Barnet Financing Plan: an alternative approach to funding

infrastructure

Hester FairgrievePolicy and Partnership Manager,

London Borough of Barnet

Presentation Contents

The Wider ContextThe Local Context Building the SolutionDelivering the SolutionNext Steps

The Wider Context

UK Policy developments:

Lyons Review Housing Green Paper Sub-National Review of Economic

Development and Regeneration Successful City Suburbs Project

The Local Context 63,000 people and 40,000 new H/hs over 20 yrs 11% increase in local economy Additional population will increase local resident’s

output by £1.25 billion per annum Cricklewood, Brent Cross and West Hendon -

7,500 new homes, new commercial district, 22,000 jobs over next 20 yrs

4 large regen schemes: 3000 homes get replaced by 8000. Largely private sector funded - £1.5bn investment

The Issue

Very little funding available to Barnet for infrastructure investment

Barnet as a strong and attractive place to live and invest could be undermined:

Transport system will be put under strain Healthcare system and schools will not be able to

cope with extra demand Environment will suffer from unsustainable

physical development

Our proposed solution “Barnet Bond”

The Barnet Financing Plan: using a combination of locally generated revenue sources to

raise (and repay) finance directly from either public or

private sources

Key Infrastructure Requirements

Local Revenue Flows

Revenue element Hypothecation approach

1. Stamp duty – Borough wide Based on projected values/completions. 1% band retained

2. Business rates – Borough wide 3p of existing Borough wide take based upon rateable value

3. Business rates – Brent Cross Ring fence 100% of the incremental business rates that could be generated from the major proposed expansion

4. Brent Cross lease renegotiation Ring fencing of increased and lease receipts

5. Brent Cross car parking levy £1 per visit levy on visitors parking at Brent Cross

6. Council tax recovery 1% of Council tax ring fenced

Indicative finance capacity

Revenue element Projected annual income (£m)

Up front finance capacityPrudential Borrowing (£m)

Up front finance capacity Project finance pricing (£m)

1. Stamp duty – Borough wide 5 62 28

2. Business rates – Borough wide

6 72 32

3. Business rates – Brent Cross

9 104 46

4. Brent Cross renegotiation 3 36 16

5. Brent Cross – car parking levy

6 71 32

6. Council tax recovery 2 17 8

31 362 162

Delivery Structure

Infrastructure Plan

Investmentprofile

Funding Profile

Local Growth Fund

Prudential Finance Project Finance

Infrastructure Output

Recycling of Investment

Revenue Flows

London Boroughof Barnet

LGF

Infrastructure Plan

Investmentprofile

Funding Profile

Local Growth Fund

Prudential Finance Project Finance

Infrastructure Output

Recycling of Investment

Revenue Flows

London Boroughof Barnet

LGF

Where next?

Concept launched on 11 Sep 2007Discussions planned with CLG and

Treasury to agree whether to proceed to stage two

Inclusion in LAA

Questions or comments?