What is a BID and how does it work?
What is a BID? A Business Improvement District (BID) is a business led partnership set up to improve and enhance a commercial district.
Under the regulations, the district must be clearly defined by an area map denoting exact streets covered. The BID is developed through formal consultation with the business community and development of a five year Business Plan. The activities of the BID are funded via a small levy based on the rateable value of the eligible businesses premises within the area. A key principle of the BID is additionality – the services it provides is over and above existing council provision.
All eligible businesses are given the opportunity to vote in a formal ballot process on the proposals and if there is a majority Yes vote the BID is deemed successful and the levy becomes mandatory. In order for a vote to be successful, it must be won on two counts:
- A straight majority of the number of those voting
- By a majority in the rateable value of those voting
Voting is done by confidential postal ballot and managed by the electoral services department at Richmond Council. If successful at ballot, the BID goes “live” and becomes a legal entity – an independent not-for-profit organisation. A key feature of a BID is that the income generated stays in the area to fund priority areas which have been directly identified by business – this in turn benefits the wider community delivering economic and environmental benefits.
The activities of the BID are governed by a board of directors from levy paying businesses. By law, the makeup of the board must mirror the business sector mix in the area. There are over 250 BIDs in the UK with over 50 in the greater London area. They have operated with great success and raised the profile of the areas they represent.
How will it work and how much will I pay? The proposal is to finance the BID with an annual levy based on a small percentage of the rateable value of your business premises. The levy rate to be paid by each hereditament (rated business unit) is to be calculated as 1.5% of its rateable value. Based on 1.5% levy, over £600,000 per annum could be generated and invested in the local area on priority areas identified by businesses themselves.
For example, if your business has a rateable value of £35,000, you pay £525 a year based on a levy multiplier of 1.5%. If your business has a rateable value of £35,000 or less, it is proposed that there will be no levy to pay.
The BID will operate over a five year term with annual levy mandatory on all eligible businesses.