What next for coastal communities?

The Autumn Budget gave coastal communities no indication of a better tomorrow, writes Christopher Kerr.

The new Labour Government has promised to “rebuild Britain”. That is no easy task, but it must start somewhere, and ideally where the greatest need lies. There is a strong argument that the greatest need today is along our coastline, which fares disproportionately worse than the national population for health, crime, housing, socio-economic status, opportunity and environmental resilience. Yet, to read through last week’s budget, you wouldn’t think so. The Government could have gone much further to support the local authorities and other groups who are responsible for stewarding our coastal places, particularly in these areas:

Transport links

Reporting on the issue in 2019 and then reaffirming it in their 2023 follow-up report, the House of Lords Select Committee on Regenerating Seaside Towns and Communities found that coastal towns were often at “the end of the line” and typically suffer from poor rail connectivity, insufficient bus connections, and inadequate road infrastructure. 

This lack of connectivity has significant consequences, particularly from an economic standpoint. It is problematic for attracting inward investment, limits economic diversification, and as we saw from the Beeching cuts, impacts the sustainability and growth of existing industries like the visitor economy, which remains a major source of employment for many coastal towns. As a result of continuing rail and bus service decline, people living in coastal communities also face greater challenges in accessing essential services like A&E departments and supermarkets, and face higher-than-average travel time to work.   

The previous Government had sought to change this by reversing the Beeching cuts but the ‘Restoring your Railway’ fund was scrapped by the Chancellor in July, citing savings of £76m next year as the reason for doing so. There is no doubt that tough decisions have to be made in light of current public finance challenges, but this investment would have made a significant difference to isolated communities, and helped the UK to be more efficient and effective overall. The Autumn Budget announcement that the Department for Transport would get £30bn to spend on other schemes like HS2 and the Transpennine Route Upgrade, which are important in their own right, will only make those coastal communities without sufficient transport infrastructure feel further cut off and left behind.

Digital connectivity

Digital connectivity is critical for the future prosperity of coastal areas struggling to create sustainable local economies, particularly those suffering from inadequate transport links. Post-pandemic ways of working have opened up new opportunities for coastal areas, but without investment into next generation gigabit-capable broadband, they cannot fully capitalise on them. 

Coastal communities have less premises with gigabit-capable broadband than non-coastal communities and England as a whole. Coastal areas also have a lower proportion of areas receiving 4G signal from at least one mobile network provider, than non-coastal communities. This has a significant impact on working-from-home opportunities and economic diversification via small to medium businesses.   

The Autumn Budget does make provisions for a £5bn investment into digital connectivity with the goal of ensuring every place in the UK has access to gigabit-capable networks by 2030. This is excellent news, but the Government must allocate funds on a needs basis, providing investment to the most underserved locations first. For many coastal communities, this would be a real lifeline and attract some of the key growth sectors identified in the industrial strategy green paper. 

Taxes to hit visitor economy and high streets

Businesses in hospitality, leisure and retail have been hit by the triple-whammy of increased employer national insurance, lower thresholds for paying it and the reduced discount on business rates which, come April 2025, will nearly double in their current cost. 

As coastal areas provide a higher proportion of jobs in tourism-related industries (25% compared to 20%), this will be a major concern to local economies that already suffer from higher rates of economic inactivity (people not in work and not looking for work). Some areas such as Torquay have nearly double the share of hospitality workers than the national average (39%). These jobs are extremely important to the local and national economy, but they are seasonal and less resilient to sudden increases in cost like this. 

Many coastal towns are trying to regenerate their high streets but, at least for the short-term, these additional costs will reduce the risk appetite of many national retailers, and in some cases could lead to closures in lower-performing areas. Permanent reductions to business rates will happen in 2026/27 but a comprehensive overhaul of the current regime is needed to address the failures in the system that continue to prevent the regeneration of our high streets. Their revival depends on a tax environment that encourages investment, growth and entrepreneurship but this is currently lacking and will continue to stifle regeneration plans.    

Industrial strategy

As part of the Budget, the Chancellor released the new ‘Modern Industrial Strategy 2035’ green paper which has highlighted eight growth-driving sectors, including advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. There will be opportunities within this for coastal locations, particularly under the clean energy and defence sectors but, as part of this process, the Government might consider creating a coastal-focused industrial strategy that builds on the existing strengths of individual areas of the coast e.g. offshore wind in North Sea locations, and maritime and defence innovation in Plymouth etc. This coastal-focused strategy could also identify at-risk areas that are reliant on SOC1&2 employment, and help them to transition towards more productive sectors such as blue carbon capture, marine protected areas, clean energy, technology, research and development etc. Again, this is no easy task, and any strategy must be developed with the understanding that no two coastal towns are the same. Such an approach would positively impact education and skills development and stop the ‘brain drain’ from coastal locations.

For too long our coastline has been let down by public policy and insufficient investment. The Autumn Budget provided a few lifelines but, on the whole, is disappointing for those of us hoping to see a more focused effort. However, there is still time for the Government to change and offer our coastal communities hope for a better tomorrow if they choose.

Christopher Kerr is Head of ESG at the UK’s largest specialist real estate law firm, Davitt Jones Bould. He also chairs the firm’s Coastal Regeneration special interest group.