Make betting shops sui generis in the planning system

logoMy article for Modest Proposals (2 September 2013) on local authorities’ lack of powers to control the spread of betting shops on high streets. I argued for a reform to the planning system to ensure bookmakers must acquire planning permission for each  new betting shop they propose to open.

The bookmaker Paddy Power appealed in June against a decision by the London Borough of Newham to refuse a premises license for a new betting shop in East Ham. The judgement went in favour of Paddy Power, disappointing campaigners and other councils eager to prevent the growing clusters of betting shops throughout the country.

Betting shops have become the object of multiple lines of attack in recent years. Most opposition focuses on the problem of gambling addiction. Casino-style gaming machines  – also known as fixed odds betting terminals (FOBTs) – are the main target for the Campaign for Fairer Gambling, which has mapped their prevalence in every community in Britain. Meanwhile, Newham’s objection to Paddy Power was on crime and disorder grounds – the decision was overturned by the judge because of insufficient evidence.

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Another objection to betting shops is that clusters of them have a negative impact on local economies. This is somewhat counter-intuitive. At a time when high street vacancy is running at 14%, it may seem more reasonable to suggest that a betting shop is preferable to an empty shop. Certainly, the Association of British Bookmakers (ABB) is very bullish about the positive economic effect of betting shops, and fairly persuasive in its statistics: a recent report compiled for the ABB by Deloitte found that there were 35,000 full-time equivalent jobs in retail betting, and the sector contributes £1.8 billion to the economy in direct Gross Value Added (GVA).

However, the ABB figures consider the betting shop sector in its most flattering pose –  in isolation from the local economies in which betting shops are situated. The alternative perspective is that  a high concentration of betting shops in any area has a detrimental effect on the surrounding businesses. Arguably, an over-concentration of betting shops drives down the value of a high street because other potential shop tenants do not wanted to be located near them.

Then there is the simple effect of reduced diversity, which makes high streets less appealing to potential visitors. Although it might be argued that a concentration of vacant units has the same impact, framing this choice as one between betting shops and empty shops is misleading. The financial clout enjoyed by major bookmakers means they can  offer high rents to landlords who might otherwise have been persuaded to reduce their asking price by other, less well-endowed tenants.

The evidence that betting shops have grown in concentration is clear, but not straightforward. There has been a fall in the total number of betting shops in Britain recently: the ABB says from 16,000 in the 1970s to 8,700 today. This figure masks a second trend, in which betting shops have shifted toward more prominent locations. The London Assembly recently found, for instance, that the number of betting shops in the capital’s town centres had increased by 13% in the three years 2010 to 2012, while falling slightly outside of town centres. The back-street bookie has disappeared while national chains have been colonising high streets.

The simplest and best solution is to give local authorities much greater autonomy to decide what is appropriate for their own areas. At present, councils’ options for controlling the number of betting shops are extremely limited. They should be able to use the planning system, but regulation curtails local decision-making in unhelpful ways. Betting shops are included in the A2 planning class, for ‘financial and professional services’; this places them, perversely, in the same category as banks, building societies, estate agents and employment agencies. Whenever one of these businesses closes, therefore, a betting shop can take over the premises without requiring planning permission. Furthermore, changes from A3 (restaurants and cafes), A4 (pubs) or A5 (fast food takeaways) to A2 are also allowed without planning permission. The government has taken this approach further still, with new rulesallowing betting shops to be opened in almost every other type of high street premise without requiring planning permission for two years.

A theoretical power available to local authorities is to an issue an ‘Article 4 direction’, under the Town and Country Planning (General Permitted Development) Order 1995.  These directions remove the permitted development rights – as set out above – that bookmakers might otherwise enjoy, and require them to seek planning permission. But issuing an Article 4 direction is fraught with risk. A direction must be justified according to strict criteria, can be overturned by the Secretary of State for Communities and Local Government, and is likely to be subject to legal challenge. Councils may also be liable to pay compensation to those whose development rights are affected.

Local authorities could regain control over the spread of betting shops at a stroke if they were made sui generismeaning that they would not fall into any of the existing planning categories, and therefore removing automatic rights to open in any premises. Other notable high street entities such as theatres, launderettes and petrol stations – none of them provoking public opposition – have this status.  Making betting shops sui generis would allow local authorities to judge every application on its merits, considering the implications for local communities and other businesses.

Image: Kake Pugh

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