Move dismissed by British Property Federation as “small beer”
Chancellor George Osborne today announced a £150m fund for large scale projects in Britain’s main cities financed through Tax Increment Financing (TIF).
The money, through additional government funding and available from 2013–14, will be allocated through a competition due to be announced in the next few months.
TIF, a system widely used in the United States, enables local authorities to borrow against future growth in business rates.
However, Peter Cosmetatos, director of finance at the British Property Federation, said: “£150m seems like very small beer after years of preparatory work and the hopes and expectations that have built up around the country for a new instrument that could, if designed well, unleash investment and growth.
“What isn’t clear is whether the £150m referred to represents the capital sum which can be invested in enabling infrastructure, or the element of total annual business rates revenues that the government is happy to see funding the annual financing cost of such investment. If it’s the latter, that would mean more could be invested in infrastructure.
“It’s also disappointing that, 18 months after TIF was announced as government policy, we have yet to see any detail about how it will work, and we are only promised details “in the coming months” about how the government will decide which schemes get the go-ahead.”
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