Business Improvement Districts or BID’s have been around since 2003, they were introduced in the Local Government Act 2003 but you may not have heard of them unless you have experience of one. The concept of BID is not actually bad. The government defines a BID as:
Business Improvement Districts are business led partnerships which are created through a ballot process to deliver additional services to local businesses.
On the face of it this looks like a good idea and in many cases BID works out really well. For example, in my home town of Basingstoke, the local BID “Basingstoke Together” appears to be very popular with only 5-star reviews on Facebook. Earlier this month another BID only 15 miles from me won their ballot in Andover but with much more controversy. But why does something with such noble sounding intentions and positive results elsewhere attract controversy?
The BID in Andover started around 12 months ago, there are a number of ways that a BID can be started:
A Business Improvement District can be set up by the local authority, a business rate payer or a person or company whose purpose is to develop the Business Improvement District area, or that has an interest in the land in the area.
The critical part is “the local authority”, BID does not necessarily have anything to do with businesses and this is the case in Andover. Test Valley Borough Council (TVBC) have been massively invested in the project for a year before the ballot even took place. Back in October 2017 TVBC committed, £50,000 in Tax Payers’ Money to support the BID. This was given to the BID consultants CMS. Before this money was made available TVBC Councillor David Drew told us “Evidence shows that a BID ballot is significantly more likely to succeed with the help of expert consultants”. This on it own implies that a BID ballot will not be successful on its own merits, hence the need for £50,000 of tax payer’s money to get the process through. Andover BID freely admits in its prospectus that this will not be returned to the council.
We should of course first ask why the council is spending all this money on something for businesses? Why are the businesses themselves not funding this? Well the answer may shock you. In the Andover BID prospectus, they report “Over 207 written responses to consultation from businesses with RV of over £5000”. Yet only businesses with a rateable value of over £10,000 will have to pay the BID levy, interestingly some of those businesses were not consulted not given the proper documentation. But why would it be in CMS’s interests to do so? If the BID gets a yes vote, the chances are they will get more work setting the BID company up. You can clearly see this vested interest in the map of the BID area. The BID area contains a number of car parks, Andover college, but bizarrely misses out ASDA. Or is that so bizarre, when you consider that ASDA has a history of voting down BIDs which earned them a call to be boycotted in Bedminster.
The next twist is the car parks, which are owned by TVBC. The combinations of properties that TVBC own in the BID area means when it comes to the ballot they get to vote 13 times. To put this number into perspective, there were only 137 votes cast, 13 of these were by TVBC that is almost 10% of the votes being the council votes. The vote was subsequently won by only 3 votes. How can it be democratic that a council who wants support for their project be allowed 10% of the votes? If that is not underhanded enough, TVBC is currently controlled by the Conservative Party, but the Conservative Party HQ will not have to pay the BID levy as it just happens to fall outside of the BID area.
The impact is already being seen on the high street, the BID will mean all businesses with a rateable value above £10,000 will need to pay a new tax in addition to their existing taxes. Reading the BID prospectus, the levy will be due in advance and must be paid as a one-off lump sum payment. Some retailers are already scaling back their community activities so they can cover the BID cost, since 2013 Andover has a “Remembrance Day Window”, funded by one of the local businesses. Sadly, the money they allocated to that now has to go to BID.
BIDs are voted back in every 5 years across the country because the deliver value to the businesses they serve. Clearly this is not the case in Andover where, like HS2, a vanity project of the local council is a perfectly acceptable reason to spend a load of tax payers money.