29 August 2019

Rebalancing Britain: Blackpool has had some dark days – but its future could be bright

By Paul Smith

Earlier this year CapX launched a major new project with the Joseph Rowntree Foundation focusing on how the Government should tackle the longstanding imbalances in the British economy. ‘Rebalancing Britain’ focuses not only on the well-documented North/South divide, but on the way smaller towns and cities are often left behind in national policy debates. Today we hear from Paul Smith, tourism lead for Blackpool’s Pride of Place National Advisory Board, on how the Lancashire seaside town is trying to reinvigorate its economy.

The town of Blackpool is a national treasure which has provided – and continues to provide – happy memories for millions of people. The narrative of social decline is well known, but new opportunities are emerging for Blackpool and the future is looking brighter than some might think from the general tone of national media coverage.

Who would have thought, for example, that Blackpool would ever have the fastest broadband speed in the UK, as it will do soon in the Blackpool Enterprise Zone with the arrival of the transatlantic loop from New York? Once it’s up and running, investment banks will be able to take advantage of a broadband speed which connects Blackpool to the New York Stock Exchange 11 milliseconds faster than the London Stock Exchange. With a new tech hub, companies can nearshore from London to Blackpool to take advantage of the “Silicon Sands” and substantially reduce costs.

The visionaries are returning. A new conference centre will open shortly at the historic Winter Gardens with capacity for 7,000 delegates. In anticipation of the opening, a number of new high-quality hotels are opening up such as the Boulevard near the famous Blackpool Pleasure Beach with a five-star hotel under construction on the Promenade near to the iconic Blackpool Tower.

Such developments hark back to the town’s visionaries of a previous era. In the 19th Century Blackpool had a dream to be the best town in the land, building the Blackpool Tower to rival the Eiffel Tower in Paris and creating the Blackpool Illuminations – “the Greatest Free Light Show On Earth” – first lit in September 1879, extending the summer season to attract more tourists. When the Winter Gardens opened in July 1878 it the Lord Mayor of London who brought his coach to Blackpool to take part in a torchlight procession. The event was attended by the Mayors of nearly every English town. This was a time when the resort was at the pinnacle of Victorian society.

The nearby cotton manufacturing towns in the northwest of England such as Bolton and Burnley would close the mills for the annual “Wakes Week” and the whole town would decamp to Blackpool. The resort continues to be popular with thousands of visitors from Glasgow, many of whom settled in the town spending their pension pots buying bed and breakfast properties.

With the boom in tourism, hundreds of small hotels and guest houses proliferated. Blackpool became the entertainment mecca of the UK and all the leading acts of the day entertained visitors in theatres more opulent than many in the West End of London. The Victorian properties were extended and expanded with extensions added to the extensions of properties to cope with the influx. The properties of inner Blackpool became very densely packed.

Tourism in Blackpool remains vibrant with 18 million tourist visits a year. However, instead of coming for a week they tend to come on day trips or single nights and the challenge is getting them to stay longer. The advent of cheap package holidays to Spain in the 1960’s led to a rapid change in the resort’s fortunes. Guaranteed good weather on foreign shores led to thousands of tourists not going to Blackpool anymore. Ironically, the building of the M55 motorway to Blackpool led to fewer visitors rather than more, since Blackpool is no longer a day’s return journey to distant towns and so there’s less need to stay over.

With substantially fewer tourists many of the bed and breakfast properties and shops shut their doors. The town began to rapidly decay. Many of the empty hotels were converted into flats. There are now 8,000 privately rented properties in inner Blackpool, which is 50% of the housing stock. 80% of those properties are let to the recipients of housing benefit. Blackpool now has the greatest concentration of deprivation in the UK. 8 of the top 20 most deprived wards in the UK are in Blackpool. The town has the highest rate of premature deaths in the UK. 26% of the residents have long-term mental ill health problems and anti-depressant prescriptions are the highest in the UK.

The problems of inner Blackpool are fuelled by the policies of central government. Government policy is to build more homes. Inner Blackpool needs fewer homes. Also, Housing Benefit is paid with no assessment of the quality of the property (unlike the position in Scotland). There is little incentive for many landlords to improve the quality of their offering when the level of housing benefit they receive from their tenants is the same regardless of the standard of the property. The calculation of housing benefit also severely distorts the market. In most parts of the country housing benefit would not cover the rental of a property, with the tenant having to cover the difference between the benefit and the rent. In Blackpool however, the benefit usually covers the rent – this has led to a huge influx of people from outside the town coming to live in cheap properties.

The incoming residents are often escaping troubled lives in their home towns, drawn to Blackpool by memories of visits to the seaside town in happier times. Landlords advertise their properties to people leaving prison and other towns encourage their troubled residents to move to Blackpool. The result is a transient population wanting small, cheap flats of which there is an abundance, bringing in a host of people with complicated needs. Blackpool Council patches them up as best they can and then they move on. There are 5,500 new housing benefit claimants in inner Blackpool every year. Over £80 million of taxpayers’ money is spent on housing benefit in inner Blackpool creating a sink estate of highly vulnerable people. Blackpool exports healthy people and imports the unskilled, the unemployed and the unwell.

There are ways out of this. For starters, Blackpool needs help from the Government to set up a Housing Action Zone, which would start to address the unique problems of inner Blackpool by ensuring that policy, legislation and welfare spending come together, in order to sustainably tackle the problems of deprivation. Such zones could have extra, specially-allocated funding to convert and regenerate dilapidated buildings, particularly housing stock for example. Other avenues to pursue involve greater use of planning permissions, greater enforcement against rogue landlords and demolishing or improving slum properties. But we should not let the problems blind us to progress being made. Blackpool is changing from a failing seaside town to a regenerating can-do area. The town understands its problems. It has a plan, and that is a start.

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Paul Smith is a Partner at Eversheds Sutherland and Tourism Lead at Blackpool Pride of Place National Advisory Board