Swinney agrees new loan plan to fund Ravenscraig
FINANCE Secretary John Swinney has approved plans by North Lanarkshire Council for funding a £73 million investment in the redevelopment of the former Ravenscraig Steelworks site at Motherwell.
He has allowed the council to use Tax Incremental Finance (TIF) to help pay for the second phase of the regeneration of the giant site, which includes upgrading roads and infrastructure to eventually create a new town centre.
It’s claimed the project has the potential to unlock £425m more in private investment and create up to 4500 new jobs.
TIF, pioneered in the United States, involves using anticipated incremental tax revenues to fund infrastructure projects.
It allows local authorities to borrow cash from the Public Works Loan Board for infrastructure and use business rates from the resulting new commercial development to pay it back. The Scottish Futures Trust (SFT) has developed TIF for use in Scotland and a Government spokesman said Ministers were supporting pilot schemes to test its suitability.
In September last year Mr Swinney provisionally approved a business case to use TIF in the £84m upgrade of Edinburgh’s waterfront and, as well as announcing support for Ravenscraig, the Government also confirmed that the Edinburgh TIF scheme had now been formally agreed.
Mr Swinney said: “Massive cuts to the Scottish Budget imposed on us by Westminster have underlined the importance of finding new, cost-effective funding models for crucial infrastructure projects such as the Edinburgh Waterfront and Ravenscraig regeneration, enabling us to unlock economic development, whilst ensuring maximum value.
He added: “The Ravenscraig regeneration scheme is vitally important to the future of the North Lanarkshire and wider Scottish economy.”
He said the council and SFT had presented a convincing business case for the use of TIF in driving forward “this pivotal project”.
He said: “In its first full year SFT delivered some £111m of net benefits and savings, well within our expectation of benefits in the region of £100-£150m. And in 2011/12 SFT will work on capital projects valued at £9 billion helping to sustain economic recovery and stimulate construction.”
The total cost for the second phase of the regeneration of Ravenscraig is £500m.
It is already home to Motherwell College and the Ravenscraig Regional Sports Facility.
The area will eventually house 10,000 people and will be served by a new rail station and a bus interchange, and have quick access to motorways.
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