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Are BID Schemes Worthwhile?

27 September 2010

There are currently more than 100 Business Improvement District (BID) schemes in place across the country. The scheme requires local businesses to pay an increased charge on their current business rates to create a fund, which would be used to improve the local area. The extra services are to be provided on top of those already supplied by the council and include ensuring the town centre is cleaner, with better promotion and marketing for businesses in the town. Decisions on the areas to be improved are decided by the businesses in the scheme.

To set up a BID scheme, a non profit steering group, comprised of property owners and local businesses encourages other businesses in the area to vote in a ballot. If the vote agrees for the scheme to be adopted, it will then run for five years. The overall aim is to improve trading conditions for the local businesses and increase the competitiveness of the area.

So far, many of the schemes seem to have been successful. The areas have seen increased footfall and cleaner, more vibrant towns. Also, in the majority of UK BID schemes, properties with rateable values of less than £7,500 are exempt from voting or paying the levy, but they can voluntarily choose to take part in the scheme if it proceeds.

But for some, the added strain of the levy on top of increased business rates is not worth the potential benefit of the BID scheme.  Many companies are failing to pay the levy as well as their business rates, resulting in councils having to take legal action. Also, some larger chain stores do not support the BID schemes, angering smaller businesses. It is after all due to large retail shopping parks that many local businesses are suffering, hence the reason for most BID schemes.

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