Let city raise funds for New Street revamp, say MPs
Feb 27 2007
By Gary Marks, Birmingham Mail
BIRMINGHAM should be allowed to pay for the redevelopment of New Street from local taxes, according to MPs.
They warned that plans for the £500 million Birmingham Gateway refurbishment of New Street were being stifled by excessive centralisation.
Their proposals include allowing councils to set their own business rates - which would mean local shops and employers helping to pay for it.
Alternatively, they said the council should be allowed to borrow money against the expected increase in tax revenue in the area around New Street once the work was completed.
The proposals were put forward by the all-party urban development group.
Plans for the Birmingham Gateway were first revealed a year ago in response to congestion problems at Birmingham's outdated main station.
The group called on a review led by Sir Michael Lyons, a former chief executive of Birmingham City Council, to devolve funding and financial powers to Britain's cities and towns.
The MPs' report noted: "Of the £340 million in public-sector funding required for the project to go ahead, a gap of £140 million remains to be filled despite the station's central position on the national rail network - and the efforts of Birmingham City Council, Advantage West Midlands, and local private-sector stakeholders."
Councils should be allowed to adopt a US system, tax increment financing, which allowed them to pay for capital projects which were expected to increase property prices, using the projected increase in tax revenues the project would generate.
