Three cities win ringfenced TIF powers
Thu 12th July 2012, 11:07 am
The Government has announced the three cities which will be allowed to use ringfenced tax increment financing powers as part of its second wave of city deals.
In March's budget, the Treasury announced that it would seek bids for up to £150 million of "option 2" TIF schemes, which will not be subject to periodic resetting of business rate levels, from England's core cities.
This week, it announced that it had signed off six more city deals, bringing the total to eight. As part of these deals, Newcastle, Nottingham and Sheffield will be allowed to use the "option 2" TIF mechanisms.
Deputy Prime Minister Nick Clegg said: "These groundbreaking deals signal a dramatic power shift, freeing cities from Whitehall control."
The three TIF deals will total £133 million - £92 million for Newcastle, £33 million for Sheffield and £8 million for Nottingham. This is £17 million less than the amount the government had said it would set aside for TIF in documents released alongside the budget.
Sheffield will combine its "option 2" TIF with an "option 1" to create a pot to be spent on city centre infrastructure improvements.
Ben Morley, deputy director of regeneration at Sheffield City Council told SocInvest: "We are very pleased that our proposal has been accepted as one of the three TIF deals."
"We are entering uncharted territory and it will be a learning process."
The Newcastle and Gateshead TIF will fund infrastructure on four key development sites covering 80ha.
Nottingham will put its TIF borrowing towards transport and public realm improvements to connect the proposed Creative Quarter to the rest of the city.
As part of its city deal, the Leeds city region says it will consider using other sources of funding, including the the use of local authority assets through an asset backed vehicle, along with European Funds.
Bristol city region's city deal will see the creation of a single portfolio of public sector land and property assets.
Its plan said that it would "develop a detailed work plan that will set out the portfolio of land that it would manage and the benefits that this approach would yield".
It said that Bristol will present a plan to ministers in early 2013.
The core cities are Birmingham, Bristol, Leeds, Liverpool, Newcastle, Nottingham, Sheffield and Manchester.
Liverpool and Manchester signed off city deals earlier this year.
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