Questions over borough link with Boston BID

Our recent criticism of the Boston Business Improvement District (BID) has brought a detailed response and some very important questions from Darron Abbott ... a self-employed accountant who has lived and worked in Boston all his life.
Mr Abbott began enquiring into Boston BID after one of his clients was summonsed by Boston Borough Council for non-payment of the levy raised by the organisation.
"My client passed the summons to me to investigate as the levy was for an empty premises, one which Boston Borough Council acknowledge that no business is being run from as no business rates are being charged.
"My first port of call was Boston Borough Council, which stated the BID levy was payable - despite the property being empty. The council then referred me to the BID manager Niall Armstrong. Once again he confirmed the levy was payable for empty properties, and during the discussion he mentioned the Annual General Meeting was to be held on the 15th June.
"Businesses that are in the BID levy area have since received a letter that states 'unfortunately it has been necessary to cancel the General Meeting.'
"What is not explained is that the misfortune was due to the fact that the Boston BID had breached Companies Act 2006 section 307. This deals with the notification of members (businesses within the BID area - these businesses are made shareholders of the company upon payment of the first year's levy.) Section 307 states all members should be notified of the date and venue of the AGM not less than 14 days prior to the meeting. It soon became apparent that no notifications had been sent out, The cynical amongst us may suggest that the officers of the company did not want anyone there.
"Next call was Companies House, and the request for a copy of the annual return dated 29th January 2010. Upon inspection it appeared only 31 shares had been issued. I knew for a fact that some of my clients had paid their first year's levy before the date of the annual return. One other concern was the fact the chairman of the company did not appear to have paid the levy on his two businesses within the BID area.
"The BID business plan states the first £1 of the first year's levy would buy the business paying the levy a share in Boston BID. Section 558 of the Companies Act 2006 states - 'shares in a company are taken to be allotted when a person acquires the unconditional right to be in the company’s register.'
Basically when the levy was paid a share should be issued - so everyone who paid his or her first year's levy should have been issued a share certificate immediately. Section 555 of the Act requires a company to inform Companies House of any allotment within 28 days using form SH01. After viewing the annual return it was very apparent that the officers were in breach of this section and also the company had filed an incorrect annual return.
"Then on to Boston Borough Council - and a freedom of information request.
"Boston Borough Council issue the demands, collect the levy and issue summons for non-payment. Surely they charge for this service, as Boston BID is an independent private limited company.
"The reply came back that they do not charge a penny. They do have a statutory duty to collect the levy on behalf of Boston BID Limited, but it does not state that the council cannot recover its costs. Someone within the council has decided not to recoup any of its costs, therefore all businesses and council tax payers of the borough are subsidising Boston BID.
"Then another thought struck me - as all of Boston Borough Council properties (Municipal Buildings, Guildhall, Assembly Rooms, car parks, etc) have a rateable value - are they liable for a BID levy. "Guess what? Yes they are, and yes they do pay it!
"Considering the rateable value of the Municipal Buildings alone is £211,000, this is a levy of at least £2,110 paid by the council taxpayers of the borough. I have issued a further freedom of information request to ascertain the amount of the levy paid by the council.
"Finally I exercised the right of one of the shareholders of Boston BID and attended Boston Business Centre to inspect the books and records of the company. The financial records were not available. I could not, therefore, ascertain the financial position of the business. The non-availability of the financial records is deemed as a refusal by Companies House, which is a criminal offence, deemed to be committed by each of the directors. After inspecting the register of members, it became apparent that towards the end of March some realised that lots of shares should have been allotted and share certificates issued. Unfortunately the relevant form SH01 had not been submitted to Companies House, once again in breach of Section 555.
"I have concerns regarding the management of Boston BID.
"If the officers of the company cannot complete statutory forms and comply with the Companies Act 2006, are they capable of running a company that has statutory powers to demand a levy from all businesses in an area defined by themselves?
"I have concerns as a council tax payer as to the extent that the council are subsiding a private unassociated company at a time when we will be facing cuts in services. Can we afford to continue to throw money at yet another organisation?
"I would urge all shareholders of the company to attend the new AGM on 14th July. If they are unable to attend, complete the relevant part of the notice they have received appointing a proxy, and get them to attend and vote on their behalf.
"If enough unhappy shareholders turn up they can force a vote to have Boston BID wound up - and say goodbye to future levies.
"Any shareholder unhappy with the running of the company should contact Dominic Roberts from Companies House at dfroberts@companieshouse.gov.uk or phone 03031234500.
"All council taxpayers who are unhappy with their money being used to subsidise this company should contact their councillor - I hope they have more luck than I did ... she said I was making wild unfounded allegations and was not interested. I would point out that other organisations such as Boston Chamber of Commerce, and Meteor Parking are not afraid to charge Boston BID for services provided by themselves, so why should Boston Borough Council not recover their costs?
"Also we should find out which officer of the council decided that no costs be recovered.
"Council tax payers can also attend the AGM as observers, as they have a vested interest as Boston Borough Council hold a share in the company and should respect the views of the council tax payer when they vote on any issue."

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