Can any towns weather the retail storm?

The British Retail Consortium brought less than tidings of comfort and joy for the UK economy when it announced a 1.6 per cent drop in like for like retail sales for the last year.

Add to that the pessimism of the chancellor’s autumn statement as well as ongoing storms in the eurozone, and we are gearing up for a chilly festive season for the British high street.

High street sales are seen as a bellwether for consumer confidence, and to some extent reflect the attitudes of consumers living in the surrounding areas.

In general the recession has exacerbated existing trends. Lizzie Crowley

The BRC’s figures are obviously a headline overview and around the country there are some places which seem relatively unscathed. But what makes some places more insulated from economic chaos than others?

Who’s surviving the downturn?

Walking around a town like Harrogate in North Yorkshire for example, there is little sign of the economic downturn; there are few empty shop units and a healthy bustle of shoppers mills around the streets.

But make the same walk four miles away in picturesque Knaresborough and you are presented with a different picture. At least a third of the high street shops are boarded up. The bulk of shopping activity focuses on the local market.

As a tourist town, Knaresborough suffers from the same problems as some sea-side resorts, with the winter season showing clearly how dependent it is on holidaymakers’ cash.

According to The Work Foundation, such towns are among those who have fared worst in the downturn, with former mill towns like Burnley or mining communities in Wales also suffering.

So why are they suffering? Lizzie Crowley, a researcher at the Work Foundation told Channel 4 News towns and cities which are surviving have several things in common.

“Those which have done rather better are generally around the major economic drivers, London, Reading and Oxford. Edinburgh, Guildford, Crawley and Luton have also fared pretty well.

Putting up a new building will do little for the local economy when there is also a fundamental problem with skills. Paul Swinney

“Leeds is likely to drive private sector employment growth in the Yorkshire-Humber region,” she said.

“These places tend to have highly skilled workforces and are logistically well-connected. In general the recession has exacerbated existing trends so those places that had been doing well before it continued to do well while those which were doing badly have continued to be left behind and have created fewer private sector jobs.

“Even when there was sustained investment though, the gap between richer and deprived areas remained and even widened. The difference is that now, there are fewer levers to change this than there were before.”

The best insulation?

Paul Swinney an economist with the think tank the Centre for Cities, agrees that places with a highly-skilled workforce have the best insulation against the downturn. They often have fewer people out of work which can shield the region from the impact of public sector cuts.

He told Channel 4 News: “In terms of employment, Cambridge has fared the best; its Jobseeker’s Allowance claimant count (which was already very low) increased by less than one percentage point whereas Hull which had one of the highest claimant counts, saw the largest increase in the number of JSA claimants, up by 3.5 percentage points.

“Looking to the future, places such as Bristol, Leeds, Reading and Aberdeen have higher proportions of highly skilled people, relatively low claimant counts and look to be comparatively well insulated from public spending cuts in terms of cuts to welfare spending and public sector job losses.”

He said the key to being recession-protected is equipping people with a better and less narrow set of skills.

Paul Swinney said well-intentioned authorities could do more to encourage training, but instead tend to build new office space which then lies empty or under-occupied.

He said: “Putting up a new building will do little for the local economy when there is also a fundamental problem with skills.

“For example, in Barnsley and Blackburn, one in three people doesn’t have qualifications higher than five GCSEs at grades D-G. And other places might sell themselves as centres for say, digital arts, but these industries might only employ a few hundred people and unemployment is in its thousands.”