"Don’t let Welsh towns & cities lag behind England” Welsh Lib Dems demand urgent regeneration action

2010 Medi 30 9:18 AM

The Welsh Liberal Democrats have demanded that the Welsh Government adopt a radical new approach to financing redevelopment across Wales, which could see new town redevelopments funded through future business rates.

The scheme, known as Tax Increment Financing, has been announced for England by Deputy Prime Minister, Nick Clegg MP. The Welsh Liberal Democrats are calling for a similar programme to be introduced in Wales, so that Welsh towns and cities are not left behind.

In a debate in the Assembly today, Jenny Randerson AM formally proposed the introduction of a similar scheme for Wales.

Commenting, Shadow Economy Minister, Jenny Randerson AM said:

"It is imperative that the Welsh Government takes advantage of this opportunity. Wales is already the least competitive nation in the United Kingdom and with Labour having left us with the largest peacetime deficit in history, the money is not available to develop large new regeneration schemes.

"This exciting new scheme would allow local Councils to borrow sensibly and sustainably, using the extra business rates they would receive to finance the loans."

"It wouldn't be a huge amount of work for the Welsh Government to make sure that Welsh communities could rejuvenate areas that have lacked investment in the past.

"The Labour/Plaid Government must to take action to make sure Wales isn't left behind England yet again"

ENDS

Notes to editors:

1. Tax Increment Financing (TIF) is a mechanism that allows local authorities to borrow money to fund new developments by using the business rates that they will accrue in the future as collateral. This scheme would allow local Councils to borrow money now using the extra business rates they would receive to pay off the loans.

2. In order to take this opportunity, the Welsh Government needs to do two things. Firstly, it would need to pass the necessary legislation enabling local authorities to adopt the scheme and secondly, it would need to agree to ring-fence the business rates from these developments.

3. A wide-range of expert opinion is aligning behind Tax Increment Financing in the last few years. The Financial Times has called it "vital", Professor Brian Morgan from UWIC called it "innovative" and Cardiff Council warning of a "significant risk that Wales could suffer" if this programme is not implemented by WAG.

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