Financing the future, a call to action
As we face the growing shadow of recession and development across the country slows, the regeneration agenda has started to change. Where innovation and ambition was once heralded, now simply maintaining progress on existing developments is the challenge. In the face of this challenge, the Core Cities are pushing forward with their proposals for a new model of capital investment to empower the cities themselves to maintain the momentum of urban renewal that has emerged in recent decades to make our cities destinations for business, leisure and learning.
Launched recently at the autumn 2007 party conferences, this new model, ‘Accelerated Development Zones’, was developed out of a nine-month study produced by the Core Cities Group with Pricewaterhouse Coopers (PwC). We are now looking at ways of progressing this model with Government and our partners, including exploring a bid under the Sustainable Communities Act. Birmingham, Coventry and the Black Country have also prepared a bid for an ADZ on a city region basis and are hoping to progress this to a pilot shortly.
The research, published in the Core Cities report Unlocking City Growth , is based on a business model first used in California in the early 1950s: tax increment financing. At its simplest, a local authority bringing forward a development site retains some of the business rates and other income from the new enterprises for a set period, instead of forwarding the revenue immediately to central government. It then borrows money against that future income to fund the site’s infrastructure needs, before using it to repay the loans.
The PwC analysis suggests that the Californian idea would translate well to this country - especially when used with regional infrastructure funds - and that it could increase the number of homes and jobs being created in some schemes by between 50 and 80%.
The research featured four live case studies from several core cities, including Birmingham, Sheffield, Leeds and Nottingham.
Chris Murray, Core Cities Director, has recently written a piece for the independent in The Independent. Click here to view the full article “A Taxing Time “