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FEATURES - FINANCE

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With more than 20 town centres across England now signed up to the introduction of business improvement districts, ...
With more than 20 town centres across England now signed up to the introduction of business improvement districts, any further delay to the Local Government Bill could prove costly.

The government has threatened to drop the BIDs element of the bill if debate over the initiative hinders the whole legislation, but even if this doesn?t happen, a hold-up could have serious implications.

The bill ? at the committee stage in the House of Lords ? will enable the establishment of local BID partnerships, providing services to improve areas and giving businesses a say in what these services should be. They will be funded via a supplement to the business rate.

Initially, it was thought the legislation would receive royal assent this summer. This would allow the balloting of business ratepayers by November and, if they say ?yes?, would result in the launch of local BIDs by the start of the next financial year.

This is now beginning to look optimistic, which could cause problems for local authorities in the process of planning a BID.

A delay could mean the formal vote required to establish a BID cannot be held until the spring of 2004. For councils which planned to incorporate the billing of BIDs into their standard business rate billing process, this could present a quandary. Should the BID be delayed for a further year or should a completely separate bill be sent out to businesses?

If BIDs are postponed until later in 2004, what effect might this have on how businesses feel about the initiative? The Kingston First partnership ? comprising Kingston upon Thames LBC and Kingston Town Centre Management and funded by the London Development Agency ? has consulted local businesses about the idea of paying a supplement to fund a BID.

Many have indicated their willingness to do so. But with a significant rise in business rates expected in spring 2005, a delay could affect this goodwill. Businesses may be unwilling to support what they may regard as yet another rates burden.

There also exists a p otential impact on consultation funding. In Kingston we had estimated a BID would take around 12 months to establish. A budget was allocated to run everything from the initial needs assessment to appointing BID staff. In Kingston the LDA has agreed an increase in funding, but many partnerships may need to review their budgets.

The BID model has the potential to help revitalise town centres. Above all, the greatest cost of delay is that it will take longer for its benefits to be felt. And it may well dilute the spirit of the BID initiative.

Devendra Saksena

Director of environmental services, Kingston upon Thames LBC

www.lgcnet.com/policyresearch

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