Examination of Witnesses (Questions 340-359)|
THURSDAY 11 JULY 2002
340. Can I ask all of you what lessons can be
drawn for the drafting legislation from the pilot BIDs?
(Ms Millet) In Coventry, the City Council transferred
responsibility and budget for the management of core city centre
services to what was originally the City Centre Company. We would
then top that up with additional funding. We have learnt from
that process that flexibility is the key, certainly in terms of
future legislation because we believe it needs to be sufficiently
precise to allow the minimum statutory regulations at the local
level. Flexibility is absolutely key to maximising the chances
of approval from contributors. In Coventry, our scheme is largely
retail led and in return for membership subscriptions we deliver
a benefits package. It is essential that that benefits package
in Coventry is integrated with core services because you cannot
co-ordinate services delivered by separate
341. Where do they get additional funding from?
(Ms Millet) We get about £5.5 million from the
City Council, but our budgets are £7.2 million, and the additional
funding comes in part from the membership schemewhich we
believe is virtually ready to form the basis of a Business Improvement
Districtand the rest we draw in from commercial income.
You have to think creatively and try to sell your services to
other people; so that is another advantage of having direct control
of service delivery. For us, Business Improvement Districts are
only one part of the equation, and the very fact that we are set
up as we are provides leverage to draw funding from other sources.
342. How do you avoid free-loaders at the moment?
(Ms Millet) You do not entirely avoid free-loaders,
but you design the benefits package in such a way that free-loaders
are clearly disadvantaged. For instance, one element of our benefits
package is a retail crime initiative. Those people who are members
are automatically part of that, and we can show a year-on-year
reduction in stock loss and shoplifting. Those people who are
not members are not part of it, and equally they will not get
the advertising and promotion benefits that we offer to members.
Whilst we have free-loaders, they tend to be at the smaller independent
level, and we need to tweak our membership scheme to attract those
343. I address this question to Westminster
Council: at a recent conference you spoke about your fears that
the Comprehensive Performance Assessment process would prove damaging
to high-performing authorities. Can you explain what you meant
and give practical examples of where it is working against your
(Mr Rogers) I did not actually say it would be damaging
to high-performance authorities, but it will be because it diverts
us from delivery. The real damage will be at the opposite end,
where we have failures, and whether the categorisation changes
or not. To name and shame failing authorities will cause difficulties
in recruitment and retention in those authorities, and I believe
that the performance gap will widen across the local authority
spectrum. If freedoms are given to the top end of performance
to improve faster, without bringing up the vast majority of authorities
to that level to start with, and focussing support on the bottom
end, inevitably there will be a polarisation of performance and
a spread of performance, which will increase. If the objective
is to make local authorities perform at a consistent rate and
improve the process generally, then I believe the categorisation
344. What sort of freedoms do you believe the
Government should introduce?
(Mr Rogers) I think it should give us freedoms to
charge and trade, as is proposed, but make it a generic power
for local authorities and remove it where local authorities or
the inspection teams have doubts that they can use them effectively.
345. Could it be introduced within the Comprehensive
Performance Assessment framework?
(Mr Rogers) I believe the Comprehensive Performance
Assessment framework is flawed.
346. Will you explain that further?
(Mr Rogers) I could explain in some detail.
347. Not in too much detail!
(Mr Rogers) I can run through it in a variety of ways.
The entire process of categorisation is simplistic. No local authority
scores consistently across all of its services. Westminster is
seen as a very rich borough: in fact 15 of its 23 wards are below
the average of deprivation; but on average we are seen as rich.
That spread of poverty and wealth is disguised in average. Similarly,
performance is disguised by a simplistic average for an authority.
If you then move into the paralysis through analysis that exists,
we have heard about three months at Coventry we have already spent
a month at Westminster preparing to go through the hoops, when
we have just had a three-star social services inspection. We have
had a resent Ofsted, which classifies us as a "significantly
improving authority" with good performance; and yet we are
again going to have to justify that through the CPA process. It
is not clear yet how the light touch will operate in terms of
best value or in respect of CPA.
348. Can I assume that the Comprehensive Performance
Assessment framework will be of benefit to poor-performing authorities?
(Mr Rogers) I think the peer review process which
could be imposed or a supported inspection framework which could
be imposed wouldbecause, again, we are using existing inspection
data to drive the results. If that result is there now, why is
it not possible to identify those authorities that need help and
support, and provide it? It reduces the level of commitment and
the level of diversion, and increases the speed of resolution
in those authorities that need itand there is still the
existing inspection regime for authorities like my own that welcome
it to confirm their own performance.
349. Is this the experience of our other friends
here this morning, from Wolverhampton and Coventry?
(Mr Williams) Wolverhampton has started its Comprehensive
Performance Assessment today, which is why the Director, Brian
Bailey is not here and sends his apologies. Our experience in
preparing for the assessment has been very similar to that of
Coventry and Westminster. The document requirements of the assessment
team are extremely large and onerous. In terms of paralysis, the
senior management across the authority has been very heavily engaged
in this process for at least a month. We have had to construct
appropriate office accommodation for the inspection team within
the civic centre. Obviously, because Wolverhampton wants a fair
assessment, we have had to produce an enormous amount of documentation
and training, which we have had to disperse throughout the whole
of the staff.
350. Have you had a similar experience in Coventry?
(Mr Nolan) Yes, we have.
(Mr Williams) Given that we have not completed the
review yet, we are uncertain as to the outcomes, but there is
a fear in Wolverhampton that the process and the very simple assessment
that the team is going to produce could be formulated in advance
from other inspection regimes. The CPA process is more like forming
league tables for their own sake, rather than producing mechanisms
for improvement. Clearly, we are in the early stages of the process,
but what is important is the outcome and delivering a clear action
plan for Wolverhampton as formulated as part of the process, and
making sure that that process of improvement is carried forward.
Clearly, the burdens that it is placing just to prepare for the
inspection are extremely onerous.
351. The proposed legislation is more enabling
legislation than prescriptive. Do you think that the framework
for Business Improvement Districts will be attractive to local
government and to business?
(Mr Rogers) If I could give the Westminster perspective,
the early stages that we have gone through, in terms of creating
BIDs with the private sector lead us to a number of conclusions.
The first is that it is important in an area such as Westminster
that owners are involved in the process. Inevitably, the longer
term benefits of this go back to the owners of property rather
than the occupiers of property, because of the increases in rents
and leases that will follow. On that basis we feel it is vital
that owners at least are involved in improvments and voting in
the development of BIDs. The second area is that there must be
additionality over and above what local authorities are there
to provide. That is a longer term issue because, quite clearly,
the BIDs in Westminster are largely geared on things such as cleansing
and on wardens, which are directly correlated to the level of
cleansing and the level of policing within the area. Any reduction
in public sector involvement which is seen to be a substitute
for additional private sector funding will be damaging to BIDs.
352. In Coventry, retailing is the main factor
there, is it not? Can you give us a little more information on
(Ms Millet) We believe that Business Improvement Districts
will vary depending on the context and the overall purpose. The
context in Coventry is that it is largely led by the retailers,
and it is tending to be around the primary shopping area. Having
said that, we do have landlords involved as well. The number of
landlords in Coventry is quite limitedwe have about three
or four that tend to own most of the city centre. That is why
we believe that there needs to be sufficient flexibility within
the legislationand there isto allow for definition
of the sector or the geographical area, depending on the local
context; and to allow the way in which contributions are calculated
to vary. In our case, it is as a percentage of business rates.
353. Do you think that the Government has got
the balance right between prescription and voluntary guidance?
(Mr Williams) In the Wolverhampton submission on BIDs,
we are rather more sceptical than our colleagues from Westminster
and Coventry. There is no strong desire in Wolverhampton to return
to a supplementary business rate. Wolverhampton city is not rates-rich
when it comes to business rates; there are about 7,000 non-domestic
properties in the city. If we tried to formulate a BID, of say
5 per cent of those and 5 per cent by rateable value, and if we
were to levy a 1 per cent supplementary rate we would only generate
£30,000, so it is not a particular attractive means of raising
finance. Certainly, the burden comes in terms of getting agreement.
354. How do you think it should be changed?
If we look at the proposals in the legislation and consider that
it does not appeal a great deal to Wolverhampton, what should
(Mr Williams) I do not think Wolverhampton's view
is that the legislation should not go forward, because there are
obviously authorities that wish to use the flexibility that it
gives. Wolverhampton would look for other mechanisms for assisting
business and communities through grants such as ERDF and single
355. Coming back to Coventry, it worked pretty
well on a voluntary basis in the city centre, but Coventry has
a fair number of sub-district shopping areas. Do you think it
has any future in an area like that, where the shops are in decline
because of out-of-town shopping, the sheds and other things like
(Ms Millet) We believe it has. The Coventry model
is very much based on the North American model where the level
of decline was much more severe. In our submission we said that
we would welcome the opportunity to extend it into neighbourhoods
and business parks. The two key issues in Coventry that would
relate to those more disadvantaged areas are "clean"
and "safe", and that is the starting-point for us of
any subsequent regeneration.
Sir Paul Beresford
356. Would you say that some businesses are
concerned that it is a blackmail racket, or could be with some
local authoritiesand I am not suggesting your local authorityin
that if they do not play the game and pay the extra, they will
not get the services and there will be a service reduction?
(Ms Millet) I think that is a legitimate view, but
357. A legitimate fear?
(Ms Millet) It is. As Westminster suggest, that is
when you have to demonstrate genuine measurable additionality.
It would not only give people a package of enhanced benefits and
services, but we also set ourselves performance targets every
year, much like public service agreementsand we are part
of Coventry's public service agreementwhereby people can
see that there have been tangible and measurable improvements
in trading performance and crime levels, et cetera.
358. You have managed to do it as part of the
city centre in Coventry is on a voluntary basis, but could you
not also do it in the other areas in Coventry on a voluntary basis?
(Ms Millet) Certainly you could if the benefits package
was sufficiently attractive to those people participating.
359. What is the advantage of the legislation
(Ms Millet) The legislation allows us to build in
much higher guarantees and sustainability, and it also brings
in free-loaders. That is where many businesses feel that they
are putting in contributions and other people are benefiting,
however hard you try to tailor the benefits package accordingly.