Property Owner Business Improvement Districts

There are now over 200 business improvement districts (BIDs) in the country.  BIDs are democratic, business-led vehicles with an ability to raise a mandatory levy, based on rateable values, to invest in their areas.  They focus on issues of importance to local ratepayers, and the levy is paid by ratepayers.  Since BID legislation first emerged in 2003, there has been a lobby for a levy to be charged on property owners as well as on the payer of business rates. In many places property owners are able to bring a different perspective on, and longer term funding for, the changes necessary for a place to be successful.  After 14 years of waiting the Local Government Finance Bill now brings forward the right for property owners to start their own BIDs.  This builds on the experience of three London BIDs who, because of a happy coincidence back in 2009 of the business rate supplement and Crossrail, have been able to bring forward property owner BIDs earlier than anyone else.

The note, prepared by Dentons and the BIDsBusiness, sets out some of the challenges and opportunities that the draft legislation offers.  Most importantly it argues that it would be helpful to be able to separate ratepayer and property owner BIDs.  In many areas they will overlap but there should be an ability for a property owner BID to come forward without a ratepayer BID.  Separately there are issues in relation to BID set up, information requests and governance that need to be settled for both ratepayer and property owner BIDs.  The legislation could be used to address those issues.

With some refinement the Bill could genuinely help BID areas and provide a new energy for BIDs, an encouragement of long term vision and significantly deeper pockets to fund change.  Let’s hope that the opportunity is seized.

BID for success

Business Improvement Districts now number over 150.  They offer a real local voice for businesses.  Some are working towards neighbourhood plans, although hamstrung by the lack of a real voting mechanism to be able to force through proposals.  CLG have published plans to allow property owners to set up BIDs, running in parallel with a BID run by tenants.  Disappointingly this will only be possible for the moment in London since the legislative framework was pushed through as part of the Crossrail funding proposals and requires a business rate supplement to be in place.

Despite some progress in giving BIDs a real role in the planning and economic development world there is one area from which BIDs are being excluded.  Local communities will benefit from between 15% and 25% of Community Infrastructure Levy being paid to them.  There is no provision for any part of this to be paid to BIDs.  In many ways BIDs are more democratic and more accountable than the neighbourhood forums to which the community share of CIL will often be payable.  Where there is a BID why not allow them to take, say, half of the CIL money raised in the area.  That would give local businesses a real incentive to support new development and, probably, a more mature organisation through which to ensure that the infrastructure that CIL promises is actually delivered.