Publication - Minutes

Retail Strategy Steering Group minutes: March 2021

Published: 7 May 2021
Directorate:
Chief Economist Directorate
Part of:
Economy
Date of meeting: 4 Mar 2021

Minutes from the meeting of the group on 4 March 2021.

Published:
7 May 2021
Retail Strategy Steering Group minutes: March 2021

Attendees and apologies

Attendees

  • Jamie Hepburn, Minister for Business, Fair Work and Skills – Chair
  • John Brodie, Scotmid Co-operative
  • Robert Deavy, GMB
  • Tracy Gilbert, USDAW
  • Katie Hutton, Skills Development Scotland
  • Keith Irving,  Castle Food Town Initiative / Irvings Homestyle Bakery Ltd
  • John Lee, Scottish Grocers’ Federation
  • David Lonsdale, Scottish Retail Consortium
  • Andrew McRae, Federation of Small Businesses
  • Lindsay Methven, Scottish Enterprise
  • Andrew Murphy, John Lewis Plc
  • Emma Parton, The Highland Soap Company
  • Colin Smith, Scottish Wholesale Association
  • Professor Leigh Sparks, University of Stirling
  • Andy McGeoch, M&Co
  • Fiona Richardson, COSLA
  • Carron Smith, Falkirk Council / Scottish Local Authorities Development Group
  • Anne Buchanan, Enterprise & Innovation, SG
  • Debbie McCall, Economic Development, SG
  • Emma Mcginlay, Economic Development, SG
  • Rowan Smith, Economic Development, SG
  • Stephen White, Economic Development, SG

Apologies 

 

  • Reuben Chesters, Locavore
  • Kathy Murdoch, Buchanan Galleries
  • Lucinda Bruce-Gardyne, Scotland Food and Drink / Genius Foods
  • Tracey Clements, Boots
  • Allan McQuade, Scottish Enterprise
  • Hugh Lightbody, Business Gateway

Items and actions

Actions  arising

1. Scotland Office to be invited to future meetings.

Decisions made

1. Terms of reference agreed

Issues discussed

1. Welcome and context

Minister for Business, Fair Work and Skills (Minister)

  • Welcomed people to the meeting, highlighted the useful discussion in the last meeting.
  • Clear perspective that this group cannot be all things to all people.
  • It is a focused piece of work picking up on the main areas to make the greatest impact.
  • A paper was circulated to steering group members outlining the focus on specific work streams on people, place and sector.
  • Discussion will focus on vision and work streams after a presentation by Professor Leigh Sparks following publication of the Town Centre Action Plan Review.

2. Town Centre Action Plan Review

 

Professor Leigh Sparks presentation on the Town Centre Action Plan ‘A New Future for Scotland’s Town Centres’ (Slides and Transcript are available on Professor Sparks’ blog)

Town Centre Action Plan Review

  • review progress and scope
  • revised vision for towns
  • meets climate change ambitions
  • develops healthier, vibrant, and greener town centres

Not a Covid recovery plan and takes a longer view

Last Decade

  • National Review of Town Centres  
  • Town Centre Action Plan
  • Town Centre First
  • Place Principle
  • Place Based Investment Programme 

Scotland different to rest of UK and looked on enviably in other areas.  Scottish Government’s response to the Fraser Review in 2013/14 led to an agreement with COSLA to put town centre’s first using the place principle. 

The Fraser Review focused on town centres and not high streets or retail which was the focus of the Portas Review. The review looked at pro-active planning to build a vibrant local economy and place based investment with the development of community wealth building, 20 minute neighbourhoods and town centre regeneration.

Enhanced Ambitions

  • community empowerment
  • climate emergency
  • national outcomes
  • UN sustainable development goal
  • inequalities and social renewable

The enhanced national ambitions from the Scottish Government developed from 2014-2020 included the Community Empowerment Act emphasising community and place, addressing the decline in town centres and climate emergency.  National outcomes developed with Scottish Government also focusing on UN sustainable bills and inequality and social renewal to improve the country. Provides context, but need to see town centres in a somewhat different way.

Covid-19

  • exacerbated existing inequalities (and added new inequalities)
  • emphasised value of local, neighbourhood and community
  • exposed supply chains and lack of local resilience
  • produced new, simpler forms of working together

New simpler forms of working together have been highlighted in some places where better services have been provided due to the inequalities caused by Covid.  Evidence taken from lived experiences about town centres and behaviours.

The Vision

“Towns and town centres are for the wellbeing of people, planet and the economy. Towns are for everyone and everyone has a role to play in making our towns and town centres successful”

Recommendations

  • strengthen the existing national policy context
  • stop supporting activities which cause harm to our town centres
  • extend existing activities and approaches to accelerate town centre renewal

Questions around what barriers should be removed? What would accelerate and encourage faster action?  What activities receiving support should stop? What is damaging to town centres?

Recommendation 1

Strengthen the formal positioning of towns and town centres in National Planning including requirements to produce town and town centre plans, coproduced with communities and enhance data collection and use at the town and town centre level.

a) Towns and town centres to be included and prioritised in National Planning Framework 4 (NPF4)

b)Town Centre Plans need to be developed and implemented with the local community and with a focus and commitment on the wellbeing of people, the planet and the economy

c),develop a revised and enhanced focus on measurement and data for towns and town centres

National planning needs to build town centres more strongly into plans and co-produce plans with the community.  Communities feel things were done to them and not with them. The unheard voices need to be heard.   

NPF4 – the focus is on people, planet and economy. Need to build on work for data collection for town centres, being cleverer about what is captured and what it covers.

Recommendation 2

Scottish Government should review the current tax, funding and development systems to ensure that wellbeing, economy and climate outcomes, fairness and equality are at their heart. Potential suggestions for actions include:

  • amendments to Non Domestic Rates (NDR)
  • amendments to VAT
  • introduce a digital tax
  • introduce an Out-of-Town Car Parking Space Levy
  • introduce a Moratorium on Out-Of-Town Development

Need to look at tax systems to ensure fairness. Rates system is based on a 400 year old system which causes enormous problems. Out of town is cheaper with renewal of town centres more expensive. Shift to on-line retail requires thinking about the digital economy and digital tax.

Car parking needs to be considered in relation to climate change. A moratorium on out of town developments is not addressed at retailing, it is about other activities too. It is about rebalancing between out of town and in town. With out of town built on car dependency, need to look at behavioural change on a national scale. 

Recommendation 3

Expanded and Aligned Funding of Demonstration Projects in Towns and Town Centres.

We have an overall request that the Scottish Government continues to seek to expand and ensure further alignment of the funding available. Funding for town centre activities has to be substantial, multi-year and cover revenue and capital spend.

We recommend that projects should be focused around themes of:

  • Town Centre Living Expansion – housing sector incentivisation in town centres
  • Digital Skills and Use in Towns – skills development for businesses and enterprises and extended uses of various technologies to understand and change behaviours in town centres
  • Enterprising Communities – Strategic Acquisition Fund to alter ownership, development and use patterns in town centres to encourage local small business, community enterprises and entrepreneurship around local and circular economies
  • Climate Change Response – building on existing programmes in Climate Action Towns, micro-generation, retrofitting of town centres buildings and the alteration of space in town centres for active travel, pedestrian movement, green space and social settings, with a view to enhancing the resilience of town centres against climate change.

Need to build on what has been done before and expand further. Funding needs to be substantial and multi-year rather than short-term. Focus on buying assets needs balance between capital and revenue spend.

Conclusion

The current narrative is too often about the decline or death of the town centre. Decline is overstated and it is not inevitable. Towns can and should be the heart of the community, delivering for people, planet and the economy. We need to make this happen. We believe our recommendations, if implemented, can help do this.

Professor Sparks is happy to present at other groups diary permitting.

Minister

Thanks Professor Sparks’ for the presentation and asks others to comment. Important to remind ourselves not to undertake an alternative exercise to the Town Centre Review.

Andrew McRae

Is Policy Chair of FSB and was a member of the review group submitting evidence.  Many of the elements discussed that he agrees with, while others not in full agreement with. Acknowledges huge effort and work from Prof Sparks and everyone at STP.

Feedback on key points for support:

  • notes ambitions and radical ideas for moratorium on large out of town developments – important to maintain and reconfigure what we have
  • how do we have fair competition and strengthen the offer?
  • supports the concept around 20 minute neighbourhoods – great way to grow local economies. Essential to give continued support to longstanding businesses that need additional support. Ideas around 20 minute neighbourhoods play to existing businesses and new start ups.
  • supports the Strategy Acquisition Fund – talking about the impact of the blight of empty units on high streets and retail neighbours. Community engagement is important with communities able make a difference. There have been great examples in recent years, need to look to support new opportunities.
  • reservations around amending non-domestic rates. System is not perfect, it suits some better than others. Digital tax and the momentum behind that raises potential concerns for smaller businesses. Taxes aimed at large online retailers could have impact on smaller business which have moved online. 
  • the survey work undertaken during the review included a lot of public responses.  A key barrier was the limited choice within the retail offer. Local people want more and better shops – the move to take out retail space could be the wrong answer.

David Lonsdale

  • the Town Centre Review was not a review of the retail industry.
  • death or decline is overstated – guilty of using shorthand which plays into that narrative.
  • positive on transport and access, housing and recognizes the extra costs of businesses in town centres.
  • includes challenging points for the group to debate around the pros and cons of proposals for business rates, car parking, digital tax. Keen to get a sense of what discussion was like on those issues.
  • need to consider cost benefits, timeframes, primary legislation and how these fit with existing policies.
  • SG has made headway on rates reform – the system needs simplifying and made less complex.
  • main question is around what are the next steps?  Do Ministers need to respond to the report to say what they are taking forward?

John Lee

  • interesting presentation – question about 20 minute neighbourhoods.  Local convenience stores would have a pivotal role to play. Grateful to see how this is taken forward and who the key players would be.

Tracy Gilbert

  • taxation is important. Fair playing field between bricks and mortar and online.
  • in terms of planning, need to be mindful of community safety elements.  Retail workers are low paid, work late at night and rely on transport links to get them to and from their workplaces safely.
  • from Trade Union perspective, retailers opening up are growth businesses such as Lidl and Aldi which are opening in poorer communities. Poorer people tend to work for these companies and planning does not insist that they recognise trade unions.  Good terms and conditions of employment are needed to contribute to the community as poor terms and conditions have an impact on the economy. 
  • when planning stores for retail or other outlets, location and safety needs to be considered as people are hanging around late at night. People need to feel safe.

Andrew Murphy

  • regarding the enterprising communities recommendation in section 3, would like to hear thoughts on business improvement districts (BIDS) and potential of the BID model.  Businesses put money in but advantage support from local authorities is underused – it is time for that to be reviewed and expanded. Takes businesses beyond business as usual into strategic and development areas.
  • success of place in town centre rests upon collaborative relationships between owners, occupations, local authorities and government. BIDS is a product of UK legislation, but there is a platform in Central Edinburgh with a successful BID.
  • taxation and business rates need to be addressed.  Need to be careful not to be blunt about taxation – ‘decentivisation’ is not the first recourse when making things better.
  • has to be net neutrality overall – need more creative thinking about that.

Lindsay Methven

  • would like to understand how we shape thinking to consider the visitor economy, particularly post-Covid.
  • visitors might not look to go to city centres.  With the same retailers on each pitch, visitors want something different, a more authentic experience. Theme plays into many of the recommendations discussed.
  • we cannot fix every town, so how do we work across boundaries and look at towns across the whole region.

Professor Leigh Sparks

  • high level points will be developed through this group.
  • digital taxation – neutrality is right, need a balance of how we reduce costs in town centres and increase costs out of town. Sensible taxation needs to reflect the economy. There is an argument not to have a digital tax, but taxation has to relate to what the economy is. There is a broader point about digital on the international side.
  • next steps are the ministerial response which may be post-election.
  • rigid views about 20 minute neighbourhoods – but need to think about the underlying principles. Neighbourhoods could be 15 or 20 minutes or something different.  
  • BIDS – there are some issues with the smaller ones which have been struggling.  The larger ones have worked better.
  • towns are unique, they have a sense of place, community and individuality. A top-down solution will not work – it is about local community and what local people need.
  • towns need to work together in a broader context. Should not think of towns as siloes and in opposition, they are networks and we need to think about how to work with that. Happy to have further conversations more directly. 

Minister

A question the group needs to consider is the interaction of different strategies and activities.  We are not trying to reproduce or recreate these. What elements of the Town Centre Review sit in the place of retail strategy for further exploration that would make a difference for the retail sector?  We cannot pick up on all of them. Could get bogged down in taxation, so need to pick up on things we can move forward with.

Andy McGeoch

  • business trades are from secondary and tertiary sectors in high streets and have been reviewed in terms of north and south but these have been very retail focused and do not look at the overall town centre structure.
  • location of primary schools where parents drop off children was used to influence the location of a new Tesco or Aldi. Even if they are a walk from town, people will drive and will not walk into town.
  • there have been decades of high street buildings in decay which are not as easy to maintain as out of town retail.
  • distinction between ‘time rich’ customers aged 44-65 plus and ‘time poor’ customers consisting of working parents and families who are doing lots of different things.
  • services need to have hubs around the town to provide reasons to go in. Cars are parked in back streets and decades of decay make shopping easier out of town.
  • rates – economics of running stores needs to be considered, clothing retail has deflated over a 20 year period, but rents and energy costs have all gone up.
  • national living wage – true effect means £5m made in profit incurs £5m in extra costs with no sales growth.
  • no solution in rates in retail stores, what do you get for your rates -  less police with theft not taken care of. Cost of refuse from stores is significant with everyone paying different providers. Cost base of a store includes fire risk, health and safety, managers, training and pay for responsibility above the core function of managing a retail team. 
  • reasons to visit a town – no real reasons to visit. Streets are pedestrianised leaving big spaces with nothing else provided such as play parks.

Professor Leigh Sparks

  • recognises large elements of why people would visit towns. Has another presentation entitled ‘Why the hell should anyone visit Stirling’.
  • question as to how to join up the town centre review with retail.
  • 3 work streams – is leading on the place work stream. 
  • first helpful action might be to try and create a strategy document around the Town Centre Action Plan and where it hits retail which can be discussed in all the groups.

Minister

That is a sensible suggestion.

3. Scotland’s Vision for Retail and future meetings

Minister

  • next discussion moves into the space of the vision for retail for an initial discussion.  This breaks down into 3 board themes: place, people and sector.  Discussion to focus around a way forward.
  • question around the vision drafted – does it have the right scale of ambition, does it look at areas of priority and what is missing? What is the proposition to have the three work streams? Is that the correct approach and who we are we asking to head up the activity? Is there a willingness to become involved in the activity?

David Lonsdale

  • happy to pick up and share the sector work stream if that is what is wanted. Likes a number of things on the vision: looking forward, customers, optimism and language used such as thrive.
  • Do we need to say something explicit about thriving and growing. Even in retail over last 10 years notwithstanding the financial crashes, retail spend has increased by 2 or 3 billion over last decade. With small population growth as wages begin to increase, we will see at least an increase in retail spend. Quite a good change to capture uplift about future spend over the decade ahead.
  • looked at other visions such as food and drink, tourism – these are often second of third iteration strategies and this is the first retail strategy.
  • language around being world leaders with 21st century tourism, growth for food and drink - something from that language that we can think about.

Colin Smith

  • happy to be involved in a sub-group. The vision needs include supply chains as a partnership piece. The sector is about supply chains and its employees too.

Tracy Gilbert

  • vision – to strengthen the people part – unions and employees. USDAW covers distribution and food manufactory for the trade union role. 
  • strengthen part on lived experience which is vital recognising change and trends in  automation.
  • happy to chair the people strand. Needs to consider community safety and impact of digital. People are parts of the other strands and would like to be involved in these areas too. 

Minister

The work should not be siloed - need to work across the different work streams.

John Lee

  • happy to support David’s nomination for sector work stream lead and be involved.
  • happy to provide secretariat support too.
  • vision - important that there is cross-directorate awareness to the strategy within the Scottish Government. This should be mentioned in the vision.

Professor Leigh Sparks

  • broadly thought the vision should say more about diversity and localism in retailing, the social role of retail and a concern about focusing overly on labour productivity. 
  • Theretare 3 points: diverse locally focused sector, social role that local shops play and social role in other ways in supply chain, e.g. Locovore. 
  • if looking at productivity and labour, then productivity goes through the roof with big sheds and a small workforce. Need to address that.

Katie Hutton

  • vision should include something around the experience of retail as well as the service.  
  • happy to join the people work stream. Work force skills and skills derived demand needs to be considered. Need something that sets out the opportunities for people transitioning in jobs. 

Minister

  • vision talks about consumer experience - need to factor that voice into that the vision. 
  • asking if people are happy with concept and work streams and those who have been who has been asked to lead? 
  • david Lonsdale will lead on sector, Professor Leigh Spark for place and Tracy Gilbert for people.
  • all agreed.
  • timescale for work streams needs to be defined by the overall timeframe for the work – thinking of a July timescale, but needs to be led by a group perspective.

 

David Lonsdale

  • timeframe seems reasonable. Balance about how much is about Covid recovery with a longer term view.
  • if a new Minister was appointed they would need to come up to speed on this work.

Minister

Someone coming in would need to get up to speed quickly.

Tracy Gilbert

  • timeline ok – more about the practicality for feeding in. 
  • happy to work across the other two work streams and would welcome input on the people theme.

Minister

  • thanking people for helpful comments – noting that from 25 March will be in full election period.
  • need to think about growth if talking about being world leading. Happy for emphasis on lived experience. 
  • vision is to inform the output of the group strategy itself.

4. Terms of Reference

Minister

Terms of reference document was circulated following the last meeting – are people content?

John Brodie

  • what are the measures of success and timescales and where are these built in? 
  • fundamental principles of the strategy to be highlighted with other Scottish Government strategies. In light of the pandemic, does that mean our hands are tied or can we look to influence.

Minister

  • hands are not tied, but need to be cognisant of other areas of activity.  
  • the strategy needs to be a long term strategic approach for retail. Need to be conscious as to how other activities relate to each other from a Scottish Government policy perspective – this will emerge from work stream activity.
  • terms of reference agreed by the group.

5. Recap and next steps

Minister

  • need to consider the frequency of meetings and how often to come together in terms of work stream approach – Rowan will be in touch to take forward.
  • will not be at next few meetings, but will be updated.
  • grateful for people coming together to form this group and looking forward to seeing what can be produced.
  • there was a suggestion to invite someone from the Scotland Office to the group.

Ann Buchanan, SG

  • regular catch-ups are held with all the devolved administrations. There is one scheduled for next week and this will be on the agenda.

Minister

Content with that approach. 

6. AOB

Minister

Thanks to all.