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Local authorities told to factor State aid compliance into their bids for Future High Streets Fund

13 February 2019
Local authorities preparing bids for the Government's new £675m Future High Streets Fund have been reminded of the need to factor State aid compliance into the design of their proposals ahead of the first round submission date of 22 March 2019.
 

The fund, which is administered by the Ministry of Housing, Communities and Local Government, provides public funding for local areas to renew and reshape their town centres and high streets. Further information on the bidding process, including the scoring criteria and weighting, is expected to be published shortly.   

Background

The Future High Streets Fund was announced in the October 2018 budget and initial documents released during the Christmas break. The fund is the latest initiative from the Ministry for Housing, Communities and Local Government to focus on regenerating high streets and towns, complimenting the Town Centre Task Force, the Open Doors Project and the Great British High Street Awards

The Minister for the Northern Powerhouse and Local Growth, Jake Berry MP launched the fund by committing to ensure that high streets shall continue to sit at the heart of communities, using the Future High Streets Fund to transform "town centres into the thriving community hubs of thre future" and supporting local people to identify solutions because "they best understand the challenges facing their areas".  

Changing high streets and town centres

The fund has been launched in recognition of the changes affecting physical retail spaces across England, in particular as a result of the increase in online purchases. The Government's solution, which has been designed with imput of experts such as Sir John Timpson, is to fund infrastructure changes to transform town centres into "modern, vibrant community hubs" as well as to: 

  • Support small retailers by cutting business rates by a third for two years. This cut will benefit up to 90% of all retail properties, and the total relief will be nearly £900m;
  • Creating a High Street Task Force to provide hands-on expert support helping applicants develop their business case through innovative strategies; 
  • Consulting on planning reform to make the process of creating homes, jobs and choice in town centres simpler;
  • Trialling a programme which keeps a record of the number of empty shops and matching vacant properties with community groups seeking affordable space; and 
  • Reserving £55m of the High Street Fund to support the regeneration of 'heritage high streets' which will turn historical high street properties into new workspaces or cultural venues. This support aims to make certain areas a more appealing place to visit.   

Applying for Future High Street Funding

The Government plans to allocate the Future High Street Fund in two rounds. Each round has two phases. The first stage involves candidates submitting an expression of interest setting out their approach and explaining the particular need arising in their local area. The deadline for phase one stage one submissions is 22 March 2019. Successful phase one candidates will be notified in summer 2019 and will be invited to stage two to present their full case in late 2019. This second stage understood to be rigorous with strategic, economic, commercial, financial, management and legal considerations factoring into the funding decision. The second round is expected to commence in 2020. 

Further detail on the scoring and weighting criteria of the Future High Streets Fund is understood to be launched shortly, but we understand applications will be assessed on their strategic ambition, their location and challenges faced. MHCLG has said that applications are less likely to win funding if they relate to the development of Central Business Districts, small parades of shops, major city centres or multiple high streets/town centres. Therefore care must be taken to ensure bids are focused. The Government has also stressed that local authorities will need to evaluate the compliance of their bids with State aid law. 

The Government has identified the following activities which may receive support under the Future High Streets Fund:

  • Investing in physical infrastructure;
  • Acquiring land to support new housing, workspaces and public realm;
  • Improving transport access;
  • Supporting adaptations which respond to changing technology; and
  • Supporting a change of use and not just a difference in appearance. 

Applicants are expected to seek between £5-10m per application, and each applicant can receive a maximum of £25m funding. If the Future High Streets Fund is oversubscribed, the Government will take into consideration broader economic factors, including ensuring there is a fair geographical spread of funding and whether applicants have sought funding from other public and private sources. 

DWF's specialist Public Sector law team has extensive experience of advising on applications for grant funding, including advising the Ministry of Housing, Communities and Local Government on public funding initiatives. If you wish to discuss the fund in more detail please get in contact. 

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