The British Property Federation and the Confederation of British Industry have backed the Coalition Government’s move to allow council’s to use tax increment financing to fund new development.
The policy - announced yesterday by deputy prime minister Nick Clegg at the Liberal Democrat conference – will see local authorities in England granted power to borrow against predicted growth in their locally raised business rates.
The money can then be used to fund key infrastructure and other capital projects, including regeneration schemes.
BPF chief executive Liz Peace said: “We are delighted that government has taken such a far-sighted step to ensure that new infrastructure - which will be vital to rebuild the UK economy - can be delivered, even at a time when public funding is scarce.
“Ministers should be congratulated for offering industry what would appear to be absolutely brilliant news, although obviously the devil will be in the detail.
“A huge amount of work and expertise has gone into lobbying for TIFs, over a campaign lasting many years. We look forward to working with government to ensure that the emerging TIF regime is workable and effective.”
CBI head of energy, transport and planning policy Matthew Farrow said: “As we highlighted in our submission ahead of the Government’s spending review, TIF should be considered as a way of encouraging private-sector investment in infrastructure, especially at a time of constrained public sector funds.”