Ruth Duston and Ben Rogers explore the growing contribution that Business Improvement Districts are making to the economic and civic life of the city.
Business Improvement Districts (BIDs) represent one of the more notable developments in local governance in recent years. Essentially, a BID is an area-based business-led body, created through a ballot process, with the power to raise a modest precept on business rates to fund improvements to the local area. UK BIDs are required to renew their mandate through a ballot of their funders every five years. BIDs are funded primarily through their levy, but can also draw on other public and private funding streams.
Based on US models, BIDs were introduced to the UK in 2004. There are now 300 across the country and 63 in London. The BID model has proven attractive across geographies and political makeup, with take-up across inner and outer London boroughs and under Labour and Conservative administrations. The rate of adoption has been impressive, doubling between 2011-2016.
The legislation that governs BIDs is not prescriptive about size or focus, and they have proved remarkably adaptive. Originally designed with high streets and town centres in mind, we have seen the emergence of a variety of models: city centre BIDs covering world-renowned tourist attractions where the occupiers pay the levy, property-owner BIDs in prime retail zones where the landlord pays the levy, micro-BIDs covering small high streets with no paid staff, and more recently even industrial estate BIDs. The levy income in London ranges from just £20,000 p.a. to
c. £7.5 million p.a. for the New West End Company.
A growing role
London BIDs have grown in ambition and importance. When first launched, most focused on a “clean, green and safe” agenda, paying for more street cleaning, planting flowers and funding local anti-crime initiatives. However, as they have matured, they have taken on a more strategic, place-shaping role, developing, championing and sponsoring major transport and public realm improvements. Some major public realm improvement projects would have been unlikely to happen without the catalysing influence of BIDs. For example, the Northbank BID led moves to dismantle the one-way system running around Bush House at
Aldwych and create a new piazza at Somerset House: the project has now been taken on and driven by the local authority. This demonstrates the leadership role BIDs can take.
Elsewhere, the New West End Company has been an important force in the campaign to pedestrianise Oxford Street; Better Bankside has led on opening up street-level access to old railway viaducts, creating new commercial space and greater pedestrianisation of the area; and Camden Town Unlimited has developed detailed proposals for a “Camden Highline” (inspired by the New York Highline) to create new public space out of a defunct railway. Again and again we see BIDs commissioning urban planners to develop proposals for their areas, getting interested parties round the table, brokering deals and securing investment – often in innovative ways.
While BID income has generally been fairly modest, propertyowning BIDs in central London have the potential to generate significant additional revenue for investment. As essentially private funding for public projects, the BID levy is extremely valuable and can be leveraged to unlock other funding sources.
Holding a ballot followed by five years of secure income is what sets BIDs apart from other civic neighbourhood organisations. This funding means they don’t have to rely on voluntary resources or grants for their core costs: instead, they can focus on delivery until the next ballot. As part of the setup process, BIDs and local authorities have to agree that all services provided by the BID will be additional to what the local authority already provides, guaranteeing they won’t replace core local government functions.
Finally, the ballot allows BIDs to “fail clean”: if a BID loses the support of its electorate, there is a definitive end point and wind-up rather than slow atrophy.
Despite these advantages, some wariness of BIDs remains. This seems to originate from a worry that BIDs could represent the intrusion of business interests into local democracy. Others are appreciative of the benefits that BIDs can bring, but would prefer to see business interests represented in a more streamlined governance structure with both residents and businesses covered.
We think BIDs have a legitimate and valuable role to play, representing
important city interests and helping galvanise and co-ordinate local initiative. In some ways, the name is not helpful: lots of BID members and levy payers are not businesses but rather public and not-for-profit organisations. Whitehall Departments feature heavily in the Victoria Westminster BID. King’s College London and the London School of Economics and Political Science have been leading players in the Northbank BID. The Euston Town BID is chaired by a representative of University College London Hospital. Perhaps they are better thought of as “BEIDs” – Business and Employer Improvement Districts – or “CIDS”: Community Improvement Districts.
Of course, businesses and employers do have a legitimate interest in their areas of operation – they represent their employees and customers as well as tourists, students and anyone else who uses an area yet is not a resident of it. BIDs arguably play a particularly important role in London precisely because it is a city of business – especially in central London and the many town centres where workers and visitors far outnumber residents. The latest numbers suggest that there are three times as many workers as residents in Westminster. They also have a real interest in the improvement of the areas where they operate.
Working with communities
As BIDs have developed and matured, they have come to work more closely with community organisations, voluntary groups and civic societies. Victoria BID is supporting the Victoria Neighbourhood Planning Forum, looking after Community Infrastructure Levy funds on their behalf; Better Bankside operate a
small grants programme for local community organisations. Some BIDs, in fact, have a strongly civic character. Simon Brooksbank, co-founder of Planning Out, an LGBT+ planners network, is leading a move to establish a Soho BID with the aim of preserving Soho’s long history as a centre of gay culture.
Meanwhile, the Camden Town BID (Camden Town Unlimited) has set up a hub to support local startups and, working with the Euston BID and others, has also launched Alternative Camden – “a new type of local institution that helps us all create a radically more democratic, sustainable and equal future”. This new institution will support civic innovation in areas like data privacy, carbon emissions, skills and employment. We are big fans of London’s boroughs, but it’s not easy to imagine them coming up with innovations like this in the absence of a BID, as the BID has alternative routes and mechanisms of engagement beyond the traditional local authority.
Another valuable feature of BIDs, and neighbourhood institutions more generally, is their ability to work across established administrative borders. It’s almost an iron law of government that municipalities pay more attention to the centre of their districts than the peripheries, in part because improvements to a periphery tend to benefit fewer voters than improvements to the centre. For instance, it’s striking how many of London’s “opportunity areas” – that is, areas that would benefit from
major investment – straddle borough boundaries. But BIDs can be configured to cross administrative boundaries, knitting an area together and securing much-needed investment for it. Aldgate is just one example: on the border between Tower Hamlets and the City of London, the area has a rich history and an impressive mix of businesses, universities, charities and cultural institutions, but is trisected by three arterial roads and has long felt a bit neglected. The new Aldgate business partnership, that will be balloting local businesses in the new year to become a BID, is beginning to change that by advocating for transport and public realm improvements, promoting the visitor economy and helping local people with work and skills.
Of course, BIDs vary in the extent of their ambitions and the quality of their partnerships. There is definitely scope for more of them to engage constructively with local community groups and civic organisations. But it would seem a big mistake to turn our back on the enterprising, can-do, collaborative spirit that characterises the best London BIDs – especially as the balance of power remains very much in favour of local, regional and national government. Neighbourhood initiative needs all the support it can get.
What’s next for BIDs?
For the future, two priorities stand out. First, we need to revisit some of the legislation, especially around BID setup. Creating BIDs is a long and adminstratively heavy process. Lengthy notification periods and often a skeleton resource due to funding limitations, makes the establishment of a BID more challenging to deliver on. Outdated and resource-intensive burdens are placed on the local authority and BID proposers, and could be streamlined significantly.
We also need to consider whether there is some way of strengthening BIDs’ role in local decision making. Currently, boroughs, mayoral and national government agencies, utilities and others have no obligation to work with BIDs. While uncommon, we have seen cases of public sector organisations pursuing schemes that have a major impact on a BID area without engaging the relevant BIDs. Likewise, some BIDs complain of the difficulty of getting boroughs and similar organisations round the table. Could we establish a legal duty on the part of neighbourhood stakeholders to cooperate?
Beyond this, there are interesting and difficult questions about how BIDs should relate to neighbourhood forums, ward councillors and other neighbourhood-level authorities and initiatives. Any move to establish a neighbourhood forum in an area with many businesses has to win backing in both a residential and a business ballot. But there is no similar obligation on BIDs to win the backing of residents in heavily residential areas. Should there be?
Parishes have been slow to take off in London, perhaps in part because we already have two levels of permanent, formal sub-national government – the Mayor and the boroughs. But could a residential version of a BID – a pop-up parish with specific areas of focus that had to seek a renewal of its mandate every five years – be a way forward on neighbourhood governance? And if so, how would these pop-ups relate to BIDs? Could we experiment with a hybrid resi-business BID – a CID (Community Improvement District), or NID (Neighbourhood Improvement
District)? Or could we find ways of encouraging BIDs and residentialled counterparts to work together somehow?
From a certain point of view, BIDs are representatives of businesses, and as such have most in common with business membership organisations like, for example, a local chamber of commerce. But as this essay has tried to suggest, they might be understood more plausibly as a form of neighbourhood governance. They have already achieved a great deal. The question should not be “How can we constrain them?” – as it perhaps still is in some purist circles. Rather, we should be asking how we can support them to do what they do well – as well as how to harness their
enterprising spirit, deepen their civic connections and learn from them in strengthening neighbourhood capital.