TIF rebranded as 'new development deals'
Thu 19th July 2012, 9:51 am
The government has rebranded ringfenced tax increment finance deals, sparking hopes of more impetus to the scheme.
In a technical paper on tax increment financing released earlier this week, the Department for Communities and Local Government said that it would now refer to the 'option 2' type TIFs as 'new development deals'. TIF 'option 1' deals, which remain at the mercy of periodic local business resetting, will remain known as TIF.
The document said: "To enable a clear distinction between the various measures within the Local Government Finance Bill, we have taken the decision to use the term 'new development deals' instead of TIF 2."
NDDs are exempt from the periodic resetting of councils' business rates, giving more certainty over the returns which can be expected from such schemes. Earlier this month it was announced that three cities - Newcastle, Nottingham and Sheffield – would share just £133 million to fund NDDs.
Peter Cosmetatos, finance policy director at the British Property Federation, said that he hoped that the rebranding excercise was a sign that ministers would commit more money to the schemes, saying: "Hopefully the rebranding is because they want to give it a bit more oomph. The original amount allocated was underwhelming."
But he said that TIF1 was just a version of the existing prudential borrowing powers which councils possess. He said: "Retaining the TIF name for this type of deal allows Nick Clegg to say that he has kept his promise to allow all councils to get TIF powers."
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