Agenda item

Report of Director of Service Delivery.

Lead Cabinet member:  Councillor Alan Shuttleworth

(1) BID proposal approved and conformity with relevant council plans and policies confirmed.

(2) Director of service delivery given delegated authority, in consultation with lead cabinet member for community, to approve formal BID proposal (including business plan and operating agreement) when received subject to it being in line with the draft submitted and to then instruct the council’s returning officer (as ‘ballot holder) to proceed with the ballot and require the lead officer for revenues, benefits and service support to supply up to date rating list information in suitable format to the ballot contractor.

(3) Chief finance officer given delegated authority –

(i)      to determine the statement of baseline services and baseline agreement and to review the agreement annually; and

(ii)     if the ballot is successful, to operate a BID revenue account and pass over monies to the BID company.

(4) Expected costs of ballot (c.£3,500) to be met by the council.

(5) Director of service delivery given delegated authority –

(i)      to vote in favour of the BID in respect of business heriditaments held by the council within the BID area; and

(ii)     if the ballot is successful, to administer, bill, collect and enforce levies under the BID scheme .

(6) Noted that council’s returning officer is permitted to delegate his responsibilities to others and that he has engaged the services of Electoral Reform Services Ltd to undertake the ballot on his behalf.

(7) Agreed that initial ‘one-off’ software costs required to collect the levy (c.£20,000) will be met by the council.

(8) Noted that the council’s reasonable costs of collecting the levy and the associated financial management costs will be recoverable from the BID levy monies as outlined in paragraph 8.4 of report.

84.1 Cabinet considered the report of the director of service delivery detailing proposals submitted to the council for the establishment of a business improvement district (BID) covering Eastbourne’s town centre.  BIDs were business led partnerships which are created through a ballot process to deliver additional services to local businesses.  The statutory framework for establishing and operating a BID was provided for in Part 4 of the Local Government Act 2003 and the Business Improvement Districts (England) Regulations 2004. 

84.2 A BID was a defined area in which a levy was charged on all business rate payers in addition to the business rates bill.  This levy would be used to develop projects which would benefit businesses in the local area.  There was no limit on what projects or services could be provided through a BID.  The only requirement was that it should be something that was in addition to services provided by local authorities.  The BID proposer was required to develop a proposal and submit this to the local authority, along with a business plan.  Businesses that were subject to the levy, as set out in the proposals, vote in a ballot. This determined whether the scheme went ahead.  A successful vote was one that has a simple majority both in votes cast and in rateable value of votes cast.  The maximum period that a BID levy could be charged was for 5 years.  Once the term was completed the BID would automatically cease.  If the BID company wanted to continue its activities it must hold a new ballot.  Changes could be made to the arrangements without a ballot, but only where the original arrangements contain provision to this effect and only where the change would not alter the geographical boundary of the BID, increase the levy or cause anyone to pay the levy who had not previously been liable.

84.3 A BID steering group had been established with representation from a wide range of businesses in the town centre.  Since 2015 they had been developing a BID proposal with a view to a ballot being held this coming May and for the BID levy to apply for 2017/18 and future years.  The proposal was for a levy of 1.5% on each business in the defined area with an annual rateable value of £6,000 or more.  This was expected to raise £300,000 a year.  A copy of the BID business plan was appended to the report.  The plan, as well as describing the BID proposals, included a map of the BID area and spending plans.

84.4 The stated priorities and goals of the proposed BID were:

1.   Bringing more customers to Eastbourne.

2.   Attracting more businesses and jobs to Eastbourne.

3.   Creating a lively and attractive alternative to on-line shopping.

4.   Promoting Eastbourne as a place that residents and visitors will want to come back to time and again.

5.   Delivering all of these ambitions, whilst at the same time reducing your business costs.

The BID promoters had promised that in the next 5 years they would deliver various initiatives around four themes. The themes were:

1. Dressing our town – for example, invest in winter and Christmas lighting to brighten up the town between October and March.
2. Footfall, Marketing and Promotion – for example, employ street ambassadors to meet and greet visitors to the town during peak periods.
3. Safe and Secure – for example, establish a business led night time economy working group to take advantage of this great opportunity
4. Stronger Together – for example, lobby for better parking controls and restrictions.

84.5 The BID would be managed entirely by business people from within the BID area and they would oversee the delivery of projects detailed in the business plan.  Anyone from the BID area could stand to join the BID steering group at the AGM in 2018.  After the first year of operation, a not for profit company, limited by guarantee, would be set up.  In the meantime, the steering group would manage the BID.

84.6 The ballot of business ratepayers would to be held in the period 4 May and ending 5pm 31 May 2017.  The ‘ballot holder’ was the council’s returning officer.  Given the novelty and complexity of the BID ballot and the overlap of the ballot period with the county council elections this May, and also to ensure independent scrutiny and secrecy of the ballot process, Electoral Reform Services would be engaged to undertake all aspects of the ballot process.

84.7 The BID proposers had invited some 800 businesses from the proposed BID area to take part in an initial online survey in 2015, designed to assess support and determine priorities for town centre initiatives.  Of those who responded, 68% were wholeheartedly in favour and 29% stated they were not yet sure.  Since then, some 250 one-to-one consultation meetings have been held.  Further individual consultations would continue in the weeks and months leading up to the ballot.  Consultation had also included talks and presentations with interested local businesses and organisations such as the Chamber of Commerce, the Federation of Small Business and the local town centre crime reduction partnership. 

84.8 The council was expected to satisfy itself that the BID proposal did not conflict with any existing local authority policy nor propose a disproportionate burden on particular businesses by way of an unfair levy charge on a certain ‘class’ of levy payers, for example by an inappropriate manipulation of the BID boundary.  Review of the BID proposals had not indicated that there were any reasons to believe that the levy proposals and charges were unreasonable or would impose disproportionate charges on any ratepayers.  The BID proposals were broadly in line with planning policy and there was nothing in the proposals that would clash with the council’ corporate plan.  The BID proposals were consistent with these aspirations and would help to ensure that the town centre continued to be a place that businesses would want to invest and develop in.

84.9 It was a requirement of the BID regulations that the BID proposals included a statement of the existing baseline services provided by the local authority or any other public authority in the proposed BID area.  The baseline statement was currently being prepared drawing together information being provided by public bodies including East Sussex County Council and Sussex Police as well as the borough council.  As this work was ongoing it was recommended that final approval of the statement was delegated to the chief finance officer.

84.10 The council was required to manage the collection and enforcement of BID levy charges.  In practice the BID body and the local authority establish a levy collection agreement known as an ‘operating agreement’.  The principle of this agreement is to define the principles and processes for collecting the levy; enforcing the payment of the levy; reporting on collection and bad debt; monitoring provisions between then BID and the local authority; and providing regular detailed and summary information on the service to the BID as the client.  The terms of the operating agreement were currently being drafted in liaison with the BID promoter and it was recommended that formal approval be delegated to the director of service delivery. 

84.11 The council was permitted to charge a reasonable fee for this service. The Industry Criteria and Guidance Notes (published by British BIDs annually on behalf of the British Retail Consortium, the British Council of Shopping Centres, the Federation of Small Businesses and the Inter Bank Rating Forum) recommend an industry standard of a maximum charge of £35/hereditament or 3% of annual levy income, whichever was the lower.

84.12 There were one-off software acquisition costs relating to the calculations required for billing the additional levy and the mechanisms relating to collecting the funds.  These could be in the region of £20,000.  Provision had been made in the council’s 2017/18 revenue budget.  In addition the council was obliged to meet the costs of the ballot (c.£3,500), other than in the unlikely event that the proportion of ‘yes’ votes was less than 20%, in which case the ballot promoter could be requested to pay.  It was proposed that the council recover their reasonable costs of collecting the levy and account management costs and to limit this to the annual cost comprising the software licence (c.£1,500) plus a sum of no more than 3% of the levy income (based on an estimated annual income of £300,000 this would amount to no more than £9,000).  Any costs incurred over and above these sums would be met by the council.

84.13 The council, being satisfied that the BID proposal was in conformity with borough polices and did not impose an unfair charge on any business ratepayers, was obliged to move forward with the conduct of the ballot.

84.14 Resolved (key decision): (1) That the BID proposal be approved and conformity with relevant council plans and policies confirmed.

(2) That the director of service delivery be given delegated authority, in consultation with the lead cabinet member for community, to approve formal BID proposal (including business plan and operating agreement) when received subject to it being in line with the draft submitted and to then instruct the council’s returning officer (as ‘ballot holder) to proceed with the ballot and require the lead officer for revenues, benefits and service support to supply up to date rating list information in suitable format to the ballot contractor.

(3) That the chief finance officer be given delegated authority –

(i)      to determine the statement of baseline services and baseline agreement and to review the agreement annually; and

(ii)     if the ballot is successful, to operate a BID revenue account and pass over monies to the BID company.

(4) To confirm that the expected costs of the ballot (c.£3,500) will be met by the council.

(5) That the director of service delivery be given delegated authority –

(i)      to vote in favour of the BID in respect of business heriditaments held by the council within the BID area; and

(ii)     if the ballot is successful, to administer, bill, collect and enforce levies under the BID scheme .

(6) To note that the council’s returning officer is permitted to delegate his responsibilities to others and that he has engaged the services of Electoral Reform Services Ltd to undertake the ballot on his behalf.

(7) To agree that the initial ‘one-off’ software costs required to collect the levy (c.£20,000) will be met by the council.

(8) To note that the council’s reasonable costs of collecting the levy and the associated financial management costs will be recoverable from the BID levy monies as outlined in paragraph 8.4 of the report.