Chamber and committees

Good morning to the committee. I am grateful for the opportunity to participate.

As, I am sure, the committee will appreciate, we face a challenging time in relation to the real impacts of rising inflation. However, post pandemic, we also have a real opportunity to work together to transform our town centres. The inquiry is therefore very timely.

Our town, city, village and neighbourhood centres are vital to the collective wellbeing of our society, economy and environment. They are part of the solution to the big challenges around economic recovery, climate change, public health, inequalities and more. Those challenges have been exacerbated and accelerated by Covid-19, Brexit and the cost of living crisis.

Our recent response to the review of the town centre action plan recognises that success requires a collaborative approach and working that builds local assets. We need to harness the local energy and pride that people have for their towns and town centres. Its 59 actions coalesce around themes that were identified in the review and are designed to help to deliver our shared ambitions on net zero, a well-being economy and enterprising communities. They demonstrate our shared commitment, with local government and our wider partners, to support communities and businesses.

Our response includes a call to action for all to do their part in rebuilding, re-energising and reimagining our towns, putting the health of our town centres at the heart of decision making. Collaboration and partnership are also the cornerstones for delivering our recently published retail strategy and the city centre recovery task force’s report, the development of national planning framework 4, and the consultation on potential changes to permitted development rights. All those actions build on and strengthen one another.

I will take just one of those policies—the retail strategy. Retail is vital to Scotland’s communities, society and economy, as was clearly demonstrated during the pandemic. With more than 240,000 people employed within the sector, it is the largest in Scotland, with a high proportion of female and young workers.

However, as the committee will have heard, the retail sector has experienced on-going challenges and change, which have been exacerbated by the pandemic. How we shop directly impacts on retail businesses and has implications for our town and city centres. The retail strategy outlines how we will work with business and trade unions to deliver a strong, prosperous and vibrant retail sector that supports our national strategy for economic transformation ambition to have innovative and productive businesses, regions and communities.

As I announced in Parliament, we will establish a new industry leadership group for retail that will drive delivery of the strategy actions, in particular in relation to improving fair work across the sector. I am delighted to confirm that the group will be co-chaired by Andrew Murphy. Andrew is the chief operating officer for the John Lewis Partnership and has had a long and successful career in the retail sector. I very much welcome Andrew’s insight and expertise in helping to deliver the retail strategy.

I will conclude there, but I reiterate my gratitude to the committee for its undertaking the inquiry at this time, and for the opportunity to discuss these matters.

That is a fair question. There are particular challenges in that, so I am happy to reflect on what more we can do.

David, do you have a comment on that?

Landlords’ attitudes are affected by market conditions and what they consider to be opportunities. I appreciate that CPOs and CSOs are more a stick, but the carrot is that, the more attractive town centres and city centres are and the more opportunities they present, the more attractive it will be for existing landlords to make use of their properties, whether as retail or conversion to residential or to sell on.

Catherine Brown can correct me if I am wrong, but I think that we plan to develop that in the first one to two years

Please correct me if I have misunderstood your question. The funding that is available through programmes such as the place-based investment programme and the vacant and derelict land investment programme is available to all 32 local authorities across Scotland.

We are in the process of establishing the group. I believe that invitations have gone out, but I would be happy to write to the committee once the group has met for the first time to provide an update, if that would be useful.

You will appreciate that the causes are multifaceted, so the response will have to be multifaceted. It is important to remember that there are some great examples of town centres thriving in Scotland, but each town centre is unique and each has a different set of assets on which to build. Ultimately, however, the dynamic of our town centres is a reflection of the underlying economy—not just the total value of the economy, but how it operates.

In his evidence to the committee, Professor Sparks made the point that—it went something along these lines—actions during the past 50 years have cumulatively done harm to our town centres, and it will take time to undo that. We can discuss specific interventions, and I have covered many of them in previous answers when talking about CPO reform, CSOs, PDR, masterplan consent areas, changes to national planning policy and so on. However, the key is our underlying economic model, and that is why community wealth building is so vital. We need to move away from an extractive model to a model that involves more wealth being retained in communities, more democratic ownership of businesses and more pluralistic models, so that the owners of businesses are rooted within their communities. In other words, we need an economic manifestation of a place-based approach.

As far as support for local authorities is concerned, I mentioned the increase in planning fees, which, in some local authorities, is feeding through to an increase in the number of people who are working in planning departments. That will help to address that issue. I have also mentioned the work that is being done on recruitment and retention.

We are doing work in that area, but, ultimately, how local authorities choose to resource their various departments is, quite properly, a matter for the democratically elected members of local authorities to decide on.

David Cowan might want to add to what I have said.

I recognise that point, but it is important to be clear that NPF4 is not a capital spend option.

In the delivery plan, there is a range of capital spend programmes. Infrastructure investment and the strategy on housing to 2040 contain aspects of that. When we publish the delivery plan alongside the final NPF4 for Parliament to consider, a lot of that will be brought together. However, ultimately, we appreciate that development is not just about public sector investment; the private sector has an enormous role to play in that. The delivery plan will be published alongside the final NPF4, and that will demonstrate the co-ordinated approach that the committee is asking for.

First, we need to recognise the reforms that are already under way. We had the Barclay review, which reported a few years back, although some of its final recommendations will not come into effect until next year. We recently had the report from the Fraser of Allander Institute on the small business bonus scheme. One of the issues that it identified concerned data. We are in the process of establishing a short-life working group to look at those recommendations, and we are taking further action on, for example, the devolution of empty property relief, as I mentioned earlier.

As for the call for full-scale reform, I note that, beyond Barclay, the United Kingdom Government recently had a review of non-domestic rates in England. Ultimately, it landed on, in effect, what we have already introduced—for example, moving from five-year to three-year valuation cycles. Indeed, England still has a two-year tone date, whereas we have moved to a one-year tone date to ensure that, at revaluation, prevailing market conditions are reflected as much as possible.

In the context of the revaluation in 2023, and given the experience of the past few years, I understand the importance of stability for the sector. We should remember that issues relating to non-domestic rates have a huge impact across a wide range of sectors. Our immediate priority will be completion of the implementation of the Barclay reforms, and the short-life working group will consider the Fraser of Allander Institute’s report. Any considerations beyond those that take place specifically at budget time would have to be taken in line with our tax framework, which we published in December last year. As well as the Adam Smith principles, it includes a principle on engagement. Any NDR changes that might take place would therefore have to be preceded by considerable engagement with all sectors and businesses that would be impacted by them. Of course, although that is an important issue for our town and city centres, it goes far beyond that.