30 August 2007

Finance: Group backs SBRs to fund infrastructure projects

Urban transport systems and other vital infrastructure needs could be met and improved if cities were given the freedom to raise and spend more of their own money though supplementary business rates (SBRs), according to a new report. The Centre for Cities, urban research group, said business support for SBR, ring-fenced for specific projects, could raise more than £10bn towards infrastructure and transport over a 30-year period. Its report, City solutions: Towards a supplementary business rate? was published after the recent local government select committee backed plans for councils to be given powers to levy SRBs (Surveyor, 9 August). The study is part of the Centre for Cities and Pricewaterhouse-Coopers LLP’s joint City Solutions project, and contains figures to illustrate how much could be raised in 34 of England’s main cities and towns. In the Greater London area, a 4p SBR could raise more than £400M annually, and lever in loans in excess of £6bn. This could be used to finance business’ contribution to Crossrail, and contribute to other high-profile infrastructure projects across the capital, including the proposed orbital overground rail route, the cross-river tram, or selected road improvement schemes, according to the Centre for Cities. Greater Manchester could raise approximately £40M a year from a 2p SRB – and support a 30-year loan of around £600M, which would allow the city council to complete Metrolink phase III. For Birmingham, a 2p SBR could yield around £15M a year, which could support a 30-year loan of more than £200M which could help fund the New Street station redevelopment. In Newcastle, an SBR of just 4p could yield at least £10M a year and support a 30-year loan of around £150M – enough to fund Newcastle City Council’s plans for a new regional conference and exhibition centre, while at Leeds, a 2p SBR could raise up to £13M a year and a 30-year loan of some £200M to support towards the proposed £374M Bus Rapid Transit network – the successor scheme to the cancelled Leeds Supertram. Dermot Finch, director of the Centre for Cities, said: ‘Supplementary business rates have the potential to allow cities to invest around £10bn in their transport systems and other infrastructure, assuming an SBR is in place over 30 years.’ : www.ippr.org/centreforcities
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