High Streets (Built Environment Committee Report)

Lord Khan of Burnley Excerpts

Tuesday 13th May 2025 Grand Committee

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Lord Khan of Burnley) (Lab)]

My Lords, it is a privilege to stand before the Committee today to address the important topic of high streets and the findings of the Built Environment Committee. I thank the committee for raising this debate and for its insightful report. I thank the noble Lord, Lord Gascoigne, for his opening remarks, and congratulate him on his appointment, replacing the noble Lord, Lord Moylan, and filling what I see as big shoes. I thank the noble Lord for the work that he did in his role as chair.

This Government are committed to rejuvenating our high streets. We recognise the shifting tides of online and out-of-town retail, as well as the decline of local government funding by the previous Government, which have left our town centres depleted. However, like the committee’s report, the Government do not support a narrative of unmitigated decline, which serves only to sap confidence further. Instead, we should see the opportunities to reimagine high streets and to empower local places to deliver the right plan for their area. We must also recognise that high streets are symptomatic of wider issues in the economy and in society. To boost our town centres, we must address these root causes by investing in a stronger economy and in safer streets, as well as by empowering local leaders and communities to help town centres adapt to a world no longer dominated by physical retail.

That is why this Government are committed to transferring power out of Westminster and into local communities. The English devolution Bill will give local leaders the tools to kick-start their economies, as well as empowering communities to transform their neighbourhoods and high streets. We are expanding and deepening the powers available to mayors and strategic authorities. This includes integrated funding settlements for mayors who have a strong track record of delivery, as well as new powers over strategic planning to give all strategic authorities autonomy to plan for housing growth. Densified housing in our towns can address the need for homes, build new communities and support high street footfall.

We are also providing powers to help local leaders and communities take action to regenerate their area. One in seven high street premises currently stands vacant, yet our communities remain unable to retain vital assets. Community assets such as shops, pubs and community spaces have a significant role to play in developing social networks, encouraging community and promoting civic pride. Our “community right to buy” will empower local people to bring pubs and other important spaces back into the hands of the community, tackling the deep feeling of powerlessness felt by many in our society who care profoundly about preserving communities.

In addition, we are taking action against the familiar sight of shop fronts being boarded up and left empty for too long with high street rental auctions. The powers enable local authorities to tackle decline by bringing vacant units back into use, auctioning a lease to interested bidders and helping to make the high street more accessible and affordable for tenants, including small and medium enterprises, local businesses and community groups.

We recognise that businesses are vital to high street success. It is key that we create an environment in which they can flourish. To that end, we are making progress on reforming business rates. Parliament has now approved an Act enabling permanently lower tax rates for retail, hospitality and leisure properties from next April. This permanent tax cut will ensure that these properties benefit from much-needed certainty and support. We have also established a licensing policy task force to make recommendations to reform the licensing framework in order to foster a vibrant hospitality and night-time economy.

We will also take action to address the rise of anti-social behaviour, which can be so damaging to businesses and off-putting to residents. Through our neighbourhood policing guarantee and the creation of new offences in our Crime and Policing Bill, we will restore order in our town centres and empower the police to act against unacceptable behaviour. We will also provide more than £7 million in funding over the next three years to support the police in tackling retail crime.

I turn to the points made by noble Lords in the debate. I start with the points made by my noble friend Lady Andrews in relation to the plan for neighbourhoods. The Government recently announced the plan for neighbourhoods programme as a successor to the long-term plan for towns, which noble Lords referenced. The prospectus was published in March 2025; I commend it to noble Lords.

We are putting power into the hands of local people with our plan for neighbourhoods; the noble Baroness, Lady Miller, touched on this. This will address deprivation, regenerate local areas and unleash the full potential of places that have been overlooked for far too long. Neighbourhood boards are bringing together residents, businesses and grass-roots campaigners to draw up and implement plans for how they will spend up to £20 million of funding; this could be on repairing pavements in high streets, setting up community grocers that provide low-cost alternatives when shopping for essentials or establishing neighbourhood watches to keep people safe. We want to empower boards to tackle the root causes of disengagement and division, to bring people together so that they can feel proud of their area and safe in their neighbourhood, to restore a collective sense of belonging in their community.

My noble friend Lady Andrews asked me about the high street accelerators programme. This will now end in June 2025, at which point the Government will carry out a review of the programme to help inform future interventions on the high street. We hope that the current partnerships will evolve into sustainable teams that are embedded in the local area and continue to work on projects that help high streets to thrive.

The noble Baroness, Lady Miller, and the noble Viscount, Lord Hanworth, talked about high street rental auctions. We are proud to roll out this fantastic new tool to enable councils to reduce vacancy rates and the visual blight of empty shops. These powers are available to all councils to use right now, and we encourage them to do so.

To help with the initial implementation of the high street rental auctions, we have set aside a new burdens payment to cover costs, such as those borne through the notice and auction processes. Over £1 million of funding has been made available to support delivery for all local authorities in England to create high street vacancy registers and to support the cost of refurbishing vacant premises.

The noble Baroness, Lady Grey-Thompson, talked about accessibility and physical well-being. Accessibility is an important issue. I fully agree with the need for inclusive design embedding physical well-being into high streets. The plan for neighbourhoods offers communities the option to invest in measures to improve access and physical health.

A number of noble Lords, including the noble Baronesses, Lady Miller and Lady Scott, talked about transport accessibility. Effective transport is key to regeneration and plays an essential role in driving footfall to our towns and high streets. We have provided long-term funding to improve the transport network in local areas to transform and unlock regeneration opportunities. Local leaders will be empowered to choose the bus operating model that works for their area through the Bus Services (No. 2) Bill, which was introduced on 17 December 2024. This includes several options to improve bus services, such as franchising and establishing new local authority-owned bus companies.

On the point about funding support for local services, local government is vital for the delivery of the Government’s missions and it delivers more than 800 services to local people every day. This is the front line of public services; it deserves a government working alongside it, as equal partners in power.

Taken together, the additional funding announced by the Chancellor at the Autumn Budget and through the 2025-26 local government finance settlement will provide over £5 billion of new funding for local services, beyond local council tax. This includes an additional £2 billion in grants through the settlement, a guarantee that local authorities in England will receive at least £1.1 billion in 2025-26 from the new extended producer responsibility for packaging scheme and a further £233 million for homelessness services. We are delivering a settlement that aims to strengthen the foundations of local government by providing significant investment and redirecting funds to the services and places that need it most.

On the point made by the noble Lord, Lord Mair, about funding, we will set a refreshed approach to local growth funding at the spending review in the spring. This will include more integrated settlements over the longer term, with less central direction and more local choice. This is a point that the noble Baroness asked me about.

On public services and amenities, when it comes to new government services, we already consider broader benefits where appropriate and will keep further options for provision under review. Departmental spending proposals must follow the principles outlined in the Green Book, which is the government guidance on appraisal.

I move on to another point raised in my noble friend Lady Andrews’ comprehensive contribution, and by other noble Lords, about a small business strategy. This year, the Government will bring forward a small business strategy that will set out our plan to support SMEs, including consideration of how best to support our high streets to make sure that they are providing vibrant places for our communities and fertile environments for our businesses. The small business strategy will also boost scale-ups in growing the co-operative economy, making it easier to access finance, opening up overseas and domestic markets, building business capabilities and providing a strong business environment.

We also have a programme called Experience on Main Street, which promotes UK creative businesses that specialise in placemaking to decision-makers responsible for high street regeneration projects; these include retailers, local and regional government, real estate owners and urban planners. This is all to encourage the reimagination and revival of high street spaces by using creative services and products.

The noble Lord, Lord Mair, made some very interesting comments about markets. I agree that markets are an institutional part of the high street and provide local areas with a valuable community space. The Government recognise the role that markets play in providing access to good-quality, healthy and affordable food and in providing local people with opportunities for social engagement and inclusion. They can also help to build the local economy by boosting footfall and providing opportunities for entrepreneurs and start-up businesses to test new and innovative products. It is for local authorities and other market operatives to decide how best to operate and manage their markets. We encourage local authorities and market operators to continue to support market traders as they consider the best path forward to help markets thrive.

My noble friend Lady Andrews asked about business rates. The Government are looking at business rates reform in the round. We have already legislated to reduce tax rates on the high street, and the Chancellor will announce further plans for this in the autumn.

A number of noble Lords, including my noble friend Lady Andrews and the noble Lord, Lord Mair, discussed the use classes for planning. The commercial, business and service use class—known as use class E —groups together various uses, such as shops, gyms, restaurants, offices, and medical or health facilities, which means that planning permission is no longer required to switch between those uses. This change enables premises to respond quickly to how communities want to use their high streets, giving business owners and landlords the freedom to adapt swiftly to changing consumer demand. To respond to the noble Lord, Lord Mair, and my noble friend Lady Andrews, we will continue to keep planning use classes under review, to ensure that they meet the needs of our communities and businesses.

A number of noble Lords, including the noble Baroness, Lady Scott, my noble friend Lady Andrews and the noble Lord, Lord Gascoigne, asked for more clarification about parking. We know that the practices and behaviours of parking operators need to change. The Parking (Code of Practice) Act 2019 places a duty on the Government to prepare a code of practice containing guidance about the operation and management of private parking facilities. This Government are determined to drive up standards in the private parking sector and will announce their plan for the new code in due course. Parking is the responsibility of local authorities, and this Government are keen to empower them to make decisions about their local areas, since they are best placed to consider how local needs can be effectively met through their local transport plans.

The noble Lord, Lord Mair, talked about arts and culture and about adding colour to our town centres and high streets, which shape and reflect society and are enjoyed by people in every part of our country. We announced over £270 million of investment for our arts venues, museums, libraries, and heritage sector. We also recently announced an £85 million creative foundations fund to help arts and cultural organisations, with varying scales of need, to resolve urgent issues with their infrastructure.

The right reverend Prelate the Bishop of St Albans and the noble Baroness, Lady Miller, discussed parish councils. We absolutely recognise that town and parish councils have an important role in improving the quality of life and well-being of their communities, and in creating places where people are proud to live. They are close to the communities they serve, know their communities’ needs and can champion the priorities of local people and design the right services that work for their places. The Government are committed to building stronger communities where people feel proud of their neighbourhoods and actively contribute to their development.

The noble Lord, Lord Moylan, raised money laundering. To be profoundly clear, I assure him that we take this very seriously. That is why we are building up local enforcement capacity and smashing the gangs. We will continue to look at what more we can do in this area.

I thank all noble Lords for their contributions to the debate. High streets arouse strong emotions. This Government recognise the challenges that high streets face and welcome the spotlight shone by this report. With the right actions and the right leadership, we can make a different future for our town centres—a future that is more sustainable, more resilient, more connected and more aligned to the way we live our lives today. How will we achieve that? I have outlined some of our policies, but let me summarise them.

From Burnley to Pendle, our town centres need a purpose and a vision, linked to jobs and amenities and tied into a wider local growth plan. This Government are making this possible by pushing powers and funding out of Westminster, delivering the devolution that is required to transform the prospects of our towns. Alongside this, we are fixing the fundamentals: boosting local government funding; giving a permanent business rates cut to retail, hospitality and leisure; deregulating our cumbersome licensing laws; and investing in skills, jobs and infrastructure up and down the country.

We are also wasting no time in showing people real, visible improvements now. That is why we are putting 13,000 neighbourhood officers on the streets, making new laws to tackle anti-social behaviour, giving councils new powers to force open vacant shops and giving communities a right to buy valued assets such as the local pub. Through the plan for neighbourhoods, we are giving the most deprived places funding to clean up their high street or give it a makeover.

In summary, we are committed to fixing the foundations of the economy on which our towns depend, while giving local people the tools to revitalise their communities now. This is an exciting agenda which the Government are so proud to be delivering. My noble friend Lady Andrews referred to “imagination, leadership and innovation”, and that is exactly what the Government are providing.

I thank the Built Environment Committee again for an excellent report, and all noble Lords for their wise contributions to this important debate. I thank particularly the noble Lord, Lord Gascoigne, who I know will do a brilliant job because he is from a smashing part of the country—Lancashire; he is my neighbour, in Pendle. It is great to be responding to him, as he is chair of the committee.