New Economics Foundation - Guy Rubin
I am here to talk to you on behalf of the New Economics Foundation (nef) about the process by which ghost towns and ‘clone’ towns are created, and how Archway offers an opportunity to embrace a different approach. In the light of lessons learned from trends observed in our towns elsewhere, it presents an opportunity to encourage forms of economic activity that will deliver real value to your economy, which you may want to think about as you move forward with your development.
What you are doing is very exciting and it is a real opportunity to gather together a lot of different strands and themes for sustainable development and planning, and do things which could be a model for the way other communities organise in similar circumstances.
nef is an independent think-tank and charity. We aim to re-think economics to bring into account sustainability, environmental factors and social justice, looking at economic activity and forms that deliver real prosperity to local communities like Archway.
Our recent work shows that the traditional model of growth is actually delivering negative economic processes locally that are not helpful and indeed, which are unsustainable. Real, sustainable growth works to support the economy at both the global level and the local level, and I will talk a bit about our work on Post Offices and street farmers markets, which are relevant to our discussion today.
So, how did we get to the situation we are in today? Unfortunately we are witnessing a process by which a lot of communities and High Streets have been losing those things that make them distinctive and important. In 2002, nef produced a report called Ghost Town Britain - an attempt to draw attention to the process by which we were losing the institutions that make our High Streets - places where people want to go to and where they want to live.
GHOST TOWN BRITAIN - shops closing:
General stores – 1 every day
1997 – 2002: Specialist stores (butchers, fishmongers etc) -50/ week
This illustrates in numbers the process by which our High Streets are becoming ghost streets, where people jump in the car and end up at an out of town shopping centre instead.
Part of the problem is that those streets are losing specialist trades (butchers, fishmongers etc) and the skills related to them. The reason this is important is the loss of diversity. The loss of range in towns and local centres is in turn important for three reasons:
It drains our local economies of money (which delivers prosperity for global communities, as I will explain later on).
It erodes choice.In contrast to the ‘free market’ argument about choice, which you will hear from the large superstores etc, who claim they are delivering what people want,we would argue that central to the idea of choice is diversity, and that we need to refine the word ‘choice’.The concept should not be hijacked by the idea that having a hundred lots of the same thing in one store is choice.Choice needs to be a much wider and meaningful concept than that, and if we want to create communities, where there is real choice, then we need to build that in; and not allow it to be driven by an approach that delivers outcomes that we do not want, including High Streets where people do not want to go and processes that create clone towns, which I will touch on later.
It destroys the ‘glue’ that holds communities together, and this is important socially.It is important to the kind of community we want to live in, the kind of community we want to identify with. Having that diverse range of institutions, businesses, shops and so on, is part of the social glue that actually holds communities together.
Once this process gets going, it becomes almost unstoppable, and begins to deliver secondary sub- processes that are very negative as well, for example, what has happened recently in terms of trends in high street banking. A lot of the banks have withdrawn their High Street branches and moved across to on-line banking and have opened new branches in out of town shopping centres.
Ghost Town Britain: Sub-processes of local decline
1992-2002: Britain lost one third of bank branch network
Local traders report losses of between 10% and 30% when the last local bank closes
Post office closures:
Every £10 of earnedincome generates anestimated £6. 20 for the local economy.
Tipping Point – 60% of local businesses lost footfall and trade following closure
So, as we lose our local shops, that dynamic then begins to remove other services, thus creating a tipping point process that is quite damaging and dangerous. Why is it important? As our report shows, once you remove the local bank, people cannot get their money out. That means you do not have enough circulation of money, so trade also drops off. A second important example is the effect of Post Office closures, where those businesses which often act as an anchor and deliver real value to secondary shopping centres also lose out.
It is important to look at what this process means in design terms. nef recently produced a booklet called Clone Towns, which argues, that not only is there the ghost process going on, but also a process by which things / places are becoming identikit and homogenised. We see the reproduction of the same thing all over Britain, which is a sign of the increasing dominance of particular organisations in particular places. We seem to be moving towards a kind of ‘oligocomy’, whereby all of the major supermarkets control 70% of the grocery market. For more about this, see my colleague Andrew Simm’s book Tescopoly (2007), which actually sets out why and how this is taking place.
This matters in design terms, because too many of our High Streets are beginning to look the same, have the same face. They look homogenised; as architecture critic Jonathan Clancy points out : “We have replaced our busy streets with hermetic office blocks, gated shopping precincts, and bland chain stores.” . And as previously mentioned, this then links to the withdrawal of key skills and services and the process of driving out independence and diversity.
nef Clone Town Survey:
Covered 130 towns and villages across UK Locally based surveyors
Allows comparisonbetween places on the basis of retail diversity on the High Street as an indicator of retail diversity in the town.
Min population 5,000 - max 150,000
Geographic diversity – North and South
25 categories of shops
41% of towns surveyed clone towns (eg. Hammersmith, Enfield, Upton Park)
26% border towns (eg. Oxford)
33% home towns (eg. Shepherds Bush, Highgate, West Hampstead)
The Clone Town Survey enabled us to look at 130 towns and villages across the country. What is interesting about it is that it is a community-based survey, a survey which we put on our web site, and at the back of the book. You can use it to go out and look at exactly what stage your High Streets are: how many independent shops there are; how many clothes shops; chain stores; and other institutions. It is a tool which you can use to analyse what your High Street looks like – a kind of health check – and we hope to update the survey data within the next year or so.
Looking at the situation here in London, we found that trends here are in a way more complicated, as is often the case with a more extenuated process than what is happening in the rest of the country. We observe a higher proportion of towns (local urban centres) that might be classified as ‘clone’ (dominated by high street chain stores) and fewer of what we call ‘home’ towns (that retain some identity and diversity with a range of independent businesses). Interestingly enough, Highgate (and Archway) were classified by our survey as a home town, though this may have changed since it was carried out. Shepherds Bush, also a ‘home’ town where I live, appears to be very much threatened by the massive shopping centre development along the West Way, which is a real danger and threat. So we are concerned about our local situation.
Why does this matter? Why does this matter economically? Well it matters, because having an independent and diverse infrastructure in terms of shops and local business actually delivers real value to the local economy.
The studies we have done looked at supermarket supply chains including, where they source their goods from; the people that they employ; and the amount of money that goes back into the economy. From these studies we know that chain supermarkets are very inefficient in terms of giving local value. One survey found that about 90% of the money from supermarkets leaks out of the local area. This is because most of their supplies are through big contracts and monies are spent at a national level, rather than supporting local firms. This weakens the local economy and makes it more fragile, as there is less money available for local suppliers and inter trading.
This also has a social impact, as discussed earlier: it reduces diversity, undermines it, ‘hollowing out’ choice, and diminishes the social capital of an area, which is linked to local business capital. It limits social interaction and diminishes community spirit and engagement.
A very interesting study was done in America that looks at the impact of Walmart stores, a big supermarket chain in the USA, on business capital and social capital, where these stores opened. This study correlated over a time period, what happened to local social capital and business capital, before, during and after the emergence of Walmart, and was able to show quite a significant degree of correlation between the hollowing out of business capital and the moving in of these superstores.
What that means is, that the number of local solicitors, accountants, small firms etc that link to (and serve) the small businesses, was reduced when Walmart came, as the new big business placed its contracts with the big players – national contracts with central accountants, lawyers, solicitors, and so on. This then impacts on the local social economy and the social network, because having a strong thriving group of small businesses and small business people, is so important to local neighbourhoods and local associations, groups like Better Archway Forum, and so on.
You thus have a process we called ‘leaky buckets’ by which by disabling the business community and weakening the importance of it, money leaks out of the local community, more services are outsourced, and that has knock-on effects on social groups and the social balance of local communities (see figure ??? ) , and that is really why it matters.
Money flows out of communities –
Assess where money is spent and develop strategies to keep more money circulating locally
Local enterprises help money ‘stick’
Examine supply chains
Look at involvement of local firms
Integrate local firms in supply chains
As a corollary of our analysis of supermarkets, if you look at the supply chains from local business, small businesses tend to source and to choose to place contracts with more local businesses. Often that is because they know people locally, they operate locally, and they are not involved in big contracts. So, by having a healthy, thriving independent business sector, you can help to make sure that money flows into your area. And that is particularly important in disadvantaged areas, where money flow can be relatively difficult to ensure. This is an important argument that nef always raises against those pushing for a retail-lead regeneration model. We argue that this does not work, because of what we know, based on the evidence we have established.
However, there is an alternative, it is the asset-based regeneration model, and I think this is very much the kind of thing that you are doing here at Archway: recognising the key assets in your community; looking at your existing small shops and retaining them. I know you are doing a lot of very practical work with local shopkeepers, trying to explain the proposed redevelopment plans, and looking at how they could fit in. And you are trying to retail the office development to ensure that you have that kind of economic diversity we spoke about earlier.
So asset based regeneration is key to understanding what is important, and there are forms of economic activity which do deliver that:
- Street Markets: The research we conducted on street markets was extremely powerful in showing that they deliver real value to the local economy, because they offer such a concentration of independent traders. We did some work down in Newham, Queens Market. Ninety nine percent (99%) of the traders at that market were independent and they tended to trade amongst themselves and spent money locally. So the money flow was very significant. Street markets are tremendously good at entrepreneurship, because costs of stalls are relatively low, and it is an easy way to start a business. It is a flexible way in which to expand and contract. They are also terrific for entrepreneurship because they are always looking at ways to stimulate small businesses and making it grow. And, of course, they give such a buzz to the location. They are a destination people come to and they provide a positive approach to regenerating areas. If you were to look at bringing in a market on a day you know not many people are circulating, say a Sunday, when there is not much trade, you can actually bring in new money to flow into the local economy.
The other thing we found which is very interesting, is that markets complement, they don’t wipe out your integral local businesses. This is because local traders shop there, because local people who spend money in the market also go and spend money in the local shops. We found that for every £10 spent at the market, it also meant £5 or £6 spent in the area. So it is actually not an issue, that you would run your local, independent businesses out of business. In a way, you might actually be stimulating them:
a) by bringing in trade at a time when your not busy.
b) by increasing footfall.
- Saxmundham: A study called ‘The Real Choice’ focused on this town, organised by the Campaign for the Protection of Rural England as an example of what happens when a supermarket gets rejected. Local campaigners were successful in persuading their local authority to turn down a proposed supermarket development. The study looked at the range of local, regional suppliers and shops that were there before the supermarket was proposed and afterwards, to see whether you could demonstrate that by having an approach that focused on building the local supply chains between businesses, and irrigating the local economy, you could actually stimulate a more productive and healthier economy. They found that that was indeed the case: local and regional food suppliers in and around Saxmundham increased from 300 to 370 with a wider range of local products sold since the local Council rejected the supermarket application in 1997.
They were successful by being quite ‘strategic’, with a sophisticated retail impact plan which looked at what they wanted in terms of businesses - the kind of shops they had, what was needed, the kind of suppliers they had, and how they could preserve links. As a result of this, they have now got a thriving local economy that is not based around a supermarket-lead development. This therefore scotches the myth that regeneration needs to have a supermarket as an anchor.
- Post Offices: nef conducted a study of Post Offices in Manchester and found that they are key assets in the local economy of urban areas, as they supported and sustained secondary shopping centres and arcades.
They are rather fascinating institutions because they have a recognised social and economic role that even the government recognises. They are not just economic institutions, they provide social value as well; people go in there for a variety of services from filling in forms and official applications, to local meeting places. They are important social glue as well as economic delivery, and they are very good examples of viable, independent small businesses. They are in fact part of the biggest retail chain in the country. But the key is that as small businesses, we found that they act as anchors and magnets which bring money to the local economy.
People go into the Post Office and then also use the range of shops and services next door. If you remove the Post Office this often acts as the tipping point, which leads to the closure of secondary shopping. I am saddened, but also in a way pleased, to find out how right the research nef conducted has proved. After the publication of the nef report, we visited a local shopping arcade in Forest Hill in south-east London and talked to the shop keepers. Their experience confirmed exactly what we had found in our study: that a wide range of customers are driven by the Post Office and that if this were removed they would all very much suffer.
So asset-based regeneration and understanding of the local economy is key to the future, and some recommendations are listed in figure 5. There are legislative tools and facts you can raise with your local authority, and with central government, to support local campaigns:
- You can make imaginative uses of Section 106 Agreement to retain a mixture of shopping. Birmingham Council, for example, has done something interesting, bypassing a local authority procedure to guarantee that 20% of new retail development in Birmingham will be for independent traders.
-Under the Local Authority Planning powers’ proximity rule for example, local authorities are able to reject a supermarket application, due to its likely detrimental impact on other local shops.
- There are also the 2008 Sustainable Communities Bill and other central government tools, particularly trade ombudsmen and associations which examine competition rules, and check whether our competition framework is actually providing a level playing field.
Summing up, the number of Clone Towns is increasing, and we need to be aware that there is a tipping point, beyond which remaining local retail collapses.
There is still scope for action, both at a national level (competition policy, Sustainable Communities Bill), and at local government level (through Local Authority planning legislation, retail impact plans). Most importantly, communities can take action to safeguard against threats to their ‘home’ towns, and sustain the retail diversity which is key for thriving communities.
Here in Archway you have a real opportunity, with all the knowledge and understanding that you are developing about your local economy, to put forward a plan that builds on the lessons we have learned about productive, sustainable and useful economic activity, and develop that into something quite powerful. We at nef certainly will monitor with great interest and assist in any way we can in future, as you develop those plans.
nef recommendations on safeguarding home town centres
: Section 106 could be used to ensure that a percentage of retail premises in any new developments are safeguarded for local businesses
: Stop upward only rents; increase uptake of rent rebates.
: nef believes no supermarket should have a national share of more than 25% and a local share of more than a third. Divest their interests above 8 per cent market share – the level at which the competition commission identified that market distortion begins to occur.
Sustainable Communities Bill.
Distinctiveness campaigns: in the US campaigns like the ‘keep Louisville weird’ campaign have encouraged communities to use local shops and services.
Encourage local procurement.