British Chambers of Commerce – Written evidence (HSC0002)

ABOUT BCC

Across the UK, the 53 Accredited Chambers that make up our network are trusted champions of businesses, places, and global trade. Together, we represent tens of thousands of businesses of all shapes and sizes, which employ almost six million people across the UK. Our growing Global Business Network also connects exporters with over 75 markets around the world.  

Working together, we help firms of all sizes to achieve more. We believe it’s our relationships with others that lead us to achieve goals beyond those we could ever achieve alone. We’re the only organisation that helps British businesses build relationships on every level, in every region and nation of the UK. Our network exists to support and connect companies, bringing together firms to build new relationships, share best practices, foster new opportunities, and provide practical support to help member businesses trade locally, nationally, and globally.  

INTRODUCTION

The local economy can mean a myriad of different things to different people. It might be the traditional high street with a range of shops. It could be a shopping centre on the edge of town or a cluster of businesses on an industrial estate. Increasingly it might even be a normal residential street, where SMEs and micro businesses are being run from people’s houses. In other words, the local economy is a coat of many threads and colours. As such, there is no one-size fits all approach, but that doesn’t mean there aren’t common themes and experiences. 

Both our local communities and businesses within them are facing a challenging economic time. They are operating against the backdrop of a cost-of-living crisis, political uncertainty, inflation and interest rates pressures and a changing global trading landscape. All of this comes on the back of the Covid-19 pandemic, a once-in-a-century event that altered the way our economy works forever.

At least in part, a grand list of ideas isn’t what is required. Instead, what is required is the recognition that that every town or village (whether urban or rural) is different. What might work in Preston won’t necessarily work in Blackpool, and what fits in London won’t fit in Liverpool.

Local place-based decision making is needed, tailored to the priorities of local businesses and people in local economic clusters.  The huge challenge for policymakers is to align the priorities of individual businesses with the wider community. There shouldn’t be competing priorities, but rather working together for the benefit of the entire community.  

What has become clear is that the local economies that have managed to adapt are, unsurprisingly, the ones who are doing the best, even in tough economic conditions. The reality today is that there is too much retail space in a number of our towns and cities, with research showing a need for 40% of shops needing to be repurposed in the next five years.

Retail is no longer the primary reason people visit our urban centres. Instead, food and drink, culture and housing are as important. People, especially younger people, are increasingly going to their local town or city centre for an ‘experience’, be that a meal out, going to the cinema or some other kind of activity. It could be visiting a specific location for an independent business or taking part in an activity run by a local community interest group or charity. One example we see more and more of are independent ‘refill and reuse’ stores, allowing people and businesses to be more sustainable.

This is why the evidence shows that those towns doing best are those who have thought about a ‘place-based’ strategy that incorporates a range of mixed unit development that can facilitate this ‘experience’ led activity.

The evidence also shows that landlords, especially the larger corporate types, are diversifying the tenants they let commercial property to. Not only does this highlight the changing nature of our local economies but also the economic reality that landlords can be less selective about who they let to.

The places succeeding have strong partnerships, great local leaders and understand the importance of place-based solutions, bringing together businesses, policy and the local community in a collaborative model.

The places struggling are those that don’t have partnerships, which is leading to a siloed mindset that prevents meaningful change and adaptation.

Local Economy of the Future Report

On 20th February, BCC published our Local Economy of the Future Challenge report. This goes into considerable detail on a number of areas referenced by the call for evidence. It can be accessed here: https://www.britishchambers.org.uk/wp-content/uploads/2024/02/Local-Economy-of-the-Future-Report-1.pdf

Planning

The planning system has a major role to play in our economy at both the national, regional and local level; delivering the vital homes for our skilled workforce, along with the land and premises for our growing businesses. Crucially, it must also underpin the strategic development of our economic infrastructure - enabling the new, greener technologies and energy sources that are essential for our people, planet and progress.

Chambers of Commerce across the country are working with businesses and strategic economic partners to boost investment, generate sustainable growth and create new opportunities in local communities. The need to maintain a high-quality environment in which local communities and businesses can prosper together is of crucial importance. That’s why we need a planning system that recognises the importance of economic growth and the social and environmental benefits it brings.

To unlock the planning system, we need better-resourced LPAs, greater stability of planning policy and more focus on the supply of land for business use. Given the strength of a development plan-led system, planning must respond to prevailing economic, social and environmental challenges and do more to balance the needs of business with other stakeholders. A report commissioned by the Royal Town Planning Institute (RTPI) suggests that the UK needs at 12.5% increase in the number of planning officers between 2021 and 2031.

Planning for jobs and homes, together with up-front government investment in modern, green and smart infrastructure, will give our businesses the platform to compete globally and grow their local economies. Future planning decisions must also take into account the impact of climate change, especially with regard to flooding risk both current and expected.

Permitted Development often creates poorly designed and delivered housing units, with none of the necessary accompanying infrastructure. This leads to commercial property being taken for residential use, often with no overarching plan to maintain similar levels of availability within a locality. Any use of extended Permitted Development rights should involve dialogue between relevant local stakeholders and respect the needs of the local community – including local businesses.

An inefficient planning system holds back local economies and the business community at large. Firms are finding it increasingly difficult to use the planning system and find the land and premises they need. Alongside rising costs and complexity, the business voice is being lost as housing, green belt and neighbourhood plan issues dominate the planning system.

To unlock the planning system, we need better resourced LPAs, greater stability of planning policy, and more focus on the supply of land for business use and appropriate housing solutions for the local workforce.

Devolution/Funding

When it comes to devolution, businesses want to have active participation and not just cursory consultation. Business communities will not lend their support to greater devolution of spending or tax-raising powers from Westminster to local areas without clear, democratic accountability to local firms as well as residents.

Given the current economic conditions, councils sometimes use ‘un-ringfenced’ monies intended for economic development to plug holes in their service budgets. Mechanisms need to exist to ensure that devolved spending is transparent to businesses and residents – so that local taxpayers know how their resources are ultimately spent.

At the same time, it’s clear that the funding pot system for local government has become overly complex, with unnecessarily high thresholds and too many logistical loops to jump through. Instead of continuing to create more and more individual funding pots, central government should rationalise these streams into fewer, easier to navigate funding pots whilst also boosting general finance.

Government should reduce and streamline the number of funding pots (but not the overall fiscal amount) available to local economies, making them easier for local authorities and other business development bodies to access and spend the funds, in a transparent and accountable way.

Business voice in economic development

There is significant risk that the voice of the private sector will be diminished following the Government ending core LEP funding and economic development reverting to be led by local authorities. It is vital that local government ensures the voice of business is clearly heard in the development of their economic development priorities, strategies and major projects. It is vital to utilise local assets and expertise. Local partners, including businesses, need to feel empowered to support and achieve shared strategic goals, and be involved in decisions on how resources are used.

It is also important that Chambers are fully involved in the appointment of members of the Business Boards that many local authorities are planning to set up to replace LEP boards. A significant number of LEP staff are moving into senior local authority roles, and there is a risk that local authority Business Boards end up with the same people who were on the LEP boards - many of which are not truly representative of their local business community. Action from DLUHC is required to ensure the business voice is listened to and acted upon.

DLUHC should facilitate the involvement of the business community in a meaningful way, including on strategic questions. There should be specific requirements to involve independent business membership organisations based in the local government regions, to ensure that the wider business community is fully represented in strategy development and decision-making.

FOR MORE INFORMATION

If you would like to discuss this submission, please contact Jonny Haseldine in the first instance (j.haseldine@britishchambers.org.uk).

28 February 2024