Mr. Mark Fielding:

I thank the Chairman. ISME welcomes the opportunity to discuss the problems in town and village centres and the ways in which we can rectify them. As we all know, the sad reality is that town centres that were once the vibrant hearts of their communities, serviced by many small and medium businesses, are under threat. The difficulties being experienced on the main streets and in town centres are well documented. I will talk about a number of issues, many of which are relevant to small businesses, be they in a town centre or an out-of-town centre. There are high commercial rents, a decrease in domestic demand, an increase in the popularity of Internet shopping and local authority rates and charges, not to mention the black economy which is booming in Ireland. In addition, there are parking problems in town centres. There has been a massively accelerated rate of shopping centre development, with an accompanying surge in the availability of new retail space. This has irreversibly changed the face of town centre retailing.
The ability to build stores outside towns has been made possible by a combination of confused and poorly applied planning rules, the power of big developers and the weakness of local councils and councillors who were bamboozled by developers. The retail planning guidelines, as they apply, represent best international practice and were intended to direct policy-makers in the assessment of planning applications in the context of devising retail policies and strategies. One of the key issues arising was their inconsistent interpretation by decision-makers. That occurred owing to a combination of vagueness within the guidelines and a lack of understanding by practitioners. As a result, the short-sighted decisions made allowed far too many out-of-town centres to be opened, tearing the heart out of local communities. At the end of 1999, before what we call the Celtic tiger, although it was more or less the end of the real Celtic tiger, there was about 500,000 sq. ft. of shopping space in Ireland. By the end of 2007, there was 3.3 million sq. m of non-high street floor space. Therefore, there had been a massive increase. Suffice it to say Ireland ranked second in shopping space per capita. It was surpassed only by the Netherlands.
As we know, there was always competition in town centres, which helped the community. The old system was a much fairer one, both for the town and the community, because there was variety, quality and choice, while people shopped around. Now, owing to a lack of foresight on the part of councils and an eagerness to grab the shilling, as we would say, we have managed to decimate our towns. Local neighbourhood centres, where all services could be availed of, are closing down. We have sacrificed communities in favour of perceived convenience. Not only did we do this but the previous Administration tampered with the cap on retail warehousing to facilitate one multinational retailer. That has probably opened the door, even though there were promises of 500 jobs in Ballymun. I would like to know exactly how many quality jobs were created there. How many quality jobs have we actually lost in the furniture sector across the country because of what occurred? The trade-off was not in our best interests as a country. However, it has been done. ISME is stating politicians' fingerprints are all over this and it is now incumbent on them to sort it out, or at least to help to do so.
The reduction in footfall, stemming largely from decreased consumer spending, has contributed to the ghost town effect. The decay of town centres did not happen overnight. A speedy resolution, while preferable, will not be possible. We need a comprehensive strategy for renewing main streets and town centres and it must be agreed to and implemented as quickly as possible if streets which were once the focal points of community life are to be maintained. There is a definite correlation between a proactive and supportive local authority and a strong business revival in village and town centres. Businesses can be encouraged to remain in or move to towns through a range of schemes and incentives. The long-term outcome would be a vibrant town and increased revenue all around.
One issue that arises is that of parking, about which we keep hearing. City and county councils must assist their rate-paying business customers by offering parking incentives to consumers. Councils have a responsibility to consult relevant stakeholders to decide on a package of parking incentives that would best suit their town centres. This seems to be a big issue that keeps coming up.
While many say the aforementioned is not the be all and end all, we now see that when the municipal district reduces its parking income, the total amount of the general municipal allocation, GMA, will also be reduced. In other words, existing guidance incentivises municipalities to increase rather than decrease parking charges. If municipal income is increased, the general municipal allocation increases and vice versa. That issue needs to be examined.
With regard to streetscapes and the attractiveness of towns, a number of issues arise. First, we certainly need to incentivise a scheme to occupy vacant properties along the lines of what has been done in the Limerick area where there has been grant relief based on certified fit-out costs, up to a maximum of 50% of the annual rates in year one and 25% in year two. That would certainly help. We need to impose disincentives on landlords to prevent them from leaving units vacant. We also need to bring into place the concept of town teams, about which members will have heard time and again. The teams work towards improving the prosperity of town centres and creating a viable and sustainable town centre economy. Town teams in Ballinrobe and Claremorris operate according to a vision and purpose to improve their towns' prosperity and they work by consensus. A team consists of private and public sector representatives, creating an operational plan in seeking partnerships in an annual work plan to rejuvenate the town.
Regular community events such as village or town fairs and festivals do much to encourage footfall. If one goes to an out-of-town shopping centre, one will find that somebody is in charge of entertainment and ensuring there is more to shopping then just purchasing. In other words, shopping becomes an experience. We need to bring this thinking to town centres again. Most towns could have a proactive way of organising such events. We have seen an increase in the number of such events in recent years, but much more work needs to be done.
We have seen a lot of work being done in the United Kingdom. There is no harm in considering the incentives being examined there, including the review of double yellow lines, legislating to allow grace periods and ensuring CCTV is not used just to detect parking violations.

Much of that work has been started over there. It is good to track and analyse those measures to be in a position to adapt them and to permit the mistakes and successes to influence any initiatives adopted for town centres in Ireland.

Crime is a priority for local Garda stations and it is addressed by way of ASBOs etc. It is important to increase the use of CCTV in town centres to ensure the streets both are and are perceived to be safe. It is an important aspect of the initiatives. More broadly, we are looking at local authority charges and rates, upwards-only rent reviews, increases in PRSI this year and the threat, which is becoming more of an issue, involving the sale of cigarettes. All of these issues are having a negative effect on retail. ISME has proposed a rates freeze for existing businesses for the short to medium term to allow owner-managers facing economic and costs uncertainties to at least have some certainty in this regard. The simple act of guaranteeing rates for a specified time would help to instil confidence and make it easier to predict future costs. That would facilitate growth in business and job creation opportunities. Charges for simple requests, such as a licence for outdoor chairs and tables, must also be reduced or eliminated where possible. Local authorities must work with owner-managers in businesses who are attempting to improve town centre trading rather than viewing them solely as an opportunity to boost town coffers.

Upwards-only rent reviews require attention, obviously. Senator Quinn's Bill has gone through the Seanad. We hope the Whips will not be brought out on that one and that it will get a proper hearing in the Dáil at least. It should be passed so that if the President decides to refer it to the Supreme Court, that can be done. That would get rid of the anomaly whereby we had pre-election promises which were broken afterwards based on certain advices. The advice that was given before seemed to change. It is incumbent on us to look at the number of retailers who are in trouble based on upwards-only rent reviews.

The increase in employer PRSI for low-paid workers is an issue. In the retail trade, many employees are working shorter hours to suit themselves. The previous PRSI rate of 4.25% was increased to 8.5%, a 100% increase that has had a major effect on retailers in particular. Not only has it threatened recruitment, it has threatened existing jobs in retail. In addition to the PRSI increase, we now have a new fee for retailers who are selling cigarettes, which we regard as the imposition of a punishment tax on retailers and the placing of an additional burden on businesses which are already struggling. We hope the Minister for Health will see that and reduce it accordingly to something that is more manageable.

Overall, retailers are being hit by a rapid increase in online retailing. Whether one is a town-centre or out-of-town business, it is the same thing. Retailing has evolved to a point at which people are expecting to view products online prior to visiting a store. Consumers also expect that they can order online and collect in-store or else have goods delivered to them. The stores that will survive in the coming years are the ones that adapt to the evolving world of retail. We see Government making some efforts in that regard with the online trading vouchers which were launched as part of the national digital strategy. That has the potential to get more businesses trading online, but there have been low numbers and a slow roll-out. They were promised and promised again last year, but we now see them starting to come out. We hope the scheme will start the ball rolling and become effective, as online trading has become a fact of life, and this will affect retailers who do not embrace it.

Shopping local is an area in which, now more than ever, we need a national effort to save and retain Irish jobs. Buying from locally-owned businesses keeps money in circulation closer to where it is spent. Local shops use local services, including local accountants, local insurance brokers and PR companies, as well as employing local people. They also carry a higher percentage of locally made goods. From our own and international research, we see that for every €10 spent locally on Irish products, the multiplier effect is of the order of approximately €24 for the local community. To look at it in a different way, of every €1 spent with local shops, 45 cent is invested locally, whereas the equivalent figure for foreign multiples is approximately 15 cent. There is a three-fold increase in local investment when one trades with local suppliers. A greater effort to purchase locally is required.

On a more positive note, our research indicates that the majority of retailers in our organisation are optimistic and resilient. They are intent on expanding. They are carrying out reviews of their businesses from finance to service delivery and staff training to premises and equipment investment in anticipation of any increase in consumer spending. As retailing is intensely competitive and dependent on consumer preferences, quality, value for money and customer service, it is paramount that businesses create a shopping experience. To invest and revamp, one needs finance. After the recent banking fiasco which led to the bailout and created major problems, a little over 60% of our retail members have found it almost impossible to get bank financing, whether for new or renegotiated facilities. The hard fact is that many retailers have had to fund any investment through their internal self-finance resources, if such are available. Another recent challenge has been the massive increase in money handling and transmission fees and charges foisted on retailers by bailed-out banks in an attempt to get back their super-profits. It is an area we must keep an eye on.

Despite the disastrous recession, however, retailers are preparing for the positive. They can see the return of more people to work and they will ensure by prudent management of their own resources a near-term return to sustainable job creation. We have seen evidence of that in our most recent trends survey, the results of which have not yet been published. We see retailers starting to come out of the recession, although they are behind the main economy. There are positive trends in employment in particular. The whole essence of dynamic retailing is to be innovative and competitive. Innovation is not just a matter of building large shopping centres or enormous stores to the maximum extent possible; it is about providing new formats, suitable to local conditions and accessible to a wider number of consumers in the largest number of locations with the minimum additional impact on congestion.

What we are talking about, of course, is town centres. It is too easy to seek one solution to solve all problems, but we have by our actions over the last half century neglected our town centres. The way we live has changed and will change further. If town centres are our lifeblood and if they are to be a point of difference, we must support and guide them and encourage radical thinking and action over a sustained period.

We do not need nor will we again have the town centres of the 1950s and 1960s, but we need an energetic and effective town centre in the Ireland of the 21st century. We in ISME believe that by implementing the recommendations seen by the committee, the vitality of town and village centres can be restored, which would inevitably lead to the creation of jobs and the greater enhancement of community life for local people and tourists. Examining rates and charges and the way in which the money is spent, introducing town teams, providing for a mix of businesses and services and exploring ways of exploiting the opportunities available online will work to restore town centres to being the heart of community life.