London calls for US-style funding
Author: Local Government Chronicle |
London Councils and London mayor Boris Johnson have made a last ditch plea for greater financial autonomy ahead of the pre-Budget report.
The boroughs and the mayor want to explore the use of US-style funding models to finance capital projects and a rationalisation of thirty or more specific grants over and above revenue support grant.
Under the tax incremental finance (TIF) model, which has been used for decades in the US among other countries, public bodies fund new infrastructure by borrowing against projected future increases in business rates that the project would generate.
A joint paper Investing in Recovery – A new deal for London said: “[TIF] would enable boroughs to boost economic development by investing upfront in enabling infrastructure.
“The freedom and responsibility to generate and manage local revenue streams will provide a significant incentive to investment, leveraging private sector funding.”
On grants it said: “The Government should initiate a major consolidation of grants which would reduce the overall administrative burden [and] allow for additional funding to be given through area based grants and enable efficiency savings to be realised at local and national levels.”
London Councils chairman Merrick Cockell (Con) said: “This is not a case of us simply calling on the government to give more money to London. It is about investing in the leadership and innovative thinking from boroughs and their partners, including the mayor, in tackling the problems this city faces head on.”