Plans for funding building projects
A scheme worth hundreds of millions of pounds that is expected to create over 17,000 new jobs across Scotland took a vital step forward today.
Three local authorities have been given approval by the Scottish Government to develop proposals under the Tax Incremental Financing (TIF) model.
The successful councils plan to fund infrastructure projects by borrowing against the future business rate income that should be generated by the resulting development.
The following local authorities will now work with the Scottish Futures Trust (SFT) to develop full TIF business cases:
- Falkirk Council - £52 million direct investment to key strategic road improvement, the Grangemouth flood defences and site enabling works. It is forecast to attract £365m of private sector funding and creating over 5,000 full-time equivalent (FTE) additional jobs at national level
- Fife Council - £17 million for improved vehicle and marine access to Energy Park Fife, site remediation and enhanced delivery of a Levenmouth Low Carbon Investment Park. It is estimated that 1,000 new jobs will be created
- Argyll and Bute - £20 million proposal to extend Oban's North Pier and to construct a development road at Dunbeg/Dunstaffnage. 1,000 FTE jobs expected
Ministers have so far approved two TIF business cases:
- City of Edinburgh Council - £84 million Leith Waterfront project has the potential to unlock £660 million of private investment generating 4,900 FTE jobs
- North Lanarkshire Council - £73 million Ravenscraig Phase two scheme is expected to unlock £425 million of private investment and over 4,500 FTE jobs
In addition to those already agreed, work on developing further TIF business cases remains underway.
Glasgow City Council is in the process of developing a business case for a £80 million TIF project, Buchanan Quarter, which is expected to be submitted shortly.
Aberdeen City Council's plan to use TIF for Union Terrace Gardens project will be progressed if public support for the project can be demonstrated.
Cabinet Secretary for Infrastructure and Capital Investment Alex Neil said:
"As Westminster cuts bite, it is imperative that we do all we can with the increasingly limited public finances available to assist regeneration by levering in additional private sector capital.
"Driven by the Scottish Futures Trust, innovative funding models such as TIF will help invigorate our economy and deliver a legacy of infrastructure assets for communities across Scotland.
"Later this year we will unveil our Infrastructure Investment Plan, a blueprint for ambitious capital investment for the next ten years that underlines infrastructure as an essential lever in our economic strategy for Scotland.
"Depending on progress with TIF pilots, we will bring forward primary legislation before the end of this Parliamentary session to roll out TIF more widely across Scotland. There may also be further opportunities to progress those bids not announced as successful, to ensure good geographical spread, before then."
The private investment and jobs figures are taken from analysis undertaken by the individual local authorities.