09.
FINANCE
The levy that provides the BID’s funding is governed by a set of BID rules.
Essentially, when the BID is approved at ballot all eligible businesses will pay 1% of their rateable value to fund the action plan set out in this Business Plan.
The BID will be in place for five years and all retail, leisure, food and beverage and office businesses at or above the £160,000 threshold of rateable value level will be liable for contributing to the BID.
The BID Rules
- The BID term will be a period of five years from 1 Aug 2022 until 31 July 2027;
- The BID levy will be applied to rated properties in the BID district with a rateable value of £160,000 or more;
- The levy will be a fixed rate of 1% rateable value as at April 1, 2022 using the 2017 list for all eligible ratepayers;
- Properties that come into the rating list during the BID term will be subject to the levy from the effective date that the property is brought into the rating list and the rateable value effective at that time;
- Where the rateable value for an individual hereditament changes and results in a lower levy, then this comes into effect only from the start of the financial year in which the change is made and no refunds will be made for previous years. This is known as the closed year rule;
- The levy will assume an annual growth rate for inflation of 3% to be applied on April 1 each year;
- There will be no VAT charged on the BID levy;
- There is no distinction to be made between occupied or unoccupied hereditaments;
- The liability for the daily BID levy will fall on the eligible ratepayer;
- The eligible ratepayer will be liable for the BID levy for empty properties with no void period. Listed properties will be exempt;
- Charitable organisations in receipt of mandatory charitable relief from rates will receive an 80% allowance;
- Specifically the NHS Trust Hospital will receive an 80% relief allowance;
- The BID levy will not be increased other than as specified in the levy rules;
- The BID levy rules and BID area cannot be altered without an alteration ballot.
BUDGET
| Year 1 £ | Year 2 £ | Year 3 £ | Year 4 £ | Year 5 £ | Total £ |
|
|---|---|---|---|---|---|---|
| Income | ||||||
| BID levy | 1,050,000 | 1,081,500 | 1,113,945 | 1,147,363 | 1,181,784 | 5,574,592 |
| Property Voluntary Contributions | 60,000 | 61,800 | 63,654 | 65,564 | 67,531 | 318,549 |
| Commercial Income | 50,000 | 51,500 | 53,045 | 54,636 | 56,275 | 265,456 |
| Public Funding | 50,000 | 51,500 | 53,045 | 54,636 | 56,275 | 265,456 |
| Total Income | 1,210,000 | 1,246,300 | 1,283,689 | 1,322,199 | 1,361,865 | 6,424,053 |
| Expenditure | ||||||
| Voice & Representation | 95,000 | 97,850 | 100,786 | 103,809 | 106,923 | 504,368 |
| ESG | 100,000 | 103,000 | 106,090 | 109,273 | 112,551 | 530,914 |
| Environment & Place | 250,000 | 257,500 | 265,225 | 273,182 | 281,377 | 1,327,284 |
| Reducing Costs | 100,000 | 103,000 | 106,090 | 109,273 | 112,551 | 530,914 |
| Insights | 60,000 | 61,800 | 63,654 | 65,564 | 67,531 | 318,549 |
| Engagement & Communication | 250,000 | 257,500 | 265,225 | 273,182 | 281,377 | 1,327,284 |
| Administration & Management | 200,000 | 206,000 | 212,180 | 218,545 | 225,102 | 1,061,827 |
| Contingency | 105,000 | 108,150 | 111,395 | 114,736 | 118,178 | 557,459 |
| Total Expenditure | 1,160,000 | 1,194,800 | 1,230,645 | 1,267,564 | 1,305,590 | 6,158,599 |
| Annual Surplus | 50,000 | 51,500 | 53,044 | 54,635 | 56,275 | |
| Cumulative reserves | 101,500 | 154,544 | 209,179 | 265,454 | 265,454 |
Notes to Budget
Budget figures are indicative based on the anticipated levy income using 2017 rateable values. Assumed 3% annual inflationary increase and 100% levy collection rate. Levy income may fluctuate in relation to occupancy and is subject to the market at the time of the ratings assessment.
Allocations reflect current priorities; these may change causing variances and re-allocations across the five year term. Any material variations of the budget will be approved by the Board. Contingency based upon 10% of BID levy.
Our management and overhead will be maintained beneath the industry benchmark of 20%, currently reflecting 19% of expenditure. We seek to leverage voluntary income, which will help enable more of our members’ contributions to be allocated to work programmes, which directly benefit business and the local area in general.
FINANCE
Levy Monitoring
Through an Operating Agreement with the Council, a process will be put in place to monitor the collection of the BID levy over the duration of the five-year tenure.
Within one month of the ballot result, the Fitzrovia Partnership BID and the Council will set up a Monitoring Group. There will be at least two meetings of the group each financial year throughout the BID term. At each meeting the monitoring group will:
- Review the effectiveness of collection and enforcement of the BID levy
- Assess the information provided by the Fitzrovia Partnership BID and the Council to each party and make recommendations and/or adjustments
Leveraging additional Non-BID Levy Funding
The Fitzrovia Partnership BID will seek to grow its number of voluntary members and in particular leverage its activity towards the delivery of additional funding to support ongoing work programmes. This is with particular regard to public funding opportunities, property owners and commercial/corporate partners.
