Alex Plant Executive Director, Economy, Transport & Environment Cambridgeshire County Council Board Advisor, Greater Cambridge Greater Peterborough

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1 Alex Plant Executive Director, Economy, Transport & Environment Cambridgeshire County Council Board Advisor, Greater Cambridge Greater Peterborough Enterprise Partnership Senior Visiting Fellow, Department of Land Economy University of Cambridge Funding for Growth Planning Officers Society Annual Conference, June

2 Outline of presentation Funding for growth in the new system Why strategic planning is critical The emergence of LEPs Complex mix of new funding streams Heseltine Review and consequences Tax Increment Finance Making best use of public sector assets City Deals and how they can enhance growth The Cambridgeshire model 2

3 Strategic Planning Matters! 3

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8 New Structures: Local Enterprise Partnerships 8

9 Enterprise Zones EZs : a reprise of 1980s regeneration policy More focus on growth this time Discounted business rates for those locating on EZs Streamlined planning regime Guaranteed superfast broadband All business rates growth from the EZ retained by the local area (through its LEP) for 25 year period Our LEP secured EZ status for Alconbury Airfield huge 525 hectare site equidistant between Cambridge and Peterborough located on A1, A14 and East Coast Mainline 9

10 The Funding Maze Government grant becoming a rare beast. New streams of funding: - Growing Places Fund - Enterprise Zone receipts - New Homes Bonus - Community Infrastructure Levy - Business Rates - European Funding Upfront funding through prudential borrowing and/or Tax Increment Financing Heseltine Single Capital Pot 10

11 Heseltine : brave new world? 11

12 Tax Increment Financing True TIF allows a local area to borrow to fund infrastructure in expectation of increased tax revenues created by the infrastructure in question Widely used in the US to deliver growth and regeneration Never been tried in UK HMT wary about debt Cambridgeshire has been at forefront of debate on TIF Still insufficient distinction made in Whitehall between good and bad debt Manchester Earnback model as part of its City Deal may represent a breakthrough Is central to Greater Cambridge City Deal bid 12

13 Tax Increment Financing Tax Increment Financing - basic US model Property Tax Revenues Tax increment expected with projected increase in value of houses as a result of infrastructure investment Tax increment expected with projected growth in numbers of houses Year 2007 tax base Expected natural increment without housing growth or property value enhancement Year year Infrastructure Bonds issued in 2007 to raise capital for infrastructure, predicated on expected future tax revenues 22

14 Revolving Funds and the like Cambridgeshire Horizons developed Rolling Fund idea as means of stretching value of capital Horizons ring-fenced nearly half of the CLG award as Flexible Fund Used money as loans and equity investment, so recouping cash at later point for re-investment Addenbrookes Access Road Clay Farm development equity stake and incentives Trumpington Meadows loan deal New Science Park Station funding model City deal, community budgets, Heseltine could herald ambitious, integrated approach to capital funding 14

15 Public Sector Assets Common approach to public land and buildings Benefits expected: - reduce cost of managing estate (50% revenue savings year on year) - allow for rationalising of estate - reduced carbon footprint - unlock investment potential and backing for infrastructure borrowing - facilitate shared service delivery - facilitates additional capital returns over time 15

16 Greater Cambridge City Deal? Potential for devolution of powers and control of more revenue streams to a combined body working across the core of the Cambridge travel to work area and pooling powers currently variously held by County, City & District 3 local authorities, LEP, University leading the bid Focus on TIF/Earnback models as the key to unleashing the next wave of the Cambridge Phenomenon Cambridge growth is net additional to the UK not displacement from other parts of the UK given knowledge economy and global competition Demand currently suppressed by housing and transport constraints City Deal could unlock this 23

17 The Cambridgeshire model Cambridgeshire uniquely (in south-east) a pro-growth area Recognition of need for new homes to enable growth of economy, and to address acute affordability problems Significant demand exists, currently suppressed History of working across boundaries on planning, both at strategic level and development control (joint committees) Cambridgeshire Horizons legacy of innovative funding Ability to pool future revenue streams and assets across administrative boundaries and to work to a shared strategic plan will be key for Cambs and other areas with underlying market demand to maximise potential But this is not a panacea for all areas - the regeneration challenges are different to the growth challenges 17