Stuart GouldenA proposed £28.5m fund to bankroll initiatives that boost York’s economy has been announced, drawing early support from a collection of key local business leaders.
The five-year initiative, which will be considered by City of York Council’s Cabinet along with other proposals for the 2012-14 budget, is being called the Economic Infrastructure Fund (EIF).
Tasked with growing the local economy, the Fund will focus on five key themes:
- Get York Moving – including Access York Park and Ride, Better Bus Fund, Highways Infrastructure
- Digital York – City Centre wifi and creating the digital infrastructure to enable a modern economy
- Reinvigorate York – city centre regeneration and public realm improvements
- Economic Inclusion York – intervention projects, reducing inter-generational poverty, targeted approaches to creating employment opportunities whilst stimulating economic growth
- Sustainable Economy York – supporting existing businesses, attracting inward investment and supporting new/emerging green businesses
If agreed, the EIF would be funded from two sources; the New Homes Bonus (an indicative £8.5m grant) and Prudential Borrowing (a £20m loan), with potentially any gains from the localisation of business growth being used in the first instance to cover the borrowing costs associated with the EIF. The total borrowing costs on £20m of debt are roughly £1.8m at today’s borrowing rates, which equates to approximately 10% of the proposed spending cuts over the next two years, but also only 2.2% of the business rates collected annually by the Council. Clearly it is hoped that the Fund will grow the economy, create jobs and investment, and increase the revenue from many of the Council’s services that are dependent on a good economy, such as car parking income, and therefore exceed the debt costs in time.
The plans have already received the support of two of York’s key business leaders: Peter Kay, Chair of York Economic Partnership, and Susie Cawood, Head of York and North Yorkshire Chamber of Commerce.
Peter Kay, said: “I fully support any initiative designed to boost York’s economy. Job creation is vital to replace those that are being lost through this recession. To do this it is vital to encourage investment in new and emerging businesses in the city. The proposed Economic Infrastructure Fund could provide assistance for those businesses, which may have difficulty accessing finance but yet have a good case for being supported. It is important that this fund is properly managed and wherever possible repaid and recycled for further business growth.”
Susie Cawood, said: “The Chamber of Commerce supports development, expansion and investment in the city in order for our economy to grow and prosper so we strongly support the City of York Council’s initiative.”
The proposals are contained within Friday’s budget announcement by City of York Council, alongside the creation of a Delivery and Innovation Fund at a cost of £4m across three years. Earmarked to support major project delivery and to facilitate the development of new and innovative ways of working within the Council, it is hoped the Delivery and Innovation Fund leads to the provision of more efficient and effective services in the future.
The City of York Council’s budget announcements have been met with mixed responses, with proposed savings totaling £19.7m (almost £11m are coming from detailed service reviews, efficiency, and better procurement) and a proposed council tax increase of 2.9% in 2012/13 predictably unpopular decisions.
The net revenue budget of £122.24m is funded by Council tax income of £75.68m and a Government grant of £46.57m.
What do you make to the proposed budgets and Economic Infrastructure Fund? How do the plans affect you?
