BIDs and ‘The Establishment’

Written by Paul Clement, CEO of CMS.

The term ‘the establishment’ has come to mean a status quo to which there is no viable or possible alternative. It is about power, exercised from within society, which bears down upon any notion of risk or change and creates common association through some reassurance of continuity.

Oddly enough, it isn’t really a political construct, albeit that recent events in the UK (Brexit) and the US (Trump) have been justified by some as a backlash against ‘the establishment’ in a post-austerity, anti-capitalist, counter-globalisation world filled with fear and uncertainty. There is some logic to the argument that, in times of peril, we consider retreating behind borders or building walls to ‘defend’ ourselves. History demonstrates that this has often been a natural default.

But, there is a rather more simplistic, alternative interpretation of ‘the establishment’, which is less about people, personality or party, and more about “what normally happens here”. If one accepts that as being the case, BIDs could be about to face some risk.

Sometimes, global networks like BIDs can get carried away with thinking, “everything we do is great, people love us, and we can prove this by our growth”. Yet, there are some warning signs that we should ignore at our peril. Some academic theory primarily critiquing US BIDs (that are funded by property owners rather than occupiers, remember) suggests that BIDs are part of a grand ‘capitalist project’ to re-engineer places through ridding them of anything that is unsightly or off-putting and replacing it with expensive, glitzy monuments to consumerism – the so-called ‘privatisation of public space’ dilemma. The argument goes……”if a place can attract large new corporate businesses and permit their highly qualified employees to shop in the very best stores and live in expensive new apartments, does it matter in the scheme of things that the small independent has to disappear to accommodate them or that the streets must first be rid of buskers, peddlers and traders?”

In the UK, as thresholds for the payment of the BID levy continue to rise and the dominance of the Top 20 local rate payers in any ballot (judged through the so-called ‘dual-key’ mechanism) continues, could the same criticism of BIDs being “just about the big guys” migrate here? Indeed, could some BIDs embroil themselves in this by deliberately raising their thresholds to give even more of a voice to the large corporates?

Concurrently, as places strive to differentiate to maintain market share, more and more UK BIDs are playing a leading part in the local ‘place-making’ agenda alongside a more traditional place-management role. On the one hand, the risk is that BIDs – despite well-intentioned (and yet toothless) baseline statements drawn up at ballot – get stuck within a never-ending cycle of ‘clean and safe’, thereby reluctantly picking up the slack as local authority and police budgets continue to reduce. Consequently, the clear dividing line between ‘public’ and ‘private’ becomes ever more blurred and BIDs risk getting swept up as part of any backlash against ‘the establishment’. If BIDs start to be about ‘managing decline’, they could be in real trouble.

And so, on the other hand, there is an understandable drift towards differentiation by leaving those janitorial elements to the ‘other’ sector and becoming advocates of change. Yet, the types of change required cannot happen unless the bins are emptied, the streets are cleaned and the pots are planted. So, budgets get stretched as BIDs start to fill both sides of the ‘additionality gap’ (a phrase coined by Steve Sawyer of Manor Royal) and the pressure bears down to increase levy rates. Thus, as BIDs get drawn into picking up services that most people (even levy payers) expect their local authorities to provide through council tax and business rates, they could become ever more part of ‘the establishment’ and risk criticism from way beyond their core levy paying audience. As citizens demand something better for ‘their place’ and resist paying any more to receive it, they identify those things that are going wrong or must be improved as part of the problem. A proportion – usually the most vocal – then seeks out anyone that can be publicly blamed and shamed. Thus begins the demonisation of ‘the establishment’ that, in the instance described, includes the BID.

Now, before I get accused of being a ‘prophet of doom and gloom’, let me emphasise for anyone that might doubt it, that I am – as most will know – a huge supporter of BIDs and the role that they are playing in over 270 locations across the UK. Seldom are they the only answer, but they have the capability and capacity to play a role as part of the solution to local transformation. An enthusiasm for BIDs, however, should also mean being mindful of the risks faced and thoughtful about how to overcome them.

So, what lessons, if any, can be adopted by BIDs that might identify with any anti-establishment agenda? It seems to me that there are some……

BIDs must be non-political. Of course, part of the modus operandi of BIDs is achieved through a positive working relationship with local government and so becoming a part of local governance. But politics must be kept out of the BID Boardroom and, whilst the Regulations prevent a BID from countering local policy, it is not a political tool for other agendas. Whilst Councils are essential to creating BID Proposals, there is a strong argument to suggest that the section of the Regulations that permits them to go on and become the BID Body should be reconsidered.

Talking of which, strong corporate governance is absolutely essential. Whilst there might be examples of best practice, I don’t personally subscribe to there being a ‘one size fits all’ solution as local conditions always apply. However, any governance arrangements must always enable and encourage good decision-making whilst preventing delivery and performance being highjacked by non-contributors or minorities. Levy payers have provided the mandate, they expect a BID to get on and deliver. Those advising BIDs should also be certain of their own good practices and be sure that they can stand up to scrutiny of claims that they have made or of practices that they have adopted.

Whilst BIDs are not the only answer, levy payers see them as being at least a part of any solution and expect a joined-up approach. Despite baseline arrangements, if a service sits better with a BID than with a council it should transfer, as long as the money comes with it. The same is true in the other direction, though.

That said, BIDs becoming elitist and moving away from core safe and clean- type agendas introduces risk. Where such core services are maintained, clearer demarcation and repeated explanation between baseline delivery from the public sector and additionality through a BID is critical in avoiding accusations of ‘mission-creep’ and all that goes with it.

It is understandable why most BIDs seek to introduce thresholds and increase them at renewal. Indeed, rather like the principles of small business rate relief it benefits local independents without charging them. However, that does mean that small business could become disenfranchised over time, left without a vote in any future ballot. So, BIDs should encourage inclusion through in-term governance arrangements and, such as in the case of BIDs like Nottingham, allocate budgets to promote the independent sector irrespective of the fact that it may not contribute to BID funds. BIDs will understand the unique contribution of independents in differentiating one place from another.

However, it is not just businesses outside of any BID area (though I have less sympathy for them as they can create their own BID should they so desire) or beneath any threshold that might feel excluded. It can also be the local resident who, by definition, cannot be part of a BID, pay into it, or vote in its ballot. Managed residential estates with service charge arrangements are BID-type models – leading me to see future evolutionary potential for the model through neighbourhood resident-funded BIDs perhaps? In many ways the business community, being prevented from playing any part in deciding local politics and local politicians, has found its ‘voice’ through BIDs. Despite this, given where we presently are, collaboration between BIDs and local residents can only help to prevent criticism both of corporate elitism and establishment working.

If there were to be a summary, it might sound something like this. As UK BIDs mature, and the world around them changes, they will face new challenges. No longer the bright, ‘new kid on the block’, able and willing to experiment, sure in the knowledge that it will be forgiven for any mistakes made and given a second chance. Now, it is a more grown-up deliverer of strategic objectives, carrying with it the responsibility that goes alongside whilst having to be more open to and expectant of scrutiny and criticism. If ‘the establishment’ is that which may hold back change in favour of continuity, BIDs should be differentiating themselves. Most governments unravel in the end because people become bored of the same old thing and so demand change. That is the same risk that BIDs face in every renewal ballot, except that there is no opposition that can ‘take over’ whilst the incumbent goes away and redefines itself. If a BID fails renewal, chances are that there will be a vacuum that will be filled by elements of ‘the establishment’, thereby making it harder to recreate the model at any later stage. Therefore, part of the DNA of any BID must be its intent to remain relevant, to reinvent itself from within and to refuse to just offer more of the same. That needs to be during each term, not just at renewal.

The task is, therefore, within the confines of good governance, for BIDs to be entrepreneurial agents for local change. They need to be ‘factories of ideas’. If BIDs are here to stay – and I don’t see a real, viable and sustainable alternative on the horizon yet – they must become further (not less) embedded in local governance arrangements; yet they must not be so tied down by them that they cannot respond quickly and efficiently to stimulate any change needed. Part of their differentiation from others is that BIDs will sometimes need to be prepared to stand up and argue against their local partners. Future BIDs will need to be clearly known both for what it is they do and for what it is they stand. Any ‘establishment’ shackles surrounding them must not hold them back; indeed they must identify their own unique role in the drama of place-making, that necessarily includes a range of other actors, some of whom cannot respond or change as quickly as circumstances dictate.

It is a position that requires a fine balance on a tightrope – one strung between being part of ‘the establishment’ on the one side and being the alternative to it on the other. BIDs need to be capable of adapting and ready to step out further onto the tightrope – however much they may fear the drop.

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