A Business Improvement District (BID) scheme is a business led initiative supported by government legislation which gives local businesses the power to ‘raise funds locally to be spent locally’ on improving their trading environment or trading prospects. There are now over 300 BID schemes operating across the UK with 8 in Cornwall.
BID schemes are ‘business led for business benefit’ and operate in clearly defined geographical areas, often but not exclusively, town centres. They are not local authority led schemes although Cornwall Council is responsible for running the ballot and collecting the levy on the BID Company’s behalf assuming the BID is approved. Unlike business rates, all the money collected remains in Newquay to be spent on the priorities identified by businesses.
The process of developing a BID involves extensive consultation with businesses to establish what improvements they want and may be prepared to pay for.
The BID programme is primarily funded by the private sector although any non-domestic rate payer will be eligible to pay including organisations in the public or voluntary sector that have premises over a rateable value of £7,500 within the defined Newquay BID boundary.
The BID is funded through a levy on rateable value. If Newquay BID were to commence a third term, the levy would be based on 1.1% of the rateable value of the premises against the new ratings 2017 list generating circa £150k per year each year for five years.
BIDs are viewed by many organisations as a fair and affordable way of creating a ring-fenced fund for 5 years that is managed by business for business through a private sector led, not-for-profit company.
BIDs are about new investment not about placing additional tax burdens on businesses. Where BIDs are successful, businesses will see a return on their investment. There is clear evidence of the success of BID schemes which have led to increased footfall, higher spending, cleaner, safer and more vibrant towns.
Following consultation with businesses, a business plan is produced which outlines the key aims and objectives the BID will lead on for the upcoming 5 years. A ballot is then held where each business has the opportunity to vote ‘yes’ or ‘no’ to the BID. For the BID to be approved, of those who vote, two tests must be met:
- More than 50% of those who vote must vote ‘yes’
- Of those ‘yes’ votes, they need to represent more than 50% of the total rateable value of all votes cast
If these conditions are fulfilled payment of the levy for the next five years becomes mandatory for all businesses regardless of how they voted.