Town centre come-back

With the opening of the Metro Centre in Gateshead in 1986, out-of-town developments in the UK moved into a new era. Consumers flocked to these shopping meccas, deserting the high street and turning town centres into ghost towns of charity shops and empty premises.

It soon became clear that a major problem was facing the UK, and the North East was no exception.

Research undertaken in 1994 found that barely 25 per cent of new retail and leisure-related development was in, or adjoining town centres. It was clear that a central government initiative was needed to try to secure regeneration by policy manipulation.

Ten years after the Metro Centre opened its doors, the Government introduced new planning regulations under the central guidance planning for retail aimed at town centre and retail developments.

The main thrust of this move was to attempt to channel retail, leisure and other associated outlets back to town centres in order to maintain their vitality and viability.

As a result, town centres started to come back to life and in-town developments received preferential treatment when it came to gaining planning permission for new developments and regeneration projects.

Even today, in and around Newcastle and Gateshead, we are seeing the benefits of this approach with significant investment being pumped into the North East’s town centres. This is exemplified by the emerging Eldon Square/Greenmarket redevelopment in Newcastle, which has attracted Debenhams as the flagship retailer.

Retail development

However, whilst town centre development has been revived thanks to this approach to planning, a most welcome and essential development for our region, the same cannot be said for out-of-town retail development. In many cases, the policies and complexities involved in any application are complicated, slow moving and can become very expensive.

For example, Tesco’s attempt to build on the old Vaux brewery site in Sunderland, which is not in the recognised town centre, has now been frustrated for a number of years. Today, this key site looks no closer to finding a planning solution than it did at the start of Tesco’s plans.

Another long running saga is the site of Sainsbury’s proposed development in Alnwick having taken almost 15 years to resolve. The council initially withheld planning consent on the grounds that any development would be to the detriment of the town centre. In due course, however, consent was granted to Safeway some years later.

The Secretary of State then became involved and revoked the planning consent on the grounds that it went against central guidance. It was not until some years later that Sainsbury’s was able to convince the council that developing the site would add value to the current retail offering without impacting existing retailers. Planning permission was secured in early 2007 and development of the site is almost complete.


Many of the problems involved for out-of-town developers centre around the number of tests and investigations to determine whether such plans can be permitted.

Primarily this type of approach has revolved around analysis of ‘impact’ on a town centre; and ‘need’ within a shopping catchment area for the proposed development.

Applications are assessed according to the ‘impact’ which is represented by the proportion of the spending capacity of the population of the particular catchment area taken up by the proposal, and the degree to which that spending capacity would be drawn away from the town centre, to the detriment of the existing shops.

There is also an assessment of ‘need’ that relates to a range of factors, such as surfeit of available spending capacity within the catchment area (known as quantitative need) and a lack of certain kinds of retail commonly accepted as desirable (qualitative need).

A recent case in point was the Tesco application to build an express store in Harrowgate Hill (Darlington), which was declined as it was found that there was no apparent need amongst local residents and that the proposal would negatively impact existing local retailers.

The same can also been said about a recent public inquiry in Berwick which Dickinson Dees’ Planning Team worked on, looking at a number of competing retail proposals from Morrisons, Asda, Tesco and two retail warehouse developers. Suffice it to say that all these applicants, the objectors and the council produced retail analysis on matters of impact and need, and no two experts arrived at the same conclusion. And it will still be some time before the Secretary of State finally issues a determination as to who (if anybody) should receive a consent.

Current situation

As a result, there has been a drive amongst retail developers to lobby for changes in out-of-town planning applications for retail outlets to try and make the process faster, less complex and without the associated high costs.

In fact, the current planning system across the UK has been under review although primarily from a housing point of view. The idea being to assess ways in which the system could be used to speed up the planning and building of new affordable housing.

Housing in North East England followed the pattern of its industrial heritage: terraces for shipyard workers along its rivers, houses built for miners and social housing built to house workers in the newer manufacturing and chemical industries. This combines with a sparsely populated rural hinterland of market towns and smaller settlements.

Like other parts of the country, the North East faces a complex set of housing issues, with areas that are in need of regeneration and market renewal alongside areas of soaring house prices with many households unable to participate in the housing market.

The Challenge ahead

In order to address these issues, extensive policy and legislative changes have been introduced to cover the housing market. In addition, the original review was been extended to look at improving the speed, responsiveness and efficiency of land use planning.

The end result of this was the Government’s publication of its ‘Planning for a Sustainable Future’ White Paper, which came out in May this year.

The White Paper is naturally a consultative document with aims to improve the effectiveness of town centre planning policy. There is a strong emphasis on working with industry and local stakeholders to develop new guidance which is why the British Council of Shopping Centres Conference taking place at the Sage in Gateshead gave national and local retailers the chance to have their say.

It acknowledges the need to support current and prospective town centre investment, but also emphasises that policy must promote competition and consumer choice and not unduly or disproportionately constrain the market.

Where development outside a town centre would not impact detrimentally on the town centre, and is otherwise acceptable in planning terms, it is suggested that local development plans and planning decisions should reflect this.

A recent case in point was the Dragonville retail development in Durham. As the city is a world heritage site, it was determined that pushing retail into the town centre would be to its detriment. It was felt that an out-of-town retail development was a much more viable option that would protect the city’s heritage.

Exciting if slightly unnerving times ahead for major retailers in the North East; especially the convenience goods chains, who will be jostling for position in what could, in a couple of years’ time be a very different market from the current one – providing changes to the planning guidance are forthcoming.

The challenge for retailers during the period of uncertainty will be to demonstrate that increased flexibility over planning will not damage high street retail in major towns and cities such as Newcastle, Gateshead and Sunderland – and that out-of-town can deliver added value to the region, rather than take away.

Paul Finch, partner, Dickinson Dees