A report today from the New Local Government Network is calling for greater incentives for councils to introduce long-term economic development projects. The NLGN is concerned that traditional sources of Whitehall funding cannot keep pace if investment in projects is to match public expectation.
Today’s report, “Capital Ideas: Financing Future Local Economic Development”, includes a series of recommendations to improve capital investment in transport, housing and regeneration, including new income streams and local authorities being given the right to retain rewards from sound investments. It argues that a new approach is needed to harness investment from the Government, the private sector, Europe and the Regional Development Agencies.
The document is published as the Government is preparing its Comprehensive Spending Review, due in the autumn. That will look in part at the future of funding for large scale infrastructure projects and the future of funding local government.
“Capital Ideas” calls for local government to be given the incentive to invest through keeping rewards from sound investment and for local income streams to be increased and diversified to reward economic creativity. It also urges earmarking future revenue increments for local benefit and a Local Communities Capital Taskforce to provide development consultancy across local government. It also proposes the re-evaluation of public sector debt treatment to create a ‘a mezzanine level public debt facility’, allowing a further three per cent latitude on the ‘sustainable investment ratio’.
The report is also suggesting that in the forthcoming Spending Review, PSA targets should be refined to recognise local economic development and investment responsibilities. It also calls for the establishment of a Treasury-led ‘Pioneer Local Hypothecation Programme’ to give local authorities certainty and to produce more effective and efficient economic development solutions.
Anthony Brand, who has written the report, said that it highlighted the increasingly vital role councils should play in delivering the investment for community infrastructure.