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EXECUTIVE SUMMARY

In early 2019, eight Northern Colchester businesses oversaw the creation of a Steering Group to look at the potential for a Business Improvement District (BID). This led to CRM Consultancy being commissioned to carry out an independent feasibility study into the possibility of introducing a Business Improvement District (BID) into the Northern Colchester area. The study began in earnest in July 2019 and culminated with the release of a summary report in September 2019.

There are 463 rateable buildings within the Northern Colchester area which equates to 347 individual named businesses to survey. Responses were collated from a comprehensive selection of sectors and businesses throughout Northern Colchester; the sample represents approximately 25% of the 347 within the potential defined areas of Northern Colchester and covers a full cross-section of sectors. With initial cold survey results of over 80% of those completing the survey in favour of a business-led group to deliver on improvements to the area, 55% in favour of a business-funded initiative and 52% in support of a BID as a model moving forward, we believe that there is a demand to take the next steps of developing a BID and starting the process accordingly.

A timetable overleaf is put forward for businesses to vote on a BID for Northern Colchester, based on a detailed, fully costed business plan that will be worked on and agreed by the Steering Group for early 2020, with a view to a five-year BID term starting in October 2020.

  • The proposed boundary of the BID is to cover both Severalls and Colchester Business Parks and to include some of the surrounding area in this first instance; this is where there is the greatest proven shared need, relevant to the income generated that can be spent on possible solutions – based on other similar case studied areas, such as Witham Industrial Watch
  • 1.25% is the most appropriate rate of levy to apply to the BID, due to the current BID guidelines, set by the town centre BID and WIW local industrial BID levy
  • An exemption level is to be set at £14,999 – meaning that those properties with a rateable value of less than £15,000 would not be liable to pay the BID levy, even though they are situated within the BID boundary and will gain some benefits as a result. This has been decided based on Colchester setting its small business relief at £15,000.

88

Businesses surveyed

80%

Businesses in favour of a business-led group to deliver improvements in the area

52%

In favor of a BID at this early stage

1.25%

Proposed levy fee

£14,999

Exemption level

POSSIBLE PROJECTS

We recommend principal projects determined by the results of the survey
will focus on aspects of the following key issues:

BUSINESS IMPROVEMENT DISTRICTS

There are over 300 established BIDs operating across the UK and the Republic of Ireland. Locally, a very successful industrial estate BID has just been successfully voted in for a 3rd five-year term, called Witham Industrial Watch.

A BID is a business-led partnership that enables coordinated investment in the management and marketing of a defined area. It provides sustainable, consistent investment for an area and its businesses. In order to ensure fairness and transparency, it is governed by legislation and aims to provide additional services to meet changing business needs.

A BID zone (or district) refers to an agreed area within which there will be the hereditaments that guarantee funding to the BID via a levy; this levy pays for additional services to help boost the area and the businesses within it. The levy is usually a small percentage of 1-2% of business rateable values,
with the actual levy percentage varying depending on the defined area and the cost of the activities defined in the Business Plan.

A BID is formed through an official vote, which is referred to as a ‘ballot’. For the ballot to be successful the ballot must be won on two counts: majority by number and majority by rateable value. Upon a successful ballot result, businesses in the defined BID area are charged a levy.

This report identifies recommendations for the most appropriate potential boundary for the Northern Colchester BID area.

The BID’s intention is to create projects and activities over and above those which already happen. A BID is not a mechanism to allow any public or private sector body to cease providing existing, established activities or divest the cost of providing them. A BID provides additional services to meet changing business needs. Services provided by business rates are not replaced. It is expected that a levy would be collected by Colchester Borough Council and passed to the BID to fund
the specific services and facilities outlined in the agreed Business Plan. The funds are ring-fenced and cannot be used for other projects outside of the BID zone.

The maximum term covered by a BID business plan is five years and the continuation of any BID beyond this initial term is reliant on the generation of a new Business Plan and a renewal ballot of the businesses within the BID area.

BID structures vary and details are usually included in the Business Plan. BIDs generally involve the creation of a Company Limited by Guarantee and a BID Board is formed of representatives from local businesses and organisations, including businesses that would pay the BID levy. The BID Board may also feature observers from businesses and organisations who do not pay the BID levy but who have an interest in the BID area or services (e.g., a representative from the police or representatives from smaller independent businesses), although they will not have voting rights.

NORTHERN COLCHESTER OVERVIEW

Northern Colchester is comprised of Severalls Business Park, Colchester Business Park and the Northern Gateway and also includes further employment areas such as Axial Way and Highwoods. The whole area is strategically located adjacent to the A12 / A120 interchange with excellent access to the national motorway network, only 2.5 miles from Colchester town centre, with a regular bus service, and easy access to Stansted Airport.

The area contains a range of businesses and ancillary services, including a bank, property agents, motor dealerships and professional services. There are also gyms, health centres, a centre for worship, retail facilities and much more.

The Northern Gateway area itself is located off of Axial Way, benefitting from excellent road links, with access to the A12 via the newly completed Junction 28

It is a combined area of approximately 4 hectares (10 acres) and is close to other employment areas such as Easter Park and Flakt Woods, as well as the JobServe Community Stadium and Colchester Business Park. This area north of Colchester is an area of growth; Colchester Borough Council’s ambition is for the area to be “a new business, sport, leisure and residential destination of regional significance”. The relocation of the rugby club is underway.

THE BUSINESS SURVEY

The Northern Colchester BID area within our initial BID boundary contains 463 rateable buildings with a defined total rateable value of £24,356,370.

These businesses range from small independents to significant national multiple operators. Feedback was sought from a representative sample of all sizes and types of businesses within our defined boundary as to their attitude towards a BID. It is important to note that while a tentative boundary has been defined as the preferred option of Severalls Business Park, Colchester Business Park and Severalls Lane, this boundary will need to be reviewed to ensure it is the correct delineation of the Northern Colchester BID area and in due course it may change to reflect the different responses from businesses as the planning stage and consultation begins about the BID.

The feedback was captured in the form of an online, structured questionnaire which was carefully designed to disseminate a number of key pieces of information from the business community.

The survey ran from July to September to give time for local businesses to engage and give their considered opinions. The survey was distributed in part by email (where applicable email addresses were obtained via feedback from visiting businesses and/or cold-calling) and in part by hard copies delivered directly to businesses. The survey was promoted during an open business meeting which was attended by over 30 businesses.The entire survey process yielded a total of 88 responses.

The survey displays that 54 of the 88 businesses surveyed, of the 206 within the defined area, suggested over 50% saying yes to a BID immediately

Type of Respondents:
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79% Independent businesses
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6% Multiple
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1% Charity
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5% Franchise
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9% Other

SURVEY QUESTIONS

Which of the following applies to your business?

Which of the following best describes your business premises?

Which of the following best describes your business type?

Roughly how many people does your business employ locally? (Including both full and part time employees)

How many years has the business been in Colchester?

What would you rate as a priority to your business? (Representation of all comments made)

How much of a problem do you consider the following to be? You may feel that some of these are not relevant to you; if this is the case, please select “No response”

Would you like to see alternative transport methods promoted within the business park?

Would you or your colleagues make use of communal outdoor spaces?

Would you or your colleagues make use of pre- or after-work facilities, such as social events, leisure activities, clubs/groups etc?

Would you or your colleagues make use of a business-to-business network (such as an app, website, newsletters etc?)

What security provisions would you like to see on the business park? (Representation of all comments made)

What additional services/provision would you like to see on the business park? (Representation of all comments made)

Would you be in favour of a business led group to deliver on improvements within the area?

Would you be in favour of a business funded initiative to deliver on improvements within the area?

In principle, do you feel a BID might be a good idea for the Northern Colchester area and one that should be tested in a business vote (ballot)?

Will you be the person who will vote in the event of a BID ballot? If not, please advise who it will be.

If there are any other initiatives you feel should be explored please state the in the box below. (Representation of all comments made)

MAIN BOUNDARY OPTIONS FOR THE NORTHERN COLCHESTER BID

The initial businesses surveyed covered a wider area including Axial Way, Highwoods and parts of the Northern Gateway but the majority of those that engaged with the survey are from Severalls and Colchester Business Parks. Given that over 50% of respondents indicated they considered a BID should occupy their area of Northern Colchester, a proposed BID’s geographical area would have a natural line of Severalls and Colchester Business Parks and both are representative of the current support of initial feedback. This is not to say the boundary could not be changed as the consultation stage progresses.

Our income calculations for the estimated BID income are based on the above parameters and we are confident that it offers sufficient common interest across the wider business community and that the proposed projects would impact positively on all eligible voters. Our recommended boundary would cover approximately 412 rateable buildings equating to 206 named businesses.

LEVY OPTIONS FOR THE BID AREA

We have modelled scenarios from 1% to 1.75% as these rates will give sufficient funding to achieve a fairly ambitious portfolio of projects, as hinted at by the survey returns.

In the case of Northern Colchester, our review of the rateable value listings suggest that approximately 206 businesses in the proposed area would be under the suggested threshold and their annual BID levy at 1.25% would have generated approximately £201,830 per year, spread of 206 businesses which would be sufficient to provide a robust service mix for local businesses.

The latest ratings information has been applied in order to determine a range of possible levies and corresponding income per year and these, as well as a total income figure for the five-year period, are shown as follows:

At this preliminary stage, the recommended levy is considered to offer the best balance of income with a manageable size of BID, in relation to the income it would generate (from existing businesses) and in relation to projects and solutions that could be delivered. Specifically, our recommendation is a levy rate of 1.25% together with an exemption to be applied to any premises of £14,999 or below (meaning that a business with rateable values of less than the threshold would not have to pay the levy).

We recommend reducing the levy rate to 1% for charitable organisations in line with other BIDs 0.25% reduction to charities.

Exemption is in line with small rate relief that applies to properties that have a rateable value less than £15,000.

The recommendations are in line with figures from the National Bid Survey and the current Colchester Town Centre BID’s levy was set at 1.5% at ballot and the successful Witham Watch Industrial BID is set at 1%.

All of these recommendations should be subject to further testing through further detailed business consultation. To succeed in a BID ballot, a majority of total votes and total rateable value needs to be achieved and we consider that our recommendations would ensure a good mix of small and large businesses in the BID area.

FINANCIAL INCOME MODELLING

The maximum period that a Business Improvement District levy can be charged is for 5 years. We suggest that a BID for Northern Colchester be considered for a five year period to allow the maximum amount of time for the BID projects to become accepted, actioned and generate positive results.

Once the 5 year term is completed the Business Improvement District will automatically cease. If the Business Improvement District company wants to continue its activities it must hold a new ballot. BIDs are run as non-profit making organisations and generally operate as very lean organisations, meaning that the majority of BID expenditure is on improvement projects.

The majority of BID income is derived from the business levy and it is prudent to set an anticipated collection rate of between 95%-98% depending on the view of the Local Billing Authority.

Although, BIDs have been proven to generate significant additional income in the form of grants, sponsorships, voluntary business contributions and trading activities as they develop.

NEXT STEPS

The next step in the process is to undertake a further, deeper engagement study, the consultation period – after which the outcome will be used to determine the possible future direction and service priorities of the proposed BID.

This should include a further survey of approximately 50% of businesses in the area that would contribute to a BID, a series of workshops for local businesses, alongside further publicity and engagement to gain the maximum possible input from local businesses and other stakeholders in the area. This would ensure that the core of businesses are engaged with, have suitable time to tackle any apathy and educate and provide understanding to what a BID’s purpose is for e.g., additionality not replacement services etc.

RISKS

The vast majority of BID ballots have been successful, although there is always some risk in this regard. An unsuccessful ballot can result in:

  • No return on the investment in developing the BID proposal
  • Possible loss of reputation and credibility of the organisation(s) proposing and championing the BID process
  • Requirement for a cooling-off period of at least 2-3 years before any reattempt is made to develop a BID within the area.

RECOMMENDATIONS

Having considered the survey returns and mulled over the outcome in the light of our experience, our key recommendations are as follows:

  • Northern Colchester moves forward with a detailed consultation and ultimately the production of a draft BID business plan
  • A timescale is agreed with a view to a BID ballot taking place in June 2020 and subject to a positive vote a BID operating from October 2020.
  • Further consultation is carried out with the Northern Colchester area around the following outline proposals:
    • The BID boundary to cover the designated area defined earlier
    • A 1.25% BID levy being proposed
    • A reduced rate of 1% levy to be proposed for charities in the BID area
    • A BID term to be proposed to cover the maximum period of five years
    • Priority projects be drawn up into a draft business plan should focus on:
      • Deliver a strategy to reduce traffic congestion and create better access entering and exiting
      • Security improvements, possibly to include CCTV, more policing patrols or auto number plate recognition that has been successful on other industrial estates
      • Street cleansing with focus on additional provision to tackle trucks stopping overnight causing over and above litter and waste
      • Networking, staff retention and leisure amenities to improve sense of community
      • Physical improvements to landscaping

These recommendations would result in the following:

  • 412 eligible business premises being part of a BID
  • Annual BID Levy income of the order of £201,830
  • Total BID income over a five-year BID term will be close to £1,009,1500