A BID is brought in through a democratic ballot process and the services provided are additional to those delivered by the Council. Approaching 15 years since their inception, BIDs are becoming more mature and within a few years Central London will ‘read’ as a patchwork of BIDs aligning to each other’s boundary.
A successful BID has to have 'buy-in' from the majority of those who will finance it – both for a successful vote and also to ensure the partnership evolves in a positive environment.
A BID seeks to provide greater strategic context for business, galvanize the business community, statutory authorities and wider stakeholders behind a common vision for the district and generate an enhanced income stream which would benefit the whole area in terms of service provision. It would provide the business community with an ability to influence and help shape the future.
Governed by Government legislation and regulations, BIDs are statutorily established once voted for by the majority of businesses in an area and have a maximum term of five years before returning to their electorate for renewal. Once a majority vote had been achieved, a BID levy becomes mandatory on all defined ratepayers.
The ballot needs to satisfy two tests – a majority in number of those voting and a majority in proportion of rateable value of those voting. The BID levy can only come into effect if these two tests are met. The BID levy is then applicable to all eligible businesses. All eligible businesses in a proposed BID area are entitled to one vote per hereditament. Some businesses occupying more than one hereditament within the area may therefore be entitled to more than one vote.
To ensure neutrality, the BID ballot is administered by the Council Returning Officer and their electoral services staff. It is arranged in line with rules set out in the BID regulations (2004) as approved by Parliament.
Property owner BIDs are relatively new by comparison with occupier BIDs, with the regulations for their creation only passed into law in 2014. There are currently only three property BIDs in the UK, two managed by Heart of London and one by New West End Company.
Property BIDs were created to allow owners to contribute to their area in a similar way to that achieved by the successful occupier BID model over a number of years, ultimately benefitting the property owners through increases in the value of their property and growing prosperity of the area.
The key difference between the mechanics of occupier BIDs and its property counterpart surrounds the composition of the business constituency where rather than being provided the list of potential voters from the Council rating lists the BID proposer is charged with providing an audited list of owners within the defined geographical footprint of the proposed BID. The proposer is also asked to define the owner as they apply to the emerging BID area.
Typically, a Business Improvement District is within a local authority boundary but in April 2013 the Government introduced Cross Boundary Business Improvement Districts enabling BIDs to operate across local authority boundaries. In London the first cross boundary BID was established by the South Bank Employers Group, where the geographical footprint is shared between LB Lambeth and LB Southwark.
Essentially the mechanism enables the shape of the business district to better mirror the business makeup and character of the area rather than be hindered by what are often rather artificial borough boundaries. A similar mechanism is used to establish a cross boundary BID except that the BID proposer is required to undertake two ballots, one in each borough, an overall majority required for success.
The regulations provide that the councils involved in the BID proposal work in partnership and agree who will be the ‘lead authority’. In the absence of agreement, the borough with the largest number of hereditaments in the proposed area being deemed the lead.
There are over 300 BIDs in the UK, approaching 10% more than 2017, suggesting an increasing benefit to the local business communities where BIDs are operating. There are currently c50 BIDs at a development stage, double that at the same time in 2018 further confirming their increasing popularity, not just amongst the business community but within the public and third sectors given the significant reductions in public funding over the past 5-10 years.