Roger Trapp: Strength in numbers for small businesses

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For years, one of the most vexing issues for businesses of all sizes - but particularly for smaller ones - has been the business rate.

For years, one of the most vexing issues for businesses of all sizes - but particularly for smaller ones - has been the business rate. It is not just the size of the rate collected that causes upset. It is also - indeed, especially - the fact that the lion's share of it goes into a central "pot" to be distributed around the country.

So, on the face of it, proposals for yet another body to take money off businesses in return for services that can look a lot like those that local authorities are already supposed to be providing do not look that realistic. However, the notion of Business Improvement Districts (BIDs) seems to be gathering more support than might have been expected.

The idea, imported from North America, has just won the approval of Parliament and, with several pilot schemes already in place in anticipation of this move, votes to allow the first such schemes to go into full operation are due to take place in the coming months. Several are in London, but others are in places as diverse as the Norfolk-Suffolk border, Bedford and Manchester.

The starting point for BIDs is essentially self-help. By pooling their resources, businesses in a particular area can make real differences to their environment and so make the district a more attractive place to be. This "safe and clean" foundation remains at the root of the drive to introduce the concept to the UK.

Under the regulations passed last month, businesses in an area can organise themselves into a group and seek the support of all the businesses in the area. Provided they win the support of the majority of the businesses representing at least 50 per cent of the area's rateable value, they can set up a BID and introduce an extra levy - typically 1 to 2 per cent of the existing business rate - to pay for the additional services proposed.

These might range from additional street cleansing to the provision of grants to improve shop fronts. Heart of London, the BID covering the Piccadilly Circus area of central London that is expected to be one of the first to go "live", has in its pilot programme collected more than 2,200 bags of rubbish a month in addition to the normal collection provided by Westminster Council. It has also introduced "city guardians" who provide assistance to tourists and other visitors and who are credited with contributing to a reduction of crime in the area.

Impressive as such initiatives are, they also create suspicions that - once the BIDs are in place - the local authorities will scale down the level of their services. After all, one of the reasons why BIDs have been so successful in North America is that there is not usually the same level of environmental services from local authorities. But the fact that the BIDs will generally be subject to review after a period of years should counter such thoughts.

In the meantime, BID organisers report a highly positive response from businesses, particularly small ones. This must in part reflect the efforts the BID proponents have made to win over an audience they suspected would be sceptical about paying out more money for services. In addition to pointing out the advantages that all businesses will share from having safer and cleaner surroundings - and the effect of that on staff morale, recruitment and retention - they have stressed the help that will be available with, for instance, refurbishing shop fronts and the improved links with local authorities and indeed their larger neighbours. For example, at the Holborn Business Partnership - where many sandwich bars, delicatessens and other small businesses exist alongside the offices of international law firms, public relations companies and other large businesses - a programme of regular networking events has been set up.

But such schemes could be just a beginning. In the United States - where the idea took off in the Eighties, having been first introduced in Canada in the previous decade - it was a small step to using the BID concept as a means of economic regeneration. And it is clear that that is on the agenda for Britain, too.

Provided such schemes take account of the positive aspects of what is already there in such areas, this is all to the good. And that is where small businesses can come in and make their voices heard. By embracing the concept, they can do some good for their areas and also help themselves by gaining access to councillors, local authority officials and other people of influence that they might never otherwise be able to contact. Above all, they get the chance to influence how the money is spent and what sorts of service the extra payment should buy.