A £4.5 billion regeneration project in Brent, an £80 million roads job in Luton and the Northern Line extension have been given a boost by government plans to give councils more control of their business rates.
Proposals published just before Christmas would allow local authorities to borrow against future growth in rates to finance infrastructure projects - enabling projects using tax increment financing to get off the ground.
The Department for Communities and Local Government said local authorities have not been able to undertake TIF schemes in the past because they have not been able to retain rates, which were paid to Whitehall and redistributed.
Two TIF options are being put forward, including a standard 10-year option available to all local authorities, and a 25-year major projects system that will be subject to government approval.
One project that the Treasury earmarked to use TIF is the extension of the Northern Line to Nine Elms and Battersea, potentially supported with borrowing against future receipts of the Community Infrastructure Levy, though it is also subject to developer contributions from nearby Battersea Power Station (pictured).
Administrators Ernst & Young took control of the power station site last month from owners Real Estate Opportunities and are set to put it up for sale early this year.
EC Harris head of residential and regeneration Richard Jones said TIF was identified for the £4.5bn Brent Cross Cricklewood regeneration. He said: “This 20-year proposal with over £1bn of infrastructure investment could significantly accelerate economic growth through the implementation of the TIF.”
Earlier this year, Luton Borough Council and CBRE announced a £77m TIF scheme at Century Park, adjacent to Luton airport and involving a new road, improvements to junction 10A on the M1 motorway and access improvements to the north of the Luton Parkway railway station.
Grant Thornton government and infrastructure partner Neil Rutledge said the 24 enterprise zones will be ideal candidates for TIF, as will numerous projects in the government’s infrastructure pipeline.
He said: “The 25-year period supports the more ambitious zones whose plans involve an extended development timeframe, where material amounts of business rates may not be generated until the 2020s.”
The proposals, which came via the CLG response to the Local Government Resource Review, are set to be introduced under the Local Government Finance Bill, which will come into force from April 2013.