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Getting into a TIF about economic growth

1 November 2010

The government’s recent White Paper on Local Growth has set out proposals to increase confidence to invest.

The ‘incentives’ include: allowing councils to retain locally raised business rates, enabling local authorities to offer local discounts on business rates and new borrowing powers for councils to carry out TIF.

Free from dependency on central funding and the restrictions this entails – sounds great but, a badly thought-out framework could see more disparity between regions. What about councils that don’t collect enough business rates or indeed those who don’t collect any, how will they be supported?

It is also a small comfort that TIF will be initially introduced through a bid-based process, minimizing potential problems and risks. However, can local authorities marry their public duties with the high risks of borrowing against future additional uplift within their business rates base when this will be largely unknown at the time of borrowing? If the uplifts are not achieved it could be the taxpayer who will fund the deficit.

To have your say on the government’s proposals send your views to GrowthIncentives@communities.gsi.gov.uk by 1 December 2010.

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