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The_Portas_Review was unleashed on the UK retail sector yesterday after it was announced in May , and I suspect despite all the initial reactions coming out yesterday, the real thought is only just beginning. Talking to retail figures over the last two days, two main themes emerge. Taking the assumption for now that her proposals are considered good for the industry and the UK economy as a whole, how will they be financed, and how will they be enforced?

In terms of financing – so far, there simply isn’t any money to take on half her proposals. The government has yet to stump up any cash and it seems highly unlikely retailers, landlords or councils will feel tempted to put more money forward when they are already feeling the pinch (in some corners of course, it’s more like a punch in the face than a pinch). Some of the 28 recommendations require a great deal of money (if you haven’t seen the list yet, you can find them here) . As Jonathan Riley from Pinsent Masons, puts it: “Councils do not have the money to buy up individual empty shops, and developers are unlikely to fund councils to do so unless the number stack up.” Establishing a “Town Team” for example, takes money, as do enforcing CPOs. Retailers mentoring smaller start-ups takes time – and time is money . Compiling a register of high street landlords will take somebody to do it, and they’ll probably want to be paid for their work. Running pilots of these suggestions could take a phenomenal amount of cash. And don’t even mention Market Day.

And how to enforce these measures. The short answer is that most of her suggestions are just that, and it’s now down to the government to enforce the ones they choose to adopt. Forcing banks to sell assets under their control is a political hot potato. Of course it would be nice, rather than letting units run into a state of disrepair but frankly, if its not the right time to sell, the banks won’t sell. The real stick (..as opposed to carrot), is the threat of the Secretary of State having to sign off all “new out-of-town developments” and enforcing an “affordable shops” quota. How this fits in with the government’s deregulatory, localism agenda remains to be seen, but this would not go down well with the industry. In-town retail development is at record lows – penalising the developers who are forging ahead with out of town schemes is not the answer.

Despite this, there is affection for the Portas Review in retail property circles. The straight-talking Mary Portas spent time meeting people, discussing the issues with those who really know. The phrase “Super BIDS” apparently came out of a two-hour meeting with the BCSC, where a “Turbo-BID” phrase was lightly used through their discussions with the retail guru – and now, there it is, in recommendation No.2.

And the report has pushed retail and town centre development to the very top of the agenda again, and that can only be a good thing. In many ways, the fact the report was published is important in itself in bringing up issues and challenging lethargy towards the struggling high street. The sector  will continue to pick through the report in the weeks an months to come, and wait with anticipation to hearing the government’s response.

In the meantime, read more responses from the industry here in my analysis from yesterday.

 

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