Business rates reform and a curb on out-of-town development are key to rejuvenating town centres, which require a remodelling comparable to that of post-World War II Britain, according to a new government-supported report.

The Distressed Town Centre Property Taskforce, which was set up following recommendations in the Portas Review of the High Street, included representatives of the banking, property, retail and public sectors.

It says future town centres need to move beyond retail to provide alternative economic, social and cultural functions, with a smaller and more focused retail core.

But it envisages local convenience stores playing a key role, driven by time-poor consumers, rising fuel costs and online weekly grocery shops. Local shopping is further supported by more frequent budget-constrained shopping and better convenience offerings from the multiples.

The report makes a number of recommendations to support town centres, including a reform of business rates “to return a sense of equity to contributing businesses and, in particular, better reflect the balance of taxation levied on physical and pure online retailers”.

In the short term business rates should be capped at no more than 2% until 2017, and in the medium term contributions to Business Improvement Districts should be made compulsory. An independent review of rates is required for the long term to determine its relevance as a local tax source, the report recommends.

It says deferral of the business rates revaluation from 2015 to 2017 has resulted in businesses in struggling towns subsidising stronger-performing locations, especially in London and the South East.

Other recommendations include strengthening the ‘town centre’ first approach to planning policy in the National Planning Policy Framework. Local authorities have a role to play in ensuring towns do not lost jobs to out-of-town locations, while town centres are urged to develop an integrated digital strategy, incorporating mobile, social media and website.

In addition, with greater numbers of businesses adopting the click and collect model, town centres need to market themselves as convenient hubs for collecting products ordered online, the report recommends.

The government is advised to designate town and city centres as ‘infrastructure’ and incorporate them into its National Infrastructure Plan.

Edward Cooke, taskforce chairman, said: “What is clear is that the change we are witnessing in our towns and cities is a result of structural change, not just economic cycles. As such radical solutions are needed to enable the repositioning and redevelopment of many places so they are fit for purpose for the future.

“All stakeholders have a role to play - individuals, local councils, local and national businesses and central government. We believe these recommendations will deliver the direction and the funding necessary to make this happen.”