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Tony Travers-LSE


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Tony Travers-LSE

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