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Christmas grinch or feeling the pinch: Councils and Christmas street lights

In these times of austerity everyone is feeling the pinch, especially around the festive season, and none more so than hard-pressed local authorities in charge of displays of Christmas lights in towns and cities up and down the UK.  Arguments about economic boosts to jolly shopping atmospheres in town centres suggest the cuts to budgets for holiday decorations might well be short sighted.  So is there good reason for councils to play Grinch and take back the metropolitan Christmas magic?

With Christmas decorations, illuminations and displays for the festive season costing hundreds of thousands of pounds, in times of economic recession when local authority’s are being forced to cut their budgets, high streets are due to grow darker in the coming years.  A number of councils report ring fencing their Christmas budgets for next year, but also that they will make significant cuts to what is seen as a frivolous expense in the years to come.

However, there is consumer-focused research to suggest binning the tinsel might be false economy, if town centres feel less festive on late night shopping days in the run up to Christmas.  From Black Friday through to Christmas Eve, retail highs in city centres up and down the UK bring out energy in neighbourhoods that can produce a feel-good factor.  Consumers with a feel good-factor spend more freely. Profits go up and businesses grow and take on more staff, who in turn spend their disposable income freely, basking in the glow of Christmas lights on the high street.  Or so the economic theory suggests – and is borne out to some extent in research.

But is it really the case that such economic effects can be produced by nothing more than a few – admittedly expensive – light bulbs and some heavy-duty outdoor tinsel?  The truth is that economists find it hard to prove either way. For local authorities facing some of the most severe budget cuts, the question is an academic one.  Christmas illuminations and holiday displays represent a saving of at least a few thousand pounds.  That’s an opportunity cost that is hard to argue with, especially when libraries and swimming pools are being sacrificed, as well as health and social care.

However, some do argue the point and would suggest more money might be lost in customers feeling less festive and communities less inclined to show goodwill, given their darker streets.  Famous ‘switch-ons’ may seem trivial and it may be hard to prove the benefits, but footfall is something town centres rely on in hard times when retail is suffering and high streets are witnessing closures.

For these reasons some councils are placing emphasis on sponsorship by business: tying the profits consumers bring to responsibility for bringing them to the high streets.  Alternative cost structures help to justify maintaining a modest budget for decorations, which is more justifiable.  Certainly the association most people in the UK have of Christmas, festive treats and holiday spending is connected with the sight of fairy lights in trees and on lampposts.  Perhaps this connection shouldn’t be too readily dismissed – even by councils feeling the pinch.

This article was provided by Xmas Direct, who supply Christmas lights for the home and the high street.


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