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The full service

Bath’s Business Improvement District (BID) has potentially created the mould for others to follow by being the first BID in the country to set up a trade waste and recycling service for the city. Andrea Lockerbie paid a visit

Bath is undoubtedly a beautiful city as well as a Unesco World Heritage site, which helps attract the tourists and shoppers in droves. The city’s businesses are keen to ensure it is kept looking its best for their customers, which means having clean, clear, safe streets.

Enter the Bath Business Improvement District (BID), which was voted in by the city’s businesses a couple of years ago. One of the main issues that Bath’s businesses wanted the BID to look into was trade waste collections. Bath BID project manager Leslie Redwood explains: “So many businesses were annoyed and fed up with the collection in the city. There were 17 operators operating in the city at that time, all collecting at different times of the day. A massive variety of prices was being charged – there was a 50% variance in prices. And what businesses said to us was that they wanted firstly, a much better service; secondly, a much better price; and thirdly, some environmental benefits as well as more formal management of waste collection in the city.”

The BID undertook a formal study, using a trade waste and recycling consultancy, to investigate what was going on in the city and get an idea of how many trucks there were, when they were coming in, how many tonnes was being shifted, where it was going and what was happening to it. It gathered the data over a year and, as Laurence Swan, BID board director and local business owner says: “It became apparent that the objective we had was to get the utopia situation of one company arriving at 7am, collecting all the waste and recycling and being clear by 10am. That was the vision we started having.”

While many BIDs in the country have put in place recycling services, none have gone the whole hog and put in place a full trade waste and recycling service. Redwood says the BID came to the conclusion that it would solve 70% of its problems by doing a recycling only service, and had a “light bulb” moment when it was tendering for trade waste consultants and came across Eunomia.

“They said you should grasp the nettle and go for a full trade waste and recycling service, because actually, for that extra bit of effort, you will cure 90% of the problems you are trying to cure, whereas if you just do the recycling, you’ll probably solve 50% of your problems, but still have congestion, pollution, environmental issues, all those other things. If all those 600 businesses in the city centre were on one collection service that would make a massive impact: fewer trucks, less pollution and congestion and also the management of that contract,” recounts Redwood.

So the BID team went for the full trade waste and recycling service. “And very quickly we realised that no one else in the country, no one else in Europe, was doing that kind of thing,” Redwood says.

The formal structure of the BID gave such an initiative added security for the contractor, as BID’s are voted in for a five year term, so the Bath BID has guaranteed levies paid until the end of 2016, when it will have to go back to businesses for re-election.

Businesses surveyed by the BID were clear in their message that they wanted a full trade waste and recycling service. Redwood says: “Often the rate of return on surveys is anything between one and 10%. We had a 50% return saying ‘yes, let’s change the situation in the city, let’s do something completely unique: a great service at a great price, increased recycling, carbon tracking, zero to landfill, all that kind of thing’.”

It decided the hook of price was needed to get businesses involved initially. So it went to the board and asked it to allocate it £100,000 it could take into a contract with an operator. This would be used for operator set up costs such as trucks and sales resources, as the operator would potentially get nothing in return. “We had 50% of businesses that had signed a declaration to say they wanted an improvement in their trade waste, which was a great sales start, but apart from that we had nothing to offer. So the guys had to take a gamble on whether they wanted to come in and take that business opportunity,” Redwood says.

Savings experienced on the BID trade waste service

  • The Priory, a five star hotel located just outside the city, has saved £19,700 a year on its waste collection. It pays a levy of £2,700, which means annually it is saving £17,000 on its waste collections.
  • Another restaurant has saved £4,500 on its waste bill, in exchange for a bid levy of £350 a year.
  • Future publishing, the largest employer in the city, has saved £20,000 across four sites on its waste collections.

Eunomia ran a standard tender process for the BID which whittled the 17 operators down to five, then to three, then the final two: Sita and the council. While Redwood says the council was being very visionary, what finally swung it for Sita was its more commercial focus, where service delivery was a priority as well as the environmental elements. It was also the only operator to offer a zero to landfill service.

“Also the costings were great. But we didn’t just go on costing, we want to make that clear,” says Redwood. “We could have ended up with a much cheaper service than we have now but actually we would have had a much poorer service level because of that. We wanted to balance those two things out, and especially bring in the environmental concerns.   We felt very much that as the economy recovered people would be less focused on price and they would then become more focused on quality of service, impact on the environment and corporate social responsibility elements for the larger businesses – and Sita was very good at that. And that is what nicked them ahead in the end.”

Sita’s future proposals included the potential to bring on more food waste collections and possibly combine residential and commercial collections in the city centre, which appealed to the BID. It began work at the start of April, with the initial sales and PR contact but operations started mid-May to June. Within six weeks it had 100 businesses signed up and as of 1 November it had 300. With 620 businesses in the BID, this is an impressive level of success.

Interestingly, the trade waste scheme has also encouraged some of the businesses not involved in the BID to pay a voluntary levy to join the BID in order to get the benefit of its trade waste scheme, as well as its other benefits. Some of the savings the BID trade waste service have generated for its levy payers are quite staggering.  (See box)

Redwood points out that the £100,000 the BID put in currently subsidises the service.  “An element of the subsidy was reflected in the pricing structure that Sita put in to the tender process, so more often than not those prices are lower than nationally agreed contracts,” Redwood explains.

This has helped to persuade businesses off their nationally agreed contracts and on to the BID contract because the BID contract is better value - even for some of the larger businesses in the city.

“We deliberately did that so we could get as many BID members on as possible. So the average saving is around 50% on their previous waste collection cost.”

The subsidy is on a sliding scale, so from next year, as the turnover from the contract rises, the subsidy will fall, so that in years two and three it should fall away as market share and profitability increase for the operator.

BID businesses not currently signed up to the scheme are thought to be those on national contracts, managed by head offices, or still tied into existing contracts. The BID team hopes there will be a domino effect as the service grows and more businesses hear about it from their peers. With some of the savings figures quoted, this looks very likely.

Bath BID – facts and stats

  • Bath businesses voted for the city to have a Business Improvement District (BID), which has a term of five years.
  • 620 businesses in a defined area covering the city centre now pay the BID levy, which is compulsory.
  • Any business within the BID area with a rateable value above £25,000 pays the bid levy of 1% of its rateable value.
  • The levy money goes into a pot that is completely separate from the council and controlled by the Bath BID company.
  • BID levy income for 2011/12 was £600,000 with additional voluntary contributions of £80,000.
  • Bath BID has a ‘ranger team’ who do street cleaning and support businesses. Eg they operate a ‘quick response’ service to clean up any spills and mess outside shops and also do a continual deep clean of the city centre.
  • A Bath BID cost consultant will audit businesses and help them reduce costs for bills such as gas, electric, telephone and insurance. These savings are often more than the cost of the BID levy.
  • Bath BID has a baseline agreement with the council to ensure it tops up and doesn’t replace services the council should be doing.
  • Bath’s BID businesses are made up of: 60% retail; 20% leisure and 20% offices.

 

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