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The British BIDs Formal Response to the Government’s Review of BIDs

JUNE 2014

THE VOICE FOR BIDs Delivering Quality Services and Standards for the BID Industry


THE VOICE FOR BIDs Delivering Quality Services and Standards for the BID Industry


About British BIDs British BIDs is a highly innovative business-led organisation focused on establishing and maintaining quality services and standards for the BID industry. Over the past year we have seen our most substantial membership growth to date, with an increase of 31% from the previous year. We pride ourselves in collaborating with our partners and stakeholders, particularly through our Advisory Board, to ensure the very best expertise and knowledge is brought to the BID industry.

OUR CORNERSTONES ARE: The entire raison d’etre of British BIDs is Business Improvement Districts • British BIDs is the leading organisation speaking to and on behalf of the majority of BIDs in the UK •

THE BRITISH BIDS FORMAL RESPONSE TO THE GOVERNMENT’S REVIEW OF BIDs

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British BIDs is delivered by the leading experts in the industry and steered and supported by the major stakeholder organisations and interests


The Voice for BIDs British BIDs is a guiding voice for the industry, offering advice and information based on years of ‘on-the-ground’ and strategic experience of working with and in BID sites. Our support takes a variety of formats: • Information & Intelligence – including a complete back catalogue of all ballot results; a full register of all BIDs and their contact details; the Industry Voter Contact Database; and regular e-communications relating to policy and practice. • Networks & Events – including the Industry Annual Conference & Dinner; specialist seminars; Leadership Networks; Marketing Forums; Chairs Forums; the Welsh Network; and online groups through Linked In.

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• Specialist Training & Support – including BID Ballot training; BID Development seminars; BID Renewal Workshops; and knowledge and technical expertise on all elements of the BID process and the legislation.


Bb Industry Criteria First published in 2009 and updated annually. A collaboration between British BIDs and: • British Retail Consortium (BRC) • British Council of Shopping Centres (BCSC) • Inter Banking Rating Forum (IBRF) • Federation of Small Businesses (FSB) The document summarises the views and recommendations of all four organisations offering practical advice to help BIDs through the difficult process of preparing a business case.

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It provides a clear indication of what the minimum expectations of levypayers are likely to be and is therefore of invaluable assistance to BIDs at ballot.


Bb Accreditation

The industry standard to measure a BID’s quality management systems. Accreditation focuses on ensuring BID’s stakeholders can be satisfied their BID is well managed, has strong governance arrangements and complies with Legislation and Regulations. The further Advanced Accreditation concentrates on outputs and the way in which the work of the BID is recorded, analysed and reported to stakeholders to demonstrate real return on investment for levypayers.

“Inmidtown has valued the opportunity to apply for Advanced Accreditation – it’s a valuable opportunity to have a supportive, external, professional view on the everyday processes, controls and checks, that make up the efficient and effective management of any company”. Tass Mavrogordato, Chief Executive, Inmidtown

“Essential Edinburgh wanted to demonstrate to its levy payers that as well as the results they were seeing, and the strength of the second term business plan that was being developed, the organisation was being well run with best practise leadership, processes and governance. Achieving British BIDs accreditation was very helpful in this regard, it endorsed most of what we were doing, sharpened up a couple of areas, and helped us to a resounding majority (78%) in our second term ballot. Denzel Skinner, Chairman, Essential Edinburgh

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Our Industry Accreditation is a robust and quality-driven five stage process including an independent audit prior to an Industry Accreditation Board review.


Bb Nationwide BID Survey With the eighth annual survey underway, our Nationwide BID Survey is considered to be the ‘Bible’ on BIDs for the industry. For 2014 this key research piece is in conjunction with the Department of Communities and Local Government (DCLG) as part of this Review of BIDs.

The 2013 survey achieved an 85% response rate and found 70,000 businesses contributing a BID levy across 150 locations amounting to a total annual

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investment of £100 million


Bb BID Academy Certificate in BID Management

The only formal qualification for BID professionals, the Certificate in BID Management is based on a compulsory modular system and is an academic-accredited postgraduate short course in collaboration with the University of Westminster. The course includes a combination of distance learning and on-site training days concluding with an Assessment Day incorporating a panel of industry experts where participants present on their chosen research topic.

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Participants also have the opportunity to get a comprehensive understanding of the wider BID industry through work on the Nationwide BID Survey Boot Camp and a hugely valuable BID exchange component.


The BID Loan Fund Delivered by British BIDs on behalf of DCLG, the Loan Fund was launched in the Autumn of 2013 making £500,000 available to sites across England to facilitate the establishment and growth of new BIDs. Loans of between £10,000 and £50,000 per site are available as stage payments based on the British BIDs ‘Five Stages of BID Development’. On successful ballot, the loan would be repayable to the fund, with interest, on a pre-agreed renewal payment plan.

LOAN AWARDS GRANTED SO FAR: Bermondsey Hereford Abingdon

THE BRITISH BIDS FORMAL RESPONSE TO THE GOVERNMENT’S REVIEW OF BIDs

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Sheffield


Government Review of BIDs 2014 Produced by British BIDs on behalf of the BID Industry Collating views from Stakeholders, Local Authorities, Levy Payers and BIDs from around the Country A series of meetings, dialogues, surveys and debates incorporating the views of 130 BIDs and a total of over 175 individuals.


Ensuring Quality in BIDs

The BID concept is now well recognised in many areas and sectors around the country. Many best practice showcases are available now but often not high profile enough. Meanwhile, there have been a number of concerns raised regarding the quality of the set-up, management and governance of BIDs. Many feel that there are insufficient safeguards in place to ensure quality in their set-up and operation. At least some of these concerns potentially need a third party resolution beyond the BID and the Local Authority. The proposed measures we recommend are: 1 A communications strategy to ensure regular and positive referencing on BIDs. 2 Encourage self-regulation by supporting the British BIDs Industry Accreditation either through funding support to BID applicants and/or requiring mandatory accreditation before renewal.

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3 Consider a pre-ballot mandatory ‘checklist’ for new BID locations to act as a light-touch ‘certification’ ahead of ballot. This could be run by British BIDs or be the responsibility of the Local Authority but safeguards would be essential to ensure the Local Authority carries out its duties.

4 Require all BIDs to operate as legal entities thereby being governed by Companies House rules. 5 Provide full guidance to Local Authorities on their roles, responsibilities and obligations within the BID Legislation to ensure they are performing within their requirements. This could be produced by British BIDs alongside the existing Industry Criteria & Guidance. 6 Consider an extension to the 28 day challenge period immediately post ballot to give businesses a greater opportunity to raise concerns but do not let this preclude the start of a BID term. Additionally, require the local authority to formally notify all voters in writing of the ballot result. 7 A third party Arbiter should be created, beyond that which exists now through DCLG challenge process but not as far as an Industry Ombudsman. This would act as a critical intermediary to review cases that cannot be resolved at a local level between the BID and its respective Local Authority.


Delivery of Local Place Management Services

There is also real concern around the ability of a BID to sufficiently ‘effect change’ in their locality given that many standard ‘place management’ functions are within the hands of the Local Authority. Within a shopping centre or a privately owned and managed environment, the management team would deal with everything affecting the demands and desires of their consumer. However within a BID environment, despite many highly innovative BID projects, these are all too often delivered within an environment where the very basics of clean and safe remain unacceptable. There are some, albeit limited, examples of direct transfer of Council services across to the BID company. There is clearly further appetite from others although this is not universal and there will be many cases where there is no desire to take on direct delivery of services.

The proposed measures we recommend are: 1 Revisit the baseline services agreement model and strengthen the requirements on Local Authorities to ensure additionality of BID investment is monitored and maintained. 2 Give BIDs statutory consultee status as a matter of course at local level for planning and other resourcing decisions. 3 Give BIDs automatic Business Neighbourhood Forum status by virtue of their BID ballot success. 4 Create a specific category for BIDs within the Localism ‘Right to Challenge’ relevant body criteria to enable BIDs to opt to take on, in certain circumstances, alongside their respective budgets, the coordinated management of a variety of ‘place management’ powers including services such as markets, street trading, events and open spaces, pavement café licensing, advertising sites etc. 5 Consider greater powers for Local Authorities and BIDs for managing street nuisances such as begging, busking, taxi/pedicabs, managing utilities companies on the public realm etc. 6 Consider local powers to effect positive change in relation to vacant units on the high street, whether this be window vinyls/displays or right through to utilising the space for pop-up activities/creative spaces.

GOVERNMENT REVIEW OF BIDs 2014

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The basic foundation of the BID concept is based on the premise of local businesses jointly funding ‘additionality’ beyond the statutory and other discretionary services within a location. Many BIDs report significant frustrations around this matter, particularly in relation to their ability to enforce the baseline services agreement put in place to protect that additional investment from dwindling resources for the basic services.


Improving the Democracy and Transparency of BIDs

An important element within the design of the BID concept is transparency and this flows through a number of provisions including the requirement for consultation ahead of ballot; the formal notification to the Secretary of State of intention to ballot; the ballot itself which is run impartially through the Local Authority ballot holder; and annual reporting of spend through the billing leaflet.

a. Creation of the Electoral Register should take data from the British BIDs impartial Voter Database and the local BID contact database. Testing of this data by the Local Authority ahead of ballot should ensure sufficient scrutiny of the material

Whilst these are all useful to some degree some elements require strengthening and/or changes.

b. Electronic voting should be permitted

The proposed measures we recommend are:

c. The Replacement ballot papers process should be extended to a 14 day period

1 The Government register of the Notifications to the Secretary of State of Intention to Ballot should be made truly public so it can act as the early warning system for voters that it was designed for. 2 Consideration should be given as to whether specific proof of the scale of consultation submitted to a Local Authority prior to ballot should be strengthened in the regulations.

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3 The Regulations relating to the ballot process should be amended to cover a variety of improvements including –

d. Ballot papers should be able to be sent outside England 4 There should be a public register of the appeals made to the Secretary of State. The details of this would need refining to ensure that unsubstantiated claims are not published that might be detrimental to the concept at large.


The Public Sector in BIDs

There are concerns about the nonprescriptive nature of some areas of the Regulations leading to varied interpretation by local authorities, this is particularly true within the ballot elements. More broadly the success of the BID concept locally can be hindered by the position a local authority adopts. In particular, from the outset of BIDs there have been concerns regarding the interpretation of the ‘reasonable fee’ being charged by local authorities for levy collection and enforcement. This concern has been increasing over the years with many levy payers questioning the rationale and legitimacy of such varied charging policies around the country. British BIDs, within the Industry Criteria and Guidance, introduced an industry standard of £35/hereditament or less. There remain many that are much higher than this standard with central London ones peaking at £125/unit. Furthermore, there are additional concerns in some locations where the local authority rather than performing a ‘contractor’ role in levy collection is imposing its own rules on the BID, which is prejudicing the BID’s ability to manage their budgets and cashflow the way they choose.

Also on a more general note, the approach from the various public sector voters differs greatly when it comes to voting intention, which creates much confusion and frustration at local level given the Government support for the BID concept. The proposed measures we recommend are: 1 Provide Guidance to Local Authorities on best practice interpretation of the Regulations. 2 The pricing principles on levy collection need refining to ensure a fairer approach countrywide. 3 The option of contracting out the levy collection to a third party beyond a local authority should be investigated, which would in turn instil more competitive pricing to levy collection. 4 The principles of determining levy rules should remain with the BID proposer not the local authority. A set of broad template levy rules could be created for the industry to safeguard against having local unacceptable rules imposed. 5 Develop a Public Sector Voting Guidance Note to ensure clarity and transparency based on broad principles similar to the British BIDs Industry Criteria. This does not require wholesale yes voting but merely a presumption in favour based on published industry standards. 6 The introduction of LEPs is adding a layer of private sector involvement at a more regional level and the role of BIDs feeding into this level is critical whilst recognising a different culture of organisation.

GOVERNMENT REVIEW OF BIDs 2014

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The BID concept relies on a positive relationship with the relevant local authority. There are a variety of roles and responsibilities that a local authority is required to take on with respect to the establishment and management of a BID and these include: as custodian of the BID Regulations; as Rating List provider; as Service Provider for the purposes of Baseline Agreements; as Ballot Holder; and as Levy Collection agency.


Extending the BID Concept

After a decade of delivery there is belief and confidence in the BID concept and real impact being demonstrated on the ground. The renewal ballot success rate is running at 91% evidencing the business support for continuing the model. Having said this, with maturity and advancement comes an appetite to see longer terms where success has been proved and with this comes some potential calls for a turnout threshold linked to securing that longer term. Meanwhile there are also calls for seeing a turnout threshold at first ballot as a result of concerns that the level of consultation and engagement is too weak in some locations. However, this links back to the requirement to improve and substantiate the scale of the consultation pre-ballot.

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An acceptable turnout threshold is considered to be 40% based on the fact that the average turnout is now running at 47% but too many still fall below 40% and some even below 30%. Critically linked to the matter of turnout is the required amendments to the ballot regulations to ensure on a practical level a higher turnout is achievable.

There are real concerns developing from many BID areas around the country with regard to the potential multiplicity of levies through the possible imposition of a late night levy and/or a TBID on top of the existing BID. The nature of the traditional BID model is such that there is a direct relationship and correlation between those paying and those benefitting and the proximity of activity makes the outcomes visible to those ‘local’ businesses. There is a danger that the proposition of an additional levy for another purpose, not directly managed or governed by those businesses, would put the original levy in jeopardy at BID renewal. There is interest in investigating the scope for BIDs to be direct recipients of the Community Infrastructure Levy by virtue of their local delivery status. There is perhaps a case for mandating that a percentage of Community Infrastructure Levy raised in a BID area is paid to a BID in the same way that money is paid directly to neighbourhood and parish councils. In some cases it may not be desirable for the BID to be direct recipient of CIL funds but nevertheless there should be a direct role for the BID alongside the local authority in determining where the funds are spent and over what timescale including the option of a BID sitting on a tender panel for appointment of works.


There are inevitable concerns developing regarding the implications for BIDs of the Business Rates Review. Clearly with the income for BIDs being derived from a % levy on the business rates in a local area there are concerns over the possible deterioration of that income.

The proposed measures we recommend are: 1 Consider turnout thresholds in the context of extending BID terms in proven advanced locations. 2 Where other levy models are being developed, there should be an automatic exemption for existing BID levy payers. 3 Consider the relationship between CIL and BIDs to ensure efficient and effective local spend of these funds. 4 Extend the Property Owner BID legislation beyond London once the pathfinders have tested the broad principles of the model. 5 Careful consideration of the BID model must be borne in mind in the context of the Business Rates Review.

GOVERNMENT REVIEW OF BIDs 2014

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An appetite is developing from locations outside London to investigate the Property Owner BID model. There is limited knowledge at this stage but there is an interest in the prospect of bringing property owner investment alongside occupier investment in the metropolitan centres.


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British BIDs: A formal response to the Government's Review of BIDs