How to scam £2m out of Blackpool business

I HAVE certainly had my eyes opened this morning by some documents I received in relation to the Blackpool Business Improvement District (BID). The what?

Let me explain.

In 2003 the Local Government Act defined the concept of the business improvement district within the UK. Essentially, it’s a an area of town within which the businesses get taxed even more by the council in exchange for ‘improvements’ within the boundaries of the district. The improvements could be things as simple as extra street cleaning, marketing of the area or actual capital improvements.

The amount of additional tax levied to fund the BID company is arbitrary. Town centre BIDs tend to levy between 1 and 2 percent of rateable value and industrial BIDs tend to levy more, perhaps 5 or 10 percent.

Voting in a BID

BIDs are voted in by local businesses for a period of time which is in most cases 5 years, so one cannot say that the process is totally undemocratic.

According to the National BIDs Advisory Service;

if a majority, both by number and by rateable value, approve the proposal, all ratepayers will contribute through their business rates

So you need a majority in terms of number of businesses that vote yes, but you also need a majority in terms of the rateable value. In short, businesses that pay more rates (and therefore more into the BID coffers) carry more weight in the polling process. A vote from a big business such as Marks and Spencer (who pay around £500k rates) carries 50 times the weight of a vote from, for instance, Terry’s Balti House (who pay around £10k).

I should mention though that the majority is based on the number of businesses that vote, rather than every business. So if only a few businesses bother to vote, the outcome is totally non-representative of the actual business demographic in the town.

Blackpool BID

In Blackpool, the BID was proposed by the Blackpool Town Centre Forum which is a panel of local shop managers and some council honchos. The town centre BID is bounded by Albert Road, Adelaide Street, King Street, George Street, Buchanan Street, Springfield Road and back down the Promenade (although not including the Promenade). If you haven’t done the Knowledge and that made no sense, there’s a map (and further historical bits) in the Blackpool BID Business Plan document.

The BID has a website that promises lots of news and statistics but actually contains neither: the latest news is an advert for the BID website from 6 months ago and all of the statistics are “coming soon”, apart from footfall which is measured in unknown units. Apparently in June 2010, footfall was 1,810. Eighteen hundred what? Zebras?

The BID started in 2005 and in August 2010 it was voted upon again following this year’s “We Say Yes” campaign; an extensive self-preserving propaganda exercise by the BID company, paid for by local businesses, to get the same businesses to vote for it.

“We’ve produced this new We Say Yes campaign and newsletter so that everyone can see what we’ve been doing and how tragic it would be if these services could no longer be provided. We’re asking businesses who support us to help show everyone what we’re doing and to let their businesses be seen to be supporting a better, cleaner and safer Blackpool Town Centre by being an active supporter of the BID.”

Decoding this rhetorical garbage,

“We have realised that nobody has noticed anything we have been wasting your money on, but that’s partially because our fat salaries consume a massive chunk of it! But we’re going to guilt trip you by bigging ourselves up and making out as though we provide a valuable service, when in fact business did an awful lot better when we weren’t around hammering them for even more money they haven’t got.”

Loaded dice – August 2005 Blackpool BID ballot – 89% YES

The original 2005 ballot comprised 802 town centre properties, or ‘hereditaments’. I have no idea how you pronounce that word. But the actual turnout for this ballot was just 299 out of 802 – or 37%. Just 36 businesses voted ‘no’, suggesting a pretty misleading 89% ‘yes’ vote out of those that voted.

The ballot is put out there on the basis that every business gets a vote and therefore the process is robust and has integrity. I mentioned earlier that the outcome is determined from the businesses that vote, not the entire collection of businesses because voting on this is not mandatory. But where each business gets a single vote, in the 2005 ballot Blackpool Borough Council voted not once, not twice but 61 times. No prizes for guessing which way they voted either. A low turnout definitely loads the dice in favour of the BID.

Blackpool Transport and various other council-affiliated or public sector bodies were given votes too. They will tell us that it’s for fairness and because the council do pay rates as well (albeit with taxpayers’ money), but the council is not a business and it should be excluded from the BID. As it happens, the council vote makes little difference to the outcome in this case, but if no businesses responded, the council would get its BID with a 100% ‘yes’ vote.

August 2010 Blackpool BID ballot – 78% YES

The most recent ballot result suggests, again, that overwhelmingly the businesses in Blackpool support the idea of the BID: apparently 78% of businesses voted ‘yes’ and when judged by rateable value the ‘yes’ vote goes up even further to 89%. Turnout dropped to just 33%, perhaps because of apathy or more likely because there are simply less businesses in Blackpool. This is illustrated by a reduction in the number of hereditaments to 769 from 802. Note that less businesses gives greater priority to the council’s block vote, which may well have increased on the 2005 figure.

So after a stellar performance from 2005 to 2009, resulting in less businesses in the town centre, the BID was confirmed until 2015. And there was much rejoicing in the Ormand household.

Cashflow problems

This year the BID was forecast to take £210,270 in levies from local businesses based on 1% of rateable value and this confirms the town’s decline because the 2005 forecast was £214,589 and 2009 forecast around £250,000. On top of this comes voluntary donations of £160,000. But what is the main thing that the BID tax pays for? Can anyone guess?

It’s Town Centre BID Manager Eileen Ormand. Her predecessor started on £50,000 in 2005, and as a result of amazing performances supervising a business nosedive Ormand is now on just shy of £60,000 if her 3.5% yearly pay increase has continued. When the BID was in the conceptual stage over 5 years ago, Ormand was heavily involved and at the time represented Top Shop on the Blackpool Town Centre Forum that parented the BID. No real surprise, then, that she was a shoe-in for the job of BID Manager when it arose in 2009.

So who wants to guess what the next most costly outgoing is?

Correct! It’s Donna Jones, the Deputy Town Centre BID Manager! She stepped up from her previous (non) job as ‘Business and Crime Liaison Manager’ (some sort of gobetween for criminals and businesses to communicate?). I should mention that she’s on just over £30,700.

Alarm bells are ringing. In the initial BID Business Plan, it states quite clearly that 12% of expenditure will be on administration, and that administration of the BID will require an executive and a deputy. But if we work this out, the current two are consuming not 12% but 20% of all spending (based on 2009 figures). But wait. There’s also “part time assistance resource cost apportionment”, and no I did not make that up. Whatever it is, it comes with a 10 grand price tag which pushes the admin cost to around 23%. The business plan states a combined outgoing of around £50k when the reality is over £100k. Misleading. But new for 2010, they seem to have an “Admin Manager” now, called Janet Salisbury.

Two ‘rangers’ who patrol and limit street trading are next on the expenses list, at a cost of just under £48,000. According to BID propaganda, these rangers, or wardens, move street drinkers on, assist with shoplifters and pickpockets, and move beggars and homeless to appropriate agencies. And they’re on £24k per year. According to the BID website there are now three of these guys people.

I’m afraid we’re running out of money here guys. We’ve spent a third of the BID revenue already and we’ve not done anything yet.

This is exactly the story of the BID, though. It has done nothing. In propaganda released in February 2010, the BID congratulated itself for its performance in relation to the Yates’ fire in 2009. What a performance, indeed. Just look how the surrounding area thrives now. Clifton Street businesses must be queueing up to give more donations to the BID company.

I have also received information about the Radio Link between local businesses as an anti-shoplifting measure. Businesses were asked for further money on top of their BID levy to pay for this, but they were unaware that the BID were making a £45,000 profit on this scheme! Should schemes like this not be free of charge as part of the service provided by the BID?

The BID also seems to show preference to businesses that support it. You might say this makes sense, but of course it doesn’t when you consider that since the start of the BID, apparently 80% of family run businesses in Blackpool have gone. Looking on their latest leaflet, it’s not the small businesses that are struggling to pay their way that get a mention. Oh no. It’s Debenhams, Boots and Marks and Spencer. Companies with multi million pound advertising budgets. What about the little guy, Eileen Ormand?

If all we want are big companies, then fine. But where’s the help for the smaller, locally operated businesses that diversify the town centre?

BID – Success or failure?

According to the Blackpool BID business plan, here are the benefits of having a BID;

•Increased town centre footfall year on year, leading to an overall increase of 15% by the end of year 5.
•Increased retail trade.
•£0.7m voluntary investment.
•Reduced shoptheft leading to reduced stock losses averaging 10% by the end of year 5.
•Positive and effective working partnerships with relevant agencies to achieve consistent delivery of high standards of services, and improvements wherever possible.
•An enhanced and safer night time leisure environment and experience.
•A 5% annual increase in positive customer and business responses on perceptions of the town centre environment and safety.
•Widespread co-ordinated marketing and promotion of the retail and leisure offer.
•An improved, safer and welcoming environment for employees and visitors alike.
•Improved customer care, training opportunities and business support.
•Increased property values.

Five years on, we can now judge the success of the BID. Over to you.