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Budget leaves many questions unanswered
Published: 2010-07-09 15:14:13
What was not in the June budget was arguably more important for the regeneration community than what it contained.
TIF still on hold: it will not be until the Government publishes its White Paper this summer that local authorities will know what options are on the table for investing the benefits from business rate growth in new developments. It is also expected that the White Paper will include simplified planning consents process for areas where there is a case for business growth.
Commenting on the budget, the British Property Foundation (BPF) pointed out the need for more innovative thinking if local authorities are to restart regeneration projects.
"Tax increment financing (TIF) represents one approach that the Government should wholeheartedly approach. TIF allows the upfront cost of infrastructure to be paid for out of the rate income that new developments generate."
Local Enterprise Partnerships: the abolition of regional development agencies had been widely forecast. These will be replaced by Local enterprise partnerships, where there is a call for them from business and elected leaders.
"The new enterprise partnerships will need to achieve greater coordination of large capital spending programmes to ensure their regenerative benefits are fully utilised and promote a more proactive approach by councils and public bodies to facilitating and, where feasible, 'de-risking' regeneration schemes," said the BPF.
VAT and housebuilding: on the positive side, housebuilders have avoided a VAT rise on new build properties, despite the Lib Dem manifesto suggesting it could have been a possibility.
Other changes that could have a beneficial impact on development include the reduction in corporation tax from 28 to 24% over four years.
Many other proposed measures will be subject to further government announcements. These include the establishment of Infrastructure UK to lead work within HM Treasury to enable greater private sector investment in infrastructure, and improve the Government's long-term planning and delivery. A national infrastructure plan is scheduled for the autumn to set out goals for Infrastructure UK.
The full Budget document is available at http://www.hmtreasury.gov.uk/junebudget_documents.htm