Leeds Kirkgate Market: Plans for the future

Today Leeds City Council Executive Board will discuss plans for the future of Kirkgate Market in Leeds city centre. Having become rather interested in the market in recent months, I thought I'd have a read through the draft strategy report. Now that I've done so I feel like putting my thoughts into writing, so here they are.

There are three particular things that concern me most with the strategy. The first of these is the money issue. The charge levied by Friends of Kirkgate Market is that the council have neglected the markets and siphoned money away from them for decades. The information in the reports would seem to support this argument. This statement in the facts and figures section of the scrutiny report is key:

In 2010/11 projected income is approximately £4.2m. Expenditure and other charges amounts to £2.1m, leaving £2.1m to support the Council’s budget.

So the market was projected to generate a surplus of over 50% for the last financial year. A 50% gross profit margin would be considered pretty good in most businesses. This doesn't really fit with the image of an institution in perpetual decline.

The implication is that the entire £2.1m was diverted away from the market for use in other areas of the council's budget. Now I don't know whether this is common practice or not, it may be that markets are usually expected to provide an income source for local councils, but it seems strange to me for a couple of reasons.

The primary reason being that the draft strategy considers lack of investment to be one of the key challenges facing the market. It is noted that the 1976 and 1981 halls have far exceeded their planned 15 to 20 year life span and are in very poor condition. Now if my maths is correct, that means the most recent possible year that either of these was designed to last until was 2001, a full ten years ago. It's not unusual for structures to last far longer than originally intended, but they need maintaining.

The current dire state of affairs could have been avoided if some of the surplus generated by the markets had been re-invested over the last decade. It is also worth remembering that most of the last decade was a time of plenty in the public sector, with budget cutbacks only a very recent phenomenon. It is also worth remembering that the strategy suggests that the market has been in decline in recent years, so it's not unreasonable to assume that the surplus generated in previous years was larger than the £2.1 million projected for the last financial year.

So, on the face of it this is how it seems to me. The council probably generated at least £20 million in revenue from the market over the last decade, most if not all of which it diverted to spend in other areas even though it knew that sections of the market were a rapidly depreciating asset in dire need of investment, and that the longer that investment was delayed the more investment would ultimately be required. At best that makes the council's actions over the last decade indifferent to the plight of the market, at worst grossly negligent.

All of which is in the past, and therefore largely irrelevant. We are where we are, so I'll move onto the second thing that seems strange to me about using the market as a cash cow. The strategy wants to see the market become a top destination for residents and visitors, and to be one of the five 'must do's' for people visiting the city. But the strategy also wants the market to return a tidy sum of cash back to the council. What other council funded 'top destinations' and 'must see' places in the city are expected to generate revenue? Surely places of inherent cultural and social value to both residents of, and visitors to any city are worth investing in.

After money, my second (very much connected) area of concern is the inference from the strategy report that the market will be made smaller. There is a great deal of waffle about 'determining the optimum size for the market'. For this read 'getting rid of the 1976 and 1981 halls'. Clause 7.5 of the stratgey states:

Therefore the sensible option is to use the £200,000 to carry out repairs needed on the 1904 and 1875 halls, whilst the Council determines the optimum size for the market.

I know this is hardly an explicit statement, but despite the dire state of repair that the 1976 and 1981 halls are in, the plan is to spend the available maintenance cash on the other bits whilst 'the council determines the optimum size for the market'. The remainder of this section of the report explains how the market is the biggest in the country, and how tenants and the public are supportive of proposals to reduce the market size.

I'm not in favour of reducing the market size. Call me a dreamer or fantasist but I believe that Leeds needs to think big for once. The implication is that Kirkgate market is the biggest in the country, so that's not sustainable. Why not? Leeds is the 4th or 6th or thereabouts largest city in the UK (depending which stats you use), so I don't think it's unreasonable to have the biggest of something-or-other. Why the hell does this matter, you might ask. What about quality over quantity? I think it does matter if you want to promote the city on a wider scale. Leeds sometimes seems to lack the confidence of our other great cities. Manchester, for example is always banging on about having the tallest (building in the North), first (industrial city) and best (music) of something-or-other. Everyone laughed when Manchester bid for the Olympic Games, but in a roundabout way that laid the foundations for the Commonwealth Games which ultimately led to the city having two football clubs in the Champions League (I'm a Leeds fan so this fact sickens me by the way). A bit of chutzpah can bring benefits in the long run.

I don't wholly buy the argument that the current size is unsustainable due to the vacancy levels either. The strategy gives the current vacancy level as 14%, and states that this is unlikely to improve. This actually compares very favourably with the Leeds city centre retail unit vacancy rate which was reported as 22.1% back in February. And why is it unlikely to improve? Surely this statement disregards the plans for achieving the objectives in the strategy, one of which is 'better promotion of available units, flexible terms and better business support', presumably to get new tenants in and reduce the vacancy rate.

Which leads me back on to investment. The strategy estimates the cost of imminent and essential works as between £2.1 and £2.3 million. Not an inconsequential sum, but not that huge given that the market generates that much in surplus every year anyway. If just 50% of the surplus (£1 million per year) could be re-invested in the market over the next few years, problem solved. I understand the argument about budget pressures for the council, but £1 million equates to around 0.17% of the annual council budget of around £580 million. To my mind this would be money well spent, and could actually help to increase council revenue in the future.

The alternative to this, if they really want to be bold (as the strategy claims) would be to entirely replace the 1976 and 1981 halls. I don't claim to know anything about the feasibility of this, but it would certainly be bold, and market halls needn't be the most expensive or complicated of structures. The new market hall in Wakefield apparently cost only £3 million.

The final thing that concerns me is how the market is going to be managed going forward. The strategy recommends that the market should be moved from direct control by the Council to an arms-length organisation, possibly a limited liability partnership. I don't have a problem with this, but the strategy doesn't make clear whether this should be a not for profit organisation. If a profit making entity takes control an additional layer of cash removal would be introduced, with the management company taking their cut as well as the council. I can't see how this would be anything but a bad thing.

In summary, here is what I think should happen:

• Retain the market at its current size, through renovation or replacement of the 1976 and 1981 halls.
• Renovation or replacement should be financed using the surplus generated by the market itself, or by public sector (i.e. the council) borrowing.
• Move management of the market to an arms length, not for profit organisation.
• Promote and improve the market by the means detailed in the strategy (see section 6), including innovative means like The Source.
• Aim to improve the mix of stalls, including more upmarket offerings, but absolutely not at the expense of existing traders.

In summary, here is what I think will actually happen:

• The market will be substantially reduced in size through closure of the 1976 and 1981 halls.
• Management of the market will be moved to an arms length organisation, profit making or otherwise.
• Any investment will come from the private sector, and therefore probably work out more expensive in the long run.
• There will be a general drive upmarket with what remains, but we won't see a 'Corn Exchange' scenario. I don't fully agree with Friends of Leeds Kirkgate Market on this. I don't believe that the council are daft enough to think it's going to become the new Borough Market.

The relevant documents can all be found via the Friends of Leeds Kirkgate Market site here:

http://kirkgatemarket.wordpress.com/2011/07/25/the-councils-long-awaited-strategy-for-the-market-out-now-our-comments-will-follow-shortly/

It will be interesting to see how things pan out.