Last week, we heard of Westminster councils surprise decision to pull the plug on a joint plan with the mayor of London to pedestrianise Oxford Street.

Coincidentally, the shelving of the £60m project came a day after House of Frasers decision to pull its own plug on its flagship Oxford Street store alongside 30 others.

While many factors were at play in this decision, a 30 per cent hike in its business rates bill for Oxford Street alone – to around £9m a year – cant have helped.

Read more: Oxford Street pedestrianisation cancelled: Mayor hits out at 'betrayal'

The pedestrianisation of Oxford Street was aimed at delivering improvements for the 200m or so annual visitors to the street. They come to the West End from all over London and the rest of the world, to work, shop, and party.

Shutting out traffic might have helped restore the streets status as part of a premier retail and entertainment destination.

Despite £9bn a year worth of sales, the West End has suffered with Londons drift to the trendy east. And unlike nearby Regent Street and Bond Street, Oxford Street has struggled to keep up with the Westfields of this world.

The tens of millions of additional visitors that Transport of London says the Elizabeth line will bring were also to benefit. Poor air quality and accidents would be tackled.

So why has there been this sudden change in policy from the council? Westminster cites local residents concerns. These include worries about displaced traffic seeping into their streets and the effect of 24-hour pedestrianisation on noise in the neighbourhood.

The scheme was always going to have its challenges. Care would be needed to prevent traffic shifting onto unsuitable roads. Deliveries and other servicing could not be allowed to lead to too much addition out-of-hours noise (a constant battle for central London residents). And there would have been a need to manage the freed-up space to avoid it being constantly dug up for road works or turned into a place of rowdiness at night.

However, with sufficient resources for council services and enforcement and the good will of local businesses, all these things should have been doable.

Westminster has stated that it remains committed to improving things. But its decision brings into sharp relief a longstanding challenge for London government: how to reconcile the role of looking after local residents in areas that perform important economic and social functions for the citizens of the wider city and beyond.

Boroughs have suffered extensively from Whitehall austerity, and they have been largely disconnected from the tax base of their local businesses. In 2016/17, Westminster got to keep a paltry four per cent the £1.8bn in business rates it collected.

If local public services were funded directly by business taxes, that might make it easier to deliver ambitious improvements for everyone, and address residents concerns at the same time. In central London, it might also counter calls for reorganising London local government.

Some may argue reform could help ensure projects like this arent dropped thanks to push-back from residents in the future. For House of Fraser and other beleaguered retailers, it may already be past closing time to be able to make a difference, for now.

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