Ten Birmingham town centre managers recruited to transform ailing shopping districts are to lose their jobs, prompting fears for the future of suburban high streets.

The managers are being axed despite a Commons Select Committee being told this week there was an urgent need to revive the “golden era” of the high street and fight the rise of retail parks.

The town centre managers were paid for with cash from the £118 million Working Neighbourhoods Fund, which has been scrapped by the Government.

The managers, paid between £30,000 and £35,000 a year, were on two-year contracts and were tasked with developing commerce and growth in areas such as Kings Heath and Moseley, Acocks Green, Harborne and Sutton Coldfield.

They have been responsible for launching campaigns, such as Shop Local, to attract more shoppers to local high streets.

The funding for their roles will end in April and comes at a time when retailers are battling with last month’s VAT rise to 20 per cent and huge increases in the number of vacant retail units.

A survey published last week by the Local Data Company highlighted how the number of empty shops in Birmingham city centre rose 7.3 per cent last year to 25.2 per cent.

In Sutton Coldfield the 2010 figure stood at 16.6 per cent, in Kings Heath it was 12.3 per cent, Acocks Green had a vacancy rate of 6.9 per cent and in Moseley it was 5.1 per cent.

While smaller high street traders continue to face an uphill struggle for survival, the fortunes of the city centre appear to be brighter with John Lewis this week announcing it will build a flagship store in the redevelopment of New Street Station.

The development is the first major department store to open in the city since the recession and will ultimately create 1,000 jobs.

Mark Eftichou, chairman of Moseley Business Association and an employee at Moseley Travel in Alcester Road, described the abolition of the Working Neighbourhoods Fund as a “big blow” to small business.

He praised Nikki Carr, the town centre manager for Kings Heath and Moseley, for her work.

“We’ve been working very closely with our town centre manager,” he said. “Nikki played a very important role in reviving the business association, accessing retail grants and pushing our plans for a Business Improvement District.

"Thanks to her the business association has gone from ad hoc to something a lot more structured. I worry that without her we’ll lose that momentum.

“It would be very disappointing to see her go just as she’s getting her feet under the table. It’s a big blow.”

Ms Carr’s position is considered so valuable that money is being freed up by the Kings Heath Business Improvement District to keep her employed so she can continue to support businesses in Kings Heath.

Stan Hems, chairman of Kings Heath Business Association and owner of Johnstans Butchers in High Street, said: “We are obtaining her on a self-employed basis.

“The Shop Local campaign she led was brilliant, the Buy Local branded bags were brilliant, she’s done a shopper’s footfall survey and a gift voucher scheme which was also a great success.

“She’s been absolutely brilliant.”

A Birmingham City Council spokesman said: “The 10 town centre managers are funded through Government WNF funding, which ceases in April 2011.

“Supporting individual town centres remains a high priority for the city council and we are currently exploring alternative methods for continuing to deliver this support direct to these areas of the city.”

Dozens of shops sit empty and boarded up in Pershore Road, Stirchley, but there has still been huge support for Matthew Powell, town centre manager for Selly Oak, Cotteridge and Stirchley.

Dr Samina Zahir said Mr Powell was “instrumental” in helping her transform a vacant retail unit in Pershore Road into a vibrant tea room-turned-community space.

“Without him we would not be in this unit,” she said. “He’s been great for us and our needs and requirements and other shopkeepers speak very highly of him. Some of these town centre managers have only been in place 18 months and so the economic impact of their support might not be felt for another two years.”

The unit is one of five shops, all entitled Inhabit, which have popped up in disused sites across the city as part of a regeneration project delivered by arts-based company Hybrid Arts.

The idea arose after a brief sent out by Birmingham City Council’s arts team, which wanted to encourage arts organisations to use vacant shops to stimulate art activity and outreach among local residents. It received £50,000 in funding from The Department for Communities and Local Government.

Andrew Kerr, chairman of Harborne Traders’ Association, said its members were split on the role of town centre managers.

He said: “We have a meeting on this in March when we will discuss the pros and cons. It’s quite a hot topic in Harborne. Some people are very much for them and some would view them as too connected to the council and do not feel their interests are properly represented.”

Concerns about the future of town centres were raised in the Commons by Birmingham MP Jack Dromey (Lab Erdington), who is campaigning for new laws to support high streets, which would allow councils to discriminate in favour of high streets when they made planning decisions.

It would free authorities to put the interests of traditional town centres first without facing legal challenges from developers.

Mr Dromey told MPs: “The heart of Erdington is its high street. I must have heard the same thing several hundred times: ‘The high street is not what it once was.’

"People have a real sense of regret as they look back to the golden era of that street, and they want the regeneration that will once again make it a place to which people can be proud to go.

“Decline occurs most often in poorer areas and is characterised by empty shops, poor environment, lack of investment, and the growth of pound shops and charity shops. The use of the high street decreases as the quality of the offer is eroded.”

Birmingham City Council’s £1.8 million Retail Development Programme, which was launched in January 2009 to attract more independent retailers to the city centre, was also funded by the Working Neighbourhoods Fund.