‘Britain’s high streets need Community Investment Zones’ – LabourList

Last week, the Chancellor used her Budget to introduce permanently lower business rates for retail, hospitality, and leisure businesses. Funded by higher rates for the largest and most expensive properties – like the warehouses of online retailers – this move is part of the government’s strategy to revive Britain’s struggling high streets and town centres by rebalancing the tax burden between small brick and mortar businesses and online and out-of-town retailers. 

But concentrating on the retail sector overlooks the fundamental reality of today’s high streets. As a report by the House of Lords’ Built Environment Committee set out earlier this year, the survival of the high street depends on its evolution to a ‘life beyond retail’. Many high streets now face a chronic oversupply of retail space, with the British Chambers of Commerce estimating 40 per cent of retail units will need repurposing in the next five years. 

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Tinkering with the tax system alone won’t revive our town centres. Their future depends on long overdue transformation and civic renewal. This means creating high streets that are genuinely multi-purpose, meet a breadth of local needs and restore the civic role of the town centre as a place to meet. It means taking community seriously. 

Across the country, communities are already leading this shift. Community groups are repurposing empty shops into spaces for social connection, offering hubs for healthcare, employment support and education, and trading for the benefit of local people, generating jobs and keeping wealth local.  As the House of Lords report notes, high streets that have embraced a mixed-use model have fared far better than their retail-dominated counterparts.

In Hendon, Sunderland, the community business Back on the Map – which grew out of the New Deal for Communities regeneration programme – is demonstrating the impact of bottom-up regeneration. In the last few years, the organisation has engaged more than 500 residents in shaping a shared vision for the future of their high street, rebranding it as the “Heart of Hendon”, and tackling visible decline by purchasing and renovating a derelict block of shops. What was once a symbol of deterioration now stands as a beacon of renewal.

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These visible improvements matter. While the government’s work to grow the economy will span the duration of the parliament, creating tangible signs of local renewal that people see when they step outside their front doors helps rebuild the belief that our high streets have a future, and that we have agency to shape it. Over time, this can help to address the profound trust deficit between citizens and political institutions. 

Yet successive governments have failed to offer communities a coherent framework to lead high street renewal. The previous Conservative government’s levelling up agenda made some inroads by funding community asset ownership. Labour has strengthened this direction with legislation for a community right to buy local assets, now progressing through Parliament. But without sustained investment in community-led regeneration – and with persistent structural challenges like high business rates – this model has struggled to become mainstream.

If ministers want to go further and faster to bring about civic renewal, they must endow communities with some of the powers typically reserved for large-scale infrastructure projects. Relative to their for-profit counterparts, community entrepreneurs are grossly underserved when it comes to accessing the tools and investment to grow businesses that tackle the nation’s challenges. The government should create Community Investment Zones – neighbourhood-level zones with targeted fiscal and planning powers and investment – to create the conditions for community-led regeneration and local growth, akin to the model for government-backed Investment Zones, but rooted in civic leadership. 

Time-limited incentives like 100% business-rates relief could enable community-led and co-operative businesses to take on and repurpose surplus high street units to meet local needs. And a pot of risk-tolerant, venture capital-like innovation funding would help local people come together around shared challenges, develop new purpose-driven enterprises, and scale their impact.

The measures would go hand-in-hand with the government’s Pride in Place programme, which will see £20m invested in Hendon and hundreds of other neighbourhoods over the next decade. As well as giving communities control over how these pots are spent, government should give them the tools to deliver solutions for themselves. Community Investment Zones would help to accelerate the government’s manifesto commitment to doubling the size of the co-operative sector and spark the growth of the economy from the grassroots, as the Prime Minister envisioned in his September party conference speech.

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Instead of continuing to prop up the faltering retail-dominated model, the government should back a modern, community-powered vision for Britain’s high streets. Community Investment Zones would give communities the tools to realise the next era of our high streets and town centres – ones that are economically resilient, socially anchored and visibly renewed.

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