Radical recommendations for the future of Scotland's town centres


The viability of town centres across the country has been under significant pressure from various sources in recent years, not least the challenges facing the retail sector. Those pressures will be heightened by the impacts of the COVID-19 pandemic and associated public health restrictions, but the recovery from the pandemic may also provide opportunities to reimagine our town centres.

In July 2020, Cabinet Secretary for Communities and Local Government, Aileen Campbell MSP, set up a Review Group (the “Group”) to review the Scottish Government’s 2013 Town Centre Action Plan (the “Action Plan”) and come up with a revised plan for action. The Group Released its Report entitled ‘A New Future for Scotland’s Town Centres’ (the “Report”) on the 3rd of February 2021, and can be accessed here.


In its Report, the Group noted that the Action Plan is widely admired and has been followed in part by other Governments. They stated that while the basis of the approach remains sound, progress needs to be more consistent and rapid.

The Group made a number of recommendations around three general themes; (i) strengthening the role of town centres in planning and the role of communities in shaping their town and town centre, (ii) amending the taxation, funding and development environment to make it more attractive to operate in town centres and less attractive to operate out-of town, and (iii) expanded use of demonstration projects. The Report is a comprehensive look at a wide range of issues, and we have sought to summarise the individual recommendations below:


  1. Towns and town centres to be prioritised in National Planning Framework 4 (“NPF4”): consistent with the Scottish Government’s Position Statement on NPF4, issued ahead of the publication of a draft NPF4 later in 2021, it is recommended that there is a stronger planning policy support for towns and town centres, as well as 20-minute neighbourhoods. The Report also raises the potential for revising the Use Classes Order, perhaps by the introduction of a more general town centre use class, together with greater use of other tools such as Permitted Development Rights and Masterplanning Consents.
  2. Town Centre Plans to be developed and implemented with the local community, focusing on wellbeing of people, the planet and the economy: it is suggested that these plans would set out a vision for the town or town centre and should start now, ahead of NPF4. It is also suggested that communities should be integral to the process for developing Town Centre Plans. While it is not clear how Town Centre Plans will sit alongside other planning documents, including the Local Place Plans introduced by the Planning (Scotland) Act 2019, they are not intended to be an additional level and should link in with other strategic planning documents.
  3. A revised and enhanced focus on measurement and data: the Group has recommended that data gathered is more localised, focused on towns and town centres rather than local authority areas as a whole. It has also proposed a move towards data collection which is focused on emerging concerns such as inclusive growth, wellbeing and social value.

Taxation, Funding and Development Systems

  1. Amendments to Non-domestic rates (“NDR”): the Report proposes amendments to the NDR system which would see reduced rates for town centre uses and increased rates elsewhere, including for out-of-town uses.
  2. Amendments to VAT: amendments to VAT are also suggested, such as zero-rating developments and operations in a town centre, or high street. The Report also highlights “the perverse incentive” of lower VAT rates on new build development when compared to redevelopment.
  3. Introduce a digital tax: the Group concluded that NDR is no longer suitable as the main way of raising local government finance form local economic activity as there has been a significant shift to online services. It suggests that the taxation system should better reflect economic activity and various models of digital tax should be explored “as a matter of urgency”, while taking care in relation to small business and innovative local developments.
  4. Introduce an out-of-town car parking space levy: an annual levy on all out-of-town centre car parking spaces, not just those spaces related to retail, is suggested as a means to provide local authorities with a revenue stream which could be used to enhance public transport and active travel. The Report notes that care will need to be taken to avoid disadvantage to users who rely on private transport out of necessity, e.g. some older or disabled people, and to island and rural communities.
  5. Introduce a moratorium on out-of-town development: the Group suggests a moratorium on out-of-town development that involves large volumes of car parking for a period of 5 years, perhaps with exceptions for nationally important exceptional reasons. Challenges with this approach are recognised in the Report, including where to ‘draw the lines’.

Expanded Use of Demonstration Projects

  1. Town centre living expansion: the Report notes that some progress has been made in relation to town centre housing and living but the progress is relatively small-scale. It highlights some examples of steps that could be taken to overcome barriers to town centre living including:
    1. incentivising the housing sector to increase the volume and mix of housing in town centres;
    2. collaborative projects among public, private and social partners designed and incentivised to reuse currently vacant space; and
    3. enhancing Empty House grants/loans to incentivise individuals to renovate long-term empty housing.
  2. Digital skills: the Report suggests more could be done around improving digital connectivity, capacity, capability and access. It suggests focusing demonstration projects on the smaller and least resilient towns to demonstrate the true potential for change. One particular opportunity highlighted is the extended use of smart technology to measure against local town centre priorities, e.g. movement, air quality and energy use.
  3. Enterprising communities: included in the Report is a recommendation for more locally owned assets but states that ownership needs to be combined with involvement in the strategic use and operation of the assets. As an example, it highlights that community and local authority owned sites can become hubs for local start-ups and entrepreneurs or be an important part of the local and circular economies as local services and repair hubs.
  4. Climate Change Response: there is recognition of the climate emergency in the Report, noting that it has increased interest in the potential for town centre focused action on climate change. It suggests there is a need to alter behaviour dramatically and fundamentally. Potential actions include demonstrator climate action towns, community owned micro-generation and reallocating space to active travel modes, similar to the Spaces for People temporary changes in response to the pandemic.


The Report contains a number of sweeping and radical proposals for the future of our towns and town centres. There is no doubt that the scale of the challenge facing our towns and town centres requires strong leadership and significant change, so it will be interesting to see the Scottish Government’s response to the Report and its recommendations. However, despite the challenges, there are a number of success stories of thriving and improved towns and town centres, and the Report rightfully acknowledges these.

There is also an acknowledgment that the pandemic has resulted in more people reconnecting, rediscovering and appreciating what is in their local area. As a result, there might now be a unique opportunity to capitalise on that focus and drive a long-term behavioural change where people are more inclined to use services and facilities in their local area. It is commonly stated that there is no one-size-fits-all solution and each town and town centre will be different, so to capitalise on this opportunity each area will need to identify and meet the needs of its local population.