City Solutions: Financing local growthTowards a supplementary business rate?

Article

Supplementary Business Rates (SBRs) have recently been proposed as a mechanism to allow cities to generate additional funds for infrastructure investment. This paper presentsm new analysis that illustrates their possible contribution and the main challenges that must be tackled by city leaders, business and central government if SBRs are to finance local growth. It is part of the joint City Solutions project undertaken by Centre for Cities and PricewaterhouseCoopers LLP.

Supplementary Business Rates (SBRs) have recently been proposed as a mechanism to allow cities to generate additional funds for infrastructure investment. This paper presents new analysis that illustrates their possible contribution and the main challenges that must be tackled by city leaders, business and central government if SBRs are to finance local growth. It is part of the joint City Solutions project undertaken by Centre for Cities and PricewaterhouseCoopers LLP.

Our analysis suggests that a 4p supplement would:

o Generate in excess of £400m a year in London, which could support loans of over £6bn if the SBR was committed over a thirty-year period.

o Generate around £300m a year, in total, in 34 other English cities and towns. This sum could be used to lever in loans of £4.5bn for new infrastructure.

o In total, SBRs could potentially underpin £11bn of new, accelerated investment in England's cities, if in place for 30 years.

Centre for Cities has re-launched as an independent think tank. You can visit them online at http://www.centreforcities.org.

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