City Centre Recovery Task Force: report

Chapter 3: Our priorities

In identifying the most impactful actions to support city centre recovery, the Task Force Oversight Group jointly agreed on areas that we should take forward as more immediate priorities, focusing on a one-year recovery horizon, and those that warranted further attention in a five-year period.

As a group of seven different local authorities and national government, we are aware that we do not always agree on what should – or can – be done. Our joint work as the Scottish Cities Alliance, however, is not about setting aside all our disagreements, but rather about working in partnership to find the best way forward for Scotland and its cities. In the spirit of partnership, we have worked together to reach consensus where we can; in areas where we diverged in views, we nevertheless have committed to work together to better understand the problem that we are aiming to address, and to carefully and thoroughly look in more detail at any and all potential solutions, working together in partnership.

For immediate action on recovery, we have identified a series of broad, cross-cutting policy recommendations which we can work on jointly to support city centre recovery in a broad sense. These are:

1. Action on immediate recovery.

The £2m City Centre Recovery Fund provided in early 2021 enabled some much-needed short-term work to be carried out to support city centres. We recognised that beyond the picture of immediate business support, there was still a need to:

• close viability gaps for private investment, covering areas such as increased ventilation, energy efficiency, and conversion of vacant upper floors;
• incentivise and enable re-use of vacant ground floor units, such as shops and offices;
• create an appealing city centre experience to attract visitors back;
• tackle resource and other barriers to lay the groundwork for a refreshed city centre residential offer;
• allow for continuous and co-ordinated strategic response to city centre recovery.

To deliver on this, Scottish Government has provided a £6m for the current year for the City Centre Recovery Fund. As with the previous City Centre Recovery Fund, this funding has been allocated to cities proportionate to their size, and will be used to take forward local recovery priorities in line with the priorities we identify here.

In addition, the Scottish Government has made available an £80m Covid Economic Recovery Fund, targeting support for businesses and communities as Scotland moves to a new phase in the pandemic. With this funding, local authorities – including those of our cities - will have the flexibility to target support either using existing schemes like Scotland Loves Local, Business Improvement Districts or place-based investment programmes, or individual local authority grant schemes. Councils will also to able to use the funding to support low income households.

To address issues around vacant buildings, aspects of Empty Property Relief will be devolved to local authorities on 1 April 2023, empowering local authorities to make decisions based on their own local needs. To incentivise the reoccupation of empty non-domestic properties, 100% Fresh Start relief is available for up to 12 months on properties with a rateable value up to £95,000 that had been empty for at least 6 months.

Throughout the pandemic Scottish Government has been focused on delivering the maximum support for businesses and the economy as possible. Since the start of the pandemic, businesses have benefitted from more than £4.5bn in support, including the extension of 50% non-domestic rates relief for retail, leisure and hospitality premises, for the first three months of 2022-23, capped at £27,500 per ratepayer. Scottish Government support went further than that provided in the rest of the UK – meaning hard-hit sectors such as tourism, creative industries and taxi drivers got the support they needed.

2. Data on spend.

We heard broad agreement that cities, businesses and prospective investors need more information about current and future trends around spend in city centres. Better data about the change in spend patterns, the geographical scope of spend, the sectors which are benefitting most from recovery and how the picture of online spend is changing will allow for better, more targeted decisions to support city centres. High-level analysis could be shared with businesses to help them better understand consumer trends.

To deliver on this, we continue to work together to make the most of our existing data, as well as pursuing several parallel lines of investigation to better procure and share data where there are gaps. As different consumer trends emerge – such as, for example, a predicted move towards an "experience economy" that some experts and sectors anticipate – we will be able to better map consumer wishes to city offers.

3. Building expertise.

We recognise a need for better resource behind recovery, encompassing the knowledge, skills, experience and best practice. Potentially, a centralised resource in the form of a small number of funded posts, based within the SCA or another organisation, could be provided for cities to use if they wished. Specific details of the expertise covered would need to be further refined should this recommendation be approved, but possible areas of focus could be on existing powers and tools that cities may find more challenging to implement (such as compulsory purchase orders (CPOs) and dealing with persistent vacant land problems), or on providing cities with more confidence around new ideas and strategic innovation.

We can also learn from the successes of others. Through the SCA, we can jointly run a programme of talks and seminars from speakers from an international range of cities targeting successfully implemented initiatives elsewhere. This would also allow all eight partners of the SCA to showcase our successes to international audiences as a way of indirect marketing, and ensuring that economic networks understand Scottish successes.

To deliver on this, we have jointly set up a City Centre Recovery Peer-To-Peer Network which will allow officers across the seven cities and Scottish Government to share knowledge and best practice from Scottish and international examples. We will run a webinar series of talks, seminars, and round table discussions involving speakers from an international range of cities, targeting successfully implemented city centre initiatives that have enabled change. And we will look to broaden this beyond the public sector where we can to draw on expertise from academia and the third and private sectors, sparking cross-sector collaboration and connection.

Further, once we have worked together to finalise and embark on the next phase of our work, we will consider in partnership whether it would be useful for us to jointly invest in a centralised resource to advance longer-term actions on city centre recovery.

4. Visitor campaign.

We know that as restrictions ease, there may be still some reticence from some shoppers, workers and tourists about returning to city centres. Some of this is likely due to immediate concern over being exposed to the virus; beyond this, visitors may be less aware of or have changed their views on what city centres have to offer. The visitor economy, hugely important to our cities, also needs focus, and for the offer of our cities to be made clearer to domestic and international tourists. For other visitors, there may be a desire to return after restrictions, but less knowledge about what our city centres can offer to return to.

We expect this picture to readjust over time but we recognise the call from businesses for immediate action, as businesses reliant on footfall cannot survive prolonged periods without it. Cities and government could work together on a "Return to City Centres" campaign as public health considerations allow.

To deliver on this, we commit to working together to promote what our city centres have to offer to visitors, both local and from further afield. We recognise the importance of the visitor economy to Scotland, and the importance of the partnerships already underway across the public and private sectors for securing upcoming events. We note the business activity already underway to boost cities through, for example, Scotland's Event Campus in Glasgow, the Edinburgh International Conference Centre, and P&J Live in Aberdeen, as well as our sporting and cultural festivals. We will seek to do what we can to promote and support this ongoing work as our visitor economy recovers.

5. Investor attraction.

Scottish Government works with the other cities through the Scottish Cities Alliance to align our investment promotion ambitions within the broader frameworks for attracting inward capital to Scotland. We could consider joint work on marketing activity and investor targeting, highlighting what we have to offer on a broader stage as Scotland moves beyond this phase of the pandemic, with Scottish Government assisting in building skills and capability to support pipeline developments.

To deliver on this, Scottish Government will continue to work with the cities via the SCA's Delivery Group and Investment Promotion Working Group to align our investment promotion ambitions within the broader frameworks for attracting inward capital to Scotland.

6. Greater clarity around the return to offices.

At the beginning of this work, Scottish Government was still advising that people work from home where possible. Many of our stakeholders called for greater clarity around proposed changes to this.

To deliver on this, the Scottish Government's updated Strategic Framework, published 22 February, sets out the details of our approach to managing the virus in the medium-to-long term and our intention to rely much less on legal restrictions and much more on people and organisations taking basic and sensible steps to reduce the harm from Covid-19. This followed from the First Minister's announcement in January to a change in national guidance to allow hybrid working. We recognise that a greater cultural and/or voluntary shift towards hybrid working will have an impact on city centre offers (for example, on the demands for different types of office space, or on commuter public transport services into city centres) and the delivery of our ongoing work set out in Chapter 4 will take this into account.

7. Call on UK Government to make changes to VAT to better support city centre recovery.

The existing VAT system can serve to make re-use and renovation of sites within existing city centres less appealing to potential developers than a new build outside the city centre. We could investigate further action to mitigate this problem, while in the immediate term calling on UK Government to use the levers they have to create a more equitable playing field.

To deliver on this, Scottish Government wrote to UK Government on this subject most recently in March 2021, requesting VAT reduction for refurbishment and renovation of existing buildings. Officials are currently in discussion on VAT impacts on this and other areas of our economy, with a view to identifying the best approach to take to a joint letter to follow. If UK Government are unwilling to change their current approach, we will also seek to identify whether there are other levers we could usefully use to solve the problems we have identified.