Tax Increment Finance

Tax Increment Finance is a method of borrowing funds to pay for infrastructure, on the basis that additional housing requiring that infrastructure will increase tax revenues. Although this system is widely used in America, it has not been tried yet in the UK, in part because the US has a wider range of local tax instruments, such as property tax, whereas the UK system is more centralised.

The 2009 Budget proposed piloting Tax Increment Finance within the UK, and invited proposals. Cambridgeshire County Council, Cambridge City Council and Cambridgeshire Horizons jointly submitted a bid to CLG in June 2009.