Unresolved crisis at BID4Oban in urgent need of address

An openly expressed crisis of confidence amongst the Board of BID4Oban has been rumbling on for some months now but remains unaddressed and unresolved.

It has cost the resignations of three Directors of the Board to date, two of whom were members of the original Steering Group – which underlines  their commitment to the project and the extent of their knowledge of it. These resignations leave questions being asked about the ability of the depleted Board to fulfil its responsibilities.

For Argyll understands that some local business members are c0nsidering triggering a formal request for an Extraordinary General Meeting to have the situation confronted. This requires a written request from at least one tenth of the membership, on receipt of which the Chair of the Board must convene an EGM within the following 28 days. 21 clear days notice of the date of the meeting must be given in the case of the sort of motion or motions likely to be tabled.

The issues at the heart of this crisis could hardly be more important in a range of ways, involving a ridiculous financial management position; erratic management on the ground; with  the Chair and Vice Chair of the Board said to have failed to carry through agreed Board decisions and to have acted outside the authority given them by the Board.

For Argyll has seen documents sent anonymously in the post which are quite alarming in the situation to which they attest. BID4Oban seems short on strategic management of finance, appointments and development operations.

BIDS

A BID is a Business Improvement District agreed by a majority in a formal poll of businesses within the given boundaries of the proposed district. Once voted into existence, all businesses whose properties are at or above a specific rateable value [in Oban it is £3,000] pay a compulsory levy to fund the BID company established to operate it.

The Oban BID was voted into being early in October 2012, applying to all businesses within the town’s 30mph zone and making Oban Scotland’s first ‘whole-town’ BID.

The job of the BID company – whose Board of Management is elected from local nominations – is to make the town a more attractive place for people to visit, spend and do business.

The local Council makes an annual contribution to a BID; and in the case of BID4Oban, Argyll and Bute Council puts in £20k per annum for each of the five years of the agreed period to 2017, when, should it choose, it must campaign for a second term.

Members have input into what a BID does and may agree or disagree with propositions put forward.

For Argyll’s view from the outset has been that the current scheme for BIDs is poorly conceived and is little more than a half hearted attempt to make private sector businesses put their hands in their pockets to smarten up the business environment and take some of the heat off the public purse.

In practice, it is so poorly funded that it is little more than a low rent job creation scheme for those who are unlikely to have the experience and the ability to galvanise the initiative.

Any halfwit can spend other people’s money. Bringing in the bacon is a very different matter – yet this is what a genuinely capable BID must do, not only for the town but for itself.

In the wake of the voting in of BID4Oban, the Isle of Mull decided to go for it and be the first urban-rural whole-island BID in Scotland. This divided the island with the opposing group routinely abused as selfish, mean retrogressives; and the supporting group forging ahead with admirable energy and invention, producing a business plan that was almost completely unrealistic.

For Argyll backed the opposition in that case; as the effort, already divisive, could have done no more than additional damage to the community.

A compulsory levy is one thing when the BID area is urban and defined. Levy payers have some chance of seeing what is being done and of feeling that the location of their business is being improved to their benefit from their contribution.

In Mull, the vast majority of the businesses  – the compulsory levy payers – are B&Bs, scattered across the territory, offering accommodation in the gloriously beautiful remote parts of that spectacular island. There was no way that the compulsory levy these businesses would have paid could have benefited them. Whatever the BID could have raised would have been almost entirely eaten up in the salaries of the ubiquitous ‘managers’, with a bit left over for a few flower baskets in Tobermory, Bunessan and Fionnphort.

A Mull BID was never going to have the money to mend the awful pot holes on the island’s roads – which is the one thing that would help the flotilla of remote B&Bs.

The opposition won the Mull BID vote, For Argyll lost some friends – but we had done an honest and fearless job, which, in a markedly fearful place, is what we’re here for.

BID4Oban is a defined urban territory in a town with the greatest recognition factor in mainland Argyll and one with the additional major advantage of having a captive audience in being at one end of the CalMac umbilical cord to the offshore islands.

If a formal BID can achieve anything worth the candle – and, in the nature of this scheme, the jury is out on that – BID4Oban has a decent chance of doing it – IF it has the right staff, the right operational criteria and the right strategies.

The trouble at BID4Oban

In the Autumn of 2015, the Board of BID4Oban had a closed session where they had to take a forensic look at the organisation’s situation.

  • It was spending 57% of its levy on staffing costs.
  • Its finances were such that, without urgent remedial action, it was facing going into 2016, its fourth year, with a deficit.
  • It was paying one member of staff £20.5k a year to administer a specific budget of £7.5k for 2016.
  • That member of staff had already been asked and agreed to raise external; funding to support the costs of this part of the operation – and had not done so.
  • There were serious doubts about the capability of another employee, a matter which had been raised with the employee in question.
  • In 2017, BID4Oban’s five year scheme is up and the organisation will need to be in shape by then to secure its continuity.

After discussion, the Board decided unanimously, with each Director asked to declare their position individually, to make two redundancies to retrieve the finances and the operability of the organisation .

Putting this into action was the job of the Chair [deserving of some sympathy being a month into the position] and Deputy Chair. They made the redundancy in one case but not the other – and did not first seek advice and consent from the Board for overturning the unanimous instruction in the second case.

The outcome is a position where the Board – people with their own jobs to do – are effectively childminding the operation of BID4Oban. Quite how the purpose of the BID can be delivered in these circumstances is a mystery to us.

Directors are unhappy, to say the least. Two are identified in the published minutes of the December meeting as having resigned; and we understand that a third has since done the same. The financial position cannot have been fully recovered.

It is not unreasonable for levy payers to be agitated by the situation.

From the papers we have seen, the Chair and Vice Chair did their honourable best in a very difficult staffing situation – but flunked part of the surgery they knew to be necessary.

Their error was procedural – and critical.

Had they done what they should have done and gone back to the Board with a situation update and a request for confirmation or revision of their instructions, either of the two possible outcomes would have been helpful.

  • Armed with a confirmation of the Board’s determination following their updating, they would have been able to carry the action through.
  • A revision of the instruction would have validated the current situation – which is effectively an unconstitutional one.

In either event, the Board would have been united, where today they are in a degree of disarray, in no shape to face an EGM of angry and concerned levy payers; and the systemic paralysis in the operation of BID4Oban remains.

This is of course a matter of concern for the present and the future; and it is one that can indeed best – and perhaps only – be resolved through an EGM.

Reading through the minutes published since August 2015, we are struck by the fact that the notion of a strategic action plan appeared to be being introduced for the first time early in this period – and by a temporary manager who was a former manager at Argyll and Bute Council.

This plan – which is not publicly available so we do not know its direction of travel – was presented to the Board by this employee before departing – but we note that what activity reports have since been presented to the Board do not appear to have been informed by any relationship to a strategic plan. They seem to be more a list of supports for a random series of events.

There does not seem to be the sort of vigorous proactive strategic intelligence leading what BID4Oban is doing on the ground – and which its levy paying members must have imagined would be the case. What is going on looks more like a listless going though the motions.

This is not a happy or a promising situation and it is sad to see the high octane welcome for the initial achievement of BID status for Oban fraying in this way.

We hold to our own analysis that the BID scheme itself is ill-framed, as too many quick fix populist government schemes anywhere tend to be.

One lesson to be learned is that just because there is some public money on offer [and £20k a year is pocket money in this instance] does not mean that there is overall gain.

Too many schemes of this sort can only eat up the assured funding in staffing costs – and at a level where the staff employed, through no fault of their own, do not have the weight and the specific necessary experience to generate external funding – and serious earned revenue; and to deliver the expectations that the publicity around the schemes themselves creates.

Other matters of levy payer concern

While this is the headline crisis, levy payers have been concerned about  a range of issues around what BID4Oban has been doing.

A representative selection of these concerns includes:

  • The operation on the ground is seen as directionless.
  • Staff turnover is unacceptably high.
  • Salaries and titles of replacement staff have been inflationary with no apparent performance gains.
  • A stop-gap temporary manager for a four month period is said to have been paid a pro rata salary of £54k per annum.
  • These last two actions are thought to have substantially contributed to a financial deficit at the organisation.

An associated issue is waste of investment in what seems to be poor resource management. BID4Oban spent around £7k on seafront lights in 2014 – but these were removed mid-2015 and were not in evidence during the 2015 Winter Festival.

· · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · · ·


Related Articles & Comments

  • As a member of the company, (limited to £1 liability ), though not a board member, I have had no information till after the fact of any of the serious issues, that have been dealt with till after the fact.

    Like or Dislike: Thumb up 3 Thumb down 4

    Tom Hayward February 11, 2016 6:28 pm Reply

Leave a Comment

Your email address will not be published. Required fields are marked *