BID governance

1. What is a Business Improvement District?

A Business Improvement District (BID) is a defined area in which eligible businesses pay a levy, collected by the local authority and passed to a BID company, to fund services and projects for the area. The levy is set by a ballot. If the ballot passes, every eligible business in the area pays, whether or not it voted and however it voted.

BIDs were introduced by Part 4 of the Local Government Act 2003, which applies in England and Wales, and brought into operation in England by the Business Improvement Districts (England) Regulations 2004. Wales, Scotland and Northern Ireland have their own regulations or legislation. This guide covers England.

There are more than 300 BIDs in England. A BID usually runs for a term of up to five years, after which it needs a renewal ballot to continue.

Most BIDs are companies limited by guarantee. They are governed by their articles of association and by company law, and they answer to their members as any company does. They are not local authorities, and the transparency rules that apply to councils do not apply to them directly.

2. The legal framework

The main legislation for BIDs in England is:

• Local Government Act 2003, Part 4 (sections 41 to 59), which creates the power to establish BIDs, the levy and the ballot, and lets the Secretary of State make regulations.
• Business Improvement Districts (England) Regulations 2004 (SI 2004/2443), which set out the ballot process, the proposer's duties, the operating agreement and renewal.

What the law requires

• A ballot, run by a returning officer appointed by the local authority
• A double majority: more than half of the votes cast, and more than half of the rateable value of those who vote
• A business plan setting out the BID's proposals for its term
• An operating agreement between the BID company and the local authority
• Annual accounts filed at Companies House under the Companies Act 2006
• The general duties of company directors under the Companies Act 2006

What the law leaves to each BID

• A register of interests for BID board members
• Audit beyond what company law requires
• Publication of contracts above a set value
• Disclosure of media or communications contracts
• An oversight body with powers over BIDs during their term
• A formal route for levy payers to question spending during the term
• Publication of the operating agreement to levy payers

This reflects how BIDs were designed: as business-led companies working within a statutory framework, rather than as public bodies. It means that a good deal of what makes a BID well governed is a matter of choice. Many BIDs choose to do more than the minimum.

3. How BID ballots work

The ballot that creates or renews a BID follows these steps:

1. The proposer, usually the existing BID company at renewal, writes the business plan.
2. The proposer asks the local authority to hold a ballot, and the authority appoints a returning officer.
3. The business plan sets the BID area and the levy rate.
4. Eligible businesses vote yes or no on that business plan, usually by post.
5. The ballot passes if it wins a majority of votes cast and a majority of the rateable value of those voting.

Businesses that do not vote are not counted either way, so a ballot can pass with the support of well under half of all eligible businesses. At renewal, the existing BID prepares the business plan that voters decide on, and it is usually the best-resourced voice in the campaign. Clear, balanced information for voters matters for that reason.

Local authorities often vote in BID ballots too, as ratepayers for their own properties, and in many towns they are among the largest voters by rateable value. The overall result is published. How the authority voted usually is not.

Read more: Publishing how councils vote in BID ballots.

4. The council's several roles

In most BID areas the local authority is, at the same time:

• the body that holds the ballot;
• a levy payer that votes in it;
• the body that collects the levy and passes it to the BID;
• represented on the BID board, often by a named officer;
• paid a fee for collecting the levy, usually a small percentage of the amount collected.

Each of these roles is proper. Together they mean the council both runs parts of the process and has an interest in its outcome. The officer appointed to the BID board often comes from economic development or town centre management, where the BID's work supports the officer's own objectives.

The framework does not set out how these roles should be kept apart. Councils can do this themselves: by recording the board role in the register of interests, by giving the different roles to different officers, and by having the operating agreement reviewed independently.

Read more: The council's several roles in a BID and When a council officer sits on a BID board.

5. What good governance looks like

The legal minimum is a floor, not a standard. For a body that collects a compulsory levy, good governance usually includes:

A register of interests

A complete and current register for every board member, covering directorships, supplier relationships and membership of other relevant bodies. Updated each year and whenever things change, and published.

A conflicts policy that is used

A written policy for what happens when a declared interest meets a decision: stepping out of the discussion and vote, a note in the minutes, and independent review where needed.

Independent audit

Accounts checked by an auditor with no commercial link to the BID, its directors or its suppliers, even where company law would allow less.

Open procurement

Published records of contracts above a threshold that suits the size of the BID, so levy payers can see where the money goes, not only the categories it goes to.

Clarity about communications contracts

Where the BID pays for marketing or editorial work, the supplier is named. Where that supplier also writes about the BID, the relationship is stated in what they publish.

A reviewed operating agreement

The agreement with the local authority reviewed by an adviser independent of both parties before it is signed, and again at each renewal.

None of this is costly or unusual. Plenty of BIDs already do all of it.

Read more: What the Nolan Principles can and cannot do.

6. Where governance needs most care

When governance goes wrong in a BID, it is rarely because someone set out to do wrong. More often, the framework simply does not ask for the step that would have made things clear. These are the areas where that tends to happen.

Overlapping roles

A director may also have an interest in a supplier, or sit on another body that deals with the BID. Both facts are often public, at Companies House and in council registers, but they are not always declared side by side.

Communications work

BIDs often commission marketing and editorial content. When a paid supplier also covers the BID in its own publications, readers may not know about the payment unless it is stated.

Contract records

BID spending is usually reported by category. Individual contracts, and how they were awarded, are often not published, which makes it harder for levy payers to follow the money.

Information requests

Requests to the council about BID arrangements are best handled by someone independent of the arrangements being asked about. Clear internal procedures make this straightforward.

Ballot design

At renewal the existing BID writes the business plan and proposes the ballot. That is how the regulations work. It places extra weight on clear, balanced information for voters.

7. Accreditation

British BIDs, an industry body for the sector, runs a voluntary accreditation scheme. Its published standards cover governance, finance, performance and communications, and accredited BIDs often mention it in their business plans and ballot materials.

Accreditation can be a useful sign of good practice. Levy payers who want to know more can read the published standards, ask their BID when it was last assessed, and ask what the assessment found. It is also reasonable to ask who sets and checks the standards, as with any accreditation scheme.

8. The 2026 reform announcement

On 2 June 2026 the Communities Secretary announced that the government's High Streets Strategy would include reform of BIDs. Three commitments were stated: simpler voting, stronger transparency and accountability, and including property owners in BIDs for the first time.

At the time of this update, no consultation paper, draft legislation or timetable has been published. The measures a reform might include are already familiar from good practice: published registers of interests, independent audit, published contract records above a threshold, and a clear route for levy payers to raise questions during a BID's term.

9. Your rights as a levy payer

If you pay a BID levy and would like to understand how it is spent, these routes are open to you.

Freedom of Information requests

The council that collects your levy is covered by the Freedom of Information Act 2000. You can ask it for the operating agreement, how it voted in the ballot, its representative's role on the BID board, and records it holds about BID-related spending. The BID company itself is not covered by the Act.

The annual general meeting

BID companies hold an AGM, and levy payers can usually attend. Questions can be raised and recorded in the minutes.

Companies House

Every BID company files accounts, confirmation statements and director details at Companies House. Searching is free and needs no account.

The operating agreement

The agreement between the BID company and the council covers how the levy is collected and passed on, the council's fee, and what the BID has agreed to deliver. It can be requested from the council.

Read more: Your rights as a BID levy payer.

10. About this guide

This guide is built from the legislation, published guidance and public records, and links to the primary sources where it cites them. Where SIBA's comparisons cover councils with a BID in their area, they read the same records: the business plan, the accounts filed at Companies House, and the council's own papers on the ballot and the operating agreement.

The guide is updated when the law or the policy picture changes. The methodology explains how SIBA works.