We look into BIDs as Birmingham Jewellery Quarter verges on a decision
Business Improvement Districts were a 1970s invention but are proving to be crucial in redeveloping today’s high streets into attractive, sociable and safe shopping havens. Kathryn Bishop finds out more about this growing culture.
When you walk down your local high street, what is it that you see? Is it a welcoming place with clean streets and a local policeman keeping watch amid a buzz of community activities? Are there decorations and lights at Christmas? Does it host interesting shopping events to bring the local retailers together?
All of the above are typical of Business Improvement Districts (BIDs) that can be found in town centres up and down the UK. The rise of these schemes is reflective of a growing interest among high street retailers that want to not only improve their local area for residents, but also to give shoppers a reason to keep coming back and, crucially, spending.
Last month Birmingham’s Jewellery Quarter became the latest area considering becoming a BID. About 550 businesses are taking part in a voting process by ballot following a series of consultation and drop-in sessions run by Jewellery Quarter Development Trust (JQDT).
But what does a BID entail, how does an area become one and what else can BIDs offer businesses aside from clean streets and a local bobby?
A BID is described as a precisely defined geographical area within which the local businesses have voted to invest collectively in area improvements to enhance the trading environment. A BID has no limitations on size – it can be as small as two businesses – but they work to the agreement that they want to contribute a percentage of their business rates in order to benefit from enhanced services. Typically, a BID will be a street or area where the issues facing the businesses and retailers are shared.
BIDs were first established back in the 1970s in Canada and arrived in the UK in 2003, when legislation for BIDs received Royal Assent and 22 pilot BIDs were launched.
A BID works by charging businesses in the area with a rateable value of £10,000 or more an annual fee of an extra 2% on their business rates. This money is then invested back into the area to attract investment, increase visitor numbers and encourage a more vibrant economy, while making the area a better place in which to work, invest and live.
At its heart, a BID should be led by the local businesses that understand the area, but administration and management will often require the appointment of a dedicated staff member; something local steering committees may be able to help finance but that should be covered within a BID’s levy.
The Royal Society for the encouragement of Arts, Manufacturers and Commerce (RSA) has outlined the typical activities and applications that BIDs have focused on in the UK. These include marketing and promotion of local businesses through open evenings, town centre vouchers and discount days, the improvement of safety and security through night managers and linked shop communication devices, improved cleaning, recycling, maintenance and regeneration and business support, such as joint insurance services. The benefits of BIDs also fall into five main categories, namely to increase footfall, increase spend, reduce costs, improve safety and improve cleanliness.
In Birmingham, the JQDT chair Dave Mahony, who is also managing director of an architectural firm in the Jewellery Quarter, describes the area as a tailor-made for a BID. “The Jewellery Quarter [has a] unique blend of business and heritage, manufacturing, private investment and ownerships and its skilled, creative people who take great pride in the place,” he says.
With the Birmingham Jewellery Quarter’s ballot now underway the JQDT – which Mahony says is “determined to succeed” in getting a BID for the area – will have to adhere to two conditions to succeed.
Firstly, more than 50% of businesses balloted must support the BID’s business plan, and secondly more than 50% of total business rates for that area must be paid for by businesses supporting the BID.
If successful, the BID will be established as a legal company and a management committee from within the participating businesses will be elected to monitor progress against the business plan.
But the impact of a BID – and its success – will be determined by the local businesses that together will identify key issues for the area that the BID can help improve, by creating a tailored business plan.
Such issues can vary from cleaning the streets and securing more regular rubbish collections, through to acquisition of services not offered locally, such as extra security or special business awareness, something jewellery retailers or companies in the Jewellery Quarter, for example, could utilise.
In London’s West End – the area between Oxford Street, Regent Street and Bond Street – the New West End Company, a once voluntary organisation, has operated as an official BID since 2005 “to drive forward London’s West End as a shopping destination”.
At present it oversees improvements on Bond Street, Oxford Street and Regent Street as well as 12 neighbouring streets and this year is set to renew its BID activities for another five years. To date this BID has promoted the West End, delivered services such as refuse collection and street cleaning and funded public projects to improve the shopping environment.
But just how effective are BIDs? The RSA says that the rate of success, both in terms of achieving their individual objectives and through attracting additional investment, has been good. The report states that BIDs have been implemented across the UK and in 2010 £250 million had been raised from businesses, with a further 20% of additional funding raised from other organisations such as trusts and through BIDs generating their own income.
The RSA notes that business support for BIDs has been “quite strong”, with 70% of local businesses backing BIDs in the initial ballot processes, as well as from businesses involved in BIDs that had, in most cases, “successfully achieved their strategic objectives and had been a welcome addition to the management of town centres”.
A big worry for those considering becoming a BID is whether an increase in business rates will automatically up the BID charge. Positively, the rate of the BID levy is determined at the initial implementation of the BID and will not change until the BID is next returned to the ballot at the end of the first year or at any time after that.
A BID won’t affect the level or quality of service offered by a local authority but instead allows businesses to choose to have a level of service which goes beyond the baseline services offered by the council, and they also allow the businesses to choose how they want to see their money invested in that area, whether it is with new trees, better lighting or more shopper-focused events.
Back in Birmingham, however, where the ballot voting will close in a matter of weeks, a prospectus about turning the Jewellery Quarter area into a BID has been supported by the city’s Lord Mayor Anna Ward, as well as city council members including Timothy Huxtable, Birmingham’s cabinet member for Transport, Environment and Regeneration Councillor.
“There are currently nine BIDs in Birmingham and I have seen how BID status has helped businesses to improve their local environment for staff, residents and visitors,” says Huxtable. “The City Council sees the Jewellery Quarter as very much a part of the city centre and wishes the JQDT the best of luck in achieving its aim of securing the Quarter as a Business Improvement District.”
The decision is yet to be made as to whether The Jewellery Quarter will join together as a BID but with schemes already yielding results elsewhere in the city the green light seems likely.
For more information about BIDs in the UK, contact the National BIDs Advisory Service via ukbids.org.
This article was taken from the May 2012 issue of Professional Jeweller magazine. To read a digital version of this issue click here.