Bill Jamieson: High street stagnation needs whole new concept of recovery

ALMOST two years ago, in August 2009, that the Scottish Government, badgered by the Holyrood Conservatives, announced a £40 million regeneration package for Scotland's most run-down two centres.

Since then the retail tsunami has gathered force. Many are going under or pushing through drastic store closure plans. In such bleak conditions, can regeneration spending have much effect?

In Scotland the high street challenge is now acute. According to research by property agency Colliers International, Scotland's high streets are failing at more than twice the rate of their counterparts in England and are unlikely to recover soon. It found that some 48 per cent of Scottish town and city centres have "failing" high streets compared to 23 per cent across the UK. The retail offering of a further 4 per cent of Scots towns are "degenerating" as retailers either collapse into recession or consolidate into the handful of towns and cities that are thriving.

If it is any consolation, the problem is by no means confined to Scotland. Britain's high streets are being hit by intensifying competition from out-of-town stores, the relentless switch to online retailing, pressure on household budgets and, for the retailers, onerous overheads such as rents and rates which are combining to drive many out of business.

The number of vacant shops across the UK has tripled to more than 14 per cent since 2007. Mary Portas, the retail consultant hired by the government to help breathe life back into the high streets, has no illusions about a quick turnaround to status quo ante. "Is it really creating the high street back to the way it was?" she asked in a Financial Times interview this week. "I don't think for a minute it will be. I can't sit here and say yes, we are going to create and get all this lovely mix of independents back, when actually that may not be pertinent, relevant, or what consumers need or want in the future."/

Faced with these huge structural changes in retailing, it is not a question of a lick of paint and tidy-up until there is a cyclical upturn and the empty spaces fill again. This is a permanent sea-change in the way that we shop, coming on top of a 20-year spurt when the UK was "over retailed" - too many shops offering me-too, lookalike products. The boarded-up shop spaces that are left are of no interest to the big retailers and tend to be filled by charity shops, "social enterprises", pawnbrokers and deep discount chains: hardly a combination likely to attract aspirational shoppers and big ticket spending.

Three approaches may prove useful. One is to allow nature to reclaim many of the spaces in our smaller Scottish towns - clearing the unsightly gaps and providing grassed sitting areas and lime trees with dappled shade where pensioners can rest.This would provide a more pleasant social environment for the remaining shops to prosper.

The second would be to provide more flexible retail space in small town high streets for quick change of occupancy. Perhaps a condition of planning consent for any new out of town "retail park" would be an obligation to provide and run small "metro" convenience stores who would be like anchor tenants. Other empty units could be converted for quick turnaround "hit and run" retail.

A third approach would be to capitalise on the continuing draw of the main street as a social gathering point for local communities and to encourage those commercial activities which meet social needs - restaurants, eating areas and cafe bars. This would play to the need for people to congregate: town centres serve other important purposes than retail.

In the meantime, both landlords and local authorities are likely to take a hit: for small town high streets to survive and attract retailers of substance, both rents and council rates have to reflect the very changed - and very difficult - circumstances we are now in.

Few entrepreneurs would risk trying to build a business in a rundown area with high overheads even before a single item is sold.

The alternative of "waiting for the upturn" - which has now been pushed well into next year and will see nothing as vigorous as retailing pre-crisis - runs the risk of condemning these centres to further dilapidation and decline.

Indeed, there is concern that the real test is still to come when interest rates do inevitably start to rise from today's ultra low level. That may be not a point of recovery - but just the point when small shops throw in the towel.