Report on the Business Improvement Districts (BIDs) Bill (NIA Bill 9/11-15)
Committee: Social Development
Date: Thursday, 13 December 2012
Reference: NIA 67/11-15
ISBN: Only available online
Mandate Report Number: 2011/15 Fourth Report
Together with the Minutes of Proceedings of the Committee relating to the Report, Minutes of Evidence, and Written Submissions
The Committee for Social Development is a Statutory Departmental Committee established in accordance with paragraphs 8 and 9 of the Belfast Agreement, section 29 of the Northern Ireland Act 1998 and under Standing Order 48.
The Committee has power to:
- consider and advise on Departmental budgets and annual plans in the context of the overall budget allocation;
- consider relevant secondary legislation and take the Committee stage of primary legislation;
- call for persons and papers;
- initiate inquires and make reports; and
- consider and advise on any matters brought to the Committee by the Minister for Social Development.
The Business Improvement Districts Bill aims to introduce provisions so that business improvement districts are established on a statutory basis.
Enabling Bill and secondary legislation
The Bill is an enabling Bill with much of the detail of the Business Improvement Districts (BIDs) scheme to be introduced through secondary legislation. While the Committee raised some concerns about this it acknowledged that the specific nature of BID proposals necessitated a significant degree of flexibility to be reflected in the legislation. However, the Committee also requested and received assurances from the Minister that proposed regulations would be widely consulted on and therefore shaped accordingly by stakeholders. The Committee also received assurances that the role and responsibilities of district councils would be unambiguous and transparent. The Committee also noted that a number of the regulations, in the first instance, would be subject to affirmative resolution and therefore subject to a decision of the Assembly. The Minister's response to issues raised by the Committee clarifies a number of points and provides reassurance on certain clauses and is included in Appendix 4.
Levy and prevailing economic conditions
The Committee also had some concerns about placing a levy on businesses under the current economic conditions. Evidence from key stakeholders such as the Northern Ireland Independent Retail Trade Association (NIIRTA) and the Northern Ireland Retail Consortium (NIRC), as well as from the University of Ulster on the recent Nationwide BIDS Survey, indicated that the return on the levy, either in financial terms or in services provided, was greater than the levy itself. The Committee also recognised that this was a longer term investment, with a minimum of 5 years for a BID term in order to reflect whether the aims of the BID proposal have been achieved.
Some concern was raised about the 'mandatory' nature of BIDs i.e. a business within a BID has no choice but to pay a levy if the BID proposal is supported in a ballot. The Committee did however recognise that the BID proposal would not progress unless supported by the majority of businesses in the BID and unless a minimum turnout of eligible ratepayers entitled to vote (25%) was achieved. Other conditions attached to the ballot are set out in Clause 7 – Approval in ballot. The Committee also acknowledged that clause 8 provided BID proposers with the option to implement alternative, and more stringent, conditions in respect of the ballot.
Funding for BID development
A key issue raised repeatedly by stakeholders in both written and oral submissions was the need to ensure funding to develop BID proposals. The Committee heard that such funding arrangements are available in GB. The Scottish Government for example provides £20k per BID to develop proposals. Therefore under Clause 3 (Additional contributions and actions) the Committee recommended that the Department provide funding to support the development of BID proposals. In addition, the Committee also recommended that the Department review the work of BID academies so that expertise can be developed here and a BID academy subsequently established in Northern Ireland to share this expertise. The Committee acknowledged the Minister's commitment to examine the support arrangements for BIDs including funding and the work of BIDs academies.
While the BID is by definition business-led, the Committee had concerns about the potential lack of involvement of residents living in areas near to a BID. The Committee acknowledged that the consultation process on the BID proposal was ultimately shaped by the BID proposers but requested assurances that the consultation process would also involve residents. The Committee also believes that residents should be represented on the Board of the BID Company once established. The Minister has stated that the guidance for carrying out the consultation will be explicit about the need to consult with residents where a BID encompasses or is near to a residential area. The Committee recognises that having representatives of residential areas on the BID company board would be a matter for the BID proposer.
Duplication of council services
The Committee was concerned about the possible duplication of services i.e. those provided in a BID and those already provided by councils. However, the Department and the University of Ulster presentation clarified that the BID proposal aimed to provide added-value, over and above any services provided by councils.
The Department agreed to amend clause 19 so that regulations made under clauses 6(3) and 17(2)(b) on the eligibility of ratepayers to vote in ballots are subject to draft affirmative procedure rather than negative resolution.
In addition, the Department notified the Committee during its clause-by-clause scrutiny stage that it would be bringing forward an amendment to make 6(3) to provide greater clarity on the definition of "eligible ratepayer".
The Committee considered, and was content with the wording of these amendments.
Response of Stakeholders
The legislation has been broadly welcomed by stakeholders and the Committee acknowledged an enthusiasm among stakeholders to progress this Bill as quickly as possible. Clarification was requested by a number of stakeholders mainly on how the provisions would operate and the relationship between councils and businesses but assurances were given by the Department regarding wide and detailed consultation on the secondary legislation which would provide this clarification.
The Committee acknowledged that this Bill does not provide a panacea to the current difficulties faced by the retail industry, as did stakeholders. It does however believe that it has potential to enhance collaborative business opportunities for collective benefit. The Committee looks forward to engaging with stakeholders and the Department on the regulations to ensure that the full potential of the BIDs concept is realised.
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