QUESTIONS have been raised over the effectiveness of schemes to boost local retail after they were abandoned by traders in two towns.

Business Improvement Districts, known as BIDs, are partnerships of businesses in a defined area, usually town centres, that work to promote their locations and boost trade.

But last month traders in Aberystwyth and Neath voted against renewing the BIDs operating in their towns for a further five years.

Since 2014 the Welsh Government has supported more than 16 BIDs in Wales with funding of more than £500,000 – but most of the money raised by the organisations is through a compulsory levy charged to all businesses in the area on top of business rates.

The closure of the BIDs in Aberystwyth and Neath follows a decision by businesses in Brecon who voted against setting up a BID in the town in February 2020.

Last month the BID that businesses in Carmarthen voted to establish in 2020 also hit the headlines for the wrong reasons. Retailers, that had been prevented from trading for much of the past 12 months due to lockdown restrictions, were surprised they had to pay the additional levy although there is currently a business rates holiday.

When payment demands, which had been delayed due to the pandemic, hit doormats some traders found they were being threatened with court action if they did not pay the levy which is typically around 1.5 per cent of a businesses’ rateable value.

Though every rateable property above a £5,000 threshold is given a vote on whether to establish a BID, once the body, which has a legal standing, is in place all eligible businesses must pay in – no matter if they had previously voted against it.

Local authorities are often granted a number of votes due to the ownership of public buildings such as libraries. Ceredigion council held 16 votes in Aberystwyth but abstained from this year’s renewal ballot following criticism its votes were the difference between a ‘yes’ and ‘no’ when the Aberystwyth BID was established in 2016.

Businessman Gary Pemberthy said his objection to his local BID, which operated as Advancing Aberystwyth, was due to what he feels is the “undemocratic” way the process operates with the committee leading the process able to define the BID area.

Funding is provided by the Welsh Government to local authorities which then award contracts to companies which run a feasibility study and organise the ballot, though votes are counted and verified by local councils.

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“It is supposed to be a democratic ballot but the ‘yes’ side has huge funding, backed by the government, and the ‘no’ side has no funding, very limited access to information and no control over the electorate,” said Mr Pemberthy, who has two businesses in Aberystwyth.

While his online watch strap business, Watch Obsession, turns over £1.5million a year, his Cactws menswear and lifestyle store based on Pier Street, struggles to turn a profit. The businessman said he cannot sanction adding a further £360 a year to his business rates of around £7,000 annually.

“Cactws is yet to break in profit so it would be financially hard for me to justify paying [to support a BID]. If that’s £360 to come out of net profit, and I’m not making a profit, where does that come from? A lot of shop owners can’t justify it when they’re not paying themselves a salary or having to take second jobs.”

Though Mr Pemberthy acknowledged the BID had provided training schemes, he questioned the value of some of the events it held, including a Christmas ice rink and open-air cinema nights.

“Joe Public thinks it’s a great success having an ice rink but Joe Public doesn’t have to pay for it.

“Cinema nights have been staged and the town’s cinema has to pay in to the organisation arranging it,” he said.

With Advancing Aberystwyth no longer operating, a meeting was due to be held via Zoom this week and organised by the town’s mayor for traders to discuss a way forward.

“It will be people giving up their time again, not like the BID which had paid staff, and the focus at the minute is on businesses re-establishing themselves so you won’t get something rising up for the next two to three months,” said the businessman.

Llanelli spreads the love with Covid recovery packs

Advancing Aberystwyth was independently run after Llanelli-based consultancy The Means, which has led BIDs in inner London as well as its hometown, ran a feasibility study and campaigned to establish a BID for the Ceredigion town

Mandy Jenkins, who is the BID manager for Llanelli and also Port Talbot, said BIDs give a voice to business and in the Carmarthenshire town had worked with the police and council to address anti-social behaviour and lobbied for a dedicated police presence and extra CCTV cameras but said no funding from the BID was required.

Named Ymlaen Llanelli, the BID established in 2015, has staged events such as Super Hero Days with characters such as Batman touring the town centre and a 1980s festival.

The National Wales: A Super Hero Day aimed at boosting the crowds.A Super Hero Day aimed at boosting the crowds.

The pandemic has proved the value of the BID, said Ms Jenkins: “We provided Covid recovery packages for business and we bulk bought a lot of stuff such as hand sanitizer, floor stickers, face masks and sneeze screens which was a massive cost saving for businesses and also saved them having to source those items themselves.”

It also had to think up other ways to boost trade. The BID not only reached an agreement to provide discount advertising for independent traders on a big digital screen near a local supermarket but launched a range of ‘Love Llanelli’ branded products.

“They were really successful, we had travel coffee cups with our logo and a heart Llanelli on and they went like hot cakes. We gave them out to businesses, and there was an article in the local paper, and lots of local people were going to shops asking where could they get them.

“They were given to hospitality and retail and people had to buy an item to receive them so it was another way of getting people to spend money with local businesses. We couldn’t do events so we tried to find other things to benefit businesses.”

With BIDs reliant on local traders agreeing to pay the additional levy Ms Jenkins acknowledged the need to reduce overheads could have seen traders turn their back on Ymlaen Llanelli during last month’s renewal ballot. However it won 95 per cent support on a “pleasing” turnout of 43 per cent.

“It was obviously a big concern going into the re-ballot but with our track record I think businesses really liked what we have done in town.

“Business rates are a huge issue in Llanelli and it’s not as bad here as in some other places but for the mid-range businesses above (12,000) it is a huge cost year on year.”

During the renewal campaign Ms Jenkins said she found businesses that were sceptical when the BID was first proposed in 2016 were voting to renew the scheme for a further five years.

The Welsh Government said while it supports a network for BIDs to work together and to establish schemes it doesn’t assess performance: “Once established BIDs are financed by their levy payers and their success is determined by the BID board and members against the business plan for the five-year term.”

Editor's note: This article has been corrected since it appeared in the print edition on April 24.