These are the questions that you have asked us about the BID. We will update this list as you ask more questions.
1: What is a BID?
‘BID’ stands for ‘Business Improvement District’. It is a defined commercial area where new funding can be raised through a ‘levy’ on all businesses within that area, to invest in initiatives to improve the local trading environment. BIDs enter into baseline agreements with the local authority and other service providers which guarantee the level of service provision in the area. These ensure that any services the BID provides are truly additional.
The first Business Improvement Association was established in Bloor West Village in Toronto in 1970. It came about because of transport infrastructure improvements (a new subway) that took shoppers quickly to other shopping districts. A number of local businesses came together wanting to invest in upgrading their area in order to attract shoppers back into it but were frustrated that not all businesses would join them. They therefore lobbied the City and the Ontario government to introduce a means of raising funds from businesses that all would pay if it was overseen by an elected body. The Ontario Municipal Act allowed this to happen.
UK Town and city centres have been losing shoppers to other locations, mainly out of town, from the 1980s onwards. The initial response was the establishment of an extensive network of Town Centre Management partnerships. Although many of these initiatives were successful, they were limited in the scope of what they could achieve. Looking to North America, it was evident that if a way could be found to introduce BIDs in the UK, this could potentially bring significant increases in the investment available.
The government announced that BIDs would be introduced to the UK in April 2001. The introduction required two pieces of legislation and these were passed in 2003 and 2004 and Kingston First became the first BID in the UK in 2005. Today BIDs in the UK are generating a total annual economic contribution of over £130 million according to the 2017 National BIDs Survey.
2: How does a BID happen?
A BID can only be formed following consultation and a ballot in which businesses vote on a BID Proposal or business plan for the area. The ballot is run by the local authority or outsourced by the local authority to a third party. All businesses eligible to pay the levy are balloted. For a BID to go ahead the ballot must be won on two counts: straight majority and majority of rateable value. This ensures that the interests of large and small businesses are protected. There is no minimum turnout threshold.
In 2014 the BID1 ballot received a 54% voter turnout, with 63% voting in favour and 61% by rateable value. This can be confirmed by Electoral Services.
3: Am I eligible to vote?
All eligible businesses within the BID boundary with a Rateable Value exceeding £1,700 will be able to vote. And remember the BID can only go ahead if you vote YES.
4: Isn’t this what I pay my business rates for?
No. Business rates are collected by Canterbury City Council and redistributed at a national level. The council spends the allocated funding on services that are both statutory and discretionary, and businesses have very little say on what these services are. BIDs differ from this as the money is collected locally, ring-fenced and controlled and managed by you. It can only then be spent on initiatives detailed in business plan that you have agreed to. The BID levy does not pay for anything covered by your business rates.
5: Does this mean that the local authority will stop providing services?
No. We have established a baseline service provision from the local authorities. Baseline statements have been obtained for the following areas:
- Highways maintenance
- Street lighting
- Licensing & enforcement
- Street cleansing
- Car & coach parking
- Community safety & CCTV
7: How do I know if it’s working?
Each year the BID will produce an annual performance report to show what the BID is delivering and the Return on Investment for levy payers.
8: Why should I vote Yes?
Voting YES to a BID in Canterbury will mean that you can expect a better marketed, maintained and managed city; you will be contributing to the £2.9 million invested to improve Canterbury over the next five years. And the BID will only go ahead if it receives more YES votes than no votes, by number and Rateable Value.
9: And if I vote No?
Canterbury will no longer have a BID. Voting no will mean that you are saying no to Christmas lights, hanging baskets, Canterbury in Bloom awards, Purple Flag accreditation, city-wide national promotions for the Summer, Christmas in Canterbury campaign, BID networking, BID footfall reporting, the free MyCanterbury platform and support of the BID Ambassadors. Without this investment we will not be able to push forward with free citywide Wi-fi and the other initiatives, services and events we support. You will lose the opportunity to make a difference to the city.
10. What are the benefits of BIDs?
Long term investment: BIDs allow businesses to influence economic change in their area by raising their own pot of money that is spent on their priorities.
Economic growth: BIDs deliver good value projects through collective procurement, promote economic growth through enhanced footfall and regional presence, establish practical links between private and public sector institutions, and attract additional inward investment.
Competitive advantage: BIDs help to establish a competitive advantage by providing an improved environment for clients and employees and better facilities for businesses.
Additional Funding: BIDs can apply for additional funding through: voluntary contributions from businesses outside the BID area; lottery funding; or grants. During BID1 we were able to raise an additional 20% on top of the levy.
Lobbying: BIDs are representative of local businesses and so they can lobby on their behalf with the local authority and other agencies to effect change. Most recently your BID CEO has been at the Houses of Parliament lobbying for a business rates reform – so your voice is being heard at a national level too.
11: How many BID areas are there in the UK?
There are now over 300 BIDs established and operating across the British Isles and they are growing at a rate of over 25 a year. In the last 12 months 71 BID ballots have been run (27 of them being new BIDs) and all but 5 were successfully voted through.
12: What will I get back for my money?
If you vote ‘yes’ you will create an extra £2.9 million over five years, Canterbury will be better promoted, better presented and more vibrant. This will help to increase footfall, improve sales and make Canterbury a more attractive, safer and better managed city. You could also see savings to your bottom line and a much ‘higher profile’ for the city and therefore your business. A BID will also increase communication between businesses and deliver results. You will be an integral part of the cities’ success and an important voice in the process.
You also gain the BID Board representing a broad range of sectors and size of business for the city centre. The Board are an amazing resource who volunteer their time, for free, to ensure your voices and priorities are the focus of BID activities. You can see who they are here: https://www.canterburybid.co.uk/the-board/
13: How long does a BID last?
A BID lasts for five years. If it is successful, another ballot may be held towards the end of this period to decide whether the BID should continue for another five years.
14: Given the difficulties the high street is facing, is this a good time to ask businesses for additional financial contribution?
The alternative is to ‘do nothing’. That means that new businesses or visitors will not come to Canterbury and existing businesses may go elsewhere, seduced by other towns that are making this kind of investment. To quote Rachel Sanders from BoConcept:
“We all know about the challenges of the high street. The situation is complex, but with good leadership, I believe we can not only fill the empty stores but create a vibrant business hub that serves all of our community. The businesses in the centre of Canterbury are interdependent. My success directly impacts my neighbour’s success and that is why I believe that a collaborative approach through BID is essential.”
15: What will the public sector contribute?
The public sector will pay the levy in the same way as other businesses in the BID area. Canterbury City Council own 17 hereditaments in the city centre and will be paying accordingly. Kent County Council own one hereditament in the city centre. Please note, Whitefriars, while owned by Canterbury City Council, it is the retailers that vote and pay the BID levy.
16: Can I opt out?
No. A positive result in the ballot will mean that all eligible businesses over the threshold and within the BID boundary are required by law to pay for a 5 year period.
17: If businesses vote ‘no’, will they still have to pay?
Yes, if a majority vote in favour by number and rateable value, the levy will become mandatory. Payment of the levy carries the same enforcement as non-domestic rates.
18: I’m a small business, will I benefit as much as the larger chains?
The levy is a percentage of rateable value so generally, you will be paying a lot less than the multiples. However, the benefits will be equitable – for example the overall town marketing and promotion activities should benefit your business in particular.
19: How do you ensure the BID investment adds value?
We will enter into baseline agreements with the local authorities and other service providers. These agreements will guarantee the level of service provision in the area and show you what the councils will continue to provide. In this way you can see who does what and be confident that the BID investment is providing added value.
20: What happens if my business closes or moves during the year? Will I get a refund?
The BID Levy is based on a Chargeable Day, in our case 13th October the start of the BID year. What this means is that whoever is liable for the Business Rates on this day each year is also liable for the full BID levy, in a single payment. This means that there are no refunds available for the balance of the year if you move out of the premises for which the levy is liable; the balance of the levy is then a matter for negotiation between you and any incoming tenant or the landlord if at the end of the tenancy.
The presence of a BID levy should arise in pre-transaction searches and questions about whether a given property is included in a BID area, and if so, the amount of levy and related matters are included in standard enquiries which are raised in every commercial property transaction.
21: Why can’t I pay in instalments, like Business Rates?
We are obliged by legislation to use the collection agent used by our local authority, which, in our case, is Civica. It costs £25.50 to collect a levy from each hereditament, a cost that would increase if we collected by instalments. It is the view of the BID Board that this money is better used to invest in the programmes businesses want to see in the city, not on collection charges.