Evidence review|Evidence briefing
The future of high streets and town centres, already a government priority, face new challenges because of Covid-19. In addition to creating an economic downturn, the pandemic has exacerbated existing problems for high streets, such as the shift towards online shopping, and has introduced new changes, such as increased working from home.
Various sources of government funding aim to support economic recovery, including the Future High Streets Fund, the Towns Fund, and the Levelling up Fund. Places will want to spend this funding on the things most likely to support sustained economic growth.
This briefing presents evidence-based findings and conclusions about local growth, high streets and town centres. We use impact evaluation evidence where it’s available. To address issues for which there is not yet high-quality evidence about real-world impact, we also draw on recent data trends, and economic theory. It is designed to support people making decisions about which investments and interventions are most likely to be effective.
The role of the high street in economic growth
Sustained high street improvements need sufficient consumer demand. Investments in ‘supply-side’ measures, such as renovating shop fronts, are unlikely on their own to increase economic activity for a struggling high street. They need to be accompanied by investments and policies designed to increase demand.
Improving the skills of residents can help to address consumer demand. Higher skilled residents have higher wages on average, which will increase local demand for goods and services. More generally, local skills are a key driver of economic performance. Local growth plans should always address skills and set out how improvements to the local skills profile will be achieved.
There is surprisingly little evidence that ‘anchor stores’ are more important than other shops. Overall, the available evidence does not support the idea that public sector intervention is more justified to prevent closure of anchor stores than of other types of shops.
Implications of Covid-19 for high streets and town centres
There isn’t much evidence yet that more working from home will significantly boost high street retail. Any proposals based on assumptions of an increase in high street retail demand in the medium term should provide robust evidence to underpin those assumptions.
More working from home could reduce demand for office space in some places. Interventions which respond to this by, for example, improving the quality of existing office space, are ‘supply side’ interventions. To be successful, they need to be accompanied by new demand. Proposals for this type of intervention should explain how new demand will be generated and where it will come from.Relocation of local public sector workers to new or newly renovated offices might help, but this will have knock on effects for their previous locations.
More working from home won’t drive large population shifts away from towns and cities. The number of people living in urban centres in the UK is unlikely to decrease due to people wanting ‘more space’, because supply of larger houses outside urban centres is limited, and unlikely to increase quickly. Proposals which rely on assumptions that housing supply and population density will change significantly due to Covid-19 should provide robust evidence to underpin those assumptions.
Regeneration and economic growth
Regeneration projects designed to deliver outcomes such as improved housing quality or new community assets will not necessarily deliver local growth as well. Proposals should be assessed against the desired goal, which may not be economic growth. However, proposals which claim that physical or cultural regeneration activities will also deliver economic growth should support these claims with high quality evidence and be robustly scrutinised.
