Scotland’s government was this week set to approve the first UK use of a new finance scheme to drive infrastructure investment.
A proposal by Edinburgh City Council to trial the use of the tax increment finance (TIF) system was expected to be approved by finance secretary John Swinney this week.
TIF allows councils to borrow money to build infrastructure, which is then repaid by ring-fencing growth in locally raised business rates in the surrounding area.
The Edinburgh plan will provide £60M in “enabling infrastructure” for the £84M regeneration of the area, between Leith and Granton. The council will borrow to fund four projects, which include a new road link between Seafield Road and Constitution Street to provide improved access from east Edinburgh to the entire harbour development area, and a public esplanade.
Business plan submitted
A new pier for the Royal Yacht Britannia has also been proposed, as have new lock gates at the entrance to Leith Docks to facilitate cross‐Forth ferry traffic.
The council submitted a business plan to the Scottish Government earlier this month.
Deputy prime minister Nick Clegg has made a commitment that the Westminster government will bring forward legislation to facilitate TIFs (News last week).
However, the Scottish Government has decided that trials can be undertaken without legislation.
The project is expected to unlock up to £660M of private investment and create 4,900 jobs, adding £140M a year to the city’s economy.