Mark's campaign notepad and other stuff

Notes from the writer/LibDem parliamentary candidate for Somerton & Frome

London Assembly Report on Small Shops

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Before the election, I combined my long experience in retail and my short experience in politics by making a submission to the London Assembly Planning and Housing Committee review on the future of independent shops. As a result, I received a copy of the report recently and these are my thoughts on it, which I’ve submitted to the committee as invited.
(You can see the report at http://www.london.gov.uk/who-runs-london/the-london-assembly/publications/housing-planning/small-shops )
 
I welcome the good news that the planning system can be used to protect small shops, but I do feel more must be made to encourage councils and planning authorities both to be aware of this and to act upon it.
 
I also think it will be an improvement on the status quo to require planning permission for a change of use from A1 to A3, under an amended Use Classes Order. This would stop small retailers of useful goods being turned into yet more cafes without any examination. Incidentally, I was once in the advanced stages of taking over a small retail outlet in a North London suburb when a global coffee shop operator entered the proceedings offering the landlord a £50,000 reverse premium, i.e. a financial inducement to let them take on the lease. You can guess who got the outlet. The result: a local high street with one more coffee house and one less provider of goods. 
 
At the moment planning regulations do not require that a competition test as recommended by the Competition Commission takes place; I endorse the suggestion that it now do so, as far too many small businesses have gone under the cosh as a result of irresponsible granting of permission to new entrants. Similarly I encourage “106 provision” (where developers are given planning permission only if they also make a financial contribution to public amenities) towards town centre rejuvenation and affordable shop units, though I would query how these could be protected in the long term with rent reviews and lease renewals.
 
However, I am concerned that much of the report deals with attempting to ameliorate the situation rather than deal with its root cause. I realise that the national structure of property ownership, investment and management is outside the remit of this report, but I do think an opprtunity to address and question this has been lost. Too often because of the need of institutions to see a theortically high and secure income stream and therefore have tenants with a stronger covenant, independents misses out. When an institutional landlord has to decide between a global multiple or a local independent, the independent will always lose out. As is rightly pointed out in the report, the obligations of a 25 year long upward-only rent review lease are often too burdensome for the independent, even assuming they can overcome the hurdles of covenant and rent deposit.
 
There is a further problem caused by the upward-only aspect of rent reviews – what happens when the type of ill-advised property development referred to above is built, and local shops see their revenues fall? If rents too could fall in line with the market, then maybe they could survive – but rents are kept artificially high and the shops either go bust or become the likes of charity shops.
 
For the sake of not only our independent stores, but more generally our high streets and established shopping centres, I encourage action on the  progressive ideas in this report and ask for real engagement with central government planning policy.
 
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Written by markblackburn

December 10, 2010 at 3:39 pm

Posted in Uncategorized

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