Commercial expertise driving value and efficiency in local public services

Growth and Funding

Judith Armitt Chief Executive Local Partnerships LLP11 July 2013

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Local Partnerships is…..

• A joint venture between HMT and the Local Government Association

• Helping the public sector deliver at the local level

• A practical ‘hands on’ organisation offering commercial expertise

• Funded through Revenue Support Grant and fee-earning work

All Eyes on the Way to Growth

• Efficiencies and savings to allow investment in growth

• Attracting institutional investment in infrastructure

• Funding cocktails and incentives• Including guarantees

• Lord Heseltine: No Stone Unturned:in Pursuit of Growth

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Efficiencies and Savings to Enable Growth-a new Vocabulary

• HMT genuine interest in savings to release growth• and funding efficiency reviews

• Major assault on existing PFI projects across the public sector• DCLG programme with local authorities• Home Office programme with Police forces• DEFRA waste PFI programme to help councils• DfT programme for highways authorities likely

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Efficiencies and Savings to Enable Growth -a new Vocabulary

• Asset Rationalisation Strategies• Local authority assets used for investment and

regeneration

• Government Property Unit sponsoring One Public Estate pilots

• Green Investment Bank with £3 billion capital to spend

• DECC/Local Partnerships offering free capacity to deliver Re-Fit programmes

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• Disinvesting from poor performing assets

• Optimising asset potential:• Capital receipts• Regeneration

• Reinvesting in :• unfunded capital

programme• essential maintenance • commercial estate• Sheffield Investment

Fund

Investing in growth - Sheffield

Courtesy Sheffield City Council

Attracting Institutional Investment into Infrastructure

• Lancashire pension fund investing £12 million in Oxfordshire community wind farm• Scope for more

• LGA development of Local Government Collective Agency (Municipal Bonds Agency)• Highly competitive (or better than) PWLB• Part of a ‘grown up’ relationship with central

government• Providing a vehicle for international investors

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Funding Cocktails and Incentives

• A14 Improvement Scheme announced in SR• £1bn+ scheme• DfT required £100m in local contributions• Brokered from local public bodies on and around

the scheme

• Retained business rates, New Homes Bonus, CIL, TIF• Highly sceptical sector• Use it or lose it?

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Example-Kettering

• Kettering 5,500 homes, energy park and significant commercial development• Dependant on a junction enhancement on the

A14 – J10a at a cost of £60m

• Green Book appraisal of scope of business rate retention and New Homes Bonus

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The Limits of Business Rate Retention

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Guarantees-e.g. Mersey Gateway

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The Importance of LEPs?

• Responsible for managing a

number of existing funding

streams relating to growth.

• Preparation of local economic

strategies.

• Responsible for coordinating

the spending of European

Funding.

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No Stone Unturned: In Pursuit of Growth-the Response

• Single Local Growth Fund, devolved to the local level through new Local Growth Deals.

• Operational by April 2015.

• £2bn per year to promote and support growth (Ave £51m / LEP / year)

• 18 months to build partnership, capacity, and pipeline