Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 340-359)



Christine Russell

  340. Can I ask all of you what lessons can be drawn for the drafting legislation from the pilot BIDs?
  (Ms Millet) In Coventry, the City Council transferred responsibility and budget for the management of core city centre services to what was originally the City Centre Company. We would then top that up with additional funding. We have learnt from that process that flexibility is the key, certainly in terms of future legislation because we believe it needs to be sufficiently precise to allow the minimum statutory regulations at the local level. Flexibility is absolutely key to maximising the chances of approval from contributors. In Coventry, our scheme is largely retail led and in return for membership subscriptions we deliver a benefits package. It is essential that that benefits package in Coventry is integrated with core services because you cannot co-ordinate services delivered by separate—

Mr O'Brien

  341. Where do they get additional funding from?
  (Ms Millet) We get about £5.5 million from the City Council, but our budgets are £7.2 million, and the additional funding comes in part from the membership scheme—which we believe is virtually ready to form the basis of a Business Improvement District—and the rest we draw in from commercial income. You have to think creatively and try to sell your services to other people; so that is another advantage of having direct control of service delivery. For us, Business Improvement Districts are only one part of the equation, and the very fact that we are set up as we are provides leverage to draw funding from other sources.


  342. How do you avoid free-loaders at the moment?
  (Ms Millet) You do not entirely avoid free-loaders, but you design the benefits package in such a way that free-loaders are clearly disadvantaged. For instance, one element of our benefits package is a retail crime initiative. Those people who are members are automatically part of that, and we can show a year-on-year reduction in stock loss and shoplifting. Those people who are not members are not part of it, and equally they will not get the advertising and promotion benefits that we offer to members. Whilst we have free-loaders, they tend to be at the smaller independent level, and we need to tweak our membership scheme to attract those on board.

Mr Cummings

  343. I address this question to Westminster Council: at a recent conference you spoke about your fears that the Comprehensive Performance Assessment process would prove damaging to high-performing authorities. Can you explain what you meant and give practical examples of where it is working against your best interests?
  (Mr Rogers) I did not actually say it would be damaging to high-performance authorities, but it will be because it diverts us from delivery. The real damage will be at the opposite end, where we have failures, and whether the categorisation changes or not. To name and shame failing authorities will cause difficulties in recruitment and retention in those authorities, and I believe that the performance gap will widen across the local authority spectrum. If freedoms are given to the top end of performance to improve faster, without bringing up the vast majority of authorities to that level to start with, and focussing support on the bottom end, inevitably there will be a polarisation of performance and a spread of performance, which will increase. If the objective is to make local authorities perform at a consistent rate and improve the process generally, then I believe the categorisation process fails.

  344. What sort of freedoms do you believe the Government should introduce?
  (Mr Rogers) I think it should give us freedoms to charge and trade, as is proposed, but make it a generic power for local authorities and remove it where local authorities or the inspection teams have doubts that they can use them effectively.

  345. Could it be introduced within the Comprehensive Performance Assessment framework?
  (Mr Rogers) I believe the Comprehensive Performance Assessment framework is flawed.

  346. Will you explain that further?
  (Mr Rogers) I could explain in some detail.

  347. Not in too much detail!
  (Mr Rogers) I can run through it in a variety of ways. The entire process of categorisation is simplistic. No local authority scores consistently across all of its services. Westminster is seen as a very rich borough: in fact 15 of its 23 wards are below the average of deprivation; but on average we are seen as rich. That spread of poverty and wealth is disguised in average. Similarly, performance is disguised by a simplistic average for an authority. If you then move into the paralysis through analysis that exists, we have heard about three months at Coventry we have already spent a month at Westminster preparing to go through the hoops, when we have just had a three-star social services inspection. We have had a resent Ofsted, which classifies us as a "significantly improving authority" with good performance; and yet we are again going to have to justify that through the CPA process. It is not clear yet how the light touch will operate in terms of best value or in respect of CPA.

  348. Can I assume that the Comprehensive Performance Assessment framework will be of benefit to poor-performing authorities?
  (Mr Rogers) I think the peer review process which could be imposed or a supported inspection framework which could be imposed would—because, again, we are using existing inspection data to drive the results. If that result is there now, why is it not possible to identify those authorities that need help and support, and provide it? It reduces the level of commitment and the level of diversion, and increases the speed of resolution in those authorities that need it—and there is still the existing inspection regime for authorities like my own that welcome it to confirm their own performance.

  349. Is this the experience of our other friends here this morning, from Wolverhampton and Coventry?
  (Mr Williams) Wolverhampton has started its Comprehensive Performance Assessment today, which is why the Director, Brian Bailey is not here and sends his apologies. Our experience in preparing for the assessment has been very similar to that of Coventry and Westminster. The document requirements of the assessment team are extremely large and onerous. In terms of paralysis, the senior management across the authority has been very heavily engaged in this process for at least a month. We have had to construct appropriate office accommodation for the inspection team within the civic centre. Obviously, because Wolverhampton wants a fair assessment, we have had to produce an enormous amount of documentation and training, which we have had to disperse throughout the whole of the staff.

  350. Have you had a similar experience in Coventry?
  (Mr Nolan) Yes, we have.
  (Mr Williams) Given that we have not completed the review yet, we are uncertain as to the outcomes, but there is a fear in Wolverhampton that the process and the very simple assessment that the team is going to produce could be formulated in advance from other inspection regimes. The CPA process is more like forming league tables for their own sake, rather than producing mechanisms for improvement. Clearly, we are in the early stages of the process, but what is important is the outcome and delivering a clear action plan for Wolverhampton as formulated as part of the process, and making sure that that process of improvement is carried forward. Clearly, the burdens that it is placing just to prepare for the inspection are extremely onerous.

Mr O'Brien

  351. The proposed legislation is more enabling legislation than prescriptive. Do you think that the framework for Business Improvement Districts will be attractive to local government and to business?
  (Mr Rogers) If I could give the Westminster perspective, the early stages that we have gone through, in terms of creating BIDs with the private sector lead us to a number of conclusions. The first is that it is important in an area such as Westminster that owners are involved in the process. Inevitably, the longer term benefits of this go back to the owners of property rather than the occupiers of property, because of the increases in rents and leases that will follow. On that basis we feel it is vital that owners at least are involved in improvments and voting in the development of BIDs. The second area is that there must be additionality over and above what local authorities are there to provide. That is a longer term issue because, quite clearly, the BIDs in Westminster are largely geared on things such as cleansing and on wardens, which are directly correlated to the level of cleansing and the level of policing within the area. Any reduction in public sector involvement which is seen to be a substitute for additional private sector funding will be damaging to BIDs.

  352. In Coventry, retailing is the main factor there, is it not? Can you give us a little more information on that?
  (Ms Millet) We believe that Business Improvement Districts will vary depending on the context and the overall purpose. The context in Coventry is that it is largely led by the retailers, and it is tending to be around the primary shopping area. Having said that, we do have landlords involved as well. The number of landlords in Coventry is quite limited—we have about three or four that tend to own most of the city centre. That is why we believe that there needs to be sufficient flexibility within the legislation—and there is—to allow for definition of the sector or the geographical area, depending on the local context; and to allow the way in which contributions are calculated to vary. In our case, it is as a percentage of business rates.

  353. Do you think that the Government has got the balance right between prescription and voluntary guidance?
  (Mr Williams) In the Wolverhampton submission on BIDs, we are rather more sceptical than our colleagues from Westminster and Coventry. There is no strong desire in Wolverhampton to return to a supplementary business rate. Wolverhampton city is not rates-rich when it comes to business rates; there are about 7,000 non-domestic properties in the city. If we tried to formulate a BID, of say 5 per cent of those and 5 per cent by rateable value, and if we were to levy a 1 per cent supplementary rate we would only generate £30,000, so it is not a particular attractive means of raising finance. Certainly, the burden comes in terms of getting agreement.

  354. How do you think it should be changed? If we look at the proposals in the legislation and consider that it does not appeal a great deal to Wolverhampton, what should be changed?
  (Mr Williams) I do not think Wolverhampton's view is that the legislation should not go forward, because there are obviously authorities that wish to use the flexibility that it gives. Wolverhampton would look for other mechanisms for assisting business and communities through grants such as ERDF and single regeneration budgets.


  355. Coming back to Coventry, it worked pretty well on a voluntary basis in the city centre, but Coventry has a fair number of sub-district shopping areas. Do you think it has any future in an area like that, where the shops are in decline because of out-of-town shopping, the sheds and other things like that?
  (Ms Millet) We believe it has. The Coventry model is very much based on the North American model where the level of decline was much more severe. In our submission we said that we would welcome the opportunity to extend it into neighbourhoods and business parks. The two key issues in Coventry that would relate to those more disadvantaged areas are "clean" and "safe", and that is the starting-point for us of any subsequent regeneration.

Sir Paul Beresford

  356. Would you say that some businesses are concerned that it is a blackmail racket, or could be with some local authorities—and I am not suggesting your local authority—in that if they do not play the game and pay the extra, they will not get the services and there will be a service reduction?
  (Ms Millet) I think that is a legitimate view, but—

  357. A legitimate fear?
  (Ms Millet) It is. As Westminster suggest, that is when you have to demonstrate genuine measurable additionality. It would not only give people a package of enhanced benefits and services, but we also set ourselves performance targets every year, much like public service agreements—and we are part of Coventry's public service agreement—whereby people can see that there have been tangible and measurable improvements in trading performance and crime levels, et cetera.


  358. You have managed to do it as part of the city centre in Coventry is on a voluntary basis, but could you not also do it in the other areas in Coventry on a voluntary basis?
  (Ms Millet) Certainly you could if the benefits package was sufficiently attractive to those people participating.

  359. What is the advantage of the legislation then?
  (Ms Millet) The legislation allows us to build in much higher guarantees and sustainability, and it also brings in free-loaders. That is where many businesses feel that they are putting in contributions and other people are benefiting, however hard you try to tailor the benefits package accordingly.

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