Tax Increment Financing (TIF) could unlock billions for TfL extensions if formatted for residential use
An amended version of the investment model used to support a new branch of the Northern Line could create £4.5bn in funding for upcoming transport schemes over 25 years, WSP has said.
A new report published by the consultant alongside business campaign group BusinessLDN, endorsed building on the tax increment financing (TIF) approach.
This allows bodies to finance a scheme by borrowing money based on the expected future increase in tax revenue that will result from the project.
The extension of the Northern Line to Battersea Power Station, completed by a Laing O’Rourke team in 2021, was partly funded by a TIF agreement, which saw the Greater London Authority borrow against future increases in business rates among firms benefitting from the extension.
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The report calls on the government to create a residential TIF framework that would allow the GLA to borrow against, and retain, a proportion of future increases in stamp duty and council tax to finance transport projects directly responsible for those specific increases.
It said the model could be used to support the delivery of three projects in Transport for London’s (TfL) business plan – proposed extensions to the Docklands Light Railway to Thamesmead, the Bakerloo Line to Lewisham and the West London Orbital extension to the Overground.
WSP technical director Chris Whitehouse said: “By evolving proven funding models like tax increment financing, we can enable critical projects that drive economic growth, create jobs, and enhance communities, not just in London but across the country.”
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