Leading the BID industry
Leading the BID industry
This has been one of the most dramatic few weeks for businesses in many people’s memories, and there is a growing sense we will remain like this until the Autumn.
So, this Insight for March attempts to bring together some of the issues we are all facing.
COVID-19, and the Government's response to it, is traumatising the retail, food and drink and entertainment industries as we speak. Reduced footfall, closed shops, theatres, pubs, bars and restaurants are pushing many small businesses to the wall. The British BIDs (Bb) advice note on how to handle the range of COVID-19 issues brings together as much of the advice as possible and is available here.
The Government has moved swiftly with a financial package of £330bn, which increased the business rates retail relief in England to 100% as a one-year holiday, extended the relief to the leisure and hospitality sectors in response to COVID-19, and then ensured that the smaller businesses in that sector who don't have insurance will receive cash grants of £25,000 per business "to help bridge through this period". There is also a one-off grant of £10,000 to businesses currently eligible for Small Business Rates Relief, to help meet their ongoing business costs, and a new temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, will launch in a matter of weeks to support businesses to access bank lending and overdrafts. The Scheme will support loans of up to £1.2 million in value. This new guarantee will initially support up to £1 billion of lending on top of current support offered through the British Business Bank. We believe BIDs are eligible for this loan package and we have asked the MHCLG to confirm this.
There is a key role for BIDs here, as some of those businesses eligible for these newly expanded discounts, loans and grants may need to apply to their Local Authority, and it will be important for BIDs to check with their local taxation departments on precisely how their levy payers can ensure the benefits.
Although the business rates holiday was a vital benefit for our levy payers, it raises an issue for BIDs, whose levy payers may now only be paying their BID levies but not business rates. Those going to ballot this year will be forced to explain the added benefits of a BID, and there is already pressure on some existing BIDs to change their thresholds or collection rules. However, the regulations are clear: the local authority has to collect the levy that was voted on and pass the money to the BID. There would be a possibility for an individual BID to allocate money to alleviation projects - in the way that we put money into independent projects, but only if your business plan allowed such an activity and you had a variation process identified - which most of us have. Alternatively, BID levy holidays could be offered, but would need to be supported and funded by grants from either the Local Authority or the new loan fund.
At the same time, the risk of COVID–19 for those BIDs going to ballot will be low turnouts because of ballot papers sitting in offices as staff work from home, and antagonistic levy payers who, despite needing the very things that BIDs provide: safe and secure towns, attractive towns, recreational towns and sustainable towns, may be led by their desperate short term cash flow problems.
As part of this perfect storm, the local, mayoral and Police and Crime Commissioner elections that were due to take place in May this year have been postponed until May 2021. Feedback from at least one Local Authority is that there is uncertainty about whether the new regulations will have any impact on BID ballots. Bb has already written to the MHCLG on this to find an answer.
Bringing the two issues of an appalling business environment in which to arrange a ballot, and uncertainty over whether the new electoral rules will affect BIDs or not, Bb is asking Government to allow BIDs the opportunity to extend their term for a further year. This costs nothing, takes the pressure off BIDs, and fits in with what they have already done for Local Authorities. It is clear, simple and affordable. If allied to access to the proposed grant fund it would allow BID bodies to give levy payment holidays to their levy payers.
The budget also included an increase in the National Living Wage of 6.2% (£8.21 per hour) with a target of £10.50 per hour by 2024; this will most certainly affect many of our independent businesses.
The fundamental review of business rates this summer was a further key outcome of the budget, read more here. The three objectives will be to reduce the overall burden on businesses, improve the current business rates system, and consider more fundamental changes in the medium-to-long term.
Bb have been pushing on this issue for well over a year, with a presentation to the Treasury Select committee and representations to the Chancellor before the budget. And whilst we are keen that the review takes place, there are major concerns that the review will not look holistically at the totality of tax on business, and the relationship between business rates and residential council taxes, which are absurdly out of date.
The review will publish a call for evidence in Spring 2020 and will report by Autumn 2020.
The budget also allocated £643 million to address rough sleeping including funding for new accommodation, substance misuse recovery and support services. We know that many BIDs are getting more involved in these issues and full details are here. This ties in with a range of interesting BID projects on begging and rough sleeping in cities like Bristol, Bath and Nottingham, as well as HSBC who are working with charities in the UK to help homeless people who do not have fixed addresses to open bank accounts, which can be managed in branches or online. Details are available here for those who want to progress this.
The Government has increased the fixed penalties available for councils to enforce against littering offences to up to £150; extended powers to the whole of England to issue civil penalties to the keeper of a vehicle from which litter is thrown; and recently published improved guidance to councils and others on the use of these powers. This Spring, they will be publishing guidance to help Local Authorities and Business Improvement Districts plan the most effective bin provision for their local area, making it easier for people to do the right thing and dispose of their waste correctly. This will be supported by a £2 million capital grants scheme later in the year, to assist with the purchase of new ‘binfrastructure’. Full details are here.
The Association of Convenience Stores Crime Report 2020 found that retail crime has a huge economic impact on local shops, costing £211 million, but also a direct impact on people working in shops from violence and verbal abuse. The report estimates there were over 50,000 incidents of violence and threats and 83% of store colleagues experienced verbal abuse. The majority (77%) of shop thefts that take place in their store are committed by repeat offenders, with 52% of these motivated by a drug or alcohol addiction. Those BIDs, some 81%, who are closely involved in Crime Reduction Partnerships are clearly already helping greatly here.
Nonetheless, there have been some excellent ballot outcomes in the past four weeks, and we congratulate Plymouth City Centre, Victoria, Bee Midtown - Holborn, Bloomsbury, St Giles, Bee Midtown - Farringdon & Clerkenwell, Carmarthen and Aberdare on their successful outcomes. Brecon was sadly not successful.
As ever British BIDs is available for help and advice, please get in touch with contact@britishbids.info or chris.turner@britishbids.info.
Professor Christopher Turner, Chief Executive, British BIDs
