Home » Organisations » Chancellor urged to tackle £200bn infrastructure deficit

Chancellor urged to tackle £200bn infrastructure deficit

Councils and the property industry are working together to form ambitious partnerships that can support growth and create jobs. Together they have identified a number of ways in which government could help to get even more development schemes off the ground.

The key measures being called for are:

* Make it easier to pool public sector capital funding in a broad local area to allow for more coordinated infrastructure development;
* Allow councils to quickly bring forward and implement Tax Increment Financing powers to fund growth creating infrastructure (TIF allows the cost of building infrastructure to be paid for through the future extra taxes generated by a development);
* Allow councils to borrow against income from the Community Infrastructure Levy to fund building projects and, where councils agree, for developers to make CIL contributions in kind;
* Ensure that the "city deals" deliver greater local autonomy and extend the offer to areas that make the case for greater responsibility for growth;
* Remove barriers to better use of public sector assets for the purposes of generating infrastructure and economic development funding;
* Ensure local-authority issued bonds have maximum tax efficiency to reduce the costs to councils of borrowing to fund infrastructure;
* The Government to work with the LGA to raise awareness among pension fund trustees and advisors of the opportunities for prudent infrastructure investments.

Sir Merrick Cockell, LGA Chairman, said: "The Government needs to put the levers of job creation and growth into the hands of councils and developers by helping them access the funding they need to tackle Britain’s £200billion infrastructure deficit.

"One of the key drivers of national growth is local development. With some modest adjustments to government policy the Chancellor can make it much easier to get infrastructure projects off the ground. We just need the Government to back the creativity and ambition shown by councils in pursuing new funding models like local government bonds and Tax Increment Financing.

"Councils are already demonstrating how they can aid growth through ambitious local building projects. With the right regulatory support, accompanied by a strong, positive relationship between local authorities and developers, they could be doing even more."

Liz Peace, Chief Executive of the British Property Federation, said: "It is absolutely right that local authorities are put at the heart of business growth and job creation in their area, and we hope the Chancellor recognises this in the Budget."

Have your say on this story using the comment section below