Business owners in Clevedon, a Somerset seaside town famous for its pier and independent shops, have split into two fiercely opposed camps in recent years.

There are those for and against, the ins and the outs. The big divide? Clevedon’s Business Improvement District (Bid), introduced in 2018 and renewed for another five years last summer.

“It has torn the town apart. People who were once friendly now no longer speak. It’s a nightmare,” says Daniel Adams, owner of Stationery House, one of several businesses refusing to pay the Bid levy.

As in more than 300 similar zones across the UK, businesses within the designated area of Clevedon must pay a yearly charge to the Bid, a private limited company, with the money going on improvements to boost business in the area.

But dozens of firms have joined the No To Clevedon Bid campaign, tensions have risen and arguments have broken out in meetings. Some businesses are preparing to go to court over paying the levy.

“A lot of people don’t want to put their head above the parapet,” says Adams. “But there needs to be an alternative narrative. If you’re going into something which is going to financially commit you for five years, you need all the information.”

Lynda Parkin, owner of Ziggy gift shop, says she initially supported the Bid but changed her mind when she struggled to find out where her money was going: “There isn’t enough information out there to make a decision. It has divided the traders. I’ve heard people say ‘Oh no, I won’t use that shop because they’re anti-Bid.’ It’s sad.”

Many businesses in the town are happy with what the Bid has achieved. “I’ve had my shop for over 20 years and for me, the Bid is brilliant because it means we’ve got a pot of money to do things with,” says Amy Bennett, who runs chocolate shop Indulgence.

“Everyone can chat about what the money is spent on, and it means that things have actually got done. It bring everyone together to work for the greater good.”

She points to benefits such as extra signs, funds for a new play area and a website to promote the town. She says a “nasty campaign” has sprung up in opposition to the Bid, making “bilious accusations”. “Unfortunately, those people aren’t really offering alternative solutions.”

A few doors down, Alistair Sims, the manager of Books on the Hill, agrees that the Bid has been a “bigger force for good than bad”.

“Without having that central voice, we can’t do as much as we want to. I think it’s really helpful,” he says. “If it’s voted in, then of course everyone is expected to pay it. We have a sense of duty. There’s really no need for division.”Others feel they have seen little return for their money. “I thought the Bid originally was a good idea,” says Gary Searle, who has run the Salthouse bar on the seafront for 18 years. “But I’ve been paying £1,600 a year for five years for nothing. The flower beds round here haven’t been touched. The seafront has had nothing. We won’t be paying until we feel a Bid is going to offer value.”

Clevedon Bid rebuts the claim that it has not invested in the seafront, referring to a parkrun it helped introduce there four years ago.

Searle was particularly critical of the way North Somerset council was allowed to vote in the ballot to decide on creating the Bid. Last year, 141 votes were cast, with 80 in favour. The council had six votes: one for its headquarters, three for car parks, one for a children’s community centre and one for a library.

The council offices are in one of Clevedon’s largest buildings, with a rateable value of more than £1m, making up about a third of the rateable value of all businesses which voted in favour of the Bid. The ballot is won not just on votes cast, but on the rateable values of the businesses voting.

“Without the council votes, there would be no Bid, because not enough businesses would vote for it,” says Adams. “Councils love Bids because then they don’t have to spend on things like hanging baskets, festivals and street cleaning.”

North Somerset council acknowledges that the outcome would have been different if council properties had been excluded, but says: “We were entitled to vote and chose to do so.”

Adams says businesses are doubly angry that the council gets a 50% discount on the levy, because the building is outside the town centre.

After the ballot last July, which saw the Bid renewed for five years, the No campaign appealed to levelling up secretary Michael Gove, arguing that it was unlawful because of the council offices’ inclusion and the discount. The appeal was unsuccessful.

George Grace, chair of Clevedon Bid, says businesses are free to vote against it, but asks what would replace the service it provides: “Councils can barely pay for children’s and other essential services, so while there are fine words about saving the high street and building community, there is almost no council resource to do any of it. In Clevedon, the average weekly cost for the independent businesses to be part of the Bid is the price of a cup of coffee so it’s hardly going to break the bank.”

He says businesses are best placed to bring change in towns and that in Clevedon, people say they get a sense that someone is caring for the place. “Put most simply, businesses know [Bids] work and there are no real alternatives.”

A North Somerset council spokesperson said: “We think the Bid activities significantly benefit Clevedon’s retail and hospitality sectors, and have a positive effect on residents who use the town’s public areas.

North Somerset council holds one seat [on the board], but does not in any way have a controlling voice, and our general approach is to support the initiatives proposed locally. We would encourage businesses unhappy with how the Bid is run to get more involved at local level, so they can influence its activity.”

• This article was amended on 15 April 2024. George Grace is the chair of Clevedon Bid, not “Cleveland Bid” as an earlier version said.