Business Improvement Districts (BID)

Business Improvement District (BID) Frequently Asked Questions

What is a Business Improvement District (BID)?

A Business Improvement District (BID) is a business led and business funded scheme to improve a defined commercial area, such as a town centre or industrial estate through additional services or new initiatives.  

Government legislation enabling the formation of BIDs, was introduced into England and Wales in 2003, empowering businesses to ‘raise funds locally to be spent locally’ on improving their trading environment. 

How is a BID funded?

BIDs are funded through a nominal levy calculated on the rateable value of all businesses within a defined area. Although the percentage can be set higher or lower, most BIDs apply 1% or 2% levies and sometimes exempt very small ratepayers.  

Whilst the majority of income will come from the private sector, non-domestic rate-payers from the public and voluntary sector will also contribute towards the BID.  

This levy income can be used to lever in more funding; for example from public sector agencies, grant bodies, sponsorship, landowners and trading income during the 5 year scheme, maximising the potential funding stream and the benefits that the BID can achieve.

How is a BID established?

The process of developing a BID involves extensive consultation with businesses to establish what improvements they want and may be prepared to pay for. A BID Proposal is then produced and a 28 day postal ballot held where businesses vote ‘for’ or ‘against’ the proposed programme.  

For the BID to go ahead, two conditions must be met; firstly, a majority of those voting have to vote ‘yes’ and secondly those ‘yes’ votes have to represent more than 50% of the total rateable value of all votes cast. There is no minimum turnout threshold. If these conditions are fulfilled, payment of the levy becomes mandatory for all businesses regardless of how they voted. So, a BID will only be established if the majority of businesses, by number and rateable value, want it.  

How can a BID benefit businesses?

BIDs are viewed by many businesses as a fair and affordable way of creating a ring fenced fund for up to 5 years that is ‘managed by business for business.’ 

Town centre BIDs generally focus on increasing footfall and generating additional consumer spend, something that has been particularly relevant to businesses in the recent economic climate.  Across the UK there is clear evidence of the success of BID schemes which have led to increased footfall, higher spending, cleaner, safer and more vibrant towns.

For further information on Business Improvement Districts in the UK visit the UK BIDs website