Glasgow seeks more powers to take city centre forward

The co-chair of the City Centre Taskforce, set up to help the city recover from the pandemic, said they would advocate that both the Scottish and UK Governments have the ability to offer more control to local authorities on this matter along with looking at a VAT hindrance on converting buildings and compulsory purchase orders on properties which have fallen into neglect.

Read more: Revealed: How Buchanan Street could look after mall demolition
The conversion of a non-residential building into a house or flats will usually qualify for the 5% VAT rate but this doesn’t apply to new build.

Councillor Millar said they would like further powers to assist with Compulsory Sales Orders and ways to deal with absentee owners.

He said: “The council’s property repurposing plan would give us the opportunity to allow developers to convert existing buildings, but at the moment there is no incentive to do that when it is subject to VAT which new build isn’t.

“We need that brought into alignment to make it more appealing to convert rather than demolish and rebuild. We also need the tools to bring the owners of derelict or empty properties to the table.

“There is evidence to show there is demand for empty properties in the city which could be adapted for residential. We have that within in our gift and want to respond to that, but we need additional powers from both governments to be able to do that.”

Sauchiehall Street has faced issues with store closures (Image: Newsquest)
Glasgow has taken longer to recover from the pandemic than other similar cities across the UK, and a consultation is under way on how the 'Golden Z ' - Sauchiehall Street, Buchanan Galleries and Argyle Street, develops.

The traditional shopping streets have been the arteries which held the city together for many years, and while it might not be something that will continue to be like for like, the city is still committed to retail. 

Councillor Millar, who is also convener for Climate, Glasgow Green Deal, Transport and City Centre Recovery, says the city is very much open for business.

Despite challenges including rail strikes, December sales in Glasgow city centre were 15% ahead of the same month in 2019, slightly ahead of Manchester (13%) and substantially ahead of Edinburgh (6%) and Leeds (6%).

Sales were up 30% compared to December 2021 with recovery being led by food and drink with an increase of 54% rather than traditional retail activity.

However, it is recognised that a way to rebuild or recreate the city is through what is described as experiential – a shift away from the traditional idea of a day’s shopping but offering people an experience and the much heralded ‘dwell factor’ giving people a reason to stay for longer.

Councillor Millar added: “Glasgow city centre suffered more than other similar city centres around the UK during the pandemic and recovery partly due to the lack of established density in residential population.

"We were much more reliant in Glasgow on shopping footfall and as we know week day footfall has not quite recovered with more people working from home more often.

"We are still seeing the impact of that from the pandemic. It is one of the reasons why we started the City Centre Taskforce to bring together from various sectors to rebuild.

“It is about how we support a vision for the city centre going forward. Retail has its place in the city centre’s future, but we know that retail alone cannot support the vibrancy that we will need for this crucial part of Glasgow.”

Read more: Revealed: New images show how future heart of George Square could look
Earlier this week an event was held at the Lighthouse Building to give people a chance to offer their input on how the ‘Golden Z’ moves forward.

Councillor Millar added: “The traditional shopping streets of Sauchiehall Street, Buchanan Street and Argyle Street are vitally important for the city’s regeneration but we can’t keep thinking of them as solely shopping or retail.

"We need to think about ways to diversify them. We have seen that to a certain extent already with food and drink becoming a driver to bringing people back into the city and that is a way that we can increase city usage, but we also need to look at residential numbers in the city.” The authority committed to doubling the city centre population to 40,000 by 2035.

Images show how a changed Buchanan Street could look (Image: Landsec)
In December, footfall remained 18% below pre-Covid levels which equated to 814,000 less visitors in the city centre. Train strikes had an impact – the train strikes in mid-December resulted in 112,000 less city centre visitors compared to the previous week.

More than 40 years ago, Glasgow faced the dilemma of how it transformed from a city of heavy industry and shipbuilding to enter a new era. Glasgow recreated itself through culture and leisure and led to a string of awards, it became a visitor and retail magnet.

From his George Square office Stuart Patrick, chief executive of Glasgow Chamber of Commerce, overlooks one of the most talked about public spaces in the city which over the decades various administrations have not quite got right, but redevelopment of the much-loved space is in the pipeline.

Mr Patrick said: “The public has told us transport is number one and is the primary barrier to coming back into the city is public transport. The city is very dependent on transport links for its use and taxi provision is also something which we have asked for a review of which is under way. A settlement on the train strike would allow us to get back into a pattern."

Week day footfall remains low and Mr Patrick believes there is a need to understand the long term impact of the return to work issue.

“It appears not to be good for Glasgow. Peak morning footfall has shown the slowest return to pre-pandemic levels at 70%,” added Mr Patrick.

“Working from home is definitely having an impact. Leisure footfall and spend in the city has come back much faster, but it seems to be less working in the city, shopping and much more socialising.

"We have a worry about how work from home on the longer term impacts productivity. How do you build an organisational culture or team work and complex projects? There are issues I hear from company leaders and what we tend to get is surveys saying employees love it, we don’t tend to get many asking what the employers think of it.

"I think we need to be doing some studies on it and what it is doing to productivity. If we and the Americans are the only two countries sticking hard to working from home, it seems like a massive experiment in productivity without any real clear monitoring on the progress we are making.”

Image shows how a reimagined George Square could look (Image: Glasgow City Council)
While major chains have closed in the city and there are plans to demolish and replace Buchanan Galleries with an urban village, Mr Patrick says we take the argument retail is dead too far.

“The idea that retail is in terminal decline, that cannot be right,” he added. “Footfall recovery stats suggest that there is still life in retail and that it is a question of understanding what that new retail offer might look like.

"In both the galleries and St Enoch there is a sense the consumer is looking for a different experience in a city centre. The message coming back from consumer surveys was clear they want authenticity out of leisure and retail experience and are more likely to get that in the city centre than they are going to an out of town centre.”

One area which is already embracing the trend of offering an experience in the city is St Enoch. Just as the pandemic struck, they were finishing their leisure and cinema development.

Anne Ledgerwood, centre director of St Enoch, said: "We emerged from the pandemic as a different centre than pre-Covid.

"We did look closely at figures for our first full Christmas since Covid and our figures are down 16% but that is in line with the city, what was interesting for us spend was up not just in leisure but retail as well. We saw people coming into the city very much as an experiential thing not just to grab something but a day or night out.

"Their leisure and retail is now starting to mix and finding that place in the city that is somewhere special to go. New retailers opened in the centre just before Christmas, The Entertainer and Sostrene Grene. That was the first Scottish store and they chose us and the city centre which was an endorsement for us and Glasgow.

"We are seeing very different type of visit - less convenience based but let's have a day out and I think that is what Glasgow is seeing itself positioning at.

"We have seen more monthly or quarterly visitors coming from further afield and making that day out into the city. We have dropped footfall Monday to Thursday, but we are doing more Friday to Sunday than we did pre-Covid. For every one visit we dropped Monday to Thursday, we gained just over two visits Friday to Sunday.

"Working from home might find a level at some point and it is finding out what that level is. I don't think it will stay in terms of sustainability of offices. I think numbers will continue to increase at some point and I would like to see that.

"What we see is that people still want to come into the city centre. Maybe not everyday, but are they starting to find a bit more joy in coming back into the city centre as a leisure facility."

A Scottish Government spokesperson said local authorities already have broad compulsory purchase powers which can be used for a range of purposes, including restoration of property which may be vacant, derelict or unsafe. They said such powers can be used even where the relevant landowners are unknown or cannot be traced.

The spokesperson added: "The Scottish Government is working with businesses to deliver strong and sustainable town centres through our £80 million Covid Economic Recovery Fund, our £6 million City Centre Recovery Fund, the Place Based Investment Programme and the Town Centre Action Plan.

“Our fourth National Planning Framework, which was approved by the Scottish Parliament on 11 January and will be adopted by Ministers on 13 February, recognises our cities and towns as a national asset.

"Town centres bring together a wide range of functions and land uses and NPF4 will strengthen support for development in centres to be considered first, while limiting out of town retail development.”

A HM Treasury spokesperson said: “Residential and charitable properties that are converted from commercial to residential use or renovated after a prolonged period without use benefit from the reduced 5 per cent VAT, encouraging redevelopment and incentivising regeneration.  

“Extending this relief would come at a cost and would have to be balanced by increased taxes or reductions in public spending elsewhere.  While the Government keeps all taxes under review, there are no plans to change the VAT treatment of property conversions”.