Home rule call for business district
Oct 10 2007 by Graeme King, The Journal
NEWCASTLE businesses are being asked to support a £15m scheme that would give the city the largest business improvement district (Bid) in the country.
A Bid is a powerful partnership arrangement through which councils and business communities can work together on schemes that benefit business and local people.
The project backers say landlords benefit through assisted capital value growth, increased rental values, increased desirability of an area, more occupiers, increase in trade which affects turnover-based rents, better profile for properties away from the busiest areas and positive links forged with the council.
The key to a Bid’s success is that the services it funds must be in addition to those funded by the public sector, so that they are not a means by which the council raises additional rate revenue to pay for services which should be funded from its normal income.
They must also be specific to a defined area and appropriate to its needs; approved by most of the payers in that area because of the benefits to them; compulsory on all payers once approved by the majority; and achieved through the mechanism of a public-private partnership.
There are now 54 operational Bids in the UK. All impose charges approved by the businesses concerned through a ballot. The charges can be as high as 10% of business rates.
The Newcastle Bid is proposing a 1% levy which would be matched by contributions from regional agencies.
Details of the Bid area are being distributed to local businesses, and were discussed by a combined Newcastle and Gateshead committee of the North-East Chamber of Commerce this week.
Proposals will go ahead only if more than half of eligible businesses vote in favour of the proposals and that vote also represents more than half the rateable value.
This gives protection to large and small businesses. Businesses vote on the business plan, which will include the proposed projects, financial statements and the management structure.
The type of services a Bid could pay for include more policing, CCTV cameras and litter bins, rapid response to graffiti and litter and investment in the appearance of the area.
The Newcastle City Council-chaired City Centre Partnership, designed to drive forward regeneration of the city, is behind the proposal. Major change in the city requires co-ordinated action and significant funds to have a chance of success.
The Newcastle Bid could prove an effective mechanism for encouraging local landlords, businesses and retailers to find a common agenda for change.
Richard Freeman-Wallace is head of property at Watson Burton LLP.
