The Bangor Business Improvement District (BID) was established on April 1st 2016 to help realise the vision that Bangor is the place for visiting, working, enjoying and living in North Wales.
Frequently Asked Questions
Here are a few of the frequently asked questions raised about Business Improvement Districts in general along with some of the questions raised regarding the Bangor BID:
What is a BID? A Business Improvement District (BID) is a partnership between the local business community and a local authority to develop projects and services that will benefit the trading environment within the boundary of a commercial area. BIDs are funded in whole, or in part, by a levy which is additional to the non-domestic rates. The additional funding raised is used in the specified area to improve the public realm, promote business and make the area more profitable for business.
How is a BID established? The process of developing a BID involves widespread consultation with businesses to ascertain what improvements they want and may be prepared to pay for. A BID proposal is then produced and a 28 day postal ballot held where businesses vote ‘for’ or ‘against’ the proposed programme. For the BID to go ahead, two conditions must be met; firstly, a majority of those voting have to vote ‘yes’ and secondly those ‘yes’ votes have to correspond to more than 50% of the total rateable value of all votes cast.
How can a BID benefit businesses? BIDs are viewed by many businesses as a reasonable and affordable way of producing a ring-fenced fund for up to 5 years that is managed by business for business. Town centre BIDs generally focus on increasing footfall and generating additional consumer spend, something that has been particularly relevant to businesses in the current difficult economic environment. Across the UK there is clear evidence of the accomplishment of BID schemes which have led to increased footfall, higher spending, cleaner, safer and more vibrant towns.
Is a BID levy compulsory? If these conditions are fulfilled, payment of the levy becomes compulsory for all businesses regardless of how they voted.
Can I opt out? No. A positive result in the ballot will signify that all eligible businesses over the threshold and within the BID boundary are required by law to pay for a period of up to 5 years.
Is there a minimum turnout threshold? There is no minimum turnout threshold.
Who is permitted to vote on whether to accept or reject the BID proposals for the levy? The person(s), registered company or organisation who is the rate payer for non-domestic rates of a rating hereditament within the proposed BID area. There will only be one vote per rating hereditament.
What is the role of the local authority? The local authority has a statutory responsibility to support the development of BIDs and facilitate their establishment. This includes conducting the ballot and collecting and enforcing the levy. The authority must also confirm that the proposed BID does not conflict with area plans and schemes.
Who is liable to pay a BID levy? Any person, registered company or charity/non profit making organisation who is the occupier/leaseholder or where the property is empty and a lease does not exist, the owner, of the non-domestic rated property within the BID area is legally responsible for the BID Levy.
How is the BID levy calculated? This varies according to the BID proposal and varies according to local circumstances.
How and when is the BID levy payable? Councils will send a BID levy account for you to pay on behalf of the BID company. The BID levy is paid directly to the Council.
What happens if I don't pay the BID levy? The Council will follow the same process as non-payment of business rates.
How will the BID levy be managed? A BID is funded through the BID levy, which is a small percentage of a gross businesses’ rateable value. Once a ballot is victorious the BID levy is compulsory for all eligible businesses. The BID levy is collected by the council into a ring-fenced account (called the BID Revenue Account) and passed to the BID Company for use on the projects and services set out in the BID proposal.
What is the difference between a BID levy and business rate? Business rates are collected by local councils and handed over to Central Government for redistribution nationally. The levy is not like non-domestic rates – the BID money doesn’t go to Central Government. All of it remains in BID area to be spent on things that you decide to put in the BID business plan. It will be collected by the Council and transferred to the BID company to spend in accordance with the business plan – a formal operating agreement will be signed by both parties to authenticate this arrangement.
I’m located outside the identified BID area. This BID won’t help me, will it? You should benefit from what is described as the ‘Halo Effect’ of the programme throughout the vicinity of the BID area. Every effort should be made to include your specific business in the overall project activities.
Will non-commercial occupiers have to pay? Yes. Organisations such as local authorities, Universities etc. within a BID boundary will have to pay the levy in the same way.
I’m a small business. Will I benefit as much as the larger chains? The levy is a percentage of rateable value so, generally, you will be paying considerably less than the multiples. Nevertheless, the benefits will be equitable. For example, town marketing and promotion activities should benefit your business in particular.
Shouldn’t the Council be paying for this through my business rates? There is no relationship between the amount of business rate collected by the Council and the amount it receives back from Central Government to deliver services in the area. A BID, in comparison, generates revenue that is 100% ring-fenced for the area in which it is collected, to be spent on projects for the benefit of businesses that pay the BID levy. All services provided by the BID will be supplementary to those provided by The Council. Additionality is ensured through the production of a ‘Baseline Agreements’ with each Council, setting out the standard level of service that is already provided for the BID area. This ensures that the BID levy only funds services and projects over and above this level.
What if I already pay rates and service charges as part of my rent? Where the occupants of hereditaments pay an inclusive rent or other charge for occupying space that includes the rates charge, the owner is liable to pay the BID levy and, consequently, is eligible to vote in the ballot.
I’m thinking of taking on more premises in the BID area. Will I have to pay a levy on these when I move in? Businesses which begin to occupy existing hereditaments during the BID period will be liable to pay the levy for their period of occupation, providing the hereditament remains eligible for BID membership. The BID levy will be extended to occupiers of hereditaments built or first occupied in the BID area during the life of the BID, assuming that they are otherwise eligible.
Who will pay for the costs of the ballot? The costs of the BID ballot, if successful, will be for Councils. In the event of a failed ballot, Councils may chose to pass on costs to BID organisation.
What happens after the ballot? If there is a successful outcome from the ballot, the maximum length of a BID term is 5 years. The projects and programmes identified in the business plan will then be implemented.
What does success look like? Performance measurement is important to demonstrate tangibly the improvements to an area through specific Key Performance Indicators.
I believe my town is too small for a BID – is it? The BID is a flexible mechanism that can generate large annual levy income of £2.7 million in London’s New West End or as little as £20k in New Addington in Croydon. This is very much a local decision as a proposal must meet local expectations.
Welsh Government – BIDs Wales Development Support
Can a proposal be submitted on behalf of an organisation other than a local authority? No. For the Development Support funding we are asking local authorities to take the administrative lead and act as the recipient of the funding, on behalf of a wider partnership.
Can more than 1 application per local authority area be submitted? As the funding available is £200k we are limiting applications to 1 per local authority area and will therefore expect a maximum of 22 applications. We are asking local authorities to provide a strategic overview in selecting and supporting an area that has local consensus within the business community and has the most potential to return a positive ballot. Submitting more than one application may compromise all applications from that local authority area.
Can match funding be in kind or will you require cash? We will require a minimum of 25% funding to match the up to 75% funding that is available from the Welsh Government. You may include in kind contributions in your proposal though (printing costs, marketing and promotion, hire of venues etc.) as this will reduce the overall programme costs and the funding required within your application.
BIDs are traditionally focussed on town and city centres. Will you consider alternatives? A BID is a flexible mechanism that can be adaptable to a range of settings. We encourage creativity and innovation in your proposals and will be selecting the successful areas against the established criteria for assessing applications.
Can you support work on BIDs that has already been completed in my town? We will not be providing any retrospective funding but work that has been completed in advance that can assist in determining the feasibility of a BID in your area will clearly strengthen your application.
What can the Welsh Government’s grant can be used for? The grant is offered for the commissioning of an external, independent consultant to work with the Local Authority and the business community. The general lack of experience and technical expertise available, and the resource needed to undertake the work, have been seen as barriers for the progress of BIDs in Wales hence why the Development Support has been made available.
Can Local Authorities act as the consultant? No. The grant is offered to support the commissioning of an external, independent consultant to work with the Local Authority and the business community.
Does my area have to apply to the Welsh Government to develop a BID? Any area can develop a BID (as outlined in the legislation and regulations) by using their own resources. This may be something you may wish to consider if you feel you have the resource and expertise in-house and you do not require funding support.
If a consultant has already been identified and appointed by a potential BID ‘group’ is this acceptable? If a consultant has been recently identified and appointed that should be fine as long as (a) that the consultant was procured in accordance with the local authority’s procurement guidelines and (b) that the work for which the consultant has been asked to undertake has not already started. The grant available should not be used to support retrospective work and the commission should not commence before receipt of a grant offer letter from the Welsh Government.