How many times has the GLA used Tax Increment Financing since its inception?

The GLA has only used Tax Increment Financing (TIF) formally once to date. TIF is being used to finance the GLA’s £1 billion contribution to the costs of the Northern Line extension to Battersea Power Station and Nine Elms - which opened in September 2021. The GLA has borrowed this sum – including a large proportion from the European Investment bank – and will finance and repay this using the ring-fenced business rates growth and the local developer contributions – collected within the local designated area (equivalent to an enterprise zone) established by Parliament – between 2016 and 2041. Should the GLA be unable to repay its debt by 2041 we would be able to exercise an option to extend the period of the designation of the ring fencing of the retention of all business rates growth locally – for a further five years.

The GLA and the London borough of Newham are able to retain 100% of the business rates growth between 2013 and 2038 locally to fund their investment plans for the Royal Docks enterprise zone. The GLA is taking out borrowing to fund this work and therefore this will in effect become a second TIF scheme.

The GLA has also borrowed £4.5 billion to finance its contribution towards the Crossrail project. This is being financed and repaid using Crossrail business rate supplement (BRS) revenues and Mayoral Community Infrastructure levy (MCIL) up to 2041 and 2043 respectively. As a result of the opening of the line – and indeed on the expectation of it - additional developments will be built and rateable values may rise leading to increased annual BRS and one off MCIL revenues. So while this is not explicitly a TIF scheme Crossrail is expected to deliver additional economic growth and investment which will assist in repaying the c£4.5bn of debt the GLA has taken out to fund it.