1: What is a BID?
‘BID’ stands for ‘Business Improvement District’. It is a defined commercial area where new funding can be raised through a ‘levy’ on businesses within that area, that have a Rateable Value over a set threshold. This money is then used to invest in initiatives to improve the local trading environment. BIDs enter into baseline agreements with the local authority and other service providers which guarantee the level of service provision in the area. These ensure that any services the BID provides are truly additional to what is already provided. Recently there have been three BIDs that have entered into their first term in the Royal Borough of Kensington & Chelsea including Opportunity Kensington, King’s Road Partnership & Knightsbridge Partnership.
2: How does a BID happen?
A BID can only be formed following consultation and a ballot in which businesses vote on a BID Proposal or business plan for the area. The ballot is run by the local authority or outsourced by the local authority to a third party. All businesses eligible to pay the levy are balloted. For a BID to go ahead the ballot must be won on two counts: straight majority and majority of rateable value (RV). This ensures that the interests of large and small businesses are protected.
3. What are the benefits of BIDs?
Long term investment: BIDs allow businesses to influence economic change in their area by raising their own pot of money that is spent on their priorities.
Economic growth: BIDs deliver good value projects through collective procurement, promote economic growth through enhanced footfall and regional presence, establish practical links between private and public sector institutions, and attract additional inward investment.
Competitive advantage: BIDs help to establish a competitive advantage by providing an improved environment for clients and employees and better facilities for businesses.
Additional Funding: BIDs can apply for additional funding through: voluntary contributions from businesses outside the BID area; lottery funding; or grants.
Lobbying: BIDs are representative of local businesses and so they can lobby on their behalf with the local authority and other agencies to effect change.
4: How long does a BID last?
A BID lasts for up to five years. If it is successful, another ballot may be held towards the end of this period to decide whether the BID should continue for another term.
5: How do you ensure the BID investment adds value?
A BID would enter into baseline agreements with the local authorities and other service providers. These agreements will guarantee the level of service provision in the area and show you what the councils will continue to provide. In this way you can see who does what and be confident that the BID investment is providing added value.
6: How is the BID campaign funded?
Under BID legislation, if a BID is reaches the ballot phase, we would be required to produce and send a “Statement of BID Arrangements” (commonly known as the Business Plan) to businesses ahead of the BID ballot in order for businesses to understand what they will be voting on. The Business Plan is based on extensive consultation. Reference to this plan is essential for levy payers to help them decide on how to vote in the ballot. To increase voter turnout marketing materials are produced to create awareness of the ballot. Any money spent on a “yes” message comes from voluntary contributions.
7: Isn’t this what I pay my business rates for?
No. Business rates are collected by The Royal Borough of Kensington & Chelsea and redistributed at a national level. The council spends the allocated funding on services that are both statutory and discretionary, and businesses have very little say on what these services are. BIDs differ from this as the money is collected locally, ring-fenced and controlled and managed at a local level and controlled by the businesses that make up the BID. It can only then be spent on initiatives detailed in business plan that businesses have agreed to. The BID levy does not pay for anything covered by your business rates.
8: How many BID areas are there in the UK?
There are now over 330 BIDs established and operating across the British Isles and they are growing at a rate of over 25 a year. In 2023 80 BID ballots took place (9 of them being new BIDs) and all but 4 were successfully voted through.