High streets to get £150m boost – but business leaders warn it’s “sticky plaster on an open wound”

The government has announced a £150bn cash injection into struggling streets across the UK, but small business and industry leaders have warned the risks of the bailout are more than “a little bit of a plug on an open economic wound”.

The funding, unveiled as part of the forthcoming High Street Strategy, will be targeted at urban areas hit hardest by years of shop closures, rising costs and falling footfall. The ministers said that this money will help to rehabilitate highways that have been affected by high population density and the loss of important local shops such as butchers, grocers and bakers.

Further details of how the £150 million will be allocated and which areas will benefit are expected to be announced in the coming months.

Steve Reed, the communities secretary, said the investment marked an important step in reversing the decline of town centres.

“Our high streets are the beating heart of Britain, where communities come together and local businesses can thrive,” said Reed. “Urban areas have been hit by collapsing highways, which is why we are taking steps to fix this important investment plan and more to come.

“We have listened to what people tell us and that is why we are giving them the power and control to breathe new life back into our high streets and restore the sense of pride felt by the communities.”

However, many business owners say the funding ratio is low due to pressures facing high street firms, particularly rising business costs, higher wages and weaker consumer spending.

Jess Magill, who is the founder of Powderkeg Brewery, said that the government acknowledges the problem but fails to address its root cause.

“Although it is good that the government recognizes the problem, the level of funding is not close enough,” he said. “With the increase of businesses, the government takes with one hand and throws away the crumbs with the other.

“Many cities are still stuck with underperforming retail properties run by private companies that are happy to leave homes empty. Add to that the tight budget and it’s clear that we need more than this to close shops, restaurants and cafes.”

Some have asked how far the money will go once it is distributed across the country.

Clive Bonny, director of Strategic Management Partners, said the numbers did not add up.

“The UK has 325,000 small independent retailers,” he said. “£150 million spread across the board works out to just a few hundred pounds per business. We need transparency about who is getting this money, how it will be spent and the government’s expected return on investment.”

The harshest criticism centers on the broader economic situation facing highways.

Rohit Parmar-Mistry, founder of Pattrn Data, said the funding failed to address the root causes of the decline.

“This plan is a plaster with glue on an open economic wound,” he said. “You can repaint shops and open public spaces, but if local people don’t have money available, businesses will still fail.

“The decline of the highway is not a good thing – it is a program. The real recovery happens when people have money in their pocket to spend. Until that is resolved, this is to rule the decline with a smile.”

The criticism comes amid growing pressure on the government from retailers and hospitality companies who warn that rising taxes and the withdrawal of support during the pandemic risk accelerating the closure of urban areas. While ministers insist the £150 million is the start of a wider strategy, business groups are calling for more radical changes to business rates, rents and consumer affordability if high streets are to be sustained.