Skip to main content

Lords Committee calls for empowered leaders and improved finances to regenerate our towns and cities

7 December 2021

The House of Lords COVID-19 Committee today calls for a new relationship between central government and local government to empower local authority leaders to reimagine and regenerate their towns and cities, in light of the COVID-19 pandemic.


Many towns and cities were already struggling before the COVID-19 pandemic, with increasing online shopping, increasing empty retail units and decreasing footfall. This decline in our towns and cities has been severely exacerbated by the COVID-19 pandemic.

The seismic changes in our everyday behaviour, brought about by the COVID-19 pandemic, means that we must reimagine the towns and cities of the future, rather than pining for the urban areas of the past. Any attempt to revert to business as usual in towns and cities after the pandemic is likely to be like trying to stop the tide.

Chair's comments

The Chair of the Committee, Baroness Lane-Fox of Soho 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…

“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…

“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.”

Key recommendations

The Committee’s report sets out a range of recommendations to empower local authority leaders, regenerate our towns and cities, and put tackling inequalities at the heart of this regeneration.

  • The UK Government should, in its Levelling Up White Paper, outline 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 should introduce a three-year rolling local government financial settlement, at an increased level, to replace the current system of one-year settlements, to allow local authority leaders to develop, and deliver, long-term plans for their urban areas.
  • We encourage the Treasury Select Committee to update its work on the impact of business rates on business, in light of the pandemic, and encourage it and the Lords' Economic Affairs Committee to undertake a detailed inquiry exploring the potential for introducing an increased VAT rate for online sales or a hypothecated online sales tax.
  • We encourage local authorities to ensure that investment in housing, public transport, public services and green spaces in town and city centres, is matched by the same investment in those neighbourhoods that risk being left behind.

Further information