Question: What is a BID ?

The Government formally announced on Tuesday this week its intention to introduce a North American approach to regeneration, over here in the UK.

Via new legislation, Government will create Business Improvement Districts (BIDs): an additional business rate, agreed between local businesses and councils, to assist in paying for new projects such as improving existing street landscapes, and improvements in street furniture and public open spaces.

The announcement follows consultation with stakeholders via a Government Green Paper last year (Modernising Local Government Finance), when the merits and dis-benefits of introducing a supplementary business rate were aired.

The announcement comes with a caveat.

Details of BIDs will largely be left to local agreement, including the area it would cover, the make-up of the local partnership and the decision-making process for the plans for spending the money.

It is envisaged that legislation will require a 'contract' between councils and businesses, so that businesses (presumably owners but perhaps tenants too) would know in advance how much the rate would be, and what it would be raised for. Once the contracts are made, and a scheme is endorsed by a majority vote amongst the partnership, then the rate would be payable by all businesses in the area, not just those who voted for the additional rate.

It is understood that whilst businesses could take the lead in developing plans for spending the additional rates, councils would remain accountable for the expenditure, and would need to be satisfied that the money was to be properly spent, and represented good value for money.

BIDs are already in operation in London, on a voluntary basis. Government is now seeking to build on some successes, and the support that was expressed as a result of the Green Paper last year.

It is certainly a step forward: potentially, businesses are now able to see precisely what they will get for their money.

Further details will be in the Local Government Finance White Paper, published later this year.

If you have any queries arising out of this e-mail, please contact Tony Kitson on 020 7367 3556 (e-mail: [email protected]) or Alistair Watson on 020 367 3890 (e-mail: [email protected]).