England’s north and midlands are home to nine of its ten most resilient cities to post-pandemic changes in lifestyle, according to a study by KPMG which lays bare Covid-19’s dramatic impact on the UK’s town centres.

The report released last week reveals a strong link between the rise of home working and retail unemployment, with high streets expected to lose 20–40% of their retail offerings as the pandemic accelerates the shift to e-commerce. For local governments, it is a stark warning to rethink town centres which today are designed around shopper, worker and commuter footfall. 

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KPMG’s vulnerability index of more than 100 town centres across England combines the impact of home working, retail closures and cultural offerings to attract people to the area. London fares the best, but its commuter towns are among those hardest hit. 

“We were surprised by how badly the south-east is scoring,” said Yael Selfin, chief economist of KPMG in the UK. The region is home to five of the 11 most vulnerable locations. London’s commuter towns, including Reading and Slough, account for 10 of the 13 hit hardest. 

Hemel Hempstead and Bracknell face the biggest risks, with 27% of office work being performed from home and more than 30% of retail jobs disappearing. Basingstoke faces nearly 40% retail job losses, but is less affected by home working.

The findings add another dimension to the UK government’s levelling-up agenda, which aims to tackle regional inequalities by promoting investment and opportunities outside the wealthy south-east. Some 16 of the 20 least-affected locations are in the midlands and north, including Liverpool, Birmingham and Manchester, plus the likes of Kingston upon Hull and South Shields.

The pandemic may prompt some workers in prosperous south-eastern towns to reconsider where they live. “Now that many people can work more flexibly, perhaps having to commute only once or twice a week, some may choose to live further out where property is cheaper,” said Ms Selfin. “That could potentially disperse wealth and talent more widely across the country.” 

Reimagining the high street

The places most at risk are those with little other than retail, offices and transport to attract locals and visitors to their centres. The study is a wake-up call to England’s councils to pivot their high streets towards a broader range of offerings. 

“People are potentially not factoring in some of these changes that we’ll see once we are out of the pandemic,” said Ms Selfin. “But local governments need to incorporate them into their town planning to ensure high streets and centres provide what the local population — and businesses — now need and want.”

To remain attractive, towns and cities must transform their centres into “multi-purpose locations combining retail and hospitality amenities with residential, education, healthcare, cultural, technology, community and more”. This is helped by falling commercial property prices which present opportunities to tenants who otherwise could not afford central locations.  

Businesses too should dedicate their office space to collaborative and creative work that cannot be replicated virtually. The report suggests the possibility of firms setting up incubators or other support services for start-ups. 

The vulnerability index is not an absolute measure of towns and cities’ vibrancy, but shows the extent they are impacted by Covid-19. Some locations’ scores may be buoyed by having less office workers and retail offerings to start with. It means all local governments need to act and work to establish clusters of activities which are more magnetic than standalone outlets.