Infrastructure Funding
Author: Localis - Jan 13, 2012
The coalition has set itself two ambitious goals: eliminating the budgetary deficit by 2017, and driving £200bn worth of infrastructure investment by the end of the current parliament. To aid in the delivery of the first target it has substantially cut grant to local authorities whilst retaining financial control over certain areas of financial policy. To reach the second target, a series of financial powers are due to be given to local authorities in the following months and years. If used adeptly, these powers have the potential to partially offset the short fall in grant, and deliver much needed growth across the country. This report seeks to highlight what these mechanisms will look like, as well as suggesting ways in which they could be best used.
Whilst local authorities have hitherto been used to relying on the Public Works Loan Board to borrow capital for infrastructure investment, the Chancellor’s decision in October 2010 to raise the rate at which this institution would lend to authorities has forced authorities to seek new ways of raising monies. After surveying the past and evolving landscape, this analysis outlines how authorities may use various tools to help deliver the required infrastructure in the coming years. It also stresses where central government may best play its role, and outlines a new, more equitable public-private partnership which can not only contribute to alleviating present financial difficulties, but deliver a collaborative form of growth that will be of longer term benefit.
For more details on this project please contact Richard Carr: richard.carr@localis.org.uk
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