Nick Clegg announces Tax Increment Financing

Nick Clegg today used his keynote Conference speech to declare that the Government would be introducing new powers for local authorities that would allow them to borrow against projected future income streams. In other words, Tax Increment Financing as used in the US, and Accelerated Development Zones in a UK context.

This is a potentially significant move towards greater local control of budgets and fund raising, but it remains to be seen what the specific policy framework will entail – will there be a limit on the number, or size of TIFs/ADZs? What revenue streams will be included – business rates, stamp duty, council tax? When specifically will they be introduced, and how do they fit into the Government’s wider vision for new growth at a local level?

I predicted the Coalition may press ahead with TIFs/ADZs in a FoL Policy Focus Paper back in June, and Future of London will definately be covering this issue, and the implications of Clegg’s announcement for London, in more detail soon.

Ben H