Memorandum by Warwickshire County Council
(SBR 18)
1. WARWICKSHIRE
COUNTY COUNCIL
1.1 Warwickshire is located in the West
Midlands and has a population of over 534,000. It has a County
Council and five District Councils. There is no single dominant
town or city within the county boundary; instead there are seven
main town centres (Nuneaton, Bedworth, Rugby, Warwick, Royal Leamington
Spa, Kenilworth and Stratford Upon Avon with populations 26,000
to 100,000) along with a host of smaller market towns. WCC has
a property portfolio comprising Industrial Estates, Business Parks
and Managed Workspace, alongside private sector provision across
the County.
Over the past 10 years WCC have taken a unique
and proactive approach to Town Centres Regeneration and Business
Improvement Districts. Initially it's main role was to promote
the concept of Town Centre Management (TCM) to the five Districts
and the private sector. This has now evolved to the extent that
Warwickshire is a national leader in TCM, with a dedicated team
of "Town Champions" working with a broad range of partners
on initiatives including BIDs, TCM, Masterplanning, Major Regeneration,
Transport Strategy and Inward Investment Projects. As the Town
Centres and BIDs Manager, I have a broad network of contacts ranging
from local to overseas.
2. WARWICKSHIRE
BIDS
2.1 WCC were selected to take part in the
ODPM/ATCM National BID Pilot scheme as the only County Strategic
Pilot—known as the Warwickshire and Rugby BID. The aim was
to secure BID status in one of the County's towns and to consider
the potential for roll out to other locations in the medium and
longer terms. BIDs were seen as supporting agendas of Sustainability,
Livability, Quality of Life, Community Safety and Choice. Rugby
is a small town with a low town centre rateable value of £15m,
one of the key reasons it was selected by the County Council for
the National BID Pilot scheme.
2.2 The Rugby BID secured BID status in
October 2005 and has set a framework for the development of other
local BIDs. It will generate some £5 million over the five
year BID period and is now in it's second year. It is important
to say that this £5 million is purely funding raised through
the BID from the business rate payers, mainly private sector businesses.
It is a very high quality BID, tangible, adds value to existing
services, has high levels of business support and is attracting
study visits from across the UK and overseas. Since it's introduction,
sales have been up by 3.5% on the previous year, footfall by 1%,
compared with national figures which are flat.
2.3 Since the pilot, WCC has developed a
unique programme to help facilitate a structured programme of
BIDs across the County, both in Town Centres and Industrial/Business
locations. This is in the form of funding, staff support and expertise,
a network of contacts, a feasibility and development process,
and a BIDs learning network known as the Warwickshire BIDs Forum.
WCC provides seedcorn funds of £120k per year for BID facilitation,
which is levering the same amounts from both the public and private
sector BID Partnerships and potentially could bring in some £12
million of new investment over the next five years. This is a
good example of how County Council funds can facilitate, influence,
lever public and private funds, develop commitment, help set policy
and add value to partnership working, as well as gaining credibility.
3. THE POTENTIAL
IMPACT OF
SBR ON BIDS
3.1 The introduction of a SBR would have
a major negative impact on the business community both in Rugby
and in developing and emerging Warwickshire BID areas . The prime
reason that BIDs have been successful is the fact that they have
been lead by business, are transparent, with funds going into
specific agreed scheme, managed by the business community. Many
of the businesses within current BID areas already view their
BID levy as a SBR and will be extremely resistant to the Government
raising another business tax, particularly so soon after BID legislation.
3.2 We have been successful in Rugby securing
a mandate for a high 3.7% levy as a high quality BID was desired.
The main thrust of securing that BID was that funds were going
into a private sector pot for ringfenced projects, managed by
business. The Business Plan was totally transparent and set out
how the BID would be spent, monitored and managed. There is already
huge concern in Rugby that SBR may happen and if it does it is
unlikely that we would secure a BID mandate at the revote in 2010.
3.3 SBR would impact on developing Warwickshire
BIDs as we would not secure commitment from business paying an
additional levy when they are paying Business Rates already and
SBR is looming. Businesses are generally sceptical about BIDs
initially and think that BR go to the LA and that they should
be delivering such services. That is why development costs are
high. SBR introduction could potentially mean a loss of some £7m
BID income in the next 3 years as phase one of Warwickshire BIDs.
4. ACCOUNTABILITY
AND APPROVAL
MECHANISMS FOR
THE INTRODUCTION
OF AN
SBR AT A
LOCAL LEVEL—THE
ROLE OF
BUSINESS AND
THE WIDER
COMMUNITY
4.1 The BIDs concept is successful as it
puts business in control and support can only be gained where
BID Partnerships provide clear and robust information on how the
money will be spent and the impact assessed. Additional rates
will not provide businesses with any sort of control or reassurance
of effective or beneficial use of additional funds.
4.2 Robust partnership working, trust and
excellent relationships are critical to BID development and experience
shows that this takes time. Generally from promoting the concept
of BIDs to actually arriving at Feasibility or Development takes
some six months, partly because it is new but partly because the
business community needs to be convinced that funds will be privately
managed. It would be incredibly difficult to convince business
that SBR monies going to LG would be well invested. Even if SBR
did not go for a vote, a consultation strategy would have to be
very well planned and managed to gain business support and indeed
could be more costly than BID voting processes.
4.3 Relationships and levels of trust between
business and public sectors will have a significant impact on
how SBR is accounted, approved and implemented. Partnership working
arrangements (both existing and proposed) will be key to involvement
of the business community and potential champions for moving SBR
forward. Evidence in Warwickshire TCM and BIDs shows that this
takes time both in terms of establishing credible partnerships
and developing trust and understanding between the various sectors.
5. CONSIDERATION
OF IMPLEMENTATION
ISSUES INCLUDING
DECISION-MAKING
IN TWO-TIER
AREAS
5.1 From the Lyons report, it seems that
there are four options for the implementation of SBR:
Unitary and Metropolitan, London wide supplement,
two tier LG with a single rate with the relevant authorities and
a joint plan for use of revenues. It also states that powers to
introduce BIDs should remain with Shire Districts and London Boroughs.
There is no clarity about roles of County Authorities.
5.2 It is not clear if in two tier areas
Lyons is suggesting a blanket charge to be agreed by County and
the Districts within their boundary, or by separate agreements.
If a blanket agreement, it would be difficult to reach agreement
between County and Districts as to how these funds could be spent
due to the differing politics, priorities, aspirations and make
up of a town/location. It may be easier in principle if it were
to be a separate agreement between the County and the Districts
individually on a more tightly knit geographic basis to address
more local issues. However, as previously stated it would be extremely
difficult to convince business to pay an additional business rate
to LG whether it be through consultation or voting.
5.3 In terms of funding medium to long term
initiatives in two tier areas, consideration could be given for
the use of LABGI funding, providing links with BIDs and joint
working with levels of LG and business. If a BID secures a successful
mandate for a 5 year period, an incentive for business to vote
Yes could be a reward through LABGI funds for complimentary or
longer term initiatives. For example, the Rugby BID brings in
£5 million/five years for added value investment, LABGI funds
could well support the longer term vision initiatives/major projects
to help the longer term vitality of the town and reward business.
This may in the longer term help secure support in principle for
SBR.
5.4 In Warwickshire, WCC have taken a unique
approach to BIDs facilitation and Town Centres Regeneration and
we appear to be working already in the way that Lyons is proposing
with respect to:
(i) Leading Communities and Places: Political
and managerial Leadership; Visibility, personal networks and relationships
with key partners, outward looking approach, energy and enthusiasm;
Shared agendas; capacity to deliver, engages partners, builds
alliances, facilitate, advocate, influence rather than dominate:
and
(ii) Local Solutions to Public Service Challenges
Innovative local solutions: focusing on sense of place, tailored
to local needs, carefully judged risks; Commissioning Role; partnership
working, bringing skills, experience from other sectors, change
of emphasis from provider to advocate taking strategic views.
This approach could potentially be considered
as an example for BIDs development for other Strategic Authorities
working in two tier structures.
6. APPROPRIATE
SCALE OF
THE SUPPLEMENT/THRESHOLD
FOR PAYMENT
6.1 It would be virtually impossible to
introduce a SBR and BID at the same time, as well as business
rates for reasons stated above.
6.2 The scale of BID charging mechanism
depends on the location, particularly in smaller towns or industrial
areas with low rateable values. In Warwickshire we are generally
using the "Banding Mechanism" which seeks to bring in
£1—3 million per location over a five year period,
with exemptions generally for business with less than £5,000-£10,000
business rate and a cap on the upper limit. Generally, we have
found that business don't generally ask "what is the %"
but "what will it cost my business". Other charging
mechanisms could be square footage, or acreage for industrial
areas.
7. SUMMARY
7.1 Business would be very resistant to
paying an additional SBR. BIDs are successful as they are business
led, transparent through a very clear business plan and managed
by the private sector with investment focused on local priorities.
It is highly unlikely that business would put SBR funds into the
"public purse" as they simply would not believe that
their monies would be well spent. We recently had an unsuccessful
ballot at one of the Warwickshire BIDs—Bayton Industrial
Estate, one of key reasons being that an anti campaign came about
during the ballot period, the BID was perceived to be a public
sector led BID, businesses were already paying business rates
and would not also fund the BID on this principle, even though
60% of the businesses would only be paying £1 per day.
7.2 The Rugby BID was contentious at the
time of development due to the high levy (3.7%); one of the key
reasons that it was successful was that it would deliver very
high quality services that would be tangible and make a difference
to their business and that the Rugby BID Company would manage
the BID and not the LA. Again this was an issue during an anti
campaign, which fortunately the BID Company were able to turn.
Another factor was that there was already robust TCM partnership
working arrangements in place and good relationships in place
with key stakeholders. Rugby is now in it's second year of implementation,
market research and business feedback shows that it is successful,
this would not happen if not business owned and managed.
7.3 Since Rugby BID implemented, decriminalisation
of car parking has been enforced, this again was construed by
business as `another tax' and caused problems between the two
sectors for some time.
7.4 Robust Partnership Working arrangements,
relationships and trust will have a huge impact on the implementation
of SBR, business doesn't generally trust LA and consider that
business rates are already going to them, not government.
7.5 County Authorities can, like Warwickshire,
perform a strategic BIDs role providing leadership, joined up
thinking, links other initiatives and longer term visions. BIDs
helps generate substantial funding streams to support an improved
economy, public realm, community safety and quality of life. For
Counties to invest in the BIDs process has the potential to generate
several £millions that simply would not exist without the
BIDs opportunity, raise their own credibility and develop true
partnerships with business and enhanced two tier working.
7.6 On a national level there are currently
in the region of 45 BIDs established, working with some 20,000
businesses and securing in the region of £100 million purely
from BID Levies. Voluntary contributions of about £50 million
have been levered as a result of these BIDs, resulting in total
new investment to date of about £150 million. Funding of
this magnitude simply would not exist without BIDs and the involvement,
commitment and ownership from the business community.
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