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Reshaping Spaces: Building Back Better

Reshaping Spaces: Building Back Better

Even before Covid, 25-40% of retail space was no longer viable or needed. Yet councils are doing little to ensure these vacant properties are being converted or redesignated. 

Pre-pandemic, the amount of empty commercial property in the North East and North West was nearly double the amount of London and the South East. This picture will only have worsened after 18 months of closures and reduced footfall. 

A new report by the Centre for Policy Studies shows that if this retail space could be repurposed, it could create around 500,000 homes, or more if the space were converted into flats. 

‘Reshaping Spaces’ also shows how allowing for mixed use regeneration could unleash tens of billions in private finance to “build back better” and level up left-behind high streets and commercial spaces across the UK. 

As the new report highlights, the areas with the highest commercial vacancy rates are the same areas where the Conservatives picked up most seats in the 2019 General Election, demonstrating the urgent need to drive investment in those areas if the Government wants to demonstrate levelling up in a practical way.  

However, in some cases local authorities have been resistant to redesignating empty commercial property, which is limiting opportunities for investment and the renewal of Britain’s high streets. 

The think tank is proposing that the first part of each council’s new local plan should be a commercial assessment of their area’s needs, to be completed by the end of 2022. 

In addition, it is urging the government to reform business rates. These were too high even before the pandemic, but now risk damaging employers at a time when many are already under strain. The current rates see commercial spaces charged seven times as much as residential property. In the retail sector, business rates represent 42% of all taxes paid.  

The Government’s business rates retention scheme also creates an ill-advised incentive for councils to keep properties vacant. Because it includes commercial properties even if they are empty, a council which lets a property convert to a new home loses out compared to one that keeps a derelict eyesore on the high street. 

Luke Hall, Minister of State for Regional Growth and Local Government said:

 ‘The role of the high street has always evolved and this year it’s even more important that we work together to support change and make sure that they are the beating heart of their local community. This can be achieved with high quality housing and leisure in addition to shops and restaurants, all of which is set out in the High Streets Strategy which was published this week. 

‘This report shows how councils can repurpose retail space to help their town centres become more attractive places to live, work and visit.’


Report author and CPS Head of Policy, Alex Morton, said: 

‘There is a real opportunity to boost the levels of homes and encourage mixed use regeneration as part of the current planning reforms. Councils need to take a lead and work with partners to see how their local commercial centres will look and create plans that can help Britain build back better. 

‘With high streets seen as a clear priority among local people, and vacancy rates highest in areas that swung in the 2019 election to the Conservatives, this is an area where the Government should prioritise sensible policy changes to support redevelopment.’


Mark Allan, CEO, Landsec:

‘Local authorities face a difficult job balancing the needs of local businesses and their communities. There is, however, a golden opportunity to rethink traditional commercial centres. By creating more sustainable mixed use, living-led neighborhoods, we can build long-term economic success while also delivering quality of life locally.

‘ We are determined to work with our local authority partners to realise this opportunity and in doing so bring our purpose to life - sustainable places, connecting communities, realising potential.’

Alex Morton & Jethro Elsden - Tuesday 20th July 2021

Jethro Elsden is the Senior Data Analyst and Researcher at the Centre for Policy Studies. His main interests are: Data, Productivity, Business, and Agriculture. He has helped to research and write several reports, including costing Labour’s Four-day week, Make Work Pay, Budget for No deal, Think Small, Herding Unicorns.

Alex is Head of Policy at the CPS, overseeing our internal policy work. He was previously a Director at Field Consulting, but before that was responsible for housing and planning in the No 10 Policy Unit, including working on key policies in the 2015 manifesto. He was previously Head of Housing at Policy Exchange.