Funding High Street regeneration

Improving the fortunes of the High Street will not be cost neutral, and will need funding. So what are the options to lever in more finance? Whilst it is possible to recycle the money saved from unnecessary, low payoff or expensive schemes, businesses (and residents) have a limited control or vote over what this money would be spent on.

Larger businesses are a potential source of sponsorship for certain schemes, as I mentioned in a previous article. At a very low level, local businesses (large or small) could support the creation of minor street improvements, such as high quality benches, hanging baskets or developing imaginative tree plantings. Even as a local resident I would happily sponsor hanging baskets, and I am sure a number of business owners would be happy too. The traditional sources of finance, which include mainly Government and various foundations, can only go so far in supporting local economic development.

I believe that we need a different sort of partnership and new finance, and that this should come in increasing amounts from the private sector, which locally has a disproportionate impact on our living environment, but this could and should lever in more from public sources.

The most obvious avenue is to develop what is known as a Business Improvement District (BID). Born out of Town Centre Management Partnerships, the concept was originally set up in Canada but really took off in the US from the 1970s. BIDs have a good track record. The BID concept has proved so successful in growing the local economy and helping to maintain and improve asset values (including home owners) that legislation has been passed to enable them in the UK and more recently in Scotland. Several BID partnerships in Scotland are now implementing their second 5 year plan. There are now 19 Scottish towns with BIDs and the same number planning one ¹.

A BID is nothing more than businesses working together in partnership and investing collectively in local improvements, but it is more than a business association or a talking shop. The caveat is that it has to be additional to that delivered by a local authority or the other statutory government bodies, and would be geared principally to stimulating sustainable (meaning durable) growth of the local economy. It cannot be used by local authorities as an additional tax or to fund its services, as it is anyway business-led.

Working together businesses can use BIDs to do a variety of things, which can include narrower business improvement objectives (such as reducing costs, sharing risks or creating new platforms for growth – my idea that we could be supporting local enterprises to go beyond bricks and mortar), as well as wider investments in the public realm (for example protecting Dunbar’s Conservation Area status as a way of attracting more tourists). There are interesting BIDs all around Scotland and beyond that have been developed in the hospitality sector, tourism and visitor markets, rural areas, or other sectors where businesses wish to collectively improve their business environment.

The additional investment is used to strengthen the local economy but also give local businesses a unified voice, helping to provide an arena for businesses and local authorities to increase their understanding of each others priorities.

BIDs are developed by a working group who, with consultant support, construct a 5 year costed business plan. The BID is a managed process and initially is supported by the government to pay for the business plan and the consultation process (allow £40-50k, perhaps a bit less depending on the width and scope of the BID). I expect Scottish Government to come up with a response to Malcolm Fraser’s Town Centre Regeneration report to contain further support and stimulus for BIDs.

But without a mandate the BID cannot go ahead. The plan is paid for by way of a  levy, which businesses must vote in favour of, before the BID can be established. Each business that is liable to contribute votes in a ballot on whether or not the BID goes ahead. The interests of both large and small businesses are protected through the voting system and an equitable formula can be constructed for the levy based e.g. on the rateable value or turnover, and this – if I understand it correctly – is entirely at the discretion of the BID proposers. A BID can last for no more than five years, and will either be dissolved at the end of its term or will seek a new mandate by way of a renewal ballot.

To my mind there are at least 2 potential BID areas to look at, possibly more. One which is centred on the High Street and the harbour economies and a broader area one which is focused on the re-emerging Tourism and Leisure sectors, which e.g. is seeing growth in outdoor pursuits, whether its is golf, cycling, walking or surf. I would see town centre regeneration being part of this.  I’d like to see the objectives for the Dunbar Conservation Area being weaved seamlessly into both.