Saffron Walden BID (Business Improvement District)
We need your views on what could be done to help businesses in the town centre to thrive.
What is a business improvement district (BID)?
A business improvement district (BID) is a legal entity - established for five years - that invests in delivering projects and services that have been identified by the local business community as having value. Typically, BIDs will focus on making the kind of practical improvements to towns and cities that will directly help local businesses. This might include anything from graffiti removal to town-wide marketing campaigns.
There are currently more than 225 BIDs throughout the UK, with another 30+ in active development. Many BIDs are on their second and third terms.
Every BID is unique in terms of its priorities. All BIDs, however, must follow a prescribed template in terms of the setting-up process. The template requires those charged with developing a BID to define exactly what improvements will be made, how much is spent on each, who is responsible for delivering them, and where the district boundaries lie. All of this must be agreed, in advance, by a majority of all businesses affected.
Although BIDs are a Government initiative, they should not be a backdoor way of forcing businesses to pay for local services. As part of the Saffron Walden BID process Uttlesford District Council will be required to define and quantify those services for which it is - and will continue to be - responsible. So, while a BID may choose to invest more in street cleaning, for example, it need only do so as a ‘top up’ to the service already provided by the local council.
More information about BIDs may be found below and at www.britishBIDs.co.uk.
Does Saffron Walden need a BID?
A BID can only be set up once ALL of the following criteria have been met:
• All businesses in the defined area have been consulted, AND
• They have had an opportunity to vote on formal proposals and a business plan, AND
• A clear majority (more than 50%) of those that vote, vote in favour, AND
• Those that voted in favour represent a greater combined rateable value than those that voted against.
So, whether or not Saffron Walden needs a BID will be determined by a ballot of all businesses affected by the BID. Those same businesses will be responsible for shaping it, paying for it, and managing it - but will ultimately also directly benefit from it.
How would a BID directly benefit Saffron Walden?
The answer to this question comes in two parts: the first revolves around the BID process itself, and second around the practical benefits that might result from that process.
A BID is merely a management tool. Think of it as a large mixing bowl, to which you then add all the ingredients needed to bake a cake. The type of cake you make is entirely up to you. The ingredients and quantities you use may vary depending on your recipe and personal preferences. How you bake the cake may be determined by its size. Either way, the bowl doesn’t affect the cake itself. It just avoids you spilling cake mixture everywhere and making a big mess.
The Saffron Walden BID will be like a bowl in that it’s a tried and tested structure to which Saffron Walden local businesses can add their own ideas and plans. What they choose to put in the bowl is up to them. The bowl itself doesn’t change, and all towns and cities start with the same one.
The other way in which a BID might directly benefit Saffron Walden is in the improvements that it could bring to the town. The only limits to those improvements are ones of cost and practicality (e.g. a television commercial to encourage shoppers to visit Saffron Walden might be rather expensive).
Local BID examples
Cambridge’s BID triggered the introduction of bowler hat-wearing city ambassadors, acting as walking, talking information centres. More than 1,100 shops, bars, café and attractions in the city centre also elected to boost visitor numbers by promoting an enhanced programme of events throughout the year, including Independents’ Week, Loving Summer, and Christmas Lights and the Big Switch-on.
Newmarket’s BID was only launched in July 2016, but already plans are in place to reduce business costs by centrally negotiating services such as trade waste management, recycling, insurance and advertising. A new website, social media campaign and extensive programme of events will help attract new visitors to the town, while investment in additional street cleaning, and improved flower and light displays will help ensure they have a good time during their stay.
Pros & cons
• A BID can only be set-up following a democratic vote
• The levy you pay varies according to the size of your business (rateable value)
• Improvement are tailored to the specific requirements of the area
• The area itself can be tailored to suit local needs and wants
• Provides business community with one voice, and the resources to deliver improvements.
• The majority rule: if a majority want a BID but you don’t, you still pay
• Improvements may focus on the majority’s needs, not your businesses’
• Requires administration and management by volunteers or paid-for professionals
• May divert or dilute other local business initiatives
• Could risk splitting local business community into those within BID area and those outside it.
How would a Saffron Walden BID be set-up and who would manage it?
The Saffron Walden BID is being developed by the Saffron Walden Town Team in close consultation with Saffron Walden businesses. The day-to-day management of any eventual BID itself is still the subject of discussion, however it will have to comply with British BIDs Industry Criteria and Guidance Notes for BIDs.
These include the following clear guidelines:
• A BID should improve the economic prospects of the area and the levy payers within it. The measurement of such impact will be a key measure as to the success (or otherwise) of the BID.
• The process for forming the board and/or committee (tasked with managing the BID) should be set out in advance, allowing levy payers to contribute to the management of the BID. Nomination, election and rotation policies should be made clear in the business plan. The chair of the BID should be independent of the local authority. The overall governance of the BID should be representative of the business area covered by the BID, and BIDs should be non-party political.
• The BID business plan must set out how information, such as year-end financial accounts, will be made available to levy payers. Arrangements for electing the board/committee must also be included. Processes for reviewing performance should be stated. Commitments should be given as to the information (e.g. board minutes, AGM minutes, etc) that will be made publicly available.
• The methodology for transparently and, where appropriate, independently reviewing the impact of service delivery throughout the term of the BID should be set out in advance. Such analysis must concentrate on the true impact that the BID is having on its levy payers and the return on investment that they have received. This analysis should be made available to all levy payers.
• The process for making changes to service delivery and expenditure on services should be clearly set out within the plan.
• The dates of the ballot must be provided, together with full details of the ballot arrangements.
• A detailed budget for each year of the proposed term should be included in the plan. This should include relevant and stated contingencies on billed levy and on expenditure. Planned reserves should be set out.
•The cost of running and managing the BID must be stated as a distinct line of the budget. This should include, for example, management staff, premises, levy collection, professional fees, etc.
• The levy rate should be calculated as the lowest amount required to provide the services needed by businesses, as identified in the research findings. The preferred method of calculating the levy is as a percentage of rateable value. Details of thresholds and caps should be provided. If inflation is to be applied, the method of calculation should be stated. In those exceptional circumstances where a banded rate is proposed, the equivalent average levy rate (as a % of rateable value) must be given for each band.
• The method for charging the levy should be made clear. It is usually either ‘daily charging’ (refunds given) or ‘chargeable day’ (no refunds). If mid-year refunds are not available, this should be disclosed. The costs of levy collection (if any) should be detailed and analysed per business premises and as a proportion of expected levy income. The plan must also detail how a revaluation of business rates and/or a revaluation of a specific business premises would be treated for BID levy purposes.
• The budget should include only that income that has been fully committed and should not include ‘in kind’ donations.
• Any type of business premises to receive either a full exemption or part discount should be detailed. Arrangements for untenanted properties should be set out.
• The proposed services must be in addition to those provided through business rates and should not replace such services.
• Operating costs should not exceed 20% of total expenditure. Costs of collecting the levy are undesirable but, if required, should not exceed £35 per business premises or 3% of billed levy, whichever is the lower.