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The Vale of Glamorgan Council

 

Cabinet Meeting: 18 November, 2013

 

Cabinet Member for Regeneration, Innovation, Planning and Transportation

 

Business Improvement Districts Wales - Development Support

 

Purpose of the Report

1.         To inform Cabinet of the mechanism and process involved in running a Business Improvement District (BID) and advise of the publication of Welsh Government Guidance (attached at Appendix 1) on the application process for revenue funding to support the development of BIDs in Wales.  The report also seeks delegated authority for the Director of Development Services in consultation with the Cabinet Member for Regeneration, Innovation, Planning and Transportation and Director of Resources to submit an application to Welsh Government for BID Development Support revenue funding.

Recommendations

1.         That delegated authority is given to the Director of Development Services in consultation with the Cabinet Member for Regeneration, Innovation, Planning and Transportation and Director of Resources to submit an application to Welsh Government for Development Support revenue funding to support the development of a BID in the settlement of Penarth.

2.         That Cabinet agree to the use of the urgent decision procedure as set out in article 13.09 of the Councils Constitution in view of the need to respond to Welsh Government's application process by 29th November 2013.

 

Reasons for the Recommendations

1.         To enable the Council to submit an application to Welsh Government by 29th November 2013.

2.         To ensure the Council does not miss the deadline to apply for the funds.

Background

2.         A Business Improvement District (BID) is a business led initiative whereby local businesses and organisations are invited to come together, in partnership with the local authority, to make decisions and to take action.  The BID is a means by which local businesses and organisations have the power to raise funds that can be used for local initiatives with the aim of improving the trading environment.  It is an investment scheme where local businesses can collectively agree on the priorities and how to invest their money to benefit themselves, their staff and their customers and overall the area within which they operate.

3.         A BID operates within a defined area, within which businesses pay an additional levy, over and above the non domestic rates, in order to fund projects within the BID's boundaries.  The BID is often funded primarily through the levy but can also draw on other public and private funding streams.  A BID can be confined to a town centre area, an industrial estate or even concentrated on a theme.  The first BID was rolled out in Canada in the early 1970s and BIDs have been very successful in the United States. 

4.         The United Kingdom has benefitted from a variety of BIDs being set up throughout England over the past 10 years.  The first BID in Wales was in Swansea, covering more than 800 businesses within the city centre boundary.  Its main focus is on car parking and transportation, safety and security, cleansing and regeneration, promotion, marketing and events and commercial business.

5.         As stated above, a BID can be run in a variety of areas, however, they are largely used in town centres. The key to a successful BID is its management through a town centre partnership and "BID Manager".  The partnership is made up of stakeholders nominated by BID members and these representatives provide their time and experience free of charge.  To date the Swansea BID has raised over £2.3 million (1% of rateable value of member businesses) in levy towards delivering the aims and objectives of the BID.

6.         Alongside Swansea, Merthyr Tydfil (BID Development Study attached at Appendix 2) is the only other unitary authority area to have set up a BID in Wales and is the 129th BID in the UK.  The new BID company will invest around one million pounds on a comprehensive programme of improvements in Merthyr Tydfil town centre over the next five years.  This consists of £650,000 from local organisations, a commitment from the Welsh Government of £223,000, plus Merthyr Tydfil County Borough Council is looking to provide a yearly investment of about £30,000.  The BID ballot was 65% successful overall.

7.         The themes of the Merthyr BID range from public realm improvements to improving the visitor experience and more unique considerations such as collective purchasing to reduce costs for local businesses.

Relevant Issues and Options

8.         Welsh Government has recently announced a £200,000 fund available to assist local authorities in setting up a BID in their area.  Welsh Government is supporting the development of additional BIDs in Wales through this fund, as a key component of its commitment to encourage economic development.  The funds are available competitively to allow development up to the stage of ballot of local businesses.  Applications for funds need to be submitted by 29th November 2013.

9.         Funding of up to £25,000 is available per application with an expectation that match-funding of a minimum of 25% being put forward from other sources.  The funding will support the commissioning of consultants to assist local partnerships in developing a BID.  The consultants will be appointed by Local Authorities to work with the partnerships that have been successful in this process.  The role of the consultant is to guide and advise the local partnership and provide the necessary support to give each prospective BID the best possible chance of success.  The role of the local partnership to lead the process and promote the BID locally will be complemented by this expert support.

10.      BIDs could have a role to play in broad regeneration, including for instance a themed tourism businesses BID, coastal location BID or an industrial area.  However, the appetite for such amongst stakeholders and likely successes are untested in this area and as such I would recommend a cautious approach via a pilot. In this respect, Penarth Town Council has shown an appetite to play a lead role in pushing such an agenda for its town centre, and has already commissioned consultancy to support such a proposal.  Council officers are hence working with the Town Council to develop a submission for the development fund to progress Penarth as a pilot.

11.      The Council has recently discussed the draft Town Centre Framework document with key stakeholders in each of the four principal town centres.  This has shown that there is a clear appetite in Penarth to improve the offer in the town centre.  The BID mechanism would enable the Council to achieve these improvements with the assistance and partnership of the private sector.

12.      The Council is currently recruiting a new Town Centre Development Officer within the Business & Employment Team.  This role would be the primary contact for the Council in Penarth's BID.

13.      If a BID is successful at ballot, all non domestic rate payers within the balloted area would be obliged to pay the additional levy.

14.      A successful ballot that supports improvements to the town centre will have a positive impact upon marketing the town as a tourism destination.

15.      From research, it appears that a 1-2% levy of business rates is the norm and perhaps all that can be expected to be successful at ballot. Based on a 2% levy, a confined BID around Penarth Town Centre could raise up to £50 000 per year.  This could be reduced if for instance it is decided not to charge the levy to smaller businesses (e.g. less than £5,000 or £10,000 rateable value), which happens elsewhere or indeed if charity shops are included in the BID boundary, as they only pay 20% of their rates bill. Currently, small business rates relief is available to businesses with a rateable value of less than £6,000.  Businesses with a rateable value of between £6,000 and £12,000 will pay rates on a sliding scale from 100% to a zero charge.  On the other hand, if a BID area was to be more extended and successful at ballot to include local centres, The Esplanade or the Marina, a substantially higher levy could be raised.

16.      A successful BID could only be achieved with an initial minimum 18 month period being spent on developing the BID in partnership with the private sector.  There needs to be ballot, and success relies on a majority vote of all non domestic rates payers within the BID area, i.e more than 50% of business ratepayers by number and by rateable value.  The process is hence not straightforward.

 

17.      However, evidence suggests that BIDs which are successful at ballot generally achieve a higher percentage vote in favour when renewing at a second ballot, suggesting businesses generally recognise the benefits of raising additional funds, deciding how those funds are invested, and coming together as a coherent voice  and action group for their area.

Resource Implications (Financial and Employment)

18.      25% match funding (cash or in kind contribution) to the grant would need to be found in order to progress an application to Welsh Government.  In kind time contributions for the new Town Centres Development Officer could be used.  There would also be incidental costs such as promotional materials and consultation events.  These elements of costs are being discussed with Penarth town Council and any contributions by this Council would come from within Economic Development Service Estimates.  However, if successful at Ballot a bid could raise substantial revenue to be invested in the BID area to assist economic development.

19.      If a BID ballot is successful and implemented, there would be costs to the Council for bespoke software for the collection of the levy with non domestic rates of £5,000 plus £2,000 a year depending on the length of the BID.  There will also be staff cost implications for collecting the levy.  These costs could be top sliced from the collected levy or given as a contribution in kind by the Council.

Sustainability and Climate Change Implications

20.      A BID could generate a revenue stream to support e.g. public realm improvements and promote local investment and hence employment.

Legal Implications (to Include Human Rights Implications)

21.      An independent BID Board would be set up and made up of members paying into the bid.

Crime and Disorder Implications

22.      A BID could fund e.g. lighting or other initiatives which could reduce opportunities for crime, but this would be a choice of the BID.

Equal Opportunities Implications (to include Welsh Language issues)

23.      There are no equal opportunities implications.

Corporate/Service Objectives

24.      Corporate Plan 2013-2017 Objective R1 Work with partners to enhance and regenerate the Penarth Esplanade, and ensure sustainable and convenient links with the Town Centre and Penarth Haven; and, Objective R10 Produce and implement a framework for the future of the town centres of the Vale of Glamorgan to promote investment and improve their vitality and attractiveness.

25.      Development Services Directorate, Service Plan 2013/17 - Objective 2 "The opportunities afforded by investment and regeneration are maximised, for the benefit of local people and businesses."

Policy Framework and Budget

26.      This is a matter for Executive decision.

Consultation (including Ward Member Consultation)

27.      All Penarth Ward Members have been consulted.  Councillor M Wilson has expressed support for the proposal.  Any other comments will be reported verbally at Cabinet.

Relevant Scrutiny Committee

28.      Economy & Environment.

Background Papers

Appendix 1 Welsh Government Guidance, Business Improvement Districts Wales - Development Support

Appendix 2 Merthyr Tydfil BID Development Study by The Means.

 

Contact Officer

Emma Smith, Principal Business & Employment Officer - 01446 704878

 

Officers Consulted

Operational Manager for Countryside & Economic Projects

Principal Regeneration Officer

Tourism & Marketing Officer

Events Officer

Committee Reports Legal

Head of Finance

Revenues & Benefits Manager

Business Manager, Corporate and Customer Services

 

Responsible Officer:

Rob Thomas, Director of Development Services.