Tony Travers-LSE

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  • 1. Delivering growth in the Thames Gateway without central government investment Tony Travers London School of Economics
  • 2. The current policy environment for the Thames Gateway
    • Abolition of RDAs, GROs, etc
    • Move from ‘grants’ to ‘incentives’
    • ‘ Big Society’ and ‘localism’
          • Shift of power downwards and to neighbourhoods
    • London boroughs faced with many radical changes, esp budget cuts
    • Olympics: a help and/or a distraction?
  • 3. This week’s Budget
    • ‘ Budget for Growth’
    • Expression of Coalition economic policy
    • Little, if any, new public expenditure
    • Possibility of new incentives
    • London/GSE not a key priority?
          • Better starting point
          • Recession less bad
          • Strong private sector – across Greater SE
  • 4. Incentives and financial mechanisms
    • Enterprise Zones
    • Local Enterprise Partnerships/Regional Growth Fund
    • Tax increment Financing
    • Reform of local government finance
    • Business Rate Supplement, Business Improvement Districts, Community Infrastructure Levy etc
  • 5. Enterprise Zones
    • ‘ Back to the future’?
    • Isle of Dogs experience
          • Dynamic?
          • Inefficient?
          • But certainly an element in Docklands’ success
    • Risk of not having one where others do
    • ‘ Marginal’ vs ‘super-deprived’ areas to be chosen?
          • Doubtless a mixture of the two
  • 6. LEPs and RGF
    • LEPs are the government’s new approach to the promotion of enterprise
          • Business-local government partnerships
          • ‘ Organic’
          • To foster an “environment for business and growth”
          • To bid for resources from RGF
          • Significant excess of demand over RGF supply
          • Still in formative stage
  • 7. Tax Increment Finance
    • Around for a number of years
    • Last week’s LG resource review terms of reference stated the review should consider: “how to deliver Tax Increment Financing proposals against a context of greater retention of business rate revenues”
    • Attempt to fund projects to allow a project to go ahead with the expected increased local tax payments resulting from the development
          • Development to be ‘conditional’ on the TIF scheme
  • 8. Local government ‘resource review’
    • ‘ Resource’ review now under way
          • TsOR published last Thursday
    • Business rate retention
    • New Homes Bonus
    • Together, these reforms = ‘self-sufficiency’ for some councils
          • Incentives to deliver tax base growth
    • Need for ‘pool’ for equalisation
    • Tax competition….
  • 9. Other, related, policies
    • Business Rate Supplement
          • Crossrail funding
          • Could be extended?
    • Business Improvement Districts
          • Successful over a number of years
          • Could be extended to sectors or areas?
    • Community Infrastructure Levy
          • Levy on developments to pay for infrastructure
          • Many parts of London likely to produce a better yield than elsewhere
  • 10. Thames Gateway – maximising the resources available
    • There are opportunities for Thames Gateway in all of this…
    • but, the new world of incentives and tax-base growth will be different from one of grants etc
    • Need to bring forward schemes and make their impacts clear to national, city-wide and local politicians
    • Land values relatively powerful and growth potential strong in east London
          • a good start…
  • 11. Delivering growth in the Thames Gateway without central government investment Tony Travers London School of Economics