Business Improvement District Questions

The Business Improvement District Page

The Chamber has been working with Waverley Council and the other 3 Chambers in Waverley (Cranleigh, Godalming and Farnham) to explore the opportunity to create a Business Improvement District in each of the four towns.

We will keep this page updated as the BID process progresses.

Towards the bottom of the page is a basic backgrounder about BIDs – what they are and how they are set up and managed.

Update February 2020

Both the Chamber’s Committee and the BID team separately and together have continued to discuss options for the organisation and management of the “Business Improvement District Body”. The body will be responsible for developing and implementing the proposal which sets out how the Business Improvement District will operate – and or liaising with the local authority.

While a Business Improvement District is typically thought of as being of benefit to retailers, 50% of BIDs provide specific, dedicated support for their service and professional sector levy paying members according to the National BIDs Survey 2019.

Relationship with the Chamber of Commerce

Three models have been identified for the interaction between the Chamber and the BID.  Remember:

  • The Chamber represents all businesses within 5 miles of Haslemere’s town hall, whereas
  • A BID will represent only those organisations with the agreed BID district

Option 1 A Single Joint Organisation

Chamber disbands and reforms as a legal entity (as opposed to a loose association that it is now) encompassing the BID responsibilities. The Board has a single CEO and includes 1) BID members with a remit to spend the BID funds from business rates according to the BID business plan, and 2) Non-BID Chamber members with remit to spend subscriptions for the benefit of off-street members

  • Pros: A single board (easier to staff and coordinate BID/ Off-high street issues). Very pragmatic approach as we always struggle to staff the Chamber’s committee places as it is.
  • Issues: The key issue is balance. With far more money BID will be perceived to dominate and marginalise non-BID interests? Who will be shareholders in the new legal entity?  How will balance be maintained between those that pay the BID levy and those that pay Chamber subs?

Option 2. Separate Organisations

The Chamber remains as-is and a new separate BID organisation, with it’s own CEO and Board, is created. There is little formal interaction between the two.

  • Pros: Simpler structure to create, not involving reforming the Chamber. The BID proposal can progress without having to consider the future of the Chamber.
  • Issues: With far more money BID will dwarf the Chamber which will lose high street members to the BID organisation, hence scale and influence.  Off-high-street businesses will not be represented.

Option 3. BID as Chamber ‘business unit’

The Chamber reforms as a new legal entity with it’s own CEO.  The BID organisation is a business unit ‘owned’ by the Chamber with its own CEO and board, having control over BID funds. There may be other ‘business units’ owned by the Chamber such as the Business centre is now and as being considered for car parking.

  • Pros: The Chamber has a wide role across different sectors and business interests and is able to continue to be “the voice of local businesses”. The clear separation of functions means the different sectors are adequately represented.
  • Issues: Need to choose most appropriate legal structure and then implement (time and cost). Need to staff (multiple?) boards. Will BID members feel this is a case of the tail wagging the dog?

BID body structure

The”BID Body” must be open and transparent and has an obligation to report on its accounts. The is often a private company but can be a partnership with the local authority. Most Business Improvement District bodies are not-for-profit companies.

We currently favour a Community Interest Company (CIC) which is the arrangement used for the Business Centre.

The CIC model is designed to provide an effective legal form for enterprises which aim to provide benefit to the community or to trade with a “social purpose,” rather than to make a profit. CICs occupy an important position in company law – they are a means of making clear that the intention of an enterprise is to provide community benefit, while also conferring many of the advantages commonly associated with a limited company.

CICs are not subject to the more onerous regulations and limitations which apply to charities. In particular, they can be trading enterprises benefiting from the advantages of limited liability and (if limited by shares) can issue shares and pay dividends. This provides relative freedom for the day-to-day running of the CIC, provided that the relevant caps and regulations are adhered to.

A CIC must be registered both with Companies House and the CIC Regulator. A CIC can be any type of company – even a PLC – although in practice, most are companies limited by guarantee.

Thanks to Communities Companies for the above.

The BID Boards and Staff

The following information is from the British BIDs 2019 survey of British Isles BIDs:

  • There is a range of BID Board size and composition, although most range from 8-13, with the largest at 20 and a median size of 10;
  • The balance between Directors and Observers also varies across BIDs, with most having 10 directors and 1 observer, whilst some have up to 20 members on their board, and up to 10 Observers;
  • Most BIDs have Local Authority representation on their Boards, reflecting the important relationship between a BID and its local authority, with over 65% having such representation;
  • 68% of BIDs reported having property owners involved in their boards, with a median number of 1 and a maximum of 8

73% of BIDs operate with three or fewer full-time staff, and 12.2% of the BIDs operated on a part-time team only. The gender balance amongst BID managers, based on simple forename analysis, is almost exactly 50:50 male: female. External staff, that is staff permanently working for the BID but not on payroll, are used by 70% of BIDs. Most of the staff bought in are finance and bookkeeping at 40.9%; with marketing also important at 34.5%. Many of the ‘other ‘category included Rangers, Web design and event management staff. 10% of the sample described themselves as being overall managed by external consultants.

 

Update January 2020

The BID team has continued to meet to move things along ready to apply for a BID loan in May 2020. There are 6 main areas we need to address in our funding application:

  1. Formal inclusive partnership in place with defined governance arrangements.
  2. Costed proposal for management and other resource to support the process
  3. Demonstration of initial preparatory work to show probable scale of the BID and budget
  4. Evidence of business interest in the BID concept (5% of probable levy payers initially)
  5. Commitment from the local authority to the proposed timeline and principles
  6. Agreement from the local authority to act as accountable body

1 Governance Arrangement

The BID feels that that the best way forward was to merge the BID activity and the Chamber of Commerce into one body. To change the constitution would require a 75% in favour vote at the AGM. It was also felt that it would be a good idea if most, if not all, the current Chamber Committee would stay on at least for the next 12 months to help with the transition and that Craig would stay on as President/Chairman of the new entity. It was also suggested that board members would sit for a period of 3 years to assist continuity of project management. It was agreed that a minimum number of 10 people would be good though another 2-3 more would be useful. Duties would be a ix of general management, overseeing project with project teams picked from businesses directly affected as well as other business and commercial issues affecting the district as a whole much in the same way as the chamber committee does now.

We  are in the process of retaining the Mosaic Partnership to advise on organisational options with the pros and cons of different models.

Our AGM to be held on Wednesday 22nd April will be an important event with some key decisions to be made – please save the date.

2 Costed Management Proposal

Chris Boobyer has kindly agreed to develop the business plan along with anyone else wishing to assist. It was felt the Oxted plan would make a good starting point as their projects seemed a good fit for Haslemere.

3 Demonstration of Initial Preparatory Work

We have a considerable amount of information on the BID area and affected ratepayers collated by The Mosaic Partnership during the Feasibility Study. However, updated information has been requested from Waverley Council.

4. Evidence of Business Interest in the BID

At the BID meeting on 1st October 19 we passed the threshold of 5% of organisations supporting our BID application.

5. Commitment from the Local Authority

Under the BID legislation the Local Authority (in our cae, Waverley Council) needs to endorse and support our BID. While this was initially the case and we had enthusiastic support from Waverley Council, the new team is reviewing its position. We have written to the Economic Development Portfolio Holder to ascertain the Council’s willingness to support the BID.

6. Agreement from the local authority to act as accountable body

As for 5. above

Update 1st Oct 2019

Following the work of the core team (see below) we held a public meeting on Tuesday 1st October at the Georgian. The Chamber had arranged for 250 fliers publicising the BID and meeting to be printed and distributed to organisations within the proposed BID zone.  Around 35 people attended the meeting.

Craig McGowan, the Chamber President, led the meeting and brought us up to date with developments over the summer. Due to the change in personnel at Waverley Council (following the recent election) they have still to confirm support for the BD as required by statute. It appears that Haslemere’s BID activities are significantly ahead of the other 3 Waverley Chambers.

Sue McGowen, of Mosaic Partnership and formally Oxted BID Manager. Oxted and Caterham marketed their towns as “destinations” – similar to the the thoughts we have about marketing Haslemere. Sue advised that as we consider a BID business plan, we start from the point of what we need to do and then work back to how much it will cost and therefore the “levy” required of the subject ratepayers.

There was considerable discussion about  who would need to contribute to the BID levy. The starting point is all organisations within the target area that have a rateable value. This includes facilities such as the public toilets, the Haslemere Museum and the charity shops. As we progress through the process, we could choose to exclude some facilities – for example the Museum as its really a voluntary organisation or other facilities where the collection cost would make it uneconomic.

The BID will be administered by a “BID Company” which could be a form of community interest company. Although the Chamber could be the BID company, this is unlikely as the Chamber’s role is much wider than the proposed BID area. The governance structure is to be identified during the BID processes. Typically there are about 10 people on the BID Board.

By show of hand the attendees were asked about whether they supported progressing with the BID process. There was overwhelming support in the room to continue.

During the Feasibility Study phase, the Mosaic Partnership estimated our costs of going through the BID process would be £26,000. The funds can be obtained from the BID loan fund, an initiative of the Ministry of Housing, Communities and Local Government and administered by British BIDs. Our next major milestone is to apply for funding by February 2020.

We need to assemble a team of 12 – 15 people to work through the process and ideally someone to lead the initiative. The core team of five agreed to continue with the process – so we are looking for another 7 or so volunteers. If interested, please contact Craig McGowan on president@haslemerechamber.co.uk.

Click the following link to view the presentation used at the BID meeting: BIDs Update Oct 19

July 2019 Update

A group of 5 local businesses (Marley Flowers, May and Grace, Amazing Grace, Sass and Spirit and Dylans Ice Cream) has been working with Craig to further explore the establishment of a BID for Haslemere. Each of the 5 businesses has spoke to 5 other businesses to get a view on whether or not we should proceed with this initiative. Overall there has been a generally positive reaction to the idea of a BID.

The next steps are:

  • Find a volunteer to lead the initiative – ideally someone whose business will be within the proposed BID area
  • Build up more interest:
    • by advertising the initiative more, such as by approaching the Haslemere Herald
    • Holding another ‘Georgian’ style event but more Haslemere centric and get flyers and additional advertising out to all individual businesses to get as many people as possible to attend. Eddie to remodel the Power Point presentation to achieve more Haslemere Centric feel? Date set for Tuesday 1st October
    • Use the event to carry out ‘show of hands’ ballot for the project if we get substantial numbers
  • Formulate skeleton business plan a la Guildford?
  • Craig to approach Mosaic for joint seminar to be attended by the 4 teams. Email Sue and Mo to get help and advice on next step (if Mosaic willing to attend free of charge)
  • Ask WBC for full up to date list of ratepayers in Haslemere/Weyhill BID district with rateable values.
  • Legal Entity will need to be set up alongside Chamber or convert Chamber to a recognised legal entity ie charitable status, CIC, LTD in order to apply for BID Loan funding.

Our Bid can be funded by a loan from The BID Loan Fund – an initiative funded by the Ministry of Housing, Communities and Local Government. The next tranche of funding becomes available in February 2020. We have a lot to do if we want to take advantage of a loan at this time.

Progress of the other 3 Waverley Chambers is:

Farnham

  • Initial steering committee set up with experience of Winchester BID and others.
  • WBC have supplied data on top ratepayers
  • Steering committee meets 6/8 to discuss next steps/approach (delayed due to holidays)

Godalming

  • Working Group created to assess and carry out next steps.
  • Various interested parties involved in early discussions.
  • Waitrose to be approached.

Cranleigh

  • 2 largest (and popular) businesses have thrown their weight behind the project along with Cromwells Café Positive move as they are all popular in the village.
  • Amended Haslemere flyer used to promote the project which had a positive response.
  • Idea of offering free Chamber Membership for BID affected businesses being considered.

 

The Business Improvement District Page!

The Chamber has been working with Waverley Council and the other 3 Chambers in Waverley (Cranleigh, Godalming and Farnham) to explore the opportunity to create a Business Improvement District in each of the four towns.

We will keep this page updated as the BID process progresses.

Towards the bottom of the page is a basic backgrounder about BIDs – what they are and how they are set up and managed.

We have been working on the BID as part of our “Keeping Haslemere Alive” initiative.  We know that High Streets are suffering across the UK as peoples’ shopping and leisure habits change. So our high streets need to change as well. A BID is one mechanism that might help us manage our High Streets more effectively.

In the last quarter of 2018 Waverley Council retained The Mosaic Partnership to conduct a BID feasibility study in each of the four towns. In Haslemere, Mosaic:

  • conducted interviews with 15 businesses across Weyhill and the Town Centre;
  • conducted an online survey which elicited 19 responses from across the town.

The information below is extracted from Mosaic’s feasibility study report.

 

Next steps

The Presidents of the four Chambers plus Waverley Council are meeting at the end of April to plot our way forward.  If we do want to proceed then we need to:

  • Obtain commitment from Waverley Council
  • Discuss possible shared approach with other 3 Waverley Chambers
  • Find / agree who will lead the activity
  • Agree a management structure
  • Develop BID costings
  • Gain evidence of business interest in the BID concept (5% of probable levy payers initially)
  • Apply for funding from the BID Loan Fund ~£50k

 

 

Data and Information Analysis

A key part of the development of any BID is knowing what is ‘on the ground’, the type of business, the rateable value, the geographical and sector spread. If a BID is to be developed, this information will form the basis of a comprehensive market research and consultation exercise, the development of the business proposals, the balloting and the legal and financial framework upon which the BID is determined and operated.

The Mosaic Partnership consequently regards this part of the study as key and we have used the following data and methods to ensure accuracy.

  1. The National Non Domestic Rates (NNDR) List was formally obtained for the study from Waverley Borough Council. It should be noted that this list ultimately forms the legal basis of any BID levy charge.
  2. The NNDR list was checked and cross referenced through a week long foot survey

This information was then compiled and fully analysed and is available to BID organisers. The information held on this database should only be used for the development of the BID proposals. The key information from this analysis is set out here.

BID Levy Options

The following tables give an indication of the annual levy that could be raised from the Study Area if a percentage based or banded levy, based on rateable value, is charged. In considering these figures a number of things need to be kept in mind. Firstly, these are indicative figures for internal use. The final BID levy amount and consequently the unit amount a business might pay will be
determined by what projects are required.

Secondly, it is worth noting that BIDs operate independently so project costs will need to include not only content cost but also costs for its implementation e.g. employment of staff or use of contract agencies. There is also considerable pressure from those paying the levy to see a tangible difference therefore any levy raised should be sufficient to ‘move the needle’.

Finally it may also prove to be prudent to make exempt from paying those with very low rateable values as administratively it may be more expensive to collect than the benefit achieved. (Those who are exempt do not have a vote).

What shall we do with the money!!

Ideas that came out of the interviews and survey are:

There are a good number of events in town, but marketing of Haslemere as a destination needs improving

  • Marketing of town centre is important for business. But …Marketing of town centre rated poor or v poor
  • Events are needed to bring people into town, And … Marketing of events is good or very good
  • Car parking is a significant issue
  • Public Conveniences important – but in need to refresh
  • Floral displays and seating would be beneficial

As part of the survey, respondents were asked to state 3 words to describe their town centre. The words were used to create a ‘Wordle’ which illustrates what can be celebrated and what needs to be addressed in each area.

Wordmap describing Haslemere

Survey respondents were are what they considered to be the Strengths, Weaknesses, Opportunities and Threats are of Haslemere.

BID Fundamentals

A BID is a formal mechanism which allows dedicated funds to be collected for the delivery of an agreed business plan. Usually, a group of local businesses and public sector representatives form a partnership to develop a BID. Detailed discussions with local businesses are undertaken to identify issues and concerns and from this the partnership develops a business plan detailing projects and services which will address the issues. Businesses are then asked to vote on the plan and if they vote in favour all businesses pay a levy which is ring fenced for the delivery of the BID Business Plan. The vote is a postal ballot which is sent to all business rate payers in the BID area who will pay the levy if the vote is successful. To secure a “yes” vote the proposal needs to achieve sufficient votes through two criteria. Firstly, of those voting over 50% must vote in favour and secondly those who have voted in favour must represent at least 50% of the total rateable value of those voting.

 

Key Questions Answered

What are BIDs?

An arrangement whereby businesses get together, decide what improvements they want to make, how they’re going to manage and deliver improvements and what it will cost them. This all goes into a business plan which is voted on by all those who would have to pay. The BID can last for a maximum of 5 years and must be able to demonstrate how it has benefited businesses who have funded it.
Have BIDs been supported elsewhere in the UK? The legislation came in September 2004 and there have already been over 300 successful ballots including over 60 renewals. These BIDs involve over 100,000 businesses and will bring in over £300m of new finance to develop their centres over the next 5 years.

What might a BID deliver?

BIDs can deliver any projects or services that are agreed by the relevant businesses and are an addition to anything the Public Sector does. In most cases they focus on marketing and promotion activities, increasing safety and security for business and customers and better transport and access arrangements. The important thing is that BIDs are in the main addressing operational matters and that actual projects and services will be determined as a result of detailed consultation with all the business in the BID area.

Why is a BID needed?

A BID is a mechanism which allows businesses to control a sum of money to manage and deliver projects which they believe will improve the trading environment for them. It should ultimately increase trade and drive down costs for those businesses that are paying for the improvements.

Who can develop a BID?

A BID can be proposed by any business ratepayer, property owner, local authority or other key stakeholder with an interest in the BID Area.

How will the BID be Managed?

BIDs should be controlled and managed by local businesses that are paying the levy. The majority of BIDs are delivered through Companies Limited by Guarantee with Directors elected from the BID levy payers. The organisation delivering the BID will be responsible for the delivery of the BID projects and services and directly responsible to all it’s business membership through an elected board.

Who pays for a BID?

Once projects and services have been agreed by businesses, these are costed up. The cost to each business is worked out on a pro-rata basis. This is called the ‘BID Levy’. A formal vote then takes place on the agreed projects and services and if the majority vote YES then ALL within the BID area HAVE to pay. The BID Levy is normally paid by the occupiers of a property. In addition
BIDs can draw in other voluntary funding, e.g., from property owners, public sector and RDA’s.

How does an area become a BID?

Normally a ‘BID Task Group’ is set up which is responsible for putting together a detailed business plan setting out the projects it aims to deliver on behalf of the business in the area. This is based upon a detailed consultation process with businesses. The business plan will include the projects, cost, delivery guarantees, performance indicators and the management structure. A confidential postal vote is then held of all the businesses that would pay the BID Levy. To become a BID a majority of those that vote must be in favour by number and rateable value. A successful BID then has a mandate for a maximum of 5 years after which it needs to ballot businesses again with
a new Business Plan.

Does this mean the local authority will stop delivering services?

BID money can only carry out projects and services which are ADDITIONAL to those that public agencies have to provide. Prior to the BID Business Plan being produced the current services being delivered by all public agencies including the Local Authority and Police are benchmarked. The Local Authority has to continue to deliver that level of service for the period of the BID. The BID company can agree to provide additional resources to deliver a higher level of service over the benchmarked level if businesses want this.

How is the BID monitored?

Like any good business plan specific key performance indicators (KPIs) are set and performance is monitored against the KPIs by the BID board. As businesses contribute the funding to achieve those specific KPIs set out in the prospectus the BID Company will be required to monitor and inform its members of progress on a regular basis.

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