Are we gambling away the future of local high streets?

The recession has taken a grim toll on high street retail chains with family favourites such as JBB Sports, Peacocks and my own favourite, Jane Norman, either closing or slimming down.  But other retails outlets are thriving.  Payday lenders, pawnbrokers and betting shops have proliferated, in some areas changing the look and feel of the high street.

The rapid expansion of payday lenders is well documented.  For example, The Money Shop increased from 168 branches in 2006 to 450 in 2011. And people aren’t borrowing to pay for treats or extras.  Research by Unite found that 82% of employees surveyed said that they did not have sufficient money to get to the end of the month and 12% of these said that they had used payday lenders such as Wonga, Money Shop and Quick Quid to help them until they were next paid.

In August, a Channel 4 Dispatches programme investigated the rise of high street gambling and found a growing number of betting shops clustered in areas of poverty and high unemployment.  In places such as Deptford High Street there are now ten betting shops in the space of less than a square mile.

Since the Gambling Act, the number of British bookies has risen by more than 300, roughly one new shop a week with a growing number of betting shops clustered in areas of poverty and high unemployment. Dispatches found that in relatively prosperous areas with low unemployment, there are about five bookies per 100,000 people. But in poorer places with high unemployment, there’s an average of 12 bookies for each 100,000 inhabitants.

Figures from the National Pawnbrokers’ Association (NPA) suggest that this industry is also benefiting from the recession.  It is growing by ten per cent a year, with a new shop opening on average, every week in the UK. Households are cashing in on rocketing gold prices to make family budgets stretch further.

This proliferation of high interest lenders is not just ruining the look and feel of high streets, with a reported increase in anti-social behaviour linked to these clusters.  They are also hampering economic growth with money that would have been spent locally on goods and products being syphoned out in the form of high interest payments and gambling losses.  According to Dispatches, in 2011 British punters lost well over a billion pounds gambling on Fixed Odds Betting Terminals (FOBT), located in high street betting shops.

The Association of British Bookmakers defends their expansion, stating that up to 80% of new shops are opened in vacant units, providing jobs and investment that would otherwise be absent.  And the Money Shop claims its plans to open 50 new shops in 2012 will result in the creation of over 300 new jobs.  There is also the question of supply and demand.  Households and businesses are finding it increasingly difficult to access fair credit from mainstream lenders such as high street banks.  This leaves them no alternative but to use high interest lenders to plug the gaps in family finances.

So how do we tackle this?  By changing planning rules and increasing access to fair credit.  Changes to planning policy could place betting shops in a separate ‘use-class’ of their own, giving councils more control about numbers and locations. According to the RTPI, this would require a statutory instrument rather than a simple amendment of local plans.

However, it was one of the recommendations of the Portas Review into the future of high streets and the government has indicated that it may support the required change. Increasing access to fair credit by encouraging high street banks to lend on more favourable terms and expanding alternative providers, such as credit unions, would ensure a better deal for those needing to borrow.  It is probable that more money would then remain in the local community, helping economic growth and high street vitality.