The case for SWT Council to abstain from voting in the Taunton BID ballot.
Somerset West & Taunton Council (SWT) have received the Taunton Business Improvement District (BID) proposal and the Executive Committee are expected to give authority for the BID proposal to go to ballot at the Executive Committee Meeting on Wednesday 18th December 2019 (to be ratified at the Full Council Meeting on 27th January 2020). Even prior to approval Taunton BID have already organised and invited businesses to their Business Plan launch on 22nd January, so they’re obviously confident it’s going ahead anyway!
But one major decision both SWT and Somerset County Council (SCC) need to make, is how they will vote for each of their heriditaments in the BID area. Let’s remember that BID is meant to be for the business, voted on by the businesses and so the ballot shouldn’t be influenced either way by Council votes. Given the significant voting influence the Councils will have in the Taunton BID ballot we feel both Council’s should abstain from voting, in order to let the businesses decide. Hence in October 2019 we wrote to all Councillors & the Chief Executive at SWT about this matter, setting out the strong case for SWT to abstain from voting in the Taunton BID ballot, and below is the case we presented. In addition we’ve since written along the same lines to Somerset Councty Council, and also Rebecca Pow in respect of the Central Government vote for Brendon House.
22nd October 2019
Dear Councillors,
The case for SWT Council to abstain from voting in the Taunton BID ballot
I am writing to you both as a Taunton businessman and the founder of ‘No Taunton BID’, an organisation representing the views of those businesses against the proposed Taunton Business Improvement District (BID), which may go to ballot in early 2020. Given the serious implications of Council voting influence in the Taunton BID ballot, and the fact that we are unsure of the timing and nature of decision making by Council members with respect to this topic, we felt it best to write to the Full Council at this stage.
A controversial scheme such as Taunton BID – where a majority voting decision with no minimum voter turnout could force in a mandatory business rate (levy) on all businesses – will always be a very divisive topic, perhaps particularly so for Taunton given our town’s poor history with previous BIDs. Some of you will be familiar with Taunton’s BID history, but others may not, so to summarise:
· Taunton voted in a BID in 2007 for a five-year term.
· The BID failed a renewal ballot in 2012.
· The BID failed a re-ballot in 2014.
This history has attracted negative reporting nationally as recently as April 2019, in a BID review that was written by the Institute of Place Management and commissioned by the UK’s BID industry body, The BID Foundation. This report also acknowledged that there are genuine concerns about BIDs that need to be addressed, and that there are alternative (but legitimate) perspectives on BIDs. However, we are not writing to you to put over these alternative perspectives or to outline the strong vote NO case against Taunton BID, although that is a separate topic our vote NO campaign is well prepared for. If, however, you would be interested in reading more about our objections, and the negative aspects and risks associated with Taunton BID, please see the information enclosed and visit our website www.notauntonbid.co.uk.
What we are in fact writing to propose is that should Somerset West & Taunton Council (SWTC, hereafter referred to as the Council) not veto the Taunton BID proposal, allowing it to go to ballot, then the right thing for the Council to do would be to abstain from voting for each of its hereditaments within the BID area (i.e. car parks, public conveniences etc).
We appreciate and respect that the Council has every right to cast a vote for each of their hereditaments – after all, BID legislation allows for this as a potential BID levy payer. But we suggest that, as a BID partner legislated as responsible for the enablement and management of the BID, the Council is a very different voter because of the nature of its conflicts of interest. The Council has too much of a vested interested in voting YES in an attempt to help force through implementation of a BID; even if that goes against the majority of businesses the BID is meant to be for. Of course, it would be logical for a Council to vote in favour of a scheme in which private businesses would fund investment into their district, as it would link to their corporate aims for economic development. But such a YES decision is fraught with Council reputational risks, particularly given factors such as:
· The significant local authority voting weight in the case of a Taunton BID ballot, which is forecast to be 7% by voting numbers and 14% by cumulative rateable value (RV).
· Taunton’s BID history, which makes this a very contentious and divisive topic for Taunton businesses. Either a YES or a NO vote would be a vote against a significant number of Taunton BID businesses.
· The growing number of BIDs undergoing scrutiny and Secretary of State appeals due to inappropriate BID development behaviour (including the actions of Councils).
The remainder of this letter sets out the case for the Council to consider abstaining from voting in the Taunton BID ballot (should you allow the ballot to go ahead, that is), and we request that you give our views the objective consideration they deserve.
YES, NO and ABSTAIN are all acceptable voting decisions for Councils.
As SWTC documents prior to the merger are not publicly available, we have not been able to source the voting considerations or decisions in respect of prior BIDs for Taunton Deane Borough Council (TDBC) or West Somerset District Council (WSDC). However, for Somerset County Council (SCC) we have found the following minuted as BID voting options:
There are three possible options for SCC to consider in exercising this vote.
· The first is that SCC votes in favour of the BID, an argument for which is SCC has a vested interest in initiatives looking to support the local business community and the viability and vitality of the town centre.
· The second option is that SCC votes in opposition to the BID, the reason for which is perhaps the direct financial implications to SCC as a local rate payer.
· The third option is abstention, which could be an option if SCC felt that the decision better rests with the business community who are leading on the initiative.
It’s clear that abstention is a realistic voting decision for a Council: for example, last year Northumberland County Council abstained in the Morpeth BID ballot. Wellingborough Borough Council is an example of a Council that has at one point or another made all three of the above voting decisions – it initially voted for their BID, then voted NO for renewal in March this year (the ballot failed), and most recently it decided to abstain in a re-ballot this September (the re-ballot failed). This meant that in the September ballot it really was a decision for the Wellingborough businesses alone, without YES or NO voting influence by the Council.
Numbers demonstrate the significant extent that Council voting influence could have on the Taunton BID ballot.
It is important to consider the very high numerical voting influence that would result if both SWTC and SCC (hereafter referred to as the Councils) vote with either YES or NO in the BID ballot. The Councils have 13 hereditaments between them (SCC 2, SWTC 11) in the proposed Taunton BID area. Based on our calculations (attached and includes the detail for each council), if both councils vote, and given an average BID ballot turnout of 46.42% (source: 2018 British BIDs Survey), then:
1. For voting numbers the councils will have cast 6.73% of the vote.
2. For cumulative rateable value (RV) the councils will have cast 13.66% of the vote. To put this into perspective, this Council RV vote number would be equivalent to the combined RV of 58 BID businesses on Corporation Street, Hammet Street, Bridge Street and Magdalene Lane.
Note: For those not familiar with BID ballots, a BID is only voted in if it achieves a majority for each of two voting measures: (1) majority by number of votes, and (2) majority by cumulative RV of those votes.
As you can see, despite the Councils only owning 13 of the c.416 BID hereditaments, they will have significant voting influence (effectively a voting bias), particularly where cumulative RV is concerned. This is because of the number and size of car parks that Taunton BID have made the decision to include in the BID map (some rather dubiously, we must add – to the extent that they could possibly be considered in a ballot appeal).
A YES or NO vote is a vote against a significant number of Taunton businesses.
Based on the past two Taunton BID ballot results, which were quite close, a Council YES or NO vote is a vote against half of Taunton’s town centre businesses. For a scheme that is legislated for as being business-led, it seems inappropriate that a Council would choose to vote against and alienate so many town centre businesses in order to help force through a levy legislated as a business rate. We have established a strong vote NO campaign base against Taunton BID, and could be canvassing the Councils to vote NO. However, a Council NO vote would be a vote against those businesses that would like a BID, in the same the same way a Council YES vote would be a vote against those businesses that do not support a BID. It follows that abstaining is the most diplomatic way for the Council to appease all businesses on both sides of the argument, and not invite any reputational risks arising from a BID ballot result seen to have been decided by Council votes.
There is growing evidence across the UK that Council voting bias in BIDs has become much more of a reputational risk for Councils.
There is growing recognition of the effect Council voting is having on BID ballots. Where BIDs have been voted in with slim majorities there have been backlashes against Councils, as in those cases a majority of the ‘real businesses’ have voted NO. Here are just three recent examples:
· Andover BID. Andover BID is an example of an unpopular BID for many reasons, including the way that Council voting influenced the ballot. It was seen to have won with Council votes, given the slim 51.1% vs 48.9% majority. We have published an article on our website that goes into more detail about Andover’s BID experience, under the title “BID Horror Story! Do we really want to risk being another Andover?” After recognising the undemocratic way in which council voting bias influenced the BID ballot, one Andover Councillor even decided to make a stand in Court against his own Council.
· Yorkshire Coast DBID. The Secretary of State has accepted hearing an appeal for this BID ballot. One of the reasons for appeal is that the Council’s actions and voting stopped the development of the BID being business led (175 private sector businesses voted against the BID, and only 145 for it when council votes are excluded).
· Rhyl BID. Given business opposition to the way the BID was developed and voted on in 2018, the Rhyl BID has recently gone back to community scrutiny with Denbighshire County Council (DCC). Of 450 eligible voters, only 99 voted – 66 of those were YES votes, but 41 of those were from DCC.
It seems that Wellingborough and Morpeth’s examples of abstaining from their BID ballots really is the right thing to do to ensure that a Council does not become embroiled in voting controversy, and to allow it to be seen as morally doing the right thing by the whole business community.
It is worrying that Taunton BID is prepared to accept Council voting influence in an attempt to force in a BID on all town centre businesses.
We are not sure of previous TDBC voting decisions in respect of Taunton BID, but the Taunton Chamber of Commerce – as the BID proposer – seems very happy to accept Council voting influence against businesses if it helps it get the BID forced in at any cost. We have already asked Taunton BID to formally request that the Councils abstain, but Taunton BID replied no. If the Taunton Chamber of Commerce really wants this BID to be for the businesses, and based on a decision by the businesses, then surely one would expect them at least to join us in requesting the Councils’ abstention. However, it seems that the BID proposers are somewhat blinkered in their pro-BID views, meaning that their actions are not in the best interests of the whole Taunton business community – as the BID legislation intends, this would be to make BID development truly business led and decided. It is concerning that, with no minimum voter turnout required, Taunton BID would be happy for, say, 10% of the businesses to vote YES with a lesser number voting NO, thus leading to a BID mandate.
As an aside, it has been well documented by TDBC that Taunton’s previous BID operational and ballot failures were due in part to the BID company’s reputational problems, which led to businesses and Taunton Deane Borough Council losing confidence in them. We have proof of Taunton BID showing similar traits yet again, but these facts are not for this letter.
We acknowledge the Council’s position of wanting to be seen to support private enterprise initiatives and suggest that this is being achieved without voting.
We understand that the Council would like to be seen as supporting businesses with an initiative such as the BID, and it would be fair to say that you have already shown great support for the BID and done more than enough to support those business that want a BID. We also appreciate that the Council is legislated as a BID partner enabling BID development and management, and that the Council has an officer on the Taunton BID working group. In addition, the BID proposers have presented and liaised with you in regard to their plans, and they will present their BID proposal to you for approval to go to ballot (which the Council could veto if necessary). All this working support is to be expected, and the Council has also decided to grant (without much scrutiny) £45,000 in funding to the Taunton Chamber of Commerce for its BID consultation and the vote YES campaign (for marketing and public relations costs, etc). No doubt the Council will continue to give its support to development of the BID and its implementation if it is voted in. Therefore, taking into account all these factors, surely the Council can be satisfied, from a business community relations perspective, that it has done everything it can to support the BID proposal.
This means that there really is no need to go one step further by supporting only one section of the business community and significantly influencing the ballot by voting. Please also give a moment to consider the fact that, whilst the Council has provided strong support to the BID proposers, those businesses not in favour of it are receiving no Council backing, support or consideration to how they feel. This should be an important consideration, given Taunton’s BID voting history. It is interesting to note that the whole BID development and ballot process appears to be set up in favour of gaining a YES vote while disadvantaging those businesses against.
Summary
The spirit of government regulations is for BID development to be business led and decided, and Taunton BID is telling Taunton businesses that the scheme is for the benefit of the businesses, voted on by the businesses. Given the spirit of these BID regulations, surely such a big decision for Taunton businesses should really be left to the businesses, and not be seen as being influenced by Council voting in the ballot. Just to highlight a few points made:
· YES, NO and ABSTAIN are all acceptable voting decisions for Councils.
· If both SCC and SWTC vote, their combined vote is forecast to have an exceptionally high influence on the ballot result (7% of all votes and 14% of cumulative RV), significantly influencing the result, and thus creating voting bias in favour of Council voting intentions.
· A YES or NO Council vote is a vote against one side of the Taunton business community, risking reputational damage for the Council and alienating a large section of the Taunton business community. If the ballot were seen to have been voted in by Council votes, that would certainly cause a lot of controversy, bad publicity and ill-feeling that the town does not need.
· Taunton has a poor history with BIDs (both in running a BID and in holding ballots, given that the last two ballots have returned NO results). This will be our fourth ballot in 13 years, on what is a very contentious and divisive subject.
· There are a growing number of BIDs undergoing scrutiny and Secretary of State appeals due to inappropriate BID development behaviour (including the actions of Councils). Taunton does not need to put itself in a similar position, given the possible reputational risks for the Council.
· It is worrying that The Taunton Chamber of Commerce – as the BID proposer – is determined to do what it can to force in a BID, even if it means accepting Council voting influence at the expense of a majority of businesses not wanting a BID. This is not a fair and ethical business-led approach, or in the best interests of a cohesive business community.
· The Council is already showing strong support for the BID, as a result of its legislated responsibilities to enable the BID proposal, meetings to date, and funding the YES vote campaign to the tune of £45,000, and no doubt the Council will do the right thing and support operation of the BID if it is voted in. This means that the Council has certainly been seen to show great support in getting Taunton BID ‘off the ground’, and the BID proposers and their business supporters are no doubt grateful for this.
Given the Council’s vested interests in private sector investment into their area, we of course appreciate that there is a natural inclination to want to vote YES for your hereditaments in an attempt to get the BID legislated for. However, in order to ensure a fair ballot without Council influence, and to allow the final decision on this private business initiative to be made by the businesses of Taunton, we suggest that a position of abstention really is in the best interests of all parties concerned and in the true spirit of BID regulations. If the Taunton BID proposal goes to ballot in early 2020, the Taunton business community should strive for the highest possible voter turnout, so that the result is without Council influence and thus truly representative of the businesses.
If any members of the Council would like to meet in person – either individually or collectively – to discuss this abstention matter, this would of course be welcomed. In addition, given that we have been conducting detailed scrutiny into the Taunton BID proposal to date and will continue to do so as the proposal is developed and finalised, we would be very happy to share our alternative but legitimate perspectives on Taunton BID with Council members at any stage. Since July 2019 we have been publicly scrutinising and providing constructive recommendations to Taunton BID; if the BID is voted in, we believe it is important that as many risks as possible have been mitigated for.
Enclosures:
1. Details of SCC and SWTC hereditaments within the proposed Taunton BID area.
2. A selection of articles on our website summarising some of the objections to, negative aspects and risks of Taunton BID.
Note that some of these numbers may differ from the letter above, because since writing to the council the number of voting properties and consequently cummulative RV numbers have changed. The above is based on “final” SWT hereditament list released 28/1/20.
Email to Taunton businesses 26/01/20