Following FSB campaigning, the Scottish Government has pledged £50 million for high streets in its draft budget, which will be spent by Scotland’s 32 local authorities.

The small business campaign group is urging the funds to be focussed on diversifying the hardest pressed local high streets, suggesting a new co-investment fund to improve and convert existing properties. FSB’s calls come as it is reported that a Scottish shopping mall is for sale with a reserve of only £1.

Andrew McRae, FSB’s Scotland policy chair, said: “The future of many Scottish high streets depends upon finding new uses for long-empty retail properties. The challenge is to make our town centres not just about shopping but also attractive places for working, living and socialising. That might mean turning an empty bank into a restaurant, a former supermarket into office space, or a long vacant shop unit into a flat.

“While the money allocated is not sufficient to transform every high street in the country, it should kick off a national debate about the future of these important local places. To maximise the economic impact, councils should focus on a small number of towns, working in partnership with local business and resident groups.”

The FSB highlights that a new co-investment fund would integrate well with the Scottish Government’s relatively new ‘Business Growth Accelerator’ rates relief, which reduces the rates burden of those that invest in their property. In addition, they argue Ministers should put additional pressure on public bodies to locate more of their staff and services on high streets.

Andrew McRae said: “There’s no reason why we can’t kick off a Scottish high street renaissance if we get our public and private sectors to back our town centres. With the Scottish Government already encouraging property investment, another nudge in the right direction could get the ball rolling.

“On the other hand we can’t see one part of government trying to boost a local economy while another withdraws footfall and spending power by closing their town centre estate. Ministers must come down hard on public bodies that undermine local high streets by closing their town centre premises.”

Economy secretary Derek Mackay said: “Town centres are facing challenges as retail patterns change and evolve. That is why we are investing £50m in a new Town Centre Fund to help communities maintain their vibrancy, creativity and accessibility, while supporting them to become more diverse and sustainable.

“This fund will enable local authorities to stimulate and support a wide range of investments which encourage town centres to diversify and flourish, creating footfall through local improvements and partnerships. We will work in partnership with COSLA and local authorities to deliver this investment.

“The Town Centre Fund is part of a wider package of measures in the budget to support businesses including maintaining a competitive business rates package which caps the increase in rate poundage below inflation; ensuring that 90% of properties in Scotland pay a lower poundage than other parts of the UK.

“The budget also continues to offer the most competitive rates relief package in the UK, including the Small Business Bonus Scheme (SBBS) which lifts over 100,000 small businesses out of rates altogether, as well as the Business Growth Accelerator, which supports all businesses large and small by providing a minimum of 12 months relief for new and improved properties. This relief has been widely welcomed by businesses and is unique in the UK.”