Councils should be given greater incentives to introduce long-term economic development projects, according to a leading think tank. A report from the New Local Government Network (NLGN) called on the Government to give local authorities new income streams and the right to retain rewards from sound investments. The study, Capital ideas: Financing future local economic development, claimed the use of capital investment in transport, housing and regeneration projects by authorities would be better than traditional resource decisions made by central government. It argued Whitehall funding could not keep pace if investment in capital projects was to match public expectation. The network, which has close links to the Government, said a new approach to financing could harness investment from the Government, the private sector, the EU and regional development agencies. It hopes the report will influence the Comprehensive Spending Review (CSR) which in part will look at the future of funding large-scale infrastructure projects. Key proposals include the creation of a local communities capital task force to provide development consultancy across the local government family and for revenue increments for local benefit to be earmarked. The group also called for public sector debt treatment to be re-evaluated, providing a mezzanine level public debt facility, which could allow a further 3% latitude on the ‘sustainable investment ratio' specifically dedicated for local and regional capital investment projects. Report author, Anthony Brand, said: ‘Despite a massive increase in capital investment over the last decade, central government alone is not meeting needs and expectations. ‘If we want local authorities to build strong and prosperous communities then we need to revitalise local government's role in delivering economic development. ‘We must lever in more investment and make every public pound go further.'
