Greater Manchester outlines area-wide TIF plan
Greater Manchester is developing plans for an innovative US-style funding tool that will enable its 10 councils to pool business rates across the city region and borrow against future revenue to fund regeneration schemes.
The proposal to develop a city-region wide Tax Increment Financing mechanism is set out in a paper submitted to the Association of Greater Manchester Authorities and was approved in principle in a meet of the AGMA executive board last week, Lord Smith, AGMA chair said,
The government has said it plans to introduce TIF - a financial tool popular in the US that enables local authorities to fund regeneration by borrowing against the future uplift in business rates revenue accrued through development - with a limited number of pilots to be selected through a new bidding process.
Greater Manchester’s plan is distinct from proposals developed in other areas, such as the Mayor of London’s plan to use TIF to fund an extension to the Northern Line, in that it would not focus on particular projects but rather on the entire city region area, “within which a range of schemes throughout the area would be located”.
The paper argues that an area-based approach would enable Greater Manchester to better integrate its approach to economic development, bringing together diverse forms of funding, “to maximise the delivery of growth”.
It said an area-wide TIF would also complement Greater Manchester’s emerging approach to a single pot of funding for transport, housing and economic development more generally. It added that an area-wide approach “provides the best opportunity to influence the maximum retention of additional business rate for investment”.
Lord Smith said the key was to maximise the potential not only of TIF but of other funding streams, given the lack of public funding available for regeneration. He said officials would now be tasked with drawing up more detailed proposals to be submitted to government as part of Greater Manchester’s Local Enterprise Partnership, which were approved in principle last week.
www.lgcplus.com 02/11/2010
