With Nick Clegg’s announcement of yesterday, I find that I have to say ‘I was wrong’.
I never thought that the Treasury would agree to give up the money raised from the Business Rates of new regeneration and growth programmes, and hand it over to Local Authorities in order to operate a Tax Incremental Financing scheme.
However, I still urge caution and suggest that Local Authorities do not get over-excited by the prospect of Tax Incremental Funding. I would like to see who is going to guarantee the loan repayments and what happens should the developments fail to materialise according to the cash-flow projection. I would also like to see some estimates of how much can be raised – some people seem to be getting carried away and seem to think TiF will finance everything.