Cities will be encouraged to borrow against future revenue streams under the tax increment financing (TIF) model to raise money to fund infrastructure.
George Osborne said in his full autumn statement, published today, that the government will consider allowing city mayors and partner local authorities to borrow against the income they receive through the Community Infrastructure Levy (CIL), which allows local authorities to charge on new developments, such as safer road schemes, park improvements or a new health centre.
The government said this is part of its commitment to deliver TIF powers “where they can make a significant contribution to national infrastructure priorities”. TIF uses future revenue gains from taxes to finance the borrowing required to fund infrastructure improvements.
The government said further details on using business rates for TIF will be set out in the Local Government Resource Review in December.