What is a business improvement district?

A business improvement district is a defined area whose businesses vote to tax themselves for services the area needs and the public purse is unlikely to fund at the level required. The money is collected as a levy alongside business rates, held by a company accountable to the levy payers, and spent against a business plan those payers approved at ballot.

The model began in Toronto in the 1970s, spread widely through North America, and was legislated for in England and Wales in 2003. There are now well over three hundred BIDs across the UK and several thousand equivalents internationally — town centres, city cores, industrial estates, coastal resorts and tourism zones.

The essential bargain is simple. A single trader cannot make a street feel cared for. Several hundred of them, pooling a small levy, can.

• The boundary. A drawn area containing the hereditaments liable for the levy. Where the line falls decides who pays, who votes and who benefits — and it is the first thing a BID gets argued about.
• The levy. Typically one to two per cent of rateable value, often with a threshold that exempts the smallest premises. Collected by the billing authority, passed to the BID.
• The ballot. A postal vote of eligible ratepayers. It carries only with a dual majority: more than half of the votes cast, and more than half of the rateable value those votes represent.
• The term. Five years maximum, then a renewal ballot. Everything a BID does is therefore on a clock, and the clock is the discipline.
• The plan. The business plan put to ballot is a binding prospectus. Changing direction mid-term is possible, but it costs trust with the people paying.

Most BID budgets divide into five recognisable lines, in rough order of spend:

1. Clean and green — street washing, deep cleans, graffiti removal, planting, hanging baskets, seasonal dressing.
2. Safe and welcoming — street ambassadors, radio schemes, night-time economy support, work with police and licensing.
3. Footfall and profile — events, markets, seasonal programming, campaigns, wayfinding, the area's own brand.
4. Business support — cost savings on waste and energy, training, vacancy brokerage, grants for shopfronts.
5. Voice and data — lobbying on transport, parking and planning; footfall counters, vacancy tracking, visitor surveys.

The first four are what levy payers can see. The fifth is what makes the other four defensible at renewal, and it is usually the line that gets cut first.

BIDs work, and the criticism of them is worth taking seriously rather than deflecting. Three tensions recur:

• Substitution. Levy payers ask whether the BID is buying services the council once provided. The honest answer is to publish a baseline of statutory provision and show the BID spend sitting above it.
• Whose district. The levy is paid by businesses, yet the street belongs to residents, workers and visitors too. A BID that programmes only for spend gradually loses the affection it depends on.
• Attribution. Footfall rises and falls with weather, transport works, the economy and a new anchor tenant. A BID claiming every uptick invites the reverse argument in a bad year.

Each of the three is answered by the same thing: better measurement, taken early, and reported honestly.

Footfall counters tell a BID that people crossed the area. They say little about whether those people stayed, spent, felt safe or came back. A workable evidence base pairs the count with five other measures, all cheap enough to repeat quarterly:

1. Dwell time — median minutes spent in the area, sampled at four times of day across a weekday and a weekend. The closest available proxy for spend per visit.
2. Return rate — the share of visitors who came in the previous month. Loyalty is worth more than reach.
3. Evening use — activity in the two hours after dark, the sharpest single indicator of felt safety.
4. Frontage health — vacancy rate, unit turnover and rent movement on the streets a project actually touched, rather than the whole boundary.
5. Felt experience — a short repeated survey on comfort, welcome and whether people would choose to linger.

Take all six in the first six months of a term, then quarterly. Attribute carefully: report the change on the treated streets against a comparable untreated street, and say so plainly when the weather did the work.

The method behind this — putting a number on wellbeing in the language a budget meeting already speaks — is set out in the economics of wellbeing.

A renewal ballot is decided long before it opens. Three habits carry most of the weight:

• Baseline in year one. A BID that starts measuring in year four has four years of anecdote and one year of data.
• Report per pound. Levy payers respond to a figure they can hold: minutes of dwell gained, vacancy points recovered, incidents avoided, all set against what each contributed.
• Show the ordinary Tuesday. Events photograph well and vote poorly. What convinces a doubtful ratepayer is evidence that the average week improved.

Renewal is also the moment to widen the account. A BID that can demonstrate a healthier, better-used, better-liked district — and trade figures that moved with it — is arguing from a much larger base than footfall alone.

Place management asks what a district provides. Experience design — the XD in districtXD — asks what a district feels like to be in, hour by hour, and holds each intervention to that standard.

For a BID the practical difference is three-fold. A baseline of felt experience alongside the footfall counter. An explicit statement, before spend, of what each project is expected to change. And a return reported in both wellbeing and trade, because the two move together and the case is stronger when they are argued as one.

Read the practice in experience design, the measurement layer in District Intelligence™, and the intervention set in placemaking.

What is a business improvement district?

A business improvement district is a defined area where the businesses within it vote to pay a levy, usually a small percentage of rateable value, into a fund spent on services and improvements that the area agrees it needs — cleaning, safety, marketing, events, public realm and advocacy — delivered by a company accountable to those levy payers.

How is a BID funded?

Through a compulsory levy on eligible business premises inside the boundary, collected by the local authority and passed to the BID company. It sits on top of business rates rather than replacing them, and many BIDs add voluntary contributions from landowners and grant income.

How long does a BID last?

A BID term runs for a maximum of five years. To continue, the BID must win a renewal ballot, which requires a majority of votes cast both by number and by rateable value. Renewal is where the evidence of the past term earns the next one.

What is the difference between a BID and a place management company?

A BID has a statutory mandate and a compulsory levy won at ballot; a place management company operates by contract or voluntary subscription. The practice of the work — cleaning, safety, programming, data — is often similar; the accountability is what differs.

How should a BID measure its impact?

Footfall alone shows that people crossed the area. Pair it with dwell time, return visits, evening use, vacancy and rent movement on the frontages, and a short repeated survey on comfort and belonging. Take a baseline early in the term so the renewal case writes itself.

districtXD is a global network for places designing for how they are experienced — sharing instrumentation, protocols and a common language for what a district returns in wellbeing and in trade. BIDs and place partnerships sit naturally in it: the measurement travels straight into a renewal case. Founding Districts help shape the framework and take the first places in the Index.

Apply to become a Founding District

An initiative of XDG Labs · from the makers of the Conscious Cities Index