Almost 1,000 bank branches have been shuttered in the UK since the banking crisis in 2008. If you check back over the past decade, it gets worse: around 1 in 5 branches have closed – a net reduction of more than 2,000 bank and building society outlets.
So one might expect local authorities would help new kids on the banking block, such as Metro Bank, open new outlets. Not in Richmond they don’t. Metro Bank is keen to open a store on a prime site in Richmond but has now been refused permission for the second time by the local council. No matter that the new bank store would create around 25 to 30 jobs and be open for 80 hours a week, 362 days a year. The London Borough of Richmond upon Thames would prefer to see a new Metro Bank store hidden up a side street as opposed to the prime site, corner location identified by the bank. I know that banks’ reputations have taken a hit of late but this is really a tad ridiculous.
It all comes to change of use. Current planning rules mean that banks are at a disadvantage when it comes to securing prime high street locations – such premises tend to be classified as A1. Bank branches are classified as A2 retail uses. When I spoke with Metro Bank CEO Craig Donaldson the other day, he was a bit miffed – and understandably so. He tells me that he is six months behind target.
He had expected to open 25 new stores by now, instead of the 19 outlets currently open. It is taking Metro Bank an average of six to 12 months and between £75k and £100k per site whenever it begins the process of developing a new store. He estimates that the bank has wasted close on £1m to date, simply to secure the necessary planning consents for its stores already opened. If Donaldson was opening an undertaker or a hairdresser or a dry cleaning outlet – all currently classified as A1 uses – he could skip the time consuming and expensive charade of obtaining the requisite change of use. The regulations are so antiquated that included within the list of A1 retail uses are cats-meat shops and tripe shops.
There was a time when it made sense to treat bank branch planning applications as a separate retail use. Bank branches tended to open only from 9am to 5pm Monday to Friday and represent dead retail space at weekends. Such restricted retail hours tend not to apply to the new challenger banks. The number of empty shops on UK high streets remains at a record high and the stats are not helped by the continued lack of economic growth and the ongoing change in shopping habits.
To date, the government’s efforts to revitalise the high street have been lacklustre. It roped in retail guru Mary "Queen of Shops" Portas; she prepared a report and the PM set aside some precious time to fit in some photo opps with Ms Portas. Then he set up something called the High Street Innovation Fund and allocated around £1.2m to be shared among 12 towns. With a certain depressing predictability, 10 of the 12 towns chosen now report an increase in empty retail units.
Later this week, the Parliamentary Commission on Banking Standards will issue its long-awaited report. The remit of the study is to increase competition and strengthen governance across the banking sector. As part of its findings, the commission might care to suggest that antiquated high street planning regulations be brought into the 21st century. If such changes do not go down too well with planning lawyers coining it in from change of use appeals, then so be it.