One of the UK’s fastest growing imports isn’t a product, it’s an idea. You’ve walked through and inside this idea before, shopped inside its boundaries and maybe even felt it. The streets are cleaner. There’s suddenly more benches and a pristine graffiti mural next to a new craft beer pub, but there’s also more police, cameras, and other uniformed guards you don’t recognize. For a moment it’s easy to forget about austerity and the crumbling facade on the housing estate across the street. You’re in London, but not really. You’re in a Business Improvement District (BID).
At their simplest, the districts can be understood as privatised service providers funded by companies and focused on satisfying their needs in a given area. But the primary appeal of BIDs is that they purport to ease the strain on declining municipal budgets and the ailing British high street. After a decade of austerity and now Covid-19, councils have been looking for partnerships with businesses to share the financial burden. Many reach for BIDs as an off-the-shelf solution to create “clean, green and safe” public space at little added cost. In fact, 25 new BIDs are established in the UK every year, with over 60 in London and more than 320 across the country. For both Sadiq Khan and his predecessor, expanding the BID presence across London has been an explicit priority. While the districts have, up to this point, maintained a decidedly narrow focus on place marketing, security, and cleanliness, the UK may see BIDs take on additional responsibilities in the future – including waste collection, libraries, and city planning. In fact, the legal infrastructure to do so has already been in place since 2015.
BIDs were first devised in Canada in 1970 and spread rapidly through North American cities in the following decades. As they would in Britain years later, BIDs filled the vacuum created by the retreating local state. In 1997, a group of MPs visited the Bryant Park BID in New York and were impressed by what they saw: a whole new philosophy of urban governance, “agile” and ostensibly liberated from the frustrations of democratic decision making. What the MPs witnessed would probably be called gentrification today, but to them it must have looked like a miraculous about-face for a part of New York previously blighted by crime and capital flight. Midtown Manhattan was vibrant again. Perhaps London could be too.
The Local Government Act of 2003 would open the door for the introduction of BIDs into the UK soon after. But In the US, where such districts have existed for over 50 years, the growth of BIDs should also serve as a warning. The schemes have been accused of criminalising poverty, accelerating spatial inequality, and handing over control of public space to private companies. These are issues of particular relevance for ELL readers in both Croydon and Tower Hamlets where the districts have staked out a substantial presence.
With the consent of a council or at its behest, a district is established when a majority of businesses in a designated area votes to tax themselves in order to provide additional services. In essence, BIDs are a “tailor-made form of local government [where] local property capital takes control of a range of municipal functions for their own private urban ‘patch’,” according to professor and urban theorist Stephen Graham. Those functions can include everything from policing and surveillance, to place marketing, streetscaping and events management. Vested with the power to raise money through levies and impose their own security apparatus – powers that would normally be reserved for the state – BIDs have been described as “micropolises” or “cities within a city”, resembling something of a semi-sovereign zone.
‘Malls Without Walls’
The BIDs unofficial mantra of “clean, green, and safe” would seem a desirable objective for any city; a “win-win” for both boroughs and business in the words of Matthew Sim’s, Croydon’s BID CEO. And If all you saw from BIDs were the place marketing initiatives — 15 tonnes of sand brought in to create an artificial beach, giant LEGO dinosaurs, inflatable tentacles on Halloween — the amusement parkification and peppy buzzwords would seem a small price to pay for much-needed investment in city services. Who could blame you if you even found them fun?
“The problem is that creating companies, funded by business, to run our cities is linked to a new culture of authoritarianism and control,” writes professor and urbanist Anna Minton in her book Ground Control. Stephen Graham likened these corporate urban zones to “malls without walls”, and like malls, they welcome shoppers and exclude “undesirables”. In practice, the criminal interloper could include anybody causing “distress” to consumers. When Croydon’s town centre BID unveiled its Safer Streets campaign in 2014, a partnership with the MET and Safer Croydon, it lauded the operation as a “crackdown on street drinking and begging,” resulting in 47 arrests. Minton notes that the authoritarian ethos of town centre BIDs “helped Manchester gain the dubious title of ASBO (anti-social behavior order) capital of Britain.”
By no means are Croydon or Manchester unique. A comparative study of 10 British BIDs conducted by Bartlett School of Planning professor Claudia Magalhães, found that “safe & secure” and place marketing expenses account for 60% to 90% of BID spending on average. With that in mind, it’s not at all clear whether exaltations of a “clean” public realm suggest a spotless street or a pacified one.
The Keys to the City
While the way BIDs decide to spend levy money can have a drastic effect on the way public space is policed and managed, their real influence flows from the resources they represent: the collective tax revenue of a borough’s largest firms which comprise a growing fraction of council budgets. Using that leverage, BIDs have become a powerful lobby for the needs of private enterprise.
And it’s all part of the so-called “devolution revolution,” with the aim of transitioning councils from “mini-welfare states into local economic growth agencies,” as professor Tony Traverse put it when he chaired the London Finance Commission. As the tap of government grants has slowed to a trickle, councils have been told to refashion themselves into self-sufficient drivers of business growth, responsible for attracting capital, keeping the largest local corporations happy, and living off the business rates they furnish. In this new era of “public-private partnerships,” BIDs are the liaison between big business and indebted councils.
Hackney is one of the few boroughs with a large business presence that’s opted not to establish a BID. “[P]ublicly-owned services mean that councils can deliver services for the benefit of both residential and non-residential communities, making BIDs unnecessary… public bodies should be liable and accountable for responsibilities such as the public realm,” Councillor Guy Nicholson told the London Assembly for its research paper on the future of BIDs. Following his response, the paper qualified his position with an ominous rejoinder: “Whether councils such as Hackney may view BIDs differently in the wake of further local authority cuts remains to be seen, however.”
Setting aside the anti-democratic dimension of BID schemes Cllr Nicholson alluded to, tethering municipal finances to footloose companies can create a volatile foundation for budgets. In the same way a trade union has the leverage of a worker strike, a BID has the leverage of capital flight. At any moment, precious jobs and tax revenue can pack up and move to the next borough offering more generous incentives, with the council left to pick up the pieces.
In 2012, Croydon learned the hard way what happens when it doesn’t respond to the demands of local corporations. Nestlé’s UK headquarters, based in Croydon for over 40 years, synonymous with the borough and one of the town centre’s largest employers, promptly departed for Gatwick. The multinational food and beverage corporation had become dissatisfied with the council’s failure to deliver a suitable new office, though London Assembly member Louisa Woodley speculated Nestle’s move was also motivated by the borough’s inability to secure an “Enterprise Zone,” which would have slashed business rates for the company: “The eccentric decision of the Council to turn down the business-friendly opportunity of becoming an Enterprise Zone now looks to have been a big mistake,” she said. The solution to prevent future departures was obvious.
“We must now re-double our efforts to accelerate the regeneration of the town centre to ensure it is an increasingly attractive location for potential inward investors,” said then Council Leader Mike Fisher. Within a year, Croydon had its own version of an enterprise zone, diverting money from the Mayor’s Office meant to aid parts of the borough worst hit by the 2011 London riots and channeling it back into the town centre to stimulate investment.
As the fate of cash-strapped councils like Croydon has come to depend more and more on the satisfaction of local firms, the public stands to lose where the interests of big business are conflated with those of the broader community.
Dropped right in the middle of the Fairfield shopping area, Croydon’s town centre BID, established in 2007, is one of the oldest and most prosperous in the UK, representing over 500 companies. For a borough perpetually entranced by the dream of returning to its former glory as the premier shopping destination of London, the promise of BIDs to facilitate a commercial renaissance had obvious appeal.
In an interview with EastLondonLines, Croydon BID CEO Matthew Sims made the case that “business improvement districts are absolutely integral to town and city centre destinations. We make sure that the feeling you have in the town centre and the attractiveness of the events and activities available are positive; that you enjoy your experience each and every time you come in.” To Sims, the BID is there to supplement specific services of the council -– to provide “additionality” -– rather than replace them. In short, districts like his are there “to make sure businesses get what they need.” What critical urbanists like Minton and Graham have characterised as a business-backed takeover of local government powers, Sims sees as a mutually beneficial partnership: “It’s a collective working together. I can do far more with partnerships in place, whether it be with a local authority, or whether it be with the MET or any other player.”
However, by 2014 it had become difficult to tell whether the council was a partner of the BID or an extension of it. Croydon’s leadership decided that the needs of the borough were best pursued through the construction of a one-and-a-half-billion pound mega-mall owned and operated by Croydon BID board member Unibail-Rodamco-Westfield. In a document produced by former Council Leader Tony Newman called “The Croydon Promise,” completing the Westfield mall and “attracting investment to our district and local centres” were listed as two of the five most urgent priorities for the borough. That same year, the council installed Westfield whisperer and self-described “regeneration practitioner” Jo Negrini as Chief Executive to signal Croydon’s commitment to see the project out.
But a Growth Zone, a powerful BID, and a corporate insider occupying one of the most influential positions in the council was evidently not enough business friendliness to prevent Unibail-Rodamco-Westfield from squeezing yet more concessions from the struggling borough. According to InsideCroydon, an independent news outlet critical of the regeneration project, the transnational developers held Croydon to “ransom” over business rates and Sadiq Khan’s affordable housing mandate for new constructions. It won changes to both. But despite nearly a decade of overtures to Westfield and company, the council still finds itself empty-handed. The mall has yet to leave the drawing board.
What can be forgotten when councils partner with BIDs is that BIDs don’t represent all businesses in a borough, they represent their members. In at least one instance, the districts have shown to be unreliable advocates for the needs of companies that don’t fall within their jurisdiction. When Covid-19 struck in the early months of 2020, Croydon Council worked closely with the borough’s three BIDs on its task force to distribute emergency business grants. That task force was assembled by Councilor and Cabinet Member for Economy and Jobs, Manju Shahul-Hameed, who has been an enthusiastic proponent of the districting model. “When I came into this role, I was thinking of setting up more business improvement districts across the borough,” Councilor Hameed told EastLondonLines. “We’re in constant conversation with them… We had weekly meetings when COVID started.” Shops outside the BID boundaries weren’t given a seat at the table and were allegedly left in the dark when it came to receiving emergency relief. “The council always used to have a close relationship with businesses across the borough. Now, unless you’re one of the big boys or sign up to their BID scheme, they don’t want to know,” said one retailer in an interview with InsideCroydon.
So, with more districts set to come online within the coming years, it’s worth asking what the average resident gets in exchange for clean, green, and safe. On the one hand: a conduit for regeneration and investment, polished city centres, and new amenities for a streamlined shopping experience. On the other, If Croydon is any indication, a hard bargain and a lesson in extremes. The council taxes are up; the business rates are down. The freshly minted towers crowning the high street, a source of pride for some, take on an eerie quality, like a small patch of forest missed by the wildfire of austerity. Just a stone’s throw from the district, public libraries remain shuttered. As Anna Minton suggests, something intangible but far more important is lost too. Control. “Treating the city as a private business, accountable to property developers and retailers rather than local electors, has huge implications for public life, public culture and democracy.”