets and in town centres, we believe that in the long-term it could lead to further degradation and a negative spiral of the high street.

Not all retail space or industrial buildings will be an appropriate size to reconfigure into homes or have the necessary configuration for homes. Councils should have the ability to determine together with their communities whether a building can increase in size and if so, by how much.

The former >Government’s own research has highlighted how conversions to residential through change of use PD can fail to meet adequate design standards, avoid contributing to local areas and create worse living environments.

Changes to PD rights in March 2024 means that any commercial, business or service units (in Use Class E) can more easily be converted into housing.

The LGA believes that it would make sense for the government to target support at the tier of council closest to the high street in question.

Councils will not look at a high street in isolation, sometimes it will not always be the case that a single high street can serve the needs of all communities, but that this may be accomplished over a set of town centres/ high streets.

We support the Government’s mission to kickstart economic growth and their intentions to deepen and widen devolution across the whole country. 

The Government’s commitment towards 100 per cent devolution in England is positive and answers the LGA's long held ambition that every area of England can secure a devolution deal that works for them, their local economies, and their residents by the end of the decade. Further, we welcome the Government formalising plans for further devolution and providing clarity on the role of local government and its responsibilities for driving growth and prosperity in law via the English Devolution Bill.

We are keen to work with government on the English Devolution Bill to establish a new enhanced framework for wider devolution across England which is underpinned by local government’s pre-eminent place-shaping role and is combined with sufficient funding so that all councils., including combined authority areas, can deliver local growth priorities, unlocking the full potential of economic development teams which have been diminished by budget cuts.

Government should explore the potential for local fiscal freedoms as part of a commitment to further devolution. We are aware the fiscal environment is constrained and will continue to be so for some time, and there are not immediate sources of additional local funding.

In the quest to kickstart local growth, the nature of funding and where spending decisions are made is as important as the quantum of funding. To give new Local Growth Plans, and the government the best chance of success across all its missions, we have called on government to refresh the funding landscape for investment in local growth and social infrastructure. 

LGA contact

Archie Ratcliffe, Public Affairs Advisor 
(07867 189177)