Financing for Growth: A new model to unlock infrastructure investment

The latest report from ResPublica, Financing for Growth: A new model to unlock infrastructure investment, puts forward proposals for a new form of infrastructure financing which could attract new investment and capture latent potential from households, private business and the community sector.  Check out the full report at: http://www.respublica.org.uk/documents/utl_Financing%20for%20Growth_A%20new%20model%20to%20unlock%20infrastructure%20investment.pdf

The report, published in association with Canary Wharf Group, proposes a new model for ‘Community Infrastructure Bonds,’ which would see bonds issued not by the local public authority, but instead by a special purpose vehicle (SPV), outside the constraints of public administration. The bonds would be constructed and underpinned by a suite of revenue streams, to deliver returns. There would be no one-size-fits-all model, with local hybridity and diversity according to the local context supporting a universally recognisable platform for investors.

Possible revenues include:

  • Public budgets and      supplementary taxation;
  • Private sector contributions      and planning gain;
  • Future tax revenues (such as      Tax Incremental Financing);
  • Land Value Capture; and
  • Other revenue streams such as      efficiency savings, asset transfers, statutory charges, fees and levies      and community and citizens’ contributions.

Written by ResPublica Research Associate Dan Gregory, with Howard Dawber, Strategic Advisor at Canary Wharf Group, the report outlines the opportunity for such a bond to engage citizens and communities more directly in the financing of infrastructure development, and enable a more transparent, diverse and democratic control and governance.

Responding to the Chancellor’s recent announcement for a UK Guarantees scheme, the report emphasises that Community Infrastructure Bonds would be a means to channel this commitment whilst reflecting local and regional need, rather than top-down initiatives.

The report concludes by suggesting concrete steps to be taken by central, local Government and others to support the renewal of infrastructure development across the UK over the coming years.

The publication emerges as a flagship output from our New Economies, Innovative Markets workstream, which seeks to explore the structures and behaviour which shape and define our day-to-day economic life and how communities can best access the macro advantages that globalisation brings. Related work includes:

  • ‘Democratising      Finance: Changing the financial landscape through local, social and      peer-to-peer’,      a new project that will look at how peer-to-peer networks and co-operative      finance can provide long term, engaged capital that can deliver real      benefits to address community needs.
  • ‘Harnessing      Energy Infrastructure for Diversity and Growth’, a project that      will outline the potential for boosting growth in the development      of energy technology, local infrastructure and investment amongst a      diversity of players.

For further information, please contact Patricia Kaszynska at patricia.kaszynska@respublica.org.uk

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