Small businesses and other special
36. Under Clauses 58 and 59, for a Business Improvement
District to be established, a "prescribed percentage"
of those liable to pay the levy must first vote in favouron
the basis of both a percentage of businesses and a percentage
of the rateable value. The Regulatory Impact Assessment indicates
that this will prescribed as the majority of businesses and more
than 50% of the rateable value.
The memorandum from the Association of Convenience Stores stated,
"It is vital in setting rules for the arrangement of BIDs,
appropriate and effective protection for small businesses is retained."
We recommend that a threshold of two thirds of the number of
businesses should be adopted to safeguard the interests of small
businesses in a Business Improvement District. The memorandum
from the Association of Convenience Stores also raised wider concerns
about the need to define the scope of a Business Improvement District
well. The geographical
area where Business Improvement District levies are payable should
accurately reflect the geographical area where benefits will be
37. The Regulatory Impact Assessment states, "The
amount that small businesses chose to contribute to a BID scheme
will be left to each BID area to decide and the voting system
should ensure that their interests will be effectively represented.
It will be possible for smaller businesses to contribute at a
lower rate than larger businesses, if that is agreed locally."
Similarly, it may make sense for a few specific occupiers within
a BID not to contribute, perhaps because they have limited budgets
or because they would receive limited benefits from the scheme.
For example, it might make sense for schools, hospitals or small
providers of niche or community services not to contribute. They
could be explicitly 'carved out' in the proposal on which the
remaining businesses are asked to vote. We recommend that Business
Improvement District partnerships give consideration to reductions
and exemptions from the levy, at the start of the process, so
that the composition of those voting accurately reflects those
who will be liable for the levy.
38. We have also received evidence that proposes
that the BID concept should be developed more widely and be used
in other contexts. Professor Stoker said: "I would be
quite interested in seeing whether you could extend the principle
of BIDs, the Business Improvement District idea, to a kind of
negotiated agreement with other sectors in the economy, not just
We recommend that the Government ensures that the Bill is drafted
so that local authorities can choose to adapt such districts,
if appropriate to meet local circumstances.