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Written by Professor Michael Kenny

Town Economies and the Election: What to make of the Conservative Party's Promises

As part of the Bennett Institute's Townscapes project, Professor Michael Kenny and Ben Goodair analyse the latest set of promises for neglected towns coming out of the election campaign. What could the policies announced last week by the Conservative party mean for your town?

Last week the Conservative Party set out a new, eye-catching package of policies for ‘left-behind’ towns across England. This aims to protect local businesses and prevent the rise of vacant premises in the high-street. These policies build on measures introduced by recent Conservative governments such as the ‘towns fund’, worth £3.6bn, with 100 towns in England already selected to receive the first wave of investment.

These new proposals focus in particular upon pubs and post offices as key services worth protecting for struggling local economies. But can we be confident that initiatives like this will necessarily benefit towns that are struggling the most? As part of our ‘Townscapes’ project at the Bennett Institute we have been collecting data about the distribution of various services across Britain. Below we provide a preliminary analysis of the likely effects of such a policy, and suggest that only a small number of places that count as ‘left behind’ are likely to benefit from this handout.

The Conservative party’s new plan announces several measures to increase connectivity and ‘keep the high-street open for business’.

It includes three key measures to prevent the further closure of pubs, post offices and small retail outlets which are identified as among the most important services provided in many villages and towns in England.

The party promises: a new £1,000 business rates relief for all pubs; a greater discount in business rate, up from 33% to 50%, for small retailers; and increased powers for community groups to acquire failing assets such as pubs and post offices. A £150m fund will be made available to support local groups hoping to save any closing pubs and post offices, and there will be a period of nine months before the owners can sell their premise to non-community buyers.

So how many pubs in your town will benefit? And how many towns are at risk of losing their last post office?

You can find out more by checking out this interactive map (click here to see a full-size version)1,2

Our analysis suggests that towns that have had the largest degree of economic improvement over the last decade include the largest number of pubs and will therefore benefit most from this new handout.3,4

pubsnumberspost office numbers

This does not mean that this kind of policy will not benefit more poorly performing towns.

But this data should lead us to ask whether tax-breaks of this kind are most effective when it comes to addressing the challenges of ‘left behind’ places.

Cuts in the business rates for small retailers and pubs, may well end up benefitting towns and cities that have strong and growing economies and high-streets that are prospering far more than those which have been in decline for some while.  

Our measure of town improvement shows that if each pub was to receive £1000 per annum in tax relief, prospering towns would on average get just under £20,000 more each year for their pubs than declining towns.

None of this is to denigrate the focus upon ‘left behind’ places, and poorer towns, which have been left out of the policy discourse for too long. But the question of what kinds of policy are likely to address their position most effectively is a live one. And there is a real risk that using tax breaks in this way may well have a far more regressive outcome than is intended.


Footnotes

[1] This map reports the number of post offices and pubs, inns or bars within ‘built-up area’ boundaries. Data is provided by Ordnance Survey as of June 2019: © Crown copyright and database rights 2019 Ordnance Survey (100025252). This material includes data licensed from PointX© Database Right/Copyright 2019.
[2] Post offices provided within a larger retail outlet may well not be included in the data, neither will services located just outside of the town boundary. The map displays all ‘towns’ with an estimated 2016 population between 10,000 and 175,000.
[3] Decline or improvement is a measure relative to the average for British towns. The index reports changes in five indicators: population levels, youth population (15-19 year old %), education (NVQ Level 3+ %), business counts and employment levels (%). Changes are measured between the censuses of 2001 and 2011, although business counts changes are measured between 2010 and 2016.  Changes for each of the five indicators are standardised and combined to create the index. This is a revised version of an index developed by Pike et al. (2016) and Jennings & Stoker (2019) but is applied here at the Built-up area geographic scale.
[4] Our measure for town improvement records population and business growth for periods before the data on service numbers were collected, we would therefore expect that improving towns would be bigger than declining towns in 2019, and more likely to have a greater number of services available.

  • About the author

    Professor Michael Kenny, Inaugural Director, the Bennett Institute for Public Policy

    Professor Kenny directs the Institute’s place and public policy programme.   Learn more

    Mike Kenny