Clarkston, in East Renfrew-shire, is one of 18 communities in Scotland to have voted for a business improvement district (BID), with 16 more in the pipeline.
The scheme charges traders annual fees over a five-year term. They are pooled and spent on upgrades, marketing and events designed to increase footfall.
The levy is pegged to business rates and all business owners within a BID area – whether they voted yes or no in the ballot – are legally bound to pay.
The Clarkston BID was passed in June 2010 with a 49% turnout and two-thirds voting in favour. The levies are set to generate £300,000 between 2010 and 2015.
However, retailers have criticised the initiative as little more than another tax on top of other overheads.
Jim Watt, who runs Cafe Roma with his son James, was served by sheriff's officers on Monday with a £1300 bill for unpaid BID fees. He has come to a payment arrangement, but regrets voting yes to the BID.
He said: "Our revenue hasn't gone up a penny since it came in, but we're paying out an extra £900 a year. There was a Christmas open day which maybe increased our turnover by about £200 compared to an average Saturday, but there were plenty of other businesses that saw no increase at all.
"We wouldn't mind if we were seeing something substantial in return, but the BID has done nothing."
The levy of an extra 3.5p in the pound on business rates for the Clarkston scheme is the highest BID charge in Scotland.
Janis Logan, owner of Distinction beauty salon, also voted yes, but says she has had no return for her £500-a-year BID fees.
She said: "They've set up this loyalty scheme and are asking us to discount our treatments, but for all the money I've put in I've had one customer – a regular – back asking for the discount. I've had nothing, absolutely zip. I had a fight just to get them to put up Christmas lights in my street even though I was paying for them.
"National Insurance has gone up and VAT is up to 20%. It's more expensive than ever for me to employ someone. It's just excruciatingly difficult and then you've got BID squeezing you even more."
Created in Canada in the 1970s, BIDs spread worldwide and came into force in Scotland in 2007. But there has been criticism the ballots are fundamentally undemocratic, requiring a majority vote from a minimum turnout of 25% of eligible businesses – meaning in some cases almost seven out of eight firms in a BID area could end up paying for something when they either voted against it or didn't vote at all.
Last month The Herald revealed traders in Largs, North Ayrshire, had fought the creation of a BID there, amid claims of bullying by organisers and a botched ballot. Scottish Ministers are now deciding whether to overturn the Largs BID.
Stuart Thomson, operations director at Brite Dental in Clarkston, said his business was being chased for £500 in fees owed by the previous business which used their premises.
He said: "We just don't see the value of it. It seems to be a very undemocratic way of doing things where a very small number can vote in something that everyone is legally bound to pay for. It's asking you to pay for things in some cases that I think should already be covered by your rates and council tax."
Derek Leitch, owner of Clarkston Chiropractic and a former member of the BID committee, added: "I've had no return at all, I can say that without a word of a lie. I pay £500 and I haven't had one extra customer through my door because of it, whereas I could spend £500 to get an advert in the paper that might get me three people through the door, or 1000 leaflets."
However, BID chairwoman Debra Clapham, a local solicitor, said the town would be worse off without it. She said: "If there's not a BID in Clarkston I don't know what Clarkston will become. We've been able to tap into grants and increase funds because we've got the BID. Businesses have come to Clarkston because we've got the BID. Look at the towns round about – Clarkston is punching above its weight. Compare Clarkston with Paisley – there is no comparison.
"But people need to engage with it. There's no point complaining that people aren't coming into your shop – you need to think out of the box and give people something they can't get elsewhere or online. Tell me what would help you.
"It's got a long way to go, but what's going to do it if it's not the BID? We're not paying for anything that the council should be paying for – there are very clear rules around that.
"Support for it has soared in the last year and I'm confident we'll have another majority vote in favour in 2015."
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