New hope for inner cities is made in the USA

Clean-up of New York may prove model for reversal of urban decline

Britain's city centres, characterised in the last two decades as areas of decline and neglect, are on the verge of embracing an American solution to their problems.

The radical answer - which brought about the clean-up of New York's notorious Times Square district, turning shame into showpiece - is now quietly being considered by the Corporation of London, the Confederation of British Industry, the Association of Metropolitan Authorities, and other local authorities, as the solution to halt inner-city decline in the United Kingdom.

Last week in New York an academic from the London School of Economics and an economist from the management consultants, KPMG, unveiled their study of New York's Bids (business improvement districts). Under the scheme, a private, non-profit company is set up and owned by local businesses. The company uses funds drawn from a compulsory levy on all businesses inside the Bids area to regenerate and improve local services, generally improving civic cleanliness and street security through uniformed and non-uniformed private guards.

For Times Square, the additional cash used from the Bid scheme helped to halt the area's high crime rate, restrict the growth of the pornography industry and improve the plight of the area's homeless. The Disney group, Virgin and other leading firms operating in the Bid zone were legally obliged to add to the cash from New York's own local government.

"We had become the national symbol of decay," said Gretchen Dykstra, president of the 42nd Street/Times Square Bid.

"No one was going to come to our office towers or visit Broadway shows till something was done."

Although city officials and elected representatives can sit on the board of Bids, the driving forces are the private property owners. They do not benefit directly, but they can indirectly see the value of their businesses improve as the Bid area regenerates its reputation and environment.

Throughout the United States Bids have now passed the 1,000 mark. Their acceptance in Britain - regarded as either a crucial piece of New Labour's stakeholder jigsaw, or another boost for Conservative private-sector initiative - is seen by many as an idea whose time has now come.

Crucially at all the recent annual conferences of the three main parties, presentations were made to senior party figures on the political benefits of Bids.

Tony Travers, director of the Greater London Group at the LSE, and Jeroen Weimar, a consultant, analysed how New York Bids like Grand Central, Downtown and Times Square focused on improving "clean and safe" services. Their lecture in New York was backed by the Corporation of London. Officials from the CBI also attended.

In the UK, methods which have tried to revitalise city centres, such as the appointment of town-centre managers, have relied heavily on voluntary partnerships with local authorities. Major retailers usually carry the financial burden, while other firms usually pay nothing and "free ride".

Under the Bids formula, which would require parliamentary legislation, a vote is taken among all businesses in the area. If the majority votes in favour, all businesses must contribute the levy and free-riding is eliminated.

Possible zones where the UK's first Bids could be set up include Oxford Street, Brixton, the South Bank, and the Fitzrovia area around the Post Office Tower in London. Camden council in north London has also indicated an interest as have urban areas in Newcastle upon Tyne. In Coventry there is already a Bid of sorts where a private company has been set up to provide city centre services.

In New York the city authorities cannot abdicate their responsibility for street cleaning and security: Bids are regarded as "additional" services. Nevertheless when Bids were first discussed by the Cabinet last year they were dismissed as essentially an "added form of taxation" that would hold no political benefit. That thinking has now been somewhat tempered.

Mr Travers said: "In Britain we have had our own version of city centre decay." Empty city centres and burgeoning out-of-town shopping sheds mean we need to urgently rescue town centres, he said.

Direct US-UK comparisons are difficult, says Mr Travers. Local government in Britain is more powerful, and Bids will doubtless be seen as a threat to their elected authority.

A heavy involvement by UK local authorities on the board of Bids could alleviate this problem. Labour's stated aim to return a GLC-style government for the capital could help the birth of Bids throughout London.

In the coming election campaign, where law and order, taxation and the environment will be noted battlegrounds, Bids could become a buzz-word in manifestos.

One Treasury insider commented: "Any idea that appears to produce new money for public services, yet at no cost to the public, has to be viewed by all parties as an idea they would like to own and like to take credit for. "