Examination of Witnesses (Questions 31-39)
MS KAREN
DEE, DR
JULIE GRAIL
AND MS
SUE ASHLEY
19 JUNE 2007
Q31 Chair: We are missing the Leeds witness
because of the vagaries of the rail system. Apparently the rail
system stopped at Peterborough this morning. Perhaps the three
of you could introduce yourselves.
Ms Ashley: I am Sue Ashley from
Warwickshire County Council. I am leading on the Warwickshire
BIDs project; I am also a Board Director on the Association of
Town Centre Management.
Dr Grail: I am Julie Grail. I
am Chief Executive of British BIDs, which is a national membership
organisation for formal BIDs, developing BIDs and interested stakeholders
across Britain.
Ms Dee: I am Karen Dee. I am the
Head of Infrastructure at the CBI.
Q32 Mr Olner: May I ask what the income
from the Rugby BID is being spent on?
Ms Ashley: We are raising £5
million over a five-year period, which really is very substantial
money for a small town with a low rateable value. The projects
are an integrated security system, which is basically a brand
new, state of the art CCTV system that incorporates automatic
number-plate recognition and it incorporates the retail and radio
links for day- and night-time schemes. We have a programme of
street rangers who provide various roles. One is that they provide
an ears and eyes service for the police. They do a roll call with
the police in the mornings. They are meeters and greeters to the
visitors of the town and to the workers and they provide business
support. We also have a specialist cleaning service and that is
where the group go out and steam clean the streets on a daily
basis and get rid of chewing gum and graffiti so that the place
is really spotless. We also have what they call a `hit squad'
service and that is where they go out and clean shop fronts as
well.
Q33 Mr Olner: Are the BID monies
levied over the whole of Rugby or just Rugby town centre itself?
Ms Ashley: It is Rugby town centre.
We have about 680 businesses within the BID area contributing.
We have about £150,000 a year to spend on marketing, promotion
and events, whereas with town centre management voluntary schemes
that was probably about £5,000 in a good year.
Q34 Mr Olner: Rugby is a pilot, is
it not?
Ms Ashley: We were part of the
ODPM/ATCM (Association of Town Centre Management) national pilot
scheme. Basically we used Rugby to set a framework for other business
improvement districts across Warwickshire.
Q35 Mr Olner: How quickly do you
think you will be able to roll those out? I speak with an interest
as I represent Nuneaton.
Ms Ashley: We have developed our
own feasibility and development toolkit. Basically the feasibility
looks at the rateable value of an area, the sorts of monies that
could be generated through a business improvement district, the
sorts of initial projects that could be developed and then the
staff resources that it would need to go on to the development
phase.[1]
Q36 Mr Olner: Warwickshire is a very
diverse county from the northern end to the southern end. Obviously
the rateable value in places like Stratford-upon-Avon, Kenilworth
and Leamington Spa is far above the Rugbys, Nuneatons and the
Bedworths. Do you see a difference in tailoring a BID project
for, say, the northern end of Warwickshire to the southern end
of Warwickshire?
Ms Ashley: In terms of rateable
values, there is not a huge difference. It does depend as well
on the actual catchment area that you use for your BID. This feasibility
study looks at the actual rateable value of that area and what
the BID could deliver and then it looks at the mechanism for the
consultation and actually getting businesses to put a tick in
the box to say they want to pay. The principles of the BIDs are
pretty much the same and that is why we are rolling it out with
a structured programme across Warwickshire. We have carried out
feasibility work in Stratford-upon-Avon and Leamington and we
are now going down the development route where we will look to
get the projects sorted, the business plans pulled together, service
level agreements with the local authorities pulled together and
the BID companies established. In terms of principles, it does
not matter particularly whether it is the north of the county
or the south of the county.
Q37 Mr Olner: Do you find that enthusiasm
is growing within businesses to have BID areas?
Ms Ashley: It is. One of the real
benefits of BIDs is that they are led by the business community
and managed by the business community. The local authority's role
is about facilitating and helping BIDs happen, doing the behind
the scenes work and the training and getting people up to speed
with what BIDs are about. That is really why the businesses are
quite keen now to put money in to the business improvement districts,
because they are projects that they actually see as being a priority
for their own trading environment and that are really going to
make a difference to their turnover and footfall within their
location.
Q38 Mr Olner: I know you were all
in the previous evidence session. Can you envisage the SBR working
in a county-wide area? Are there not any huge infrastructure things
that counties or districts should be doing where an SBR should
be levied?
Dr Grail: I think the key things
about BIDs and why BIDs are working currently is because they
are genuinely local. When we say local we mean a locally defined
geographical area of a town centre or commercial area where you
are talking about a maximum of only 500 or 600 businesses often.
The discussion that has gone on before us about local is actually
local on a borough basis or even wider. So we mean genuinely local.
They are highly accountable and the governance is wholly set within
the private sector. It is set up as an independent company limited
by guarantee and it is managed and governed by the businesses
that pay the bills. That is why they like it. That is why they
believe in it and why they are voting for it. In terms of voting,
there is an affordability test in there. There has already been
a reference to the dual key voting system. There is a formal process
that has to be developed for the ballot and there is a real test
about whether that levy is affordable by virtue of having to achieve
a majority vote both in number and majority of rateable value.
That is important to ensure no big businesses are hijacking or
no small businesses are hijacking. It is also highly manageable
and on a fixed term; it is a maximum of five years. So there has
to be very significant accountability year-on-year back to the
businesses to ensure that there is definite value being shown.
We have had one renewal ballot go through in London in February.
That is the first to go through into a second term. They increased
their majorities and they increased their turnout. They demonstrated
direct value to their businesses. There is also a key thing about
transparency and that is that it is businesses managing this and
paying for this. A lot of what the BID proposal is about is a
very clear business plan that is very tangible. It is the types
of things that Sue mentioned. It is tangible security, cleansing,
specialist activities relevant to that area, marketing, promotion,
things that businesses can definitely see or indeed calculate
as a direct benefit to them. Some of the services that we are
seeing are about a scheme that might have been run before in a
different way but not wholesale across an area or indeed could
not be set up because there were not economies of scale and by
virtue of delivering it through the BID a business is making a
direct saving year on year. So the BID levy becomes an investment
in that area rather than direct expenditure year on year. The
final point to say is what is very important about BIDs and the
difference between what BIDs are doing on the ground compared
to what an SBR would do is BIDs then, through the nature of that
governance, are holding local authorities to account in terms
of services on the ground. There has to be a baseline agreement
signed up ahead of the ballot. Businesses need to be able to have
confidence and reassurance that that is going to stand up to scrutiny
so that what they are delivering and paying for is genuinely above
the existing commitment that they pay in business rate. I wholly
believe that that is why BIDs work. Let me pre-empt the next question,
ie could BIDs work alongside an SBR? In some cases possibly, if
there was a genuine strategic infrastructure element across an
area for an SBR, but I think the only way businesses would support
it, if they are already paying a BID, is if their BID levy element
is exempt from the SBR. They are not going to pay twice. If we
use the example of the new West End Company in the centre of London,
in Oxford Street, Regent Street or Bond Street, their threshold
for rateable value is £250,000. So no business under a quarter
of a million pounds is paying. That means the businesses that
are raising £2.1 million a year in the BID levy are paying
significant sums. They will not pay twice.
Q39 David Wright: Does that mean
you believe that if the SBR is introduced it will threaten the
existence of BIDs and it would actually collapse some of those
schemes around the country?
Dr Grail: Yes. We are talking
about, in many cases, very, very price sensitive areas of business.
We tend to avoid talking in percentages when you talk to the businesses
and during consultation because it does not mean a lot to them.
The norm on a BID levy is one per cent of rateable value. In small
businesses that can end up being only £100 to a business
and up to £400 or £500 for a medium-sized business.
That will make a big difference to them. Although we have a good
success rate on ballots so far, we have 45 BIDs across the country,
a lot of businesses are still voting no in those ballots. The
turnouts are okay but not fantastic. The majorities are getting
better and better, but there are still a lot of businesses uncomfortable
about the charge. What we have to demonstrate as BIDs go forward
is direct benefit. We are beginning to do that. I can tell you
as somebody in my team who developed BIDs on a daily basis, even
if you get a very successful ballot, as soon as the bills hit
the doorstep you get a huge amount of calls from people who are
unhappy about that bill, those that either did not vote or voted
no. So there is a real price sensitivity there. BIDs are working
now and can continue to work, but they will be hugely threatened
by an additional levy sitting on a bill.
1 Note by witness: It is likely to take about five
to seven years for main towns and a selection of industrial areas. Back
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