Written evidence submitted by British BIDs [HST 050]

 

Executive summary

  1. The 300 Business Improvement Districts are successful and are now investing over £131million into the UK economy. They make 300 towns and cities vibrant and successful. They support placemaking, safety and security, inward investment, and have moved from the original and very successful ‘crime and grime’ and street beautifying of their first few years to now managing and stimulating inward investment, experiential retail, curating and supporting the changing nature of the high street, engaging in planning issues, developing a cultural response in their towns and cities, and bringing together property owners and commercial agents. We ask that the MHCLG review of BIDs be reopened, Property owner BIDs legislation be brought back, local authority permitted development rights be amended, the BIDs loan fund be extended, the landlord and tenant act be amended, town centre project funding be made available, Clean Air Zones be extended, and the business rates review be wide ranging and innovative.

British BIDS

  1. This submission is from British BIDs (Bb) the well-established membership organisation focused entirely on serving the 300 Business Improvement Districts in the British Isles. Bb provides advice, training, conferences, research, accreditation, access to a government loan fund, ballot support, products and services. We have over 100 members across the sector and we have a team of BID practitioners providing information advice and guidance to BIDs across the country.
  2. This submission contains feedback from these members, identifies what is currently happening and proposes new plans and support needed.

What are Business Improvement Districts

  1. A Business Improvement District [BID] is a business-led and business funded body formed to improve a defined commercial area. They came into being following the 2003 Local Government Act and are covered by the 2004 BID regulations from the Ministry of Housing, Community and Local Government.
  2. The benefits of the 300 current BIDs are wide-ranging and allow businesses to decide and direct what they want in their area, be represented and have a strong voice in issues affecting their trading area. The BID collects a levy, the money from which is ring-fenced for use only in the BID area. This results in increased footfall and spend, improved staff retention, reduced business costs, and enhanced marketing and promotion activities in the area. A BID is a commercial company, with a Board, that enables businesses to work together with other stakeholders to plan infrastructure, work on pollution, improve traffic flow and movement, give guidance in place shaping vision activities, have powerful networking opportunities with neighbouring businesses, and allow assistance in dealing with the Council, Police and other public bodies.
  3. The BID mechanism allows for a large degree of flexibility and as a result BIDs vary in shape and size. The average size of a BID is 300-400 business premises, with some of the smallest having fewer than 50 premises and the largest at over 1,000. Annual spending is typically £200,000-£600,000 but can be as little as £50,000 per annum and as much as £2 million.

The issues - size and scale of problems

  1. The problems facing the high street are well documented. A mixture of the growth of the internet, declining real spending power, increased rents, increased business rates and changing lifestyles and habits have all affected the look and feel high street.
  2. Many BIDs believe that transforming the fortunes of high streets is eminently possible. The growth of high quality visitor experiences, the increasing integration of service industries into the retail mix, and a deeper understanding of people's need to visit our towns and cities for far more than just 'shopping' is allowing some town centres and their high streets to change and thrive. 
  3. Town and city centres are places which can support a rich mix of social, cultural and commercial activity and their ability to become a destination of choice and offer experiences to attract locals and visitors and rival the convenience of out-of-town retail and online shopping is becoming increasingly important.

What is working – the role of BIDs

  1. BIDs are a creative and innovative business led solution, and around the world they are shown to have a major impact on their communities. In the United Kingdom they have been particularly successful. The Bb annual survey of BIDs across the British Isles shows a story of growth and success and strong evidence of the business community working together to develop strategically. The active BID community now totals 300, an average of 25 new BIDs have come into existence each year since 2012, and there are some 50 new and renewal ballots taking place each year, an average of one per week.
  2. Last year the combined spending and investment by BIDs was £131,219,057 in all BID areas in the British Isles. This is an annual and growing investment in making the business community more innovative, productive and successful.
  3. BIDs are voted in initially and then every five years; their success can be measured by the fact that the success rate for 472 ballots and renewal ballots from inception is running at 92.8%, with a total number of successful ballots of 438, and a failure rate of 7.7%.

What BIDs are doing

  1. BIDs, their boards and their teams respond to the very varying business needs of their communities, but they have moved from the original and very successful ‘crime and grime’ and street beautifying of their first few years to now address a range of more strategic issues by managing and stimulating experiential retail, curating the high street, supporting the changing nature of the high street, engaging in planning issues, developing a cultural response in their towns and cities, and bringing together property owners and commercial agents.

Inward investment

  1. Many BIDs are deeply involved in inward investment, working on both local and central government projects, working with LEPs and executive Mayors, on regeneration of town centres, transport projects and place making capital investments. This inward investment activity needs to be more fully recognised in the government vocabulary about BIDs

Experiential retail and Smart cities

  1. BIDs are increasingly incorporating a more experiential element into their business plans. As the retail industry is undergoing a major transformation as e-commerce disrupts traditional brick-and-mortar store models and gives rise to new modes of experiential retail, so BIDs are applying the same thinking to the high street. This experiential retail trend is being driven by a number of factors, including the increasing popularity of e-commerce, the decline in traditional department store traffic, and the proliferation of mobile devices.
  2. Local authorities and BIDs are exploring ‘smart cities’ as a part of this development; such work needs to be supported and stimulated and those Local authorities with plans for “smart city” developments need access to project loan funding. Across the world smart city development is key; funding needs to be made available.

BIDs and the Culture sector

  1. The role of culture and the arts as an innovation tool is very evident, often BID led. This resonates with the “Improving Places” report commissioned by Arts Council England, the Mayor of London and King’s College London that highlighted how BIDs and the Culture sector improve places by working together. The report made the case for greater collaboration and presented examples of how BIDs are working with cultural organisations, including festival and event organisers, to drive economic growth and help their communities thrive. The report highlighted how festivals and events play a role in place branding by helping to promote an area as distinctive and attractive, increase footfall and reach new audiences.
  2. BIDs recognise the connections between culture, place branding and placemaking and use festivals and events as a tool to improve the image and the reality of a place; many BIDs see events as contributors to social cohesiveness and social incentives as much as major contributors to the local economy and recognise the role of festivals in influencing a sense of place. Many BIDs recognise that festivals influence destination perceptions and attachment when considering event design, purpose and outcomes as well as the direct economic outputs which are often a key performance indicator.

The Changing nature of the high street

  1. It is very clear that the make up of the High street is changing fast, as the cultural dividend and the experiential provision changes the successful high streets.
  2. One major change has been the the growth of new sorts of food and beverage on the high street. The growth of the coffee culture is mirrored by design breweries, cocktail bars, pop up eateries and the like, which BIDs are supporting with enthusiasm.
  3. At the same time remodelled professional services are moving back into the secondary shopping areas of our towns. Legal and financial services are becoming more consumer focussed, linking their internet marketing to their physical presence and BIDs are working on these area’s marketing strategies.

Safety and security

  1. BIDs are involved in awards and campaigns that support excellence – such as the national Best Bar None awards that recognise excellence in quality provision, and the national Drinkaware campaigns that support sensible healthy drinking.
  2. The national Purple Flag award, managed by the ATCM, is supported by many BIDs across the country, bringing together the local authority, businesses, the police and emergency services, the local churches and hospitals.
  3. Similarly, many BIDs part fund police, provide their own rangers, fund street pastors, fund Business Crime reduction partnerships, and keep the safety and security of the town centre under control.

Independents projects

  1. Many BIDs recognise that it is the ‘independents’ who keep the high street vibrant and active for many people, reinforcing the experience and experiential retail on the high street. It is good to see that the MHCLG has brought back the Great British High Street competition; we ask that more such projects are developed further by government and BIDs are keen and able to help

Curating the high street

  1. A key new strategic approach for BIDs involves owners, sometimes local authorities, bringing brands and retailers that are noticeable onto a high street. This process of attracting exciting new tenants creates the opportunity to mix and match them. The focus has also led to a major shift in the way agents act on behalf of their clients.
  2. Some landlords have taken leasing into their own hands where possible rather than relying on what many describe as the archaic Landlord and Tenant Act 1954 to attract the right mix of brands, offering a whole range of leases including base and turnover rents, a blend of terms, shorter leases and, should the right retailers warrant it, rents below market level. We thus ask that the Act be reviewed to allow greater innovation and flexibility.

BID meetings with groups of letting agents

  1. One key task that some BIDs are taking forward, and would be keen to do more, is bringing together the key commercial letting agents in a town. This is an attempt to mirror the idea of curating the high street, but clearly without any of the force of ownership.

Property owner BIDs

  1. A key development that many BIDs are passionate about is the extension of property owner BIDs outside London.
  2. They have been successful in London and around the world.  They were proposed last year, and then disappeared from the legislation. Some BIDs are developing voluntary schemes but a return to the legislative process would be an extremely powerful tool for government to impact on the high street.
  3. It would provide powers for BIDs to require the co-operation of remote landlords to create special purpose vehicles and jointly managed property portfolio to properly create a vision for otherwise vacant buildings and bring them back into active use in a way that makes strategic sense where fragmented ownership of buildings does not allow.

Permitted development rights

  1. Recent changes to the planning system allowing change of use from offices to residential use has not been helpful, reducing the ability of the local planning authority and stakeholders to curate the town centre they need and want, although it has allowed residents to move back into town and city centres. Thus, we believe Permitted Development works more by accident than design. We ask that government amends the planning system to introduce a ‘Presumption to convert commercial to residential’. This would allow commercial property to be converted unless the local authority can justify their retention for commercial use and would allow the power to curate commercial areas within them.

Vacant spaces control

  1. We ask that there are increased powers for to local authorities to intervene where remote landlords with empty properties are not co-operating, often retaining an unrealistically high rent and thus obstructing the interests of independents and local businesses to take up leases to bring them back into active use.
  2. This would allow the BID and the local authority to meet with the owners, allow window-wraps, introduce pop up uses until an appropriate tenant has been secured, and even have the power to request a forced sale to allow for community possession and use of the building.

Sustainability and air quality

  1. Sustainability and air quality are key emerging issues, with Clean Air Zones in Nottingham, Southampton, Leeds, Derby and Birmingham, and projects such as The Airlabs CleanAir bench on Bird Street in London. We ask that Clean Air Zones be extended and supported with adequate funding.

Local growth Fund

  1. Local Growth funding, allocated according to the strengths of each LEP’s strategic economic plans has been used to fund economic projects ranging from Business Growth Hubs, to building new colleges. We ask that the impact of EU funding changes is made more explicit and also that BIDs are fully recognised in the process.

MHCLG loan fund

  1. The BID Loan Fund is an extremely successful initiative funded by the Ministry of Housing, Communities and Local Government to assist with the development of new BIDs in town and city centres in England. To date, 24 loans totalling £782,135 have been granted. The scheme is administered on behalf of MHCLG by British BIDs.
  2. We believe that the loan fund is a vital tool for supporting the development of new BIDs. It is to be reviewed and we ask that it be extended to help more new and different sorts of business communities. BIDs have been successful, they clearly work and the loan fund would allow further development of BIDs, particularly in areas where greater help is needed.

Local authority BID loan funding

  1. The Local authority BID loan funding toolkit was developed by Bb and allows local authorities to provide a loan fund to BIDs at a local level. Based on locally agreed criteria alongside the nationally proven methodology, the model has been trialled and successfully implemented. We ask that MHCLG support and promulgate this methodology.

BID review by Ministry of Housing Communities and Local Government

  1. A 2013 government review of Business Improvement Districts, with significant engagement from the sector, strengthened the role of Business Improvement Districts so that they could better support their local areas.
  2. A further detailed government consultation on BIDs in 2015 went no further, and we are keen to get it brought back so that some key issues can be resolved including: barriers that put off businesses from considering setting up a Business Improvement District, the role of property owner Business Improvement Districts outside London, sending Ballot papers outside England, improving current legislation, and transparency.
  3. We ask that this list be extended to include term lengths of BIDs, balloting procedures being updated and modernised, improved local authority relationships, levy collection costs etc.

Business rates and fairer funding scheme

  1. Business rates are clearly a very major issue for BIDs and their members. Business rates in England raise £25 billion per year – about 5% of the UK tax-take. Unlike the other main national taxes, they are collected locally, hypothecated to local government but currently rarely spent in the areas where they are collected.
  2. We thus welcome the review of the business rates system by the Ministry of Housing, Communities and Local Government. We note Local Authorities will retain 75% of locally collected business rates, and believe it is vital that the business rates retention system operates as smoothly as possible and ask that BIDs be fully involved in the review and that it be wide ranging and innovative.

Recommendations

  1. We ask that government:
    1. Supports and celebrates BIDs as a key driver for improving high streets
    2. Amends the planning system to allow the Local Planning Authority the power to curate business areas
    3. Reviews the landlord and tenant Act to allow greater innovation and flexibility
    4. Enables city funding by way of new and innovative funding lines to replace some of the existing EU funding 
    5. Extends, following the proposed review, the current loan fund to allow more BIDs to develop, and allow more innovative rôles for BIDs.
    6. Reactivates the BID review that MCHLG started in 2015 and consider more innovative ways of assisting BIDs, by way of extending their terms beyond the current five years, enabling electronic balloting etc.
    7. Brings back onto the agenda the plans for Property Owner BIDs, that were proposed but then disappeared from the legislation.
    8. Extends Clean Air Zones and supports them with adequate funding
    9. Ensures that the business rates review to be wide ranging and innovative
    10. Provides long term town centres funding and involve BIDs who are keen and able to help

 

 

June 2018