MARY PORTAS AND REVITALISING THE HIGH STREET IN WALES

Last Thursday, there was finally some good news for the beleaguered high street as figures from the British Retail Consortium revealed that sales in May 2012 were 3.4 per cent higher as compared to a year earlier.

On the same day, 4,500 jobs were saved in 397 stores, including a number in Wales, when Clinton Cards were bought by the US retailer American Greetings. That is not to say that there are still major challenges facing the retail sector. For example, the number of businesses in the UK retail sector going into administration increased by 15 per cent in the first quarter of this year.

These have included household names such as Peacocks, Blacks Leisure, La Senza and Game. Fortunately, as with Clinton Cards, a number of these businesses have been bought out of receivership and, as consequence, jobs have been saved.

Nevertheless, it is estimated that employment in the retail sector has decreased by around 100,000 in the last year and this decline is set to continue unless radical action is taken. That is why the UK Government asked the retail marketing consultant Mary Portas to identify what politicians at national and local level, along with businesses and other stakeholders, could do together to promote the development of new models of prosperous and diverse high streets.

Reporting last December, it made a series of recommendations, including creating a visionary, strategic and strong operational management team for high streets, establishing a new “National Market Day” where budding shopkeepers can try their hand at operating a low-cost retail business and considering whether business rates can better support small independent retailers.

Other suggestions included free controlled parking schemes for town centres, restricting out of town developments, and disincentivising landlords from leaving units vacant. However, to ensure that the report did not merely remain gathering dust on a shelf in Whitehall, Portas suggested that a number of high street pilots should be run to test some of these ideas.

And rather than having civil servants choose which high streets were to benefit from the government’s largesse, towns were invited to put forward their own proposals as to how they would implement their ideas to regenerate their retail sector.

As a result, around 370 high streets submitted applications and last week it was announced that twelve high streets would benefit to the tune of support worth approximately £100,000 each. Some cynical commentators have said that this funding is derisory and the whole scheme was a publicity gimmick at a time when there are far greater economic problems facing retailers. Others have noted that the competition itself has generated real local interest and, regardless of the fact that only around one in thirty applicants were successful, it has enabled communities to come together and plan for their economic futures.

Indeed, you only have to view the hundreds of videos that have been posted on YouTube in support of bids to see local businesspeople demonstrating their passion and conviction for their town centres. The two featured below are from Bedford, one of the winning bids and Burnham on Sea, which didn't win but is already preparing a second bid.

As a result, the failure to win a cash prize will, in itself, probably not stop many of the towns from pursuing their plans, having created a group of stakeholders who have a real interest in the future of their high streets and, more importantly, a strategy for the future.

Unfortunately, as with the start-up initiatives discussed in this column last week, the Portas Review only applied in England and, given the state of many of our town centres, it is a shame that Wales did not participate in such a scheme.

Certainly, given the work already undertaken by Mary Portas, there would be scope to examine this further in the context of Welsh High Streets. Indeed, speaking to a sold-out audience at the world famous Hay Festival last week, the 'Queen of Shops'  said that there was still hope for many town centres in Wales, despite the threat of out of town developments and internet shopping.

And we could start by developing a similar programme to that envisaged for English towns that would enable those with enthusiasm for regenerating our high streets to come together to start a renaissance in the fortunes of many local economies at a time when it is sorely needed.

MAKE BUSINESS YOUR BUSINESS - IS WALES LOSING OUT?

Back in 1971, John Bolton published what was to become known as the most important report on the state of small business in the UK. It set the benchmark for policy on entrepreneurship for decades, influencing the development of small firms across the World.

Last week, Lord Young of Graffham, the former enterprise minister in the Conservative governments of the 1980s, published his review of entrepreneurship in the UK.

His report, “Make Business Your Business: supporting the start-up and development of small business” is not as comprehensive as Bolton’s massive tome from forty years ago.

Nevertheless, in examining whether the right conditions and support are in place to enable the current and next generation of entrepreneurs to build and sustain successful businesses, it does propose a number of useful policy interventions that could increase the rate of entrepreneurial activity in the UK.

One of the main recommendations, and one that heavily featured in the press during the last few days, is the new StartUp Loan for young people. This was originally proposed in a report from VirginMedia on young entrepreneurs last year and is based in the premise that if young people can get a loan to go to university, then why shouldn’t they also get a loan to start up a new business. As a result, the UK Government is now making £82.5 million available immediately to enable potential entrepreneurs aged between 18 and 24 to get £2500 to kick-start their business.

Another proposal from Lord Young, which has already been agreed by the UK Government, is the opening up of vacant or under-used space in its estates so that business start-ups can get access to premises. Making such managed spaces, which would also have support and coaching available to tenants, could help many more new businesses to get off the ground.

This blog has regularly discussed how small firms can get better access to the £230 billion of goods and services that are procured by the government every year. One of the obstacles to accessing such opportunities is the amount of bureaucracy involved in putting together bids for such work and the proposal, to remove prequalification questionnaires for all contracts worth less than £100,000 should help entrepreneurs, whose time is limited, to get a better chance of success in supplying goods and services to the public sector.

Finally, the main part of Lord Young’s report focuses on one the biggest obstacles to start-up success, namely access to finance. Despite the UK Government’s best efforts, it is clear that many start-ups are struggling to gain access to vital funding from the most traditional source of cash, namely the banks. To counter this, it is suggested that start-ups could, and should, access alternative sources of finance from other providers such as microcredit, crowdfunding and business angels.

Therefore, Lord Young’s report is to be welcomed as a wake-up call to what can be done to support small firms in the UK. However, it is worth noting that is far less comprehensive than the Entrepreneurship Action Plan produced by the Welsh Development Agency twelve years ago when Wales led the world in the development of a regional enterprise strategy that would boost the entrepreneurial potential of the nation.

Indeed, we need to re-examine the whole approach of Welsh Government policy towards entrepreneurship as the number of new businesses has plummeted from 11,525 new businesses in 2004 to 7,505 in 2010, costing thousands of jobs and hundreds of millions of pounds to the Welsh economy.
And one place to start would be by clarifying how the proposals in Lord Young’s paper actually apply to Wales as it would seem that the start-up loans for 18-24 year olds are only applicable in England.

In addition, there has been no announcement from the Welsh Government on whether it will make some of its vacant buildings available to new firms, despite the fact that there have recent news reports of such premises lying empty across Wales. Certainly, a good place to start any entrepreneurial renaissance in Wales is with young people who have the ideas, drive and energy to take advantage of new opportunities in a digital globalising world.

We therefore need to ensure that they are not at any disadvantage as compared to young people elsewhere in the UK, especially when it comes to accessing the vital finance and access to premises that can help or break a new business.