Leadership Team Report. Maria Manion, Town Centre Manager Watford Business Improvement District For decision

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1 Leadership Team Report Report of: Title: Nature of Report Maria Manion, Town Centre Manager Watford Business Improvement District For decision 1.0 SUMMARY 1.1 The paper outlines the processes and steps required for the development of a Business Improvement District in the lead up to the ballot, including the role of local authority in this process. 1.2 An initial review and assessment of the resources required to support the BID process is considered with early options identified to resource the BID. 2.0 Decision Required. 2.1 The information outlined below is received and agreed. 2.2 Agree further discussions take place with the Environmental Health and Licensing Section Head and Head of Community & Customer Services regarding effective use of Town Enforcement Officer within the BID process. 2.3 Agree to the pursue the process of appointing a Technical Support Officer (fixed term). The Head of Regeneration and Development and TCP Chair to agree a job description and establish funding and the best method of filling this post (internally and within the TCP). Contact Officer: For further information on this report please contact: Maria Manion telephone extension: maria.manion@watford.gov.uk Report approved by: Jane Custance 3.0 DETAILED PROPOSAL 3.1 Background Business Improvement Districts (BID) were introduced to England in 2003/04. The first BID was established in Kingston in January BIDs now exist in over 180 locations throughout England, Scotland, Wales and Ireland.

2 They provide funding towards a range of services and improvements that are specific to any place and are in addition to those services provided by the local authority. Such additional services are funded by a small levy paid by occupiers, usually between 1% and 2.5% who then manage delivery through an approved governance arrangement. The creation of any BID follows a successful ballot amongst those occupiers within the proposed BID area. A BID runs for a five year term, although this can be shorter, a BID must go through a renewal vote prior to the end of the five year term. Overall there is an 83% success rate at first ballot and 90% success rate at the renewal stage. 3.3 For any town to successfully secure a BID there are a number of stages it is required to go through: Feasibility Planning Local Authority Campaign Establishment Some of these stages will run in parallel to each other. Progressing through each of these stages will significantly reduce the risk of failure. A DCLG loan fund of between 10,000-50,000 is available to support organisations/towns through the BID process; this can only be accessed if the above stages are followed. The loan is based on a phased stage release and can be used to support the use of external consultants, local resources, or a mix of both. A successful BID ballot requires a majority of those voting to say YES and a rateable value majority. In June 2013 the Watford Town Centre Partnership was formed. The partnership supported by the Council comprises of businesses and business interests groups who all agreed on the need to work together to ensure the future success and vitality of Watford town. The BID process Feasibility An initial BID feasibility study was completed for Watford in August This report established that Watford had the capacity to support a BID. A short and sharp snapshot survey of the town was completed. In total 75 surveys were sent out and 56 were returned (75% response rate), the responses identified the following priorities for the town: Marketing Environment Streetscape Safety

3 3.4 Planning Representation The research also concluded that participating businesses had some appetite for getting involved and moving Watford forward, while also having ideas as to what would help create a more successful Watford. A fundamental part of the feasibility study was the financial modelling; i.e. can the town support the creation of a BID financially. Within the study area there were potentially 751 hereditaments that could be affected by a BID proposal. This is at the upper limit of the joint Retail Consortium, Inter-Bank Rating Forum and Federation of Small Business Guidelines for the maximum size of town and city centre BIDs. If a threshold of 10,000 rateable value is inserted within the study area, the hereditaments falls to 527, made up as follows: Non shopping centre > 10,000 RV = 314 In shopping centre > 10,000 RV = 213 The total rateable value of those hereditaments is 52,418,500 If a BID levy rate of 1% is applied, this would be subject to a fully assessed and costed business plan; this would lead to an annual levy of 524,185 pa. However, this is just a guide and national guidelines also require reductions for those businesses paying service charges for security, marketing and management. It should be noted that town centre BIDs with levy rates of more than 1% would be expected to have something that justifies the additional levy. The feasibility study concluded: Watford town centre would seem to suit a BID There appears to be considerable enthusiasm amongst the private sector to work in partnership with the local authority, this is reciprocal Any BID in Watford is likely to comprise circa 500 hereditaments and yield approx 500,000 per annum. From the research carried out this would appear to be appropriate in scale to meet with business expectations. The planning stage comprises of a number of facets and will run in parallel with the local authority stage. Getting the planning and local authority stage right are essential for a successful BID ballot. The stages within the planning stage can be defined as: Visioning Research response rates BID database BID modelling Consultation BID proposal for Council

4 Visioning the Town Centre Partnership (TCP) has a vision and a set of objectives these are to be tested in consultation with the town s broader business base and part of the consultation and BID proposal and BID Business Plan. The larger multi- nationals now want to see clear and strong visions where BIDs deliver real change in a town or city via place making, social and economic development. In essence they are expecting the BIDs to the drivers for change. Research will help identify the responses, and where work needs to be focused, and will provide the basis for the consultation within the town which will lead to the final BID proposal and business plan. BID database The BID depends on a successful ballot of eligible businesses in the town; the eligible businesses will be determined by the rateable value limit set (e.g. businesses with a rateable value over 10,000). Ballot paper must be sent to a named person, and those who vote in the ballot are often not those held on a local authority business rate data base. Companied with head offices out of the UK e.g. Primark would be ineligible to vote so a UK based named person would need to be identified. A rating list is not a voting list. Discussions will be required internally to develop a blended list which meets the requirements of the BID and the local authority. Current legislation refers to a rating list and voter list, the development of the voter list will take a substantial amount of time to develop and for some businesses will change on a regular basis where the manager is the named person but changes frequently. Other issues that will need considering as part of this process is empty properties; pop up shops, and ensuring all masts, car parks and bank machines etc are withdrawn from the list. The British BIDs also hold a database of national contacts which can help the process. BID modelling Explores what and how the BID will deliver, and how much it will cost. Looks at what the BID will look like, proposed structure and governance. Consultation Tests assumptions and models with businesses and ensures what is proposed is right for Watford. BID proposal for Council The proposed BID (not the business plan) needs to be approved by the Council; some Council s require a BID proposal to go through full council. The Council has the power to veto a BID proposal if it conflicts with Council objectives and priorities. Any BID proposal should fit strategically with local and national objectives. The BID proposal must be approved by the Council prior to the Business Plan being published. Business Planning The BID Business Plan will take all the information from the previous planning stage and the local authority stage and put into one concise document that will be used to clearly illustrate what the BID will deliver and how. If the BID is successful this is the tool that a BID will be measured against and what the business will hold

5 the BID accountable for. It will contain the term, budget (profit and loss, cash flow), annual levy, discounts, exemptions, governance & structure, community benefits, BID area, operating costs, research/consultation, performance management etc. Local Authority stage The principles of a BID is it should provide additional services over and above those provided by a local authority, it should not replace existing service provision and it should not be seen as a way of reducing local authority services in the longer term. This stage clarifying local authority roles within the BID, putting in place legal agreements and service delivery agreements around services the Council and its partners currently deliver across the town centre (e.g. cleansing); and is where the work around voter nomination is undertaken. In addition to the legal agreements required the local authority has a number of roles within the BID process, they: Run the ballot Approve the BID proposal Are the ballot holder Are responsible for ballot monitoring Vote this is a separate voting decision from the approval process, it is recommended that local authorities are encouraged to use their vote positively. The development and negotiations with the local authority will run in parallel to the planning and business planning stage. The TCP is required to submit a BID proposal to the local authority for ratification by the Council. The Council can exercise its veto if it considers the BID proposal: Conflicts to a material extent with any policy formally adopted and published by the authority; Places a significantly disproportionate financial burden on any person or class of person, as compared to other non-domestic rate payers in the area of the BID, and that burden is caused by a manipulation of the geographical area of the BID or the way the BID levy is structured, and that burden is inequitable. The BID proposal usually takes the form of a suite of documents consisting of the following: o BID proposal ( a summary of the aims, governance and financial standing of the proposed BID) o Operating Agreement (outline of the terms of the relationship between the BID company and the billing authority with specific regard to collection of the bid levy) o Baseline agreement (outline of the services to be provided by the local authority within the BID area, and any additional services the BID company has contracted with the local authority)

6 o o BID arrangements (outline of the governance and financial arrangements of BID company, and membership) Consultation report. Key milestones for a successful BID Notice to the Sectary of State of the intention to hold a BID ballot 84 days prior to the Notice of Ballot to the Local Authority Operating and baseline Agreements Local Authority approval of the BID proposal - this must take place prior to the Notice of Ballot Notice of Ballot 42 days prior to the day of ballot Publication of Business Plan by the Notice of Ballot Proxy votes from notice of Ballot Start of ballot 28 days minimum Deadline for proxy voters 10 days prior to day of ballot Replacement ballots 4 days prior to day of ballot Date of ballot Announcement of result 1 day after ballot Challenge period 28 days from announcement Campaigning for the BID Prior to going to the ballot a communications strategy for the BID will need to be developed, this should identify the key messages, there will need to be a different approach to each sector. The campaign period should be no more 43 days and normally commences with the launch of the BID Business Plan. Setting up a BID Assuming the BID is successful there will be a transition period from the ballot to the BID commencing this is normally several months during this time the following things will need to be put in place: Billing procedure for collection of the levy normally undertaken by the local authority, this will require the purchasing of new software and testing. This can take 2 to 3 months Governance arrangements and setting up a company 2 to 3 months allowing for VAT registration and setting up a bank account Staffing appointing staff to manage the company and delivery of business plan Performance measurement clarifying the detail on what and how performance data will be collected, measured and reported. Resources required for a successful BID ballot The level of resources required to move a town or city to a YES vote varies depending on the size and nature of the town, and what existing structures are already in place to support the transition. A variety of models operate throughout England. Some towns will already have a town centre partnership which may be staffed by the local authority or the partnership through a variety of funding streams both public and private sector. For others it may come from an emerging economic development priority with external consultants managing the process.

7 Examples of areas similar in size and levy value Chester is currently in the ballot stage with the ballot closing on 30 June. The levy they are proposing is 1% the project income over 5 years will be 2.5m the same as Watford projected income. The Board consists of 22 members Watford is 18 The BID team comprises of a Town Centre Manager and 5 members of staff, one of those members of staff is the BID advisor. Southend on Sea moved from an informal Town Centre Partnership to a BID with an operating budget of 2.5m raised through levy income. The Council employed a Town Centre Manager, (Economic Regeneration). When it was agreed the town should progress to a BID a Town Centre Officer was appointed to support the Town Centre Manager. Part funding for the post came from a DCLG grant this was supplemented by the Council. The remainder of the grant went towards marketing and events pilot projects for the BID. The Town Centre Partnership separately resourced a BID consultant (Paul Clements British BIDs). Other towns of a similar size include: Bath, Winchester, Brighton, Sunderland and Bedford, some are second terms and others have been established for a number of years. Bedford will shortly be going for its third renewal. As the above illustrates the BID process is time consuming and complex in the strands required in pulling it together, however the benefits of a successful BID can be quite significant. Watford s progress to date In summer 2013 the Watford Town Centre Partnership was established with support from the Council and consultation was undertaken with businesses to establish if there was an appetite in the town for a BID. A report published in August 2013 established there was business support for a BID in the town. Watford BC appointed a Town Centre Manager in March 2014, prior to this the Council secured 100,000 from the Innovation fund; 11,000 has been spent on consultancy, communication and memberships and completing the feasibility stage. In May following a presentation to the TCP Board it was agreed to progress to a BID. In July Board members were presented with an outline timetable with a proposed ballot date of October 2015, and the creation of the BID company commencing 1 April The budget above will be used to support the TCP progress to a BID and a range of projects occurring in the town including footfall counters; a feasibility study into wi-fi for the town and developing a coach operators market. Other projects will be developed to raise the profile of the TCP and illustrate what could be achieved in the town as a result of a successful BID. To support the BID process and the growth of BIDs nationally a loan fund of up to 50,000 (DCLG) is being made available. The TCP is in the process of applying to this fund to support their journey. In is expected the TCP will submit an application for the maximum amount of the loan ( 50,000). The loan should meet

8 the vast majority of the expenses incurred to secure a successful BID. (If the BID is unsuccessful, and Watford is successful with its loan application the loan will be written off). Technical BID consultancy and support is being sourced, at a cost, via British BIDs, this will include the facilitating and management of a one day workshop (planned for September) for senior local authority officers and key Members covering the BID process and requirements. In July 2014 it was agreed the seconded officer who supports Watford For You (One Watford) would report to the Town Centre Manager and TCP Board and British BIDs were asked to review the financial profiling of the BID area undertaken in August This review includes increasing the rateable value threshold to 12,500 and 15,000 and the application of different levy rates across the town/intu Centre ranging from 1.25% to 0.5%. This worked should be completed by September Resourcing a successful Watford BID Given the experiences of other towns and the fact the BID process is evolving nationally, with expectations for innovation and visionary delivery emerging, Watford needs to ensure all stages in the BID process are followed and businesses are as engaged as possible in the process. The current resources to support the BID process and the TCP are: The Town Centre Manager (f/t) and Marketing Manager, Watford For You (p/t, 2 days/wk). General administrative support is being provided via an existing part-time shared resource from Planning Policy and equates to 1-2 days/week. The technical support required for the BID will be provided by British BIDs and commissioned on need. This will be an essential requirement of the BID loan application we will need to demonstrate clearly we have followed all the processes leading up to the ballot. As identified above Watford is equivalent in size to a small city and the larger towns in the UK. There are a large number of businesses in the town centre including a high proportion of multi nationals. To try and ensure businesses are as fully engaged as possible within the BID process the TCP is keen to utilise existing resources and work in partnership with the Council and other agencies. This approach will demonstrate good partnership working and provide value for money. In the early stages of the BID development two common themes are emerging in the process: marketing/communications/business engagement (the need to engage with businesses and organisations in town both at a local, area and national level and ensure business feel there is an effective two way communication process in place) business administration/technical business support (getting the business rate data base set up and managed to ensure the correct names are in place for the vote, managing relationships to ensure changes are notified immediately).

9 Marketing and communications It has been agreed to extend the Watford For You seconded post 12 months to July The post holder will play an important part is delivering and co-ordinating some of the marketing and communications activities required. This role will be crucial in the lead up to the campaign period and during the campaign for a BID. Over the next few months options will be explored to support the Watford For You Marketing Manager with an intern. The Town Enforcement Officer plays an important role communicating with businesses, he is in daily contact with businesses and has an excellent insight into what is happening within the town this includes trading trends and issues. Working with and utilising the existing networks and relationships developed by the Town Enforcement Officer would be a natural step in taking forward the post in a proactive way. Further discussion is required with Justine Hoy, Environmental Health & Licensing Section Head to establish how the TCP and the BID can work with Environmental Health and Licensing to maximise and utilise existing networks and relationships. BID administration and data base cleansing this will be a highly specialised and critical function within the BID process. A range of skills will be required to successfully enable this including database collection and management and relationship management and partnership development. It is proposed a new full-time, fixed term post is created (internally or a seconded post) to assist with the administration and technical requirements of the BID. This post holder could offer support to the Economic Development Manager and Economic Development Officer, who are also delivering complex town centre projects. It is anticipated the post could be part funded via the DCLG grant for 12 to 18 months (the assumed commencement date of the BID company), although some investment may be required by the Council to support this post - if the post is advertised externally. This could be funded by a vacancy saving within the Policy Team where the Technical Officer has reduced her hours following return to work after a period of maternity leave. It is recommended a job description is agreed by the Head of Regeneration and Development and TCP Chair. It is proposed to initially advertise the post internally and within the TCP, and then externally if the vacancy cannot be filled. Where assistance is required on a short term basis the TCP will look to either see the resource can sourced via the partnership or via a short term contract or consultancy. As the BID progresses a review of resources required will be undertaken as and when required and reported to the TCP Board and Council. Additional Information British Bids Guidance Notes. This report format is based on the format used for committee reports. It can be used for any matters needing a decision or also for ideas/discussion papers.

10 Report authors should always clear any report with their Section Head before submitting a report to the Team for consideration. Report authors need to be clear why they are sending a report to the Team and any timescales involved in implementing any decision required (i.e. does it also have to go to Cabinet). Report authors should also consult with any relevant colleagues in other services before submitting a final report to ensure that a reasoned decision can be reached by the Team