BUSINESS IMPROVEMENT DISTRICTS WORKING GROUP
OUTLINE OF REPORT TO MINISTERS:PAPER 05/05
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Introduction
This paper sets out the suggested structure and content of the Working Group's Report to Minister, and an initial list of Conclusion and Recommendation for discussion.
Section 1: Introduction and Background
- BIDs concept and examples - USA etc
- Scottish Executive consultation paper and responses
- Developments in England
- Ministerial announcement and remit
- Working methods and timetable
- Membership and representation
Section 2: Use of Pilots/Pathfinders
- Approaches and funding - demonstration projects or pathfinder pilots?
- Categories of BID for pilots/projects
- Planning -
- Need for business plan
- Establishment of service baselines - specification of additional services and benefits
- Identification of costs
- Selection of pilots and projects
- Management of pilots and projects
- Timescales and evaluation
Section 3: Involvement of Property Owners
- Issues to be resolved
- Type of owner involvement
- Flexible approach
- Possible model for full participation
Section 4: BIDs in Rural Areas
- Issues of critical mass and focus
- Conclusions
Section 5: Guidance on Setting up a BID
- Discussion of key issues and recommendations
- Draft guidance document (in Annex)
Section 6: Summary of Conclusions and Recommendations
(a) There would be merit in pursuing 2 approaches concurrently to the introduction of BIDs in Scotland: "pathfinder pilots" and "demonstration projects". Pathfinder pilots would receive Scottish Executive assistance for the administration costs of setting up the BID but would otherwise be fully levy-funded in their operation. Demonstration projects would be smaller in scale and fully funded by the Executive, subject to resources being made available.
(b) During this initial pathfinder piloting and demonstration project phase, attempts should be made to ensure that there are projects in each of (5) categories namely: [to be completed].
(c) Candidates for pathfinder projects status should be invited by open bidding. Demonstration projects should be led centrally in the specified targets groups.
(d) Demonstration projects might be 6 months to 12 months duration and be mounted very quickly. Pathfinder projects would have a minimum of 12 months and possible 2 or 3 years. New evaluation processes would need to be built in.
(e) There should be a BIDs Supervisory Board for the piloting/demonstration phase, with representation similar to the BIDs Working Group.
(f) The initial planning of a BID proposal is absolutely key to its future success. Among the key aspects of this are:
- the need for a properly-documented business plan
- the need to establish quantitatively the existing service baselines in the local authority activity to be developed and the additional services to be provided
- the need to establish quite clearly the quantifiable benefits to the local businesses these additional services would bring
- the identification of the costs of the proposals and the size of the levy this would entail
- the need for involvement, and support, of the relevant local authority in the BID proposal being led by the local business community.
(g) In general any BID proposal should have the involvement and support of the owners of the business properties in question. It would not be necessary however to involve all intermediary tenants or landlords.
(h) The involvement of owners should, however, be discretionary: a BID proposal might be subject to voting arrangements which required a majority of owners to be in favour, or it might not.
(i) The Circle Initiative model provides a suitable basis for BID projects involving owners as well as tenants [expand].
(j) A BID proposal should not require the prior involvement of a minimum proportion of businesses in the area in question, but should have the full involvement and support of the local authority, and the more businesses which are involved in drawing up the proposal the greater the chances of success.
(k) A BID proposal should identify all the businesses (occupiers and owners where appropriate) in the area in question and the launching of the BID should be conditional on at least two-thirds of occupiers (and owners if appropriate) voting in favour, and those voting in favour representing at least 50% of the total rateable value of the area covered by the BID.
(l) For larger scale BIDs these should be operated by a fully fledged board, constituted as a company limited by guarantee. [Local authority membership?]
(m) For small scale BIDs a more informal arrangement may be appropriate.
(n) Wherever possible a BID proposal should draw on other business development and regeneration initiatives in the area in question, be linked or integrated with them, and should seek supplementary sources of funding from Government grants etc, over and above use of the BID levy.
(o) The BID concept is much more difficult to apply in rural areas, because key success factors are critical mass and small geographical area. Nonetheless the Working Group suggests that there may be some small-scale initiatives which could be viable in rural areas [to be completed].
(p) Rural BIDs are likely to be much smaller in scale and involve perhaps as few as 5 businesses.
(q) There is sufficient support for the BID concept in Scotland, Ministers should seek Parliamentary approval to legislation which would provide for Business Improvement Districts to be put into place (provision for compulsory levy subject to voting thresholds).
ANNEX Guidance Document on Setting up a BID (current draft attached to paper 04/14).
BIDWG Secretariat
January 2005