Local councils are standing in the way of regenerating our high streets
Local councils make running a business in Britain a bureaucratic nightmare, says Preston Benson
I moved here from the United States over 20 years ago, became a British citizen along the way, and have spent my career investing in the UK’s towns and cities. I have learned you can survive a pandemic, an energy crisis, numerous strikes and inflation. Yet this will not be enough for a business to endure if its twin nemeses are not resolved: a crippling lack of accessible finance and an oppressive bureaucratic nightmare. For me, this is the core of Britain’s growth problem.
Across the country businesses are routinely undermined by local authorities who prioritise hidden agendas, such as in-house subsidies for pet projects, over independent, job-creating enterprises.
Bureaucratic nightmare
A year ago, we lost a cherished venue, Catford Mews, to a shock eviction by Lewisham Council. Instead of working with us to reopen the venue, the local authority was more focused on teaching Universal Credit Classes to our talented team, all of whom sadly lost their jobs.
Or take the case of Peckham Levels. While popular over the years, it has always struggled because council pre-launch conditions made the numbers unworkable. Private money was expected to fund demands that defied commercial logic. When we took over in late 2021, we inherited a mess. Tenants refused to contribute to overheads, preferring to hide behind local councillors who repeatedly intervened. A rooftop tenant was allowed to directly damage the premises, with our business expected to pay repair costs and bear the inevitable rent refunds.
After three years of hard work, a venue refurbishment was agreed with investors, only for the council to intervene and offer to buy the business. They repeatedly delayed, almost bankrupting me in the process, only to pull out last minute to back a new, fully subsidised operator. A 100 per cent privately funded venue is now a burden for Southwark taxpayers.
The valley of doom
Another hurdle is readily available and affordable finance. For many viable, revenue-generating scale-ups who find themselves in the “valley of doom” (£1–5m in turnover), the system is fundamentally broken.
The UK funding environment has a decent angel network for raising up to £500k, but it falls down from here. Unlike America, British banks still demand old-fashioned bricks-and-mortar collateral, failing to reflect that most modern businesses, especially in hospitality, are asset light.
To grow, entrepreneurs are forced into a spiral of highly punitive, “Wild West” unregulated options: merchant cash advances and high-interest loans that incinerate working capital. Founders are routinely forced to sign Personal Guarantees, putting their family home and personal savings on the line. They face losing everything just to scale their business.
In this climate, where the state actively interferes in private enterprise and the financial system demands an entrepreneur’s home as security, why bother? A founder is frankly better off investing their time and capital in crypto. This is a far cry from ‘start-up Britain’ and cannot be considered a successful policy outcome.
Simple policy, huge impact
We don’t need to tinker with pension fund reform. We need to unlock liquidity in mainstream banking. The government should instruct the British Business Bank to provide a scale-up guarantee. This simple policy shift and a rethink of the post-2008 bank underwriting restrictions would allow mainstream banks to lend against the cash flow of viable, asset-light operators.
Without this change, Britain will remain a place where the entrepreneur’s risks far outweigh the rewards.
A system that penalises ambition is one that guarantees stagnation.
Preston Benson is an entrepreneur and founder of high street regeneration company Really Local Group