Empowered leaders and improved finances vital to bring about the post-pandemic recovery of our towns and cities - Lords cross-party committee report

A new relationship between central government and local government is vital to empower local authority leaders to allow them to reimagine and regenerate their towns and cities, in light of the COVID-19 pandemic. This is the major conclusion in the final of a series of reports from the House of Lords cross-party COVID-19 Committee published today.

Entitled - Towns and Cities: Local Power is the Path to Recovery, the report emphasises the importance of towns and cities to the social and economic wellbeing of individuals, communities, and the country as a whole. The report highlights that towns and cities are at the very heart of our country, with approximately 55% of the population living in these urban areas, and these areas representing approximately 60% of the economy on a jobs and output measure.

The report examines the long-term impact of the pandemic on towns and cities and how it has accelerated trends – increasing empty retail units, decreasing footfall in town and city centres, increasing online sales, increasing home working – that were already having a detrimental impact. The report sets out the Committee’s proposals for the urgent action required to regenerate, renew and revive our towns and cities, in the wake of the COVID-19 pandemic.

The Committee concludes that for too long local authorities have been held back - lacking the resources, powers, finances, and ultimately the freedom - to take the lead in regenerating their urban areas and sets out several key recommendations to empower local authority leaders to transform their towns and cities:

• The UK Government to outline, in its Levelling UP White Paper, its plans for further financial and legislative devolution of powers, to enable local authority leaders to deliver regeneration policies tailored to the needs of their specific areas;

• The UK Government to replace the current system of one-year financial settlements for local governments with a rolling three-year settlement, at an increased level; and

• The UK Government to agree with the Local Government Association to create an improved resource equalisation scheme, to ensure that additional funds from central government are targeted at those towns and cities that risk being left behind.

Beyond providing local authority leaders with further powers and increased finances, the Committee concludes that more needs to be done to ensure that towns and cities have a strong blend of housing, retail, workplaces and leisure opportunities, and that tackling inequalities is at the heart of local authorities' regeneration plans, including:

• The UK Government providing financial support to local authority leaders to enable the establishment of work hubs, pop-up retail units and arts and culture provision in our towns and cities; 

• The UK Government working with local authorities to develop a blended approach to housing, public services, public transport and green spaces in our towns and cities; 

• Local authorities developing a method for actively engaging with the different groups, communities and neighbourhoods within their towns and cities, and ensuring that these views are acted upon in developing their regeneration plans; 

• Local authorities ensuring that investment in housing, public transport, public services and green spaces in town and city centres, is matched by the same investment in housing, public transport, public services and green spaces in those neighbourhoods that risk being left behind; and 

• Local authorities developing a process for mainstreaming the consideration of inequalities when assessing proposals for improving housing, green spaces, public transport provision and public services, and ensuring that the views, and needs, of specific groups and communities are at the heart of the decision-making process. ​​​​​​​

Commenting on the report, Baroness Lane-Fox of Soho, Chair of the COVID-19 Committee said:

“Even before the pandemic, local authorities have been hindered in their efforts to take the lead in regenerating their urban areas by a lack of resource and the way their budgets are allocated.  Other factors affecting urban development include business rate costs which impact small businesses and sole traders and the fall in physical shoppers on the high streets forcing shops and businesses to close.

“Implementing a rolling three-year financial settlement to local governments, rather than the current one-year system so long-term redevelopment plans can be effectively executed is one of several key recommendations made in our report to combat the issues local leaders face in regenerating their towns and city centres. We’ve also called for the exploration of options to reform the current system of business rates and suggested the introduction of a new ring-fenced online sales tax or an increased VAT rate on digital purchases paid by the consumer, so the revenue generated from this is used to balance the decreasing revenue from business rates. This could allow local authorities to offer business premises with discounted or zero rates and could go some way to attracting businesses and retail back to towns and city centres and help revitalise these urban spaces.

“It is essential that these and other key recommendations set out in our report are followed by the UK Government to aid the recovery of our towns and cities in the wake of the pandemic and make them urban spaces which can help improve economic and social wellbeing.”

Notes to Editors

1. There are regional disparities in the way high streets and towns and cities across the UK have been affected by the pandemic. Source: https://www.centreforcities.org/data/high-streets-recovery-tracker/

Top 10 High streets where footfall and spend have shown the highest return to pre-pandemic levels of activity (data as at Nov 2021)

Bottom 10 High streets where footfall and spend have shown the lowest return to pre-pandemic levels of activity (data as at Nov 2021)