DECEMBER INSIGHTS BY CHRIS TURNER

This is the final Insight of the year and what an interesting year it has been! Wars in Ukraine and the Middle East, a major COP summit, Covid Inquiries and a possible general election next year. It is also a time for much contemplation – it is the end of a year, and we have Christmas, Hanukkah, and Diwali celebrations within weeks of each other. How are BIDs doing, is the high street really dead, and are there ‘green shoots’ emerging within what is a pretty grim economic outlook?

It is also a time of some celebration – it is 20 years since the legislation set up BIDs in England, with the 2003 Local Government Act - An Act to make provision about finance, and other provision, in connection with local and certain other authorities; to provide for changing the dates of local elections in 2004; to amend the Audit Commission Act 1998; and for connected purposes. BIDs – in Part 4 were some of the ‘connected purposes’!

Since then, we have grown apace and as of last week we have 340 BIDs across the British Isles, with 136,484.00 hereditaments and £152,987,160 annual spend. This is serious money going directly into our business communities, and for a guaranteed five years. That is £765 million over five years going into our communities – real spendable money controlled directly by our boards.

And this month we congratulate a further 13 BIDs: Harrow, Hitchin, Letchworth, Bermondsey, Sunderland, Kendal, West Ealing, Letchworth, Keighley, Crewe, Royston, Hinckley, and Brighouse for their successful ballots. Unfortunately, the Heart of London Business Alliance - St James' (Occupiers) BID was unsuccessful, making the successful Heart of London Business Alliance - St James' (Property Owners) BID unable to go forward. What is still very pleasing is that there are a further 65 BIDs in the development stage, coming forward to ballot in the next year or so.

Although very wrongly seen as a London problem, business leaders have been vigorously making the case for reinstating VAT-free shopping for overseas visitors across the country, commanding plenty of media attention and even staging their own street protest – appropriately, on Mayfair’s Savile Row – complete with “Scrap the tourist tax” banners. Since the VAT refund scheme was withdrawn in 2021 as part of post-Brexit tax changes, businesses in the country’s high-end shopping districts say that some 10 per cent of 2019 spending by international tourists, £1.5 billion-worth of sales, has gone off to Paris, Rome and other shopping hotspots in the European Union, leaving the countries’ tourist trade recovery  the worst in Europe. “The UK is now at a stark competitive disadvantage due to the fact we charge overseas shoppers 20 per cent more than our international neighbours for the same goods,” says John Dickie, chief executive of lobby group BusinessLDN. According to a recent analysis, restoring VAT-free shopping could attract up to two million extra tourists, boost UK GDP by up to £10 billion and deliver £3.6 billion of extra revenue for the Treasury, easily outweighing the lost VAT income.

The forthcoming national elections are raising agendas and hopes. British BIDs attended all the political conferences and whilst there is a view that Labour’s plans are bringing a “sense of hope” there is some concern about how the party may approach business rates reform, with potential “unintended consequences”. In a panel event co-hosted by LabourList and The Shopkeepers’ Campaign, Labour’s James Murray described business rates as a “crucial factor” affecting high streets and reiterated Labour’s plan to scrap the current system and replace it with a “fully costed, fully funded system of business property taxation for the 21st century”. The shadow financial secretary to the Treasury said the opposition is in the process of “developing our policy, having conversations with businesses and those affected about the detail”. Murray told attendees: “That shifting of the burden away from the high street is going to be a crucial element that our new system will deliver. Because we want to support high streets, not just as places which are crucial for economic growth but also for their social value.” This is clearly a vital debate for BIDs – we have to both speak for our levy payers but also recognise that most BIDs are currently linked to a rateable value model, although of course we don’t have to be.

As part of that emerging political discourse, Ending Stagnation: A New Economic Strategy for Britain from the Resolution Foundation & Centre for Economic Performance is very powerful stuff and a very vital read. Britain’s economy is broken is the simple message given in the final report and the conference to launch the report on December 4th was a high-powered affair, containing past and present members of the Bank of England’s monetary policy committee, the head of the Office for Budget Responsibility, Richard Hughes, and other members of the great and good. Jeremy Hunt showed up for the Conservatives, while Sir Keir Starmer did the honours for Labour. Given that the report’s conclusion was that the economy has been going nowhere for the past 15 years, the chancellor clearly had the tougher challenge. But Starmer faced some tricky questions, too. In one sense, the situation is even worse than the Resolution Foundation says. The result is a country falling behind its peers, where taxes, rather than wages, are rising, and living standards were under strain long before the cost of living crisis struck. The task facing the UK is to embark on a new path.

Levelling up Secretary Michael Gove announced the local government finance policy statement, with Local authorities in England set to see their funding increase by 6.5% as the Government attempts to prevent more councils from declaring effective bankruptcy. Michael Gove announced a £64bn support package after repeated warnings that local authorities across the country are facing severe financial difficulties. Mr Gove had announced on December 3 that councils will again be limited to a maximum 2.99% council tax increase. The Revenue Support Grant will increase in line with the Consumer Prices Index measurement of inflation. It was announced at the Autumn Statement that the small business rating multiplier will be frozen at 49.9p, and the standard business rating multiplier will increase to 54.6p; this will give may of our levy payers a major increase int their business rates, but will not affect BID levies, which are based on underlying rateable value lists. The government also confirmed that now is not the time for fundamental business rates reform.

Despite this, or indeed because of this, Local authority finances are not in a good place and the list of those going down Section 114 routes increases daily with recently Croydon, Woking, Birmingham, and Nottingham all raising concerns and a belief that more are to follow. For BIDs, with formal statements over additionality in their business plans, this becomes an increasing problem. A need for strategic common sense, planning and local authority relationships becomes paramount. BID Boards will need to be very much on top of this.

Christmas is upon us and our independents are delivering with a gusto and following Small Business Saturday, a great small film to counterbalance the big ones, is here, from Martha Brook stationary, to remind us what a difference even buying one thing from a small business can make. It genuinely could keep that shop open and keep someone’s dream alive.

British BIDs has confirmed its 2024 portfolio of training and development programmes, alongside its regular Certificate in BID Management and Diploma in BID Leadership. Other online courses confirmed for 2024 include An Introduction to BIDs, BIDs and Place Shaping, Complying with the Business Plan Criteria, Digital Marketing for BIDs, Managing a BID Efficiently, Planning & Managing a BID Ballot, Responsibilities & best practices for BID Directors. As ever all the details are on our website or email Shayni Langhelt on shayni.langhelt@britishbids.info for more details.

Professor Christopher Turner, Chief Executive, British BIDs