One year on from the launch of the Portas pilots it’s fashionable to slag them off as an example of this government’s failure to seriously tackle the decline of the high street. Instead of demoralising the local communities trying to make these schemes work however, we might do better to look at what the government itself is doing.
Last month the DCLG introduced new permitted development rights relaxing the planning rules allowing premises change of use for two years without having to apply for local authority permission. The government claims this will ‘breathe new life’ into the high street.
The reality is that filling up empty shops will breathe new revenue into the treasury and local authority coffers since the Business Rates Retention Scheme was introduced in April this year allowing local authorities to keep 50% of business rates collected. With 33% budget cuts to local government since 2010 and the message from Eric Pickles that it would be ‘immoral’ to increase council tax, there had to be relief from somewhere.
The government has delayed the 2015 revaluation of business tax to 2017, claiming this will provide stability for businesses when in reality it means they will be milked for a further two years at rates based on 2008 peak property valuations. If the revaluation was to take place in 2015, business property would be valued on 2013 rates, at the rock bottom of the property slump and would therefore be reduced across large parts of the country.
In addition, if the revaluation was done in 2015 the new business rates would come in one month before the next general election and would very likely piss off their core vote in London and the south east where currently businesses are effectively being subsidised by the rest of the country as their property values have risen whilst elsewhere they have dropped, particularly in the north of England.
There’s been a lot of hot air spun about how relaxed planning laws will allow pop-up shops and entrepreneurs to reinvigorate the high street. I’m sure many a well-heeled town will soon see previously empty premises offering must-have accessories and designer olives. Unfortunately I don’t envisage many sparkly trinket shops popping up on housing estates around the country. What we’re likely to see are more betting shops and pay-day loan businesses cheek-by-jowl across poorer neighbourhoods.
The proliferation of betting shops over the last 10 years is down to three factors: 1. The 2005 Gambling Act removed the demand clause where unmet need for services had to be proved before licenses were granted; 2. Bookies are classed as ‘financial services’ and can therefore convert empty banks and building societies without requiring change of use permission; 3. The introduction of Fixed Odds Betting Terminals (FOBTs), which are restricted to four per premises.
Regarded as the ‘crack cocaine of gambling’, FOBTs pay out £500 jackpots and allow gambling at the rate of £100 every 20 seconds (that’s £18,000 per hour). They now account for £1.4bn or around half of all profits made by bookmakers. To get around the restriction of four terminals per shop bookmakers simply open up more shops. Research carried out for the Channel 4 Dispatches programme shows these have been almost wholly in low income/high unemployment areas.
I don’t have a problem with bookies and when I was working in community engagement I saw them as fertile ground for chatting with residents (catch them in places where they hang around with time to spare was my motto). They are often the community hubs that soap opera writers mistakenly think pubs are and people like to put the world to rights between races. But FOBTs are designed to demand intense concentration with no time to think; they’ve created a new generation of problem gamblers who have grown up with video games and computers and they destroy lives. Gambling addicts say the ease of access and speed of gambling allowed by FOBTs makes them uniquely dangerous. A Panorama programme about FOBTs revealed that some betting shop staff became addicted after training in use of the machines and needed counselling to overcome the problem.
It’s easy to dismiss the problems of gambling addicts as being of their own making, easy, that is, if you’re not affected by it. But the wider problem is that FOBTs are draining the economies of the poorest neighbourhoods in the country and have a negative effect on everywhere they exist. In analysis done for the Guardian based on Gambling Commission data I can see that where I live in 2011 £110,025,976 was wagered on FOBTs and £3,498,826 was lost in 19 betting shops. That’s £3.5m that might have been spent on goods and services in just one area.
The Local Government Association has warned that the relaxed planning laws will lead to more bookmakers and payday loan companies, but the DCLG dismissed the concerns claiming they are carrying out recommendations from the Portas review to reduce red tape – just following orders, then. However, they are explicitly ignoring the Portas recommendation to put bookies into a planning category of their own to stop them blighting our high streets.”
With FOBTs averaging £900 per week profit per machine, under the relaxed planning laws there’s every incentive to convert many more empty shops into bookies. This is what the government is actually doing to the high street and they don’t care as long as they can screw every last penny out of business rates.