News on 25 April 2001
A new scheme of Business Improvement Districts or BIDs, designed to help councils and local businesses improve their local area was announced yesterday by Tony Blair.
The decision signals the end of supplementary business rates, an idea floated in a Green Paper on local government finance last year. Business Inprovement Districts have been widely used in the United States to improve run-down inner-city areas. The UK BIDs will be funded by an additional business rate agreed jointly by local businesses and councils, a key point for those opposed to supplementary rates levied at the discretion of local politicians.
Speaking at a conference on quality of life at the local level in Croydon, the Prime Minister said: "When a neighbourhood declines, local business suffers too. Businesses, like individuals, have a major stake and role to play in improving local areas.
"Our approach will be based on consent and on partnership. Only where a majority of businesses agree with a proposal will councils be able to raise the extra revenue required to fund it. An improvement scheme will be proposed either by councils or businesses and agreed by both parties - with local businesses having a say."
The Confederation of British Industry said the Prime Minister's announcement could improve the relations between business and local government. John Cridland, CBI Deputy Director-General, said: "Business will welcome this decision to drop the supplementary business rate. I am pleased that the Government is looking at more constructive ways of improving working relationships between local government and firms."
He cautiously welcomed the introduction of Business Improvement Districts but said any projects needed to be "genuinely additional" to activities already undertaken by local authorities: "We still need to look at the voting mechanism, the impact on SMEs and the size of BID areas. If we can resolve these, then there is a strong chance that we can move towards the goal of improved partnership working between business and local government."
The details of individual BIDs will be left to local agreement, including the area to be covered, the amount to be raised, what it would be spent on and the local council/business partnership for implementing it. Further details of the scheme will be published in this year's Local Government Finance White Paper.
