Business Improvement Districts (BIDs) have been transforming business landscapes across the UK since their advent through the Local Government Act 2003 and subsequent regulations in 2004. Born out of the Circle Initiative, the first five pilot BIDs were set up in London with funding from the London Development Agency. The pioneer UK BID, ‘Kingston First,’ launched in Kingston upon Thames in January 2005, and by the end of 2018, the number of operational BIDs reached 303 across the UK.
One of these BIDs is Bournemouth’s Coastal BID, an independent, not-for-profit entity that seeks to represent and empower the diverse community of levy-paying businesses in the area. The mission of BIDs like the Coastal BID is to manage and promote their territories, creating an optimal business environment. In fulfilling this mission, the Bournemouth Coastal BID aims to establish itself as one of the leading BIDs in the country.
Understanding the Business Improvement District Levy
The BID Levy is an additional contribution, over and above Business Rates, payable by businesses with properties within a BID area. It’s crucial to understand that this levy applies to all businesses within the BID boundary, regardless of whether or not they participated in the voting process. The BID’s formation is contingent on obtaining average consent from the businesses that did vote, not unanimous agreement from all businesses.
The Journey of Bournemouth’s Coastal BID
The birth of a BID involves a comprehensive ballot process, wherein all eligible businesses within the proposed area can vote on the Business Plan. This process is handled independently to ensure total confidentiality – in Bournemouth’s Coastal BID’s case, the Electoral Reform Service took the reins. A BID can only go ahead if it achieves a ‘yes’ vote from at least 50% of the participants, and these votes must represent at least 50% of the total rateable value of those voting.
Once approved, a BID is managed by an independent, not-for-profit company. A board made up of representatives from the participating businesses, elected by their peers, is entrusted with implementing the Business Plan approved during the BID ballot.
The Financial Implication of BIDs
The core funding for BIDs comes from a small levy, usually set between 1% and 2% of the rateable value of the eligible businesses. For the Bournemouth Coastal BID, the levy was fixed at 1.5% as detailed in the Business Plan. This percentage is not susceptible to inflationary adjustments and remains unchanged for five years. Encouragingly, for the majority of businesses (61%), this amounts to less than £1 per day.
In June 2022, Bournemouth’s Coastal BID embarked on its third consecutive five-year term, following a successful ballot where it garnered 78.70% of the ‘yes’ votes from the levy-paying businesses. It satisfied both crucial criteria: winning more than 50% of the ‘yes’ votes and representing a majority (92.13%) of the total rateable value of all voting businesses.
However, it’s worth noting that only 28.44% of the area’s businesses took part in this pivotal vote. Consequently, the fate of the larger majority was determined by this active 28.44%, with 77% voting in favour of the BID. If your business is within the BID’s jurisdiction, did you exercise your right to vote? Were you even aware of the vote? Participation in the BID voting process is of vital importance as it shapes the business environment for everyone, regardless of their involvement in the vote.
For a detailed look at the upcoming initiatives and projections, you can peruse the 2022-2027 Coastal BID business plan here.
Simplified Explanation: Business Improvement District (BID)
What’s a BID? – BIDs are partnerships led by businesses to provide extra services to local businesses in a specific area. This can include additional safety measures, cleanliness, and environmental services that local authorities don’t cover.
How’s a BID created? – A BID is established by the local authority or a business owner with an interest in the area. They submit a proposal and business plan to the local authority, who then organises a vote among businesses in the area. If a majority of businesses approve, the BID is created.
What’s the BID levy? – To fund the BID, an extra charge (levy) is added to business rates bills in the area. This money is used for the projects that benefit local businesses.
Who pays the BID levy? – Businesses within the BID’s geographic boundary pay the levy, which is usually between 1% and 4% of the business’s rateable value. There may be some relief from the BID levy for certain situations, like charities.
How long does a BID last? – A BID can last up to 5 years. Once this period ends, if the businesses in the area want to continue, they have to hold another vote.
Who manages the BID? – The BID is managed by a special body, usually a not-for-profit company. They’re responsible for carrying out the BID’s plans and projects.
What if there’s a problem with the BID? – If there are issues with how the BID was established, businesses in the BID area can appeal to the Secretary of State for Housing, Communities and Local Government. You can send your appeal by email to NDR@levellingup.gov.uk or by post to:
The Secretary of State
c/o Local Taxation Division
Department for Levelling Up, Housing and Communities
2nd Floor, Fry Building
2 Marsham Street
London, SW1P 4DF
Other complaints about the BID or the local authority should be taken up with them directly.
Unhappy with a BID? – If you have complaints, first try addressing them with the BID company or local authority. If issues persist, you can contact the Local Government Ombudsman at:
The Local Government Ombudsman
PO Box 4771
Or if the BID body is a limited company.
Navigating Business Success with The Bournemouth Observer.