Funding the Big City Plan

Well, the public consultation is over, although the creative community have an opportunity on Wednesday 11th February to share some of their views on embedding creativity in the plan, but how does the Big City Plan and some of it's ambitious aims progress with funding or without as the case currently may be. The underlining success or failure of Birmingham's ambitions for me rests on transport. The city however, working with other local authorities in the West Midlands has come up with a possible solution.

Birmingham, Coventry and the Black Country City Region, the long-winded city region name for what should be Greater Birmingham thinks the answer is Accelerated Development Zones (ADZ's). reported in July 2008 that a Core Cities report by PriceWaterhouseCooper suggested ADZ's and regional infrastructure funds are needed to improve housing and job prospects in cities.

Regional infrastructure funds would bring together funding at present separated into transport, health and education to make it easier to finance projects that cut across these services.

The ADZ plan could bring upto 44,000 new jobs to the West Midlands according to a detailed proposal by the chair of the City Region, Birmingham Council leader Mike Whitby made in a letter to Gordon Brown. The plans are different to other core cities in their ambition to cover the whole City Region rather than just an individual city and would allow councils to borrow money for investment while using a proportion of business rates generated following development to pay off the loans.

“Our proposals are the first, and by far the most radical, to come forward, because we have seen what an exciting opportunity ADZs present. If successful, we will be in a position to drive forwards our region’s competitiveness and deliver the massive infrastructure projects which will help underpin the regional, and national, recovery from the current downturn.”

In his letter Coun Whitby said: “We regard our ADZ initiative as being of national significance. It is widely recognised that, when the current economic downturn runs its course, it will be the major cities and city-regions that will lead the country back to recovery. As the largest city-region we will play a key role in the economic recovery of the Midlands and the UK.”

ADZ's have been widely used in the US to help fund community improvements and help raise revenue from local growth. For areas such as the Greater Birmingham area which are undergoing urban regeneration and redevelopment the ADZ allows funds to be generated from the benefits the regeneration brings. It is a form of fund raising estimating the potential benefits development will bring before undertaking this development. Currently any benefit development brings would be passed to central government through increased business rates with this redistributed as part of annual finance.

This relies on the principle that public projects such as roads, schools or environmental improvements increase the value of the surrounding land and buildings and hence their taxable capacity. The resulting ‘tax increment’ is used to fund the initial infrastructure development.

ADZ's offer an opportunity then to help shape the plans of the Greater Birmingham city region but they benefit most if the plans are long term. Core Cities group director Chris Murray noted in fringe events at the three main political parties conferences in 2008 that while ADZ's could increase growth in major regeneration areas by as much as 80% long term plans of 20 and 30 years would be required;

Long term plans, linked both to the Big City Plan and seperately, shouldn't be a problem. The city region has ambitious transport priorities together with developments such as an East-West growth axis across the region.

• Principle of balanced City Region growth
• East-West growth axis across City Region
• Growth focused on centres and corridors
• M’way junctions, highways, 2 Metro lines
• A single ADZ comprising about 8 projects
• About £1 billion of infrastructure
Unlocking City Growth: The Role of Accelerated Development Zones


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