BUSINESS IMPROVEMENT DISTRICTS WORKING GROUP: BIDS: KEY PRACTICAL ISSUES FOR INCLUSION IN GUIDANCE DOCUMENT:PAPER 05/04
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Introduction
1. Paper 04/14 identified a range of key practical issues for discussion by the Group and for subsequent inclusion in the Guidance document, a draft of which was attached to paper 04/14. This paper highlights those topics and summarises the views expressed to date on them.
2. The Working Group is asked to reach final views on these key issues.
Issue 1: Voting thresholds - what level should they be and should they be stated in legislation or kept flexible by allowing BID boards to set them? (cf Page 6 of draft Guidance).
3. Of those who have responded on this issue the FSB, SCC, and COSLA believe that the threshold should be set higher than 50% of those who vote and of the total RV involved. The SCC believes it should be at least two-thirds both by number and rateable value of all those eligible to vote. This would allay the concerns of the smaller businesses who may fear that larger ones will push through a BID if based on rateable value alone. The added advantage of this would be that BID proposals would have to be fully consulted on to ensure business support, and the benefits would have to be directly attributable to all the businesses who pay the levy. The disadvantage is of course the fact that very few BID projects may get off the ground due to lack of this level of support. Is a possible compromise 67% of number of businesses and 50% of total rateable value?
4. ATCM believe, however, that differing from the English system may cause confusion and that businesses would prefer consistency. In addition ATCM made the point that as there are no minimum turnout figures set for parliamentary elections then the same should be the case for BID votes. However it could be argued that BIDs are very much a voluntary concept which should only go ahead if businesses support the proposals, whereas elections have to happen and governments have to be elected.
5. Boots plc suggest that the minimum turnout figure should be flexible to an extent, although at least 20% of the relevant businesses should participate.
Issue 2: Baseline provision of services - Should the legislation state what the appropriate levels of service are, if so how? (cf Page 7 of draft Guidance).
6. Those who responded on this issue (ATCM, Boots, SCC and FSB) agreed that this was a crucial issue that had to be resolved in advance of the vote going ahead, and with the agreed services to be retained and those additional clearly set out in the business plan. This may be difficult to set out in statute. It may be worth considering whether LAs could be required to participate in agreeing baseline services via legislation. Ultimately the setting of baseline levels of service must be for the BID proposer and the relevant local authority to set out in the BID proposal. Is there any further guidance which can be offered?
Issue 3: Local Authority Veto - Views on the criteria required for an LA to use its veto. (cf Page 7 of draft Guidance).
7. The main view here was that any veto should be severely restricted to where BIDs have an adverse effect on current LA development plans, or where there was very low evidence of business support for the BID project. It was also stated that the burden of proof should be on the local authority and evidence would have to be provided by it to back up its reason for using the veto power. The view was also expressed that there should be a right of appeal for businesses to Ministers, as in England.
8. COSLA believe that where a local authority holds the view that a BID would have a negative effect on its plans, but were prevented from using its veto due to lack of evidence, then this could inhibit the success of a BID due to lack of local authority buy-in.
9. Such a BID will arguably only work if there is a genuinely constructive partnership between business and local government, is there a case for arguing that any BID proposal must have full support from the local authority.
Issue 4: Initial support for BID - Should there be a minimum level of support in place before a BID can proceed? What would this be? Should this be outlined in legislation? (cf Page 13 of draft Guidance).
10. Boots, SCC, FSB and COSLA would all like to see a minimum percentage of number of businesses in favour of a BID before a BID ballot can go ahead. Figures between 5-25% are suggested. ATCM are of the view that this is not necessary as long as an audit trail of consultation with businesses is required from the BID proposer. How practicable is it to require the BID proposer to establish the total number of businesses in the area? Would an alternative approach be to set a minimum number of businesses (eg 5)?
Issue 5: BID Boards - Aside from a company limited by guarantee are there any other options for BID boards? (cf Page 26 of the draft Guidance).
11. Those who responded supported the concept of a company limited by guarantee. The business sector also reaffirmed that the BID board must be business-led. COSLA noted that the guidance should include a reference to ensuring local authorities are involved in some fashion on the BID board. Is the Group content with the position set out in the Guidance, and how should the local authority participate where a limited company is set up?
Issue 6: Measuring progress - Is there similar information in Scotland to that outlined in the guidance document (page 28) that we can draw on to help BID projects measure progress, or identify what additional services would assist growth?
12. Those who responded made it clear that this was a critical issue for BID projects. Without demonstrable benefits then it will be very difficult to get any projects off the ground. No ideas were expressed as to how to do this, although it is recommended that any objectives should be SMART. Is it not possible for the existing Scottish Executive economic, statistical and planning reporting mechanisms to be used to assist them? Or will this generally be dependent on the monitoring by the BID Board itself of progress towards the defined benefits in the BID proposals.
Issue 7: Additional funding - What additional funding streams are available that BID projects can access? European Funding? Lottery Funding? (cf Page 33 of draft Guidance).
13. Only one member submitted advice on this point. Boots argued that the BID levy will in practice form only a part of the final funding pot for the BID and that experience from the early English BIDs is that this revenue from the BID levy forms no more than half the total pot. Is there no further guidance that Working Group members can offer on complementary sources of funding?
BIDWG Secretariat
January 2005