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.
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. These bonds would be underpinned ‘underneath the bonnet’ by a range 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 an improved, 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.