BIDs scheme raises concerns over service charges

Related tags Service charges Business improvement districts Local government Corporation

Business improvement districts (BIDs) could pose just another financial burden on businesses, Alex Salussolia, chairman of the Association of...

Business improvement districts (BIDs) could pose just another financial burden on businesses, Alex Salussolia, chairman of the Association of Licensed Multiple Retailers (ALMR), has argued.

The scheme encourages business people - including licensees - to jointly invest money in designated areas for improvements alongside their local authority.

However, some concern has been raised that the scheme could simply be a back-door way of charging licensees for extra services such as refuse collection and policing, which should automatically be provided by their local authority.

Legislation allowing the scheme to go national has rec-ently come into force, following pilot projects held in 22 areas.

Mr Salussolia, who is also managing director of Glendola Leisure, is concerned that the schemes could be used to plaster over the problems of lack of local authority services and simply be "another tax levy on retailers".

"We pay massive rates, so why should we fork out moreto a BID for services we are already paying for?" he asked.

"I have no issue with the principle of BIDs. They represent more and more taxation on businesses which in most cases are already struggling."

He is also concerned that the landlords and property companies, which support the BIDs scheme could recoup their financial contribution by increasing their service charges to retailers.

This could mean licensees and pub companies face extra burdens on two fronts, with increased service charges and payment of their levy for the local project.

Jacquie Reilly, project director of the national BID Project, has defended the scheme. She said: "Legislation in the Act itself sets out that it is a requirement that it is for additional services. A BID partnership will establish a baseline for what service levels a local authority will provide.

"There is no doubt that property owners will benefit from BIDs, but they have to prove what their service charges are for."

BIDs benefits

A positive vote of 51 per cent or more of all businesses in the area will allow it to set up a BID, which is then established as a limited company.

All the firms in the designated area then vote on the projects put forward and pay an additional levy.

Related topics Legislation

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