Examination of witnesses
David Rudlin, Tony Sophoclides and Nick Plumb.
Q156 The Chair: Good afternoon, everybody. Welcome to this second session of the House of Lords Select Committee on Home-based Working: a very warm welcome to our panel of witnesses. I am going to kick off with a general question: what do we know about the economic performance of high streets since the pandemic, and to what extent are we able to work out how much of that is attributable to remote and hybrid working?
Nick Plumb: Thank you. I am the director of policy and insight at Power to Change. We are an organisation that works with community-led business across England. There are roughly 11,000 community businesses in England, and roughly half of those are located on or near a high street.
I was previously a member of the Government’s high streets task force. I sat on the board for that for a number of years.
On the question of the economic performance of high streets and links to home and hybrid working, from my point of view there are two key messages to take away. I am sure that you are all aware of the long-standing commentary on the high street, its decline and the pressures it faces. We have continued to see that trend post pandemic, but that is due to trends that are bigger than just the home-based, hybrid-working dynamic, which we are here to discuss today.
I will give a few key figures to bring that to life. Online shopping continues to increase, but the trend is not vastly different from what we saw pre pandemic. We saw a big spike, and then over the last few years the trend has continued as we would have expected pre pandemic. We have seen footfall down in places. Footfall in high streets in December 2024 was down 2.7% compared with December 2023. Vacancy rates are broadly up compared with pre-pandemic levels. Pre pandemic, we were at roughly 11% vacancy rates as an average across the country; that is now roughly 14%. All this paints a picture of ongoing challenges for the high street that were not wildly exacerbated by the pandemic but were made slightly worse.
From the point of view of Power to Change, the key message sitting underneath all this is that, in many ways, this kind of mono-purpose high street, where retail is the dominant model on our high streets, is the real challenge here. We have long advocated for multipurpose high streets, where communities have a say in what the high street looks like. We think that these trends all reinforce the view that we need to transition to that multipurpose high street.
On the impact of home and hybrid working, during the pandemic, many of us—I certainly remember saying some of this at the time—thought that the shift to home and hybrid working could really upend the way that our economy and country were structured, with people spending much more time in their local areas and much less time in big city centres. The Centre for Cities has done some great work on this. The data shows that that is a trend to a very small degree but not to the degree that we might have thought during the pandemic. We have seen—I am sure Tony will cover this—changing trends in relation to the ways that people spend time in bars and other such places and spend money on food in and around city centres, linked to their working patterns. For example, we have seen more people spending money in bars on a Thursday compared with a Friday, and spending being down across the week compared with weekends, particularly in cities outside London. But the general trend across cities and towns is that it has not been as big a shift as we might have expected.
Tony Sophoclides: I am strategic affairs director at UKHospitality. We are the trade association for the wide hospitality sector. I say “wide” because people usually think of it as bars, restaurants, pubs and hotels; it is all those things, but it is also visitor attractions, bowling alleys, indoor leisure and all sorts. I fear I will come back to this, but it is very diverse, so there are no black and white answers to these things.
Certainly, there has been—I have to be a bit vague—between 20% and 30% lower footfall since the pandemic. You will be unsurprised to hear that it is difficult to say exactly how much of that is directly down to the pandemic because, as has been well publicised, hospitality businesses are facing very many challenges on very many fronts, in terms of employment costs, business rates—which I hope are being looked at—and all sorts of other things that I will not bore you with.
However, I say at the start that there are two sides to the answers that I might give. If we are talking about hospitality as a sector, the ONS figures will show you that, in terms of needing to be at a designated workplace, hospitality is top, because—surprise, surprise—I will not be able to serve you your rollercoaster experience, pint or meal from home. There are two ways of looking at hospitality. I think 2.4% of our workforce work from home, and they will be in largely clerical roles, for example.
I will not go over again what Nick talked about, but it is important to make that very strong link between retail and hospitality, because they support each other. We feel very much linked inextricably on that. Again, to slightly echo him, it is no surprise that the revenue hit has come in places where there was a large pre-pandemic reliance on commuter and office trade. I think that is stating the obvious. That said, there are suburban and rural areas where we have members with estates, largely in those types of areas, who say that things are better.
Even in cities where hospitality has been hit, we have seen—as we often do when hospitality faces a crisis—that innovation is to the fore. In your neighbourhoods you might have seen places offering a day rate for high-speed internet, cheaper coffee and even work from the pub—or hotels, which we have seen as well. Thankfully, the reaction has been fast but, as I said, it is hard to say how much of the struggle we face at the moment is due to the pandemic and therefore due to working from home. I will close there, but we can elaborate more on that as we go through the questions.
David Rudlin: I have spent a career in urban regeneration, and quite a lot of it in town centres. I think one of the reasons I have been invited is that I produced a book a couple of years ago, High Street, which I presented to a House of Lords committee inquiry on high streets not long ago. In this, we looked at 100 high streets. It was funded by the Royal Commission for the Exhibition of 1851 as part of their built environment fellowship, and we extended it for a year. It was awarded in 2019, and we extended it for three years, just so we could try to capture at least 12 months post pandemic in terms of what was happening on high streets.
The answers we came to were pretty much what Nick and Tony said earlier: the high street crisis, which started in 2018, did not result from the pandemic. The high street was in deep crisis at that point, the reasons for which are not that clear cut. There were lots of things ticking up, but there was no great event in 2018 that caused it to happen. It is a very sad story of the retail industry in the UK being taken over by venture capitalists and closed down, essentially. It is a very sad and quite disturbing tale of what has happened to our high streets.
One of our findings—this is based on data on the number of outlets and floor areas—was that there was a switch away from retail and towards hospitality post pandemic. People were saying, “We’re buying experience rather than stuff”; they were going out for a meal rather than buying a new suit or whatever. There was very much an uptick in the hospitality industry. That, of course, is set against all the problems that we have. We should not forget the cost of living crisis; the amount of money in people’s pockets has been lower post pandemic for no other reason. Home working is part of that bigger picture.
The last thing I will say at this point is about the geography of this, in that different centres are hit very differently. In our research, we found that the big cities were basically robust, in that there was enough going on—enough attraction—to keep them going. The smaller high streets, the suburban high streets and the smaller towns were also doing very well. In fact, the smaller towns were at the top of our charts in terms of vacancy rates and so on. That is because they did not have any of the multiples to start with. They did not have Debenhams or any of those shops, so when those shops closed down, they were not affected. The places that were really badly hit were the medium-sized towns: the Doncasters of this world. Doncaster, for example, had four department stores, all of which closed down. So you had places which were in the sweet spot, as it were: they were not big enough to ride it out like cities were but they had all those multiple retailers which they then lost. They are the places that have been really suffering. The geography of this is quite different. The data during the pandemic was that the suburban centres benefited greatly from home working because people were working from home and popping out to the local high streets, which were doing very well. That has probably changed. We can get into those discussions, but it is quite a complicated picture.
The Chair: That is fascinating. Thank you very much.
Q157 Baroness Manzoor: You have answered most of the question I was going to ask, so I will move on and ask: how do you think the situation has changed? David, you just mentioned some of the implications. You mentioned the impact on retail and hospitality, but how does it differ from other sectors? Is it really to do with hybrid and remote working or is it all the other economic factors that Nick mentioned?
David Rudlin: We struggled to find a reason for the retail crisis in 2018. There is no smoking gun. The economy was doing quite well—relatively, obviously. Internet shopping was on a gradual increase, but no great thing happened then. It is quite difficult to find a reason. It was a tipping point, basically: all these complex matters came to a point and things tipped over. All of a sudden, shops such as Debenhams, which had a very rickety financial system, found they could not survive.
The key message that we had in the book, however, is that town centres are incredibly resilient. The first part of the book talks about five crises. Town centres seem to be in perpetual crisis, going back to the 1950s and the supermarkets, which killed off huge numbers of high streets. They are for ever reinventing themselves. We could see that reinvention taking place in our data. Lots of independent businesses, in particular, came in. Rents dropped and people filled up empty units. The number of independents rose by about 10% over the course of our data. High streets have this ability to bounce back and be resilient, which I think is what is happening. I have great confidence in high streets’ ability to do that.
Baroness Manzoor: That is the economics. I wondered whether, looking at the 14% of vacancies that Nick mentioned, those vacancies have grown because people do not want to come into work and much prefer working from home. Has that been borne out in any way or shape?
David Rudlin: That 14% figure is about the same as it was when our data was done three years ago, so it has not changed greatly in that period. We found that it was structural with vacancies, in that there were companies that had gone bust with long leases and there was no incentive to re-let because the rent was still being paid. So you have these problems in the system that make it difficult to refill vacancies, whereas if you get over those problems and reduce the rent to a point there will always be people who will fill these places up. There is a structural market issue with regard to vacancies. It is not a pure indicator of demand. There can be places with relatively high demand and very high vacancy rates as well because those units have been kept vacant for reasons that are not always obvious.
Tony Sophoclides: On your question about the impact on hospitality in particular, it has been a reset of how one trades, because the shape of the week has totally changed. If you are in the middle of a city, I think we know that Wednesday is the most popular day for people to go into the office. I think we have all heard the phrase “Thursday is the new Friday” as well: workers pretty much exclusively go out with colleagues on a Thursday. It is about how traditional trading patterns have changed and how you react to that. Depending on which part of the day you look at, quite a lot of people who work in London are now more likely to come in at the weekend because they do not have to go there every day: they might come in and take in a show or whatever. The honest answer is that we are still feeling our way around that, but we are getting there.
Baroness Manzoor: We often talk about London, but I know that David mentioned that there were differences geographically. I wondered whether you had seen any.
Tony Sophoclides: For us, London, the south-east and, actually, the north-west are where the impacts have been greatest. It varies in other places, partly due to geographical factors meaning that people are closer to or further away from venues. In fact, something to be taken into account is that a lot of managerial roles are more likely to be working from home. Those people have higher disposable income. It might be that they will go out and rural and suburban areas will benefit from that, whereas younger people tend to live in the city and tend not to want to go into work because of the cost of travelling in, which is a really big factor for young people. The difference between going into work two days and three days a week is massive, because it makes it worthwhile getting a season ticket. There is a tipping point between two and three days. There are too many factors to pin one down, really.
Nick Plumb: I will add just one thing; I will not go over ground that has already been covered. One of the other things that is worth considering, which has been alluded to as we have gone through the various lines of inquiry, is the cultural impact of the pandemic and the tail that it has. There is that point around the way people spent much more time in their local areas and local neighbourhoods, and the appreciation of having things within walking distance and at your doorstep. Although the bigger economic trends are not quite as big a shift as we might have expected, we also need to consider the social and cultural impact of people reconnecting with their neighbourhoods and their communities, and the ongoing impact that might have on people’s behaviour when it comes to the high street, such as choosing to spend less time in the city centre and spending more time on their local neighbourhood high street. That is something that will continue to play out as we observe this.
Q158 Lord Fuller: I am interested in planning, and the Planning and Infrastructure Bill is before us. There are a lot of conversions of offices and commercial properties to residential, yet you mentioned Tuesday, Wednesday and Thursday being the core commuting days, when people come into the office. Is there any evidence that the conversion of offices to residential and student flats has evened it all out, so that the people who live there fill in what might otherwise have been a dip on Monday and Friday, so you have a more continuous and even approach? I know it changed after the pandemic, but are we settling down into a new normal? Does that have implications for planning?
David Rudlin: I was going to make the same point, because we are falling into a mindset of thinking that everyone lives in the suburbs and commutes into a town centre. My office is in Manchester, where 50,000 people now live in and around the town centre, so the town centre is their home. They are not travelling anywhere; they can walk out their front door and go to town centre facilities. This is confined not just to the big cities. It is not just conversion of offices into flats, although that is part of it; there are 60-storey skyscrapers going up full of build to rent. That is where the real numbers of residents are coming from. Lots of people live in city centres; therefore, they live and work there, so it is a different dynamic.
Lord Fuller: They are repopulating the city centres and town centres.
David Rudlin: Which I argued for for my entire career, yes.
Lord Fuller: Is there any evidence that that is evening out the daily commercial flows?
David Rudlin: Exactly, yes.
Tony Sophoclides: I honestly do not know the answer to that. It is an interesting one that I will take away and put to our data partners, CGA. It relates slightly to arguments we make around home-sharing platforms, such as Airbnb, where we have seen pockets of London in particular where places are being rented out in that manner. It is a very transient trade rather than people living there and using their local facilities. We have certainly heard that there is some ill feeling towards some of those practices by local people, but other than that I do not know. I have to be honest, though I would love to make up an answer.
Lord Fuller: This committee is about working from home, so I was thinking more about the people who are permanently resident than the transients.
Nick Plumb: I am not sure of the exact picture on the data; again, we would be happy to look into that. I would take a slightly different view from David on one thing. For example, Manchester is probably slightly different from what people think of when they think about the conversion of high street space to residential, because it is a big city that has always had city centre living. Where we need to be a little more careful about the conversion from, say, retail to residential is in smaller town centres. There have been various people on record over the years from the retail and hospitality industries talking about ground-floor conversion and the impact that could have on the vibrancy of a town centre or high street.
We have to remember that high streets and town centres have a very particular place in people's minds, because they serve a slightly different purpose from residential spaces across a town. They serve the function of being a civic space where people come together, sometimes for retail and sometimes for other experiences. I do not think this is what you are saying, but I would be cautious of advocating that, where there is a vacancy in towns, the automatic presumption is that we should just convert to residential. There is a risk of that kind of move undermining the unique nature of the high street, impacting on footfall and all the other things that happen in those places.
David Rudlin: I agree with that entirely. Town centre living is a good thing, but do not convert the middle of your high street into residential, because it will destroy that retail frontage.
Q159 Lord Monks: We are interested in trying to identify just how much working from home has had an impact on communities and what effects it has spread. As has been mentioned several times, we know about drinking after work, perhaps not so much on a Friday as on a Thursday, and people working in the office, if they have to come in, mainly on Tuesday, Wednesday and Thursday. It is a useful reminder from this session that other factors that may have led to changes in working patterns—the pandemic, internet shopping changes, which have been massive, and the activities of aggressive shareholder value from outfits such as private equity—are major things for town and city centres, rather than isolated changes in working patterns, which may be caused by some of those other things but are probably not the main thing. They are a reaction to the changes that have taken place. In terms of the provision of services and jobs in an area, what might people do to improve this situation? Nick, you are the looking-forward guy on these things.
Nick Plumb: I guess this question is about the impact that some of this stuff has had on local communities. Do jump in if you think I am not answering in the right way here, but it is the point I made earlier around the potential for longer-term impact on people's behaviour and perceptions of local community and local neighbourhoods that were driven by the pandemic and the way that lots of us were forced to work from home during that period. In some ways, it plays into some of those much bigger trends, as you spoke about, around the growing sense that people have of the need for social and human connection and the way that some of those things are potentially being challenged by the rise of artificial intelligence, social media and other things.
There is the potential that some of the shifts precipitated by the pandemic and being carried forward by the shift to hybrid and home working are better understood by people in communities. One really interesting example of this, which might in some ways might feel slightly tangential, is the Government's agenda on housebuilding and new towns. We have observed, being part of some of those debates, the growing understanding of the importance of social and cultural infrastructure being built alongside new housing developments. If I were to try to look 10 or 15 years into the future, one of the things I would be saying is that, hopefully, we are getting to an understanding that local neighbourhoods and the like are really important and to more importance being placed on them and the near vicinity.
Q160 The Chair: Nick, do we know anything about participation in local communities? You would think that if people were spending more time in their local community then they would be more active, but are they? Do we see any of that?
Nick Plumb: It really depends on the sorts of figures you look at. We recently published a new research paper called Closing the Void, which tries to think about the growing gap between democracy and people. One trend that many of us have observed over decades is the decline in associational life, such as membership of churches, trade unions and all sorts of civic organisations. That is a trend that we have seen and continue to see. Volunteering is struggling and not doing as well as it used to.
Equally, there are growing groups replacing some of those things, such as book clubs. It really depends on the sorts of institutions that you are looking at. The Power to Change view is that we have much further to go and we would like to see policies and interventions from the Government and others to encourage membership of associational organisations in all the forms that they take. We see community businesses as an integral part of that, as a new form of associational life that is replacing some of the old forms that we see less of these days.
David Rudlin: On the impacts on communities, we know that all the causes are complex and that town centres are suffering. The message we tried to put in the book was an optimistic one—that town centres just need to be allowed to bounce back—but, having said that, I moved to north Wales during the pandemic and I now hybrid-work between Manchester and north Wales and, going into a town such as Bangor, it is quite hard to maintain that optimism. It is looking very run down at the moment. The worry is that there is a tipping point beyond which towns do not come back.
I see it a lot because I talk to people in north Wales—I had a workshop in Colwyn Bay recently—and it has a massive impact on the self-image, pride and sense of prosperity of the community. Even if the neighbourhood where you live is okay, if the town centre that you relate to is in a state, then you feel that everything has gone to hell in a handcart and the whole thing is awful. That is a real worry. Town centres have an outsized impact on people’s perception of well-being, because it is what they respond to. If it sounds like it is doing badly, then obviously everything else must be going badly as well.
Tony Sophoclides: One thing Covid showed was how much we as a species like and miss socialising. I think the hospitality sector looked at the post-Covid period as an opportunity.
I will go back to what I mentioned in my opening comments about that: the effort to accommodate and make social spaces, not hybrid, but able to include working and pleasure.
It is sad that people maybe do not see the workplace as a social place; it really is. That is why I go into work every day to be honest—so that I can meet my team and have banter and whatever. I am glad that it looks like people here agree.
That is where the opportunity still lies. It depends on whether you are a coffee shop or a hotel, or what other sort of venue you are. We are still trying to find that level, of how far you can go, and how far you can accommodate that hybrid.
Baroness Nye: I have a very quick question for David. I think you and your co-author, Vicky Payne, suggested that high streets should be community centres rather than shopping destinations. Is there an example of where that has happened that you look to as a model for how it could be?
David Rudlin: We have said that there should be centres for the community, where you go to meet your local councillor, or go to church, or where your kids go to school. There should be places within the neighbourhood that are the focus for community life.
There are lots of examples of good town centres: places such as Frome at one end of the scale, or Ashington up in the north-east at the other. You can see town centres where, for example, the council has a policy of saying that, if there are new activities, they should happen in the town centre.
With Stepping Hill Hospital in Stockport, the plan is to bring it into the old Debenhams unit in Stockport town centre, rather it than being on the edge. People going to the hospital will populate the town centre; that brings people, activity and, more importantly, spending power into the town centre.
This is how the high streets should always have been, is it not? They got hijacked by the retailers 20 or 25 years ago and became entirely retail-based, but they were never that originally. They were always rounded places with a whole range of things going on.
Baroness Manzoor: I have a quick question. I was thinking about the previous session that we have just had, in relation to mental health. With people coming into workplaces generally on Tuesdays, Wednesdays and Thursdays, I wondered whether uptake has gone up in the hospitality area, with regard to social clubs and well-being clubs. We know that volunteering and the take-up of other civic duties have gone down, but are people going out and keeping themselves fit and healthy, or is it just a myth—or are people jogging about in their own living room?
Tony Sophoclides: Again, it depends where you are and in what sort of setting. There is a lot of return to pub quizzes, for example, and things like that; they are thriving and tend to do very well. You have got sports clubs that meet at pubs. I do not mean to cite only pubs here, but they do lend themselves to that social aspect as a community hub.
I will say something relating to that. Thankfully, we are seeing town planners learn the lessons of the past, asking themselves: where is a good place to put a pub? Getting that right is incredibly valuable in relation to how much that community centre can put back into the community.
To get back to your question, it depends on the type of venue and where it is. One thing that we have seen has nothing to do with the pandemic: there has been a change in how our younger generation are treating venues, how they socialise. That has been another challenge for the sector. If you are a hotel and you have a gym, that is now far more likely to be open to local communities and residents and, therefore, to a lot of younger people. There are lots of different ways in which tricks are being played to get trade back.
The Chair: Would you like to comment fairly briskly, Nick, as I think we are going to hit a vote?
Nick Plumb: I just want to pick up on Baroness Nye’s question, and hopefully cover a bit about what Baroness Manzoor was asking. There are three examples that I want to highlight in three very different places; I can follow up with more detail if we are tight on time.
The Stockton-on-Tees town centre renewal is a very interesting example, where the council has been quite active in thinking about the purpose of the town centre and, in many ways, has been quite decisive. There is a fairly substantial shopping centre in Stockton-on-Tees that was struggling from high vacancy rates. The council has taken a decision that that needs to go, and that green spaces should be introduced where people can come in and get together. As a destination, that draws people into the town centre. The remainder of the town centre is a more traditional high street, and they are thinking about vacancy rates. I do not have the data to hand but, as far as I am aware, when I visited a couple of years ago, the high streets task force seemed to be having a very positive impact on the rest of the town centre.
Then there are two examples of where the “communities in the lead” approach has, in very different ways, helped get us towards that model of a town centre with community at its heart. Power to Change has done a lot of work with a community business called Nudge Community Builders in Plymouth. It is not working on the central high street but on a peripheral high street that has seen huge amounts of decline over the years, with high vacancy rates. Nudge has gone in slowly and started to activate one or two of these vacant buildings. It is providing small start-up entrepreneurial space. It is thinking about events, venues and music venues. It has got a radio station. That has been a slow, painstaking bit of work, which, over time, has brought other businesses on to a high street that was really struggling.
The final example is Hastings Commons. Hastings is in many ways a struggling coastal town. It has a slightly different picture due to migration from London, but has lots of challenges of its own. Hastings Commons is another community business that is doing everything from shared workspace to affordable homes, through to something called a public living room, which is a space for people to come and connect without any need for transaction. It is trying to tap into that idea of social connection, addressing isolation and loneliness. It wants to be incredibly multi-purpose and use that to drive footfall to the town centre. It has a footprint across various different buildings in Hastings. I would like to see that model replicated in other places.
Lord Fink: What other policy levers do you think the Government can use to address the impact of remote and hybrid working on the high streets, and on hospitality—for example, concerning the purchase of vacant properties, as you have touched on, or changing the tax rules?
Nick Plumb: In many ways there are good policies out there already; it is about making use of them. Potentially, there are some good policies coming down the track as well.
The high street rental auctions policy, introduced by the last Government and taken forward by this Government, essentially gives councils powers to force the rental of properties that have sat vacant for a year or more. I think that is a very good policy—provided that councils have the capacity to make use of it, and provided that there is enough good communication to the local population to ensure that they can make use of it as well.
I am yet to hear of an example of it being used. Others on the panel might know more than me. It is relatively new but I think it has real potential.
One thing that Power to Change has long been calling for—and the Government have announced that they will be bringing this forward through the English devolution Bill—is the idea of a community right to buy. In many ways, this is like high street rental auctions, but thinking about purchase rather than occupation.
There are lots of benefits that come with ownership of a property. You can borrow against it, and you can use it to generate further income. We think that this is an important policy that the Government are set to introduce, but it needs to come with funding and support alongside it. Again, it is about how you would get that right.
Business rates reform is really important. I am sure Tony has lots to say on that so I might leave that one. Broadly, we think it is good that reform is coming. We think that the equalisation between online businesses and bricks and mortar businesses is really important. There are a few tweaks we would like to see to make sure that is done correctly.
The final thing I want to mention, which colleagues might be investigating with other hats on, is the idea of a register of beneficial ownership, which tries to look at transparency of ownership. That would be not just for high street assets, but, from our perspective, it has the potential to be really impactful there. One of the things we hear from community businesses so often is that the challenge is finding out who owns a property. They have great ideas for it, but it is owned within a trust, within another trust offshore. Getting to the point of negotiation is painstaking work. The register of beneficial ownership had the potential to help uncover that but it has not had the impact we would like to see. We want to see it go further.
Tony Sophoclides: I agree with a lot of that. Equally, I do not know of any vacant units where that has been applied. I will quickly say about business rates that it is well documented that the business rates system was skewed against hospitality venues for years and years. It is important that we get that right. We have been paying about 10% of all business rates with just under 3% of turnover. It is probably a once-in-a-generation opportunity as well. A lot of it is in the detail, even down to making sure that the Valuation Office Agency has better resource if there are going to be more, or more frequent, revaluations. I just do not know how that will happen at the moment, with the way things are.
I go back to my initial remarks about employment costs at the moment. Obviously, we would say, for the sake of hospitality venues existentially—that really is not an exaggeration—that we really would like a review of the national insurance contributions system as it now is. Happily, some hospitality businesses are doing really well but, unhappily, some of their expansion and investment is constrained because of planning and licensing being so painfully slow and expensive. I will not go into detail here, but achieving fast-track permissions and things like that is not beyond question.
On one-year hospitality investment tax credits, we have put in our submission for budgets and so on for adapting and upgrading venues, because there is investment to be made here. If we do not make that investment, we will not keep providing 3.5 million jobs, with the potential of 500,000 more before 2030, with the right circumstances. I will leave it at that massive list.
David Rudlin: That leaves very little for me to cover, but I agree with all that. As I have said before, town centres can regenerate, provided you address the barriers for them doing so, a big one of which is, as Nick said, overcoming those problems with property. A big one that we hear about all the time is business rates. Companies are paying 10 times more in business rates than they are in rent because rents have adjusted but business rates have not. That is crucial as well.
Working with town centres, as I do—I spent last year working in Stockton-on-Tees—there is a need for some money, but not huge amounts. The last Government put money into town centres, and a little bit of money goes a long way in town centres to allow local authorities to do things, to buy up properties, to make the improvements that are required, to run the markets and that type of thing. A little bit of money and a budget for town centres should be part of government policy.
Finally, I would just say planning. We talked about planning before, but planning had a major role in saving town centres in the 1990s. You might recall PPG 6, as it was called—planning policy guidance note 6—which said that there should be no out-of-town shopping centres if there is a site within town. It completely changed the locational dynamics of where retailing was built: it went from 80% out of town to 80% within town. Let us not lose that and forget that that was a big win. We should keep that in terms of the way planning works.
Q161 Lord Parker of Minsmere: Our big exam question we are trying to answer through this work—thank you for helping us with it today—relates to current and future effects of home-based working. Could I get a view quickly from each of you, thinking about trends over the next three to five years that arise in high streets and hospitality from people’s changing patterns of workplace and work patterns, on the effects you think we might see?
Nick Plumb: I come back to the point I made when I opened. The changes we have seen since the pandemic in relation to home and hybrid working have not been as significant as we would have expected. We need to bear that in mind as we look another three to five years in advance.
One of the lessons we can draw from previous experiences with town centres and high streets is that putting your eggs in one basket is not a sensible approach. We did that with retail and we are now starting to see the impacts in our high streets and town centres. From my point of view, it is about dealing with some of the bigger structural challenges that we have spoken about, such as the ownership picture, access to property, whether through ownership or rental, and leaning into the potential that we might see in secondary high streets and neighbourhood high streets in smaller towns. There is potential for those sorts of places to be areas where we see growth, whether retail, hospitality or other elements of the mixed-use model. That mixed-use model has to be part of it. Things such as public services could play a bigger role in town centres and high streets, as we are thinking about—
Lord Parker of Minsmere: Can I take you back to what we are most likely to see, rather than what you would most like to see?
Nick Plumb: That is a fair challenge. I guess I am saying that we are most likely to find that we will not see as big a shift as we might have expected. Some of it is about continuing on the path we have been taking in relation to high street and town centre renewal. There is potential for secondary high streets and neighbourhood high streets to be more important because of all the patterns we are observing in relation to hybrid and home working.
Tony Sophoclides: I agree. There will not be a change back. I do not think we are suddenly going to get a tide of people returning to the office quickly. Hospitality, as it always does, will continue to adapt and change its offer to attract customers. There is a risk, without many of the policy asks we have all covered, that the knock-on effect goes into, for example, tourism. We know that London, the south-east, and the north-west are really big starting points for tourists’ journeys. That is where they come into. Should hospitality and retail, both of which are big attractions for many tourists, start to become a little bit ragged then we can see where the danger is—and where does it stop? It is a knock-on effect. I think, by and large, that hospitality will keep adapting.
David Rudlin: Until a few weeks ago, I worked for a large architect in Manchester who had a push a couple of years ago to get people back into the office. There was pushback from the staff, and we ended up with about three days in and two days home working as an optimal level for staff satisfaction, but also for team working. I think we have passed peak home working. From this point onward, the trend is probably for the amount of home working to decline very slightly but not to disappear. I also think it has been baked into the town centre market. The market adjusted to it two or three years ago. That has already happened, so I do not see a change in home working sufficient to have any further major impact on town centres.
The Chair: That was a very succinct answer. Thank you, all three of you, for coming to talk to us this afternoon, and thank you for your evidence. I bring this session to a close.