Frequently Asked Questions
A Business Improvement District involves businesses working together and investing collectively in local improvements, in addition to those delivered by the statutory authorities. These improvements will benefit the businesses involved whilst contributing to the wider aspirations of the local residential community and contribute to growing the local economy.
A BID, which is funded by the non-domestic sector, allows for partnership working with statutory authorities to deliver a wider variety of projects and services to improve the local economy. It also gives local businesses a unified voice and provides an arena for businesses and local authorities to increase their understanding of each other’s priorities. A BID gives businesses a voice in the future direction and development of their town centre.
A BID can cover almost any project or service that local businesses agree would be of benefit, as long as these are additional to services provided by the statutory authorities.
The projects and services are determined by consulting with the businesses, to identify their issues and concerns.
Through a local steering group made up of the proposed business sectors to be involved and the local authority. Where thought necessary other relevant groups from within the proposed BID area are often involved. The steering group oversee the development process. In the initial stages the steering group instigate a dialogue with the local authority and other interested partners and initiate the engagement and consultation with the businesses within the proposed BID area to determine the issues and concerns of the businesses. The steering group make the decisions on the BID area, size and liability for the levy and the projects and services to be delivered from the dialogue and consultation with the businesses. The steering group only exists during the development of the BID and the initial set up of the new BID Company. Following a successful ballot, a new Board of Directors will be nominated from the businesses involved in the BID.
The local business community identifies a requirement for a capital project or services that will have a positive impact on the trading environment. It defines the geographic area of the BID and develops a business plan that details the project/services to be delivered. The plan identifies how much money is required to be raised to deliver the business plan, how it will be allocated, how the project will be delivered, managed, and the monitoring procedures. The Local Authority is responsible for organising the vote on the proposed plan.
Not one body or organisation has all the answers and the finances available to bring about change and improvement to St Andrews.
A BID is a proven model to secure sustainable funding to deliver services and improvements to address local issues and concerns in partnership with other bodies and the statutory authorities.
Local businesses decide and direct what improvements they want for the area to improve the local economy and trade. The business community as a whole are represented and have a voice on issues effecting the area in which they trade; be it parking, cleansing, safety and security or perhaps more importantly the future long term direction, development and prosperity of their area.
As well as providing a strong local partnership, BIDs fund a set of targeted projects and services that drive footfall, sales and improve an area’s reputation. They can also improve the physical surroundings of the BID area, help to increase staff retention and provide networking opportunities with neighbouring businesses, encouraging local business-to-business trading/supply. Businesses can also save money through initiatives such as bulk procurement and collective waste contracts.
The BID levy is ring fenced for use only in the BID area – unlike business rates which are paid to and then redistributed by the Scottish Government. The BID levy can be used to lever in additional funding that is not available to an individual business or in some cases the local authority, for further projects, programme activities and major public realm improvements.
BIDs have a proven track record in both lobbying and championing business concerns with Local Councils, Police and other public bodies, offering a recognised and respected voice with the ability to talk to the right people in the right place at the right time.
A BID is a way of securing sustainable investment for additional services and projects over a 5-year period, without the red tape and bureaucracy that is often associated with public sector investment. Funds raised are controlled and spent in line with business priorities, by an organisation whose board members are drawn from the business community, and the money raised is spent in the BID area alone.
BIDs in Scotland have a maximum term of five years, at which time the BID is required to seek a new mandate from the businesses by way of a renewal ballot to be able to continue in operation.
Once the vote has been passed, the Local Authority will collect a levy and the amount will be wholly designated to the BID. There is no specific limit or recommended amount, however whatever levy is proposed must be clearly specified in the business plan and will be voted on by the business ratepayers.
Following consultation with the businesses a draft business plan is prepared which will detail the proposed projects and services, the cost of each project and service, the delivery costs, the method of apportionment of the costs across the businesses and the cost to each group or band of businesses. The levy can be paid by property owners, occupiers or property owners and occupiers and this decision is taken locally. The levy varies from place to place dependent on the ambitions and types of projects the businesses want to see delivered, but generally for small businesses the levy can be as little as a few pounds per week.
The levy is entirely separate to business rates and can only be drawn down by the Board of Directors of the BID Company and used for the delivery of the projects and services detailed in the business plan, which has been approved by a ballot of the eligible persons. The levy is not a new source of funding for a local authority.
The BID levy cannot be used for subsidising or replacing statutory services such as litter collection and the emptying of council litter bins – these are statutory services the council are legally required to provide.
Local authorities and other statutory bodies are only required to provide statutory services such as road and footway maintenance, litter bins, street sweeping, road and footway lighting. They are not required to deliver projects or services such as events, Christmas illuminations, property improvement programmes, safety projects or business events.
To ensure that projects and services are additional to statutory services local authorities, Police Scotland and other statutory bodies are required to provide details of their baseline services and these form part of the Baseline Services Agreement. The baseline services are normally benchmarked at the beginning of the BID and monitored throughout the term of the BID.
The payment of the levy is not related to whether you pay business rates or not. The legal responsibility for the payment of the levy is based on whether you are liable to pay business rates.
The agreed additional BID levy must be paid to the billing authority concerned. In our case this would be Fife Council.
Fife Council is a statutory body and governed by legislation and regulations. They must lodge the levy monies in a separate BID Revenue Account that can only be accessed and funds drawn down by the Directors of the BID to deliver the BID Business Plan. Fife Council are required to comply with Freedom of Information Act and to operate in an open and transparent manner, they can be audited by Audit Scotland.
Funding for BIDs will not be restricted to the amount that can be raised through the BID levy but can be supplemented by voluntary contributions. A BID is also a mechanism for attracting funding from other sources, such as public sector bodies, depending on the projects involved.
The business plan will state clearly what the cost will be for each year of the BID and once this is approved by ballot this cannot be altered.
The BID Steering Group has been considering possible exemptions to the levy eg Non-Retail Charities, Places of Worship, State funded schools and Voluntary organisations.
The ballot is a confidential postal ballot, the same as a postal vote in a Scottish Parliament or local authority election, held by the ballot holder, normally the local authority. All eligible persons located in the BID area will have the opportunity to vote on the BID Business Plan.
The local authority will be responsible for calculating whether or not the vote has been successful and will have to announce the result of the ballot publicly.
A successful ballot will have to meet four tests. Firstly a simple majority of those voting in the ballot must vote in favour. Secondly, those voting in favour must represent a majority by rateable value of the properties of those voting. In Scotland a BID will only be approved if:
- there is a minimum turnout (the headcount) of 25% of the individual persons entitled to vote
- there is a minimum turnout by rateable value of the properties of 25%
- more than 50% by turnout and by rateable value of the properties vote in favour.
A non-vote is a non-vote.
The BID Business Plan is put to a democratic secret postal ballot of the eligible persons (property owners and or occupiers) and if the majority vote in favour, all eligible persons liable to pay the non-domestic rate are liable for the levy.
The steering group when setting the levy will take account of local circumstances and decide on a fair level of levy to deliver the business plan.As with other Scottish BIDs, in the event of any non-payment of the BID levy, it will be strongly pursued by the billing body to ensure complete fairness to all businesses that have paid. The legislation underpinning BIDs in Scotland includes recovery powers for the local authority to allow them to collect all levy due under the BID Arrangements.
BIDs in Scotland are underpinned by:
The Planning etc (Scotland) Act 2006
The Planning etc. (Scotland) Act 2006 (Business Improvement Districts Levy) Order 2007
The Business Improvement Districts (Scotland) Regulations 2007
The Business Improvement Districts (Ballot Arrangements) (Scotland) Regulations 2007
The Business Improvement Districts (Scotland) Amendment Regulations 2007 No 510
The Business Improvement Districts (Scotland) Amendment Regulations 2008 No 359
The legislation in relation to the development of a BID is very flexible and is able to be used in a number of diverse ways by businesses to help bring about strong local partnerships with the common objective to deliver local positive change and improvement contributing to sustainable economic growth.
Get involved. By being involved and working with others to help deliver change and improvement to your local area. A BID provides a structure and finance to be able to get things done which are going to benefit the businesses and the wider community. The most progressive BIDs in Scotland have a committed Board of Directors working within a strong local partnership with their local authority and other bodies to deliver improvement, working together to find solutions, with each understanding the priorities and concerns of the other.
For the purposes of the BID St Andrews Business Proposal, the term ‘Voluntary Organisation’ means:
Those organisations which are established for good causes, or general public benefit, which are run by individuals who do not get paid for running such organisations or which do not employ or engage (for payment) persons for the purposes of running such organisations.
Fife Council launches Guide to Business Rates
DO you run a local business, want to know more about rates but don’t know where to find the information you need? Fife Council has produced an online guide, bringing all the information together into one place and answering commonly asked questions. Depute Council Leader Lesley Laird, spokesperson for Economy and Planning, joined Eric Byiers from Fife Chamber of Commerce to launch the guide this week.
It includes information on how business rates are calculated, what to do if your business premises are empty, what reliefs are available and how to claim them. The Guide to Business or Non Domestic Rates is available online at www.fifedirect.org.uk/ratesforbusiness and from Fife Chamber of Commerce. Councillors will also be given a copy to help them answer any questions a local business has for them about rates.
Councillor Lesley Laird said: “We’re working together with the business community and other partners to ensure Fife is the best place to do businesses. “Part of that is listening to and addressing the concerns of the business community. “When I speak to businesses, I am frequently asked questions about rates. “There is a lot of misunderstanding about business rates, particularly for new businesses, where it is so important that they get their set up costs right from the start – and rates are a big part of that. There is now valuable information available on the website, and this guide also brings it all together for the business community. The council has worked with the Assessor and the Chamber of Commerce to make sure that it is relevant to businesses. “It’s also important local companies know there’s help available to them and find out if they are eligible for any rates relief and who to contact for help. “Last year, 5,800 businesses received Small Business Bonus relief, saving £10.3 million in total. “So we want all businesses to apply for any relief available to them. We’d also like them to know Business Gateway Fife will also help businesses work on their financial planning if they are making material changes to their premises or moving premises.”
Eric Byiers, Chief Executive of Fife Chamber of Commerce added: “Business rates are an issue that our members feel strongly about. We believe that there are some fundamental issues on business rates which require to be addressed – including the empty property relief scheme. However, until these aspects are reviewed, we have to work within the existing system and we welcome the council’s approach to make it easier for business to understand the reliefs available to them and who to contact for advice.”
BID Business Benefits
- BIDs enable local businesses to decide and direct improvements they want for their area to benefit the local economy and trade.
- BIDs help to increase footfall through the delivery of events and promotions, improved accessibility and a co-ordinated online presence for the businesses.
- BIDs can help with business cost reduction (eg through stock loss and crime reduction initiatives, joint procurement projects).
- The BID levy can be used to lever in additional funding that is not available to an individual business or, in some cases, the local authority.
- BIDs can provide effective area marketing and promotion to the local community and visitors.
- The BID levy is ring fenced for use only in the BID area.
- Through the BID the business community as a whole is represented and has a voice on issues affecting their trading area. BIDs have a proven track record in both lobbying and championing business concerns with local councils, police and other public bodies.
- BIDs create local networking opportunities and can lead to business to business trading, helping keep the money and employment local.
- BIDs follow a democratic process – one property, one vote.
- Established BIDs have been very successful – every initial BID in Scotland that has been to a renewal ballot has been approved for a further 5 year term.
- BIDs can also help reduce risk by providing a forum for businesses and the local authority to work together on a clear vision, leadership and strategic focus for the area, and encouraging private and public sector investment.
- The opportunities for BIDs are continuing to grow with the publishing of Scottish Governments. Town Centre Action Plan both supporting BIDs and encouraging town centre development and regeneration. The Community Empowerment Bill opens up opportunities for BIDs which are not available to single businesses.