The Growing Places and

Regional Infrastructure Funds

Versha Koria, Area Manager

South and South West HCA

2nd March 2012

Contents

The Growing Places Fund

HCA perspective on operating revolving infrastructure funds

The Growing Places Fund

£500m fund with three key aims:– To generate short term

economic activity by addressing immediate infrastructure and site constraints

– To allow LEPs to prioritise local infrastructure needs to deliver their economic strategies

– To establish sustainable revolving funds that will lever in private investment

The Growing Places Fund

Distributed to LEPs on formula basis:– Cornwall and Isles of Scilly £4.2m– Dorset £6.4m– Gloucestershire £5.6m– Heart of the South West £14.2m– Swindon and Wiltshire £6.2m– West of England

£11.3m

LEPs encouraged to work in partnerships to achieve critical mass and economies of scale

Nominated local authority to act as fund holder

The Growing Places Fund

Strong Government preference to see sustainable revolving funds established

Encouragement to adopt good practice established as part of Regional Infrastructure Funds

Majority of funding is capital

Up to 2% of fund set aside to assist management

HCA offer on Growing Places Fund

Where we are invited by LEPs, we can bring expertise and

experience to support the development of funds locally: Investment planning and prioritisation Challenging viability and deliverability Alignment with other investment (works well with

Community Infrastructure Levy and New Homes Bonus) and land

Expertise in funding models, including revolving funds and links to existing fund structures

Navigating ‘State Aid’ issues Acting as a ‘critical friend’

HCA management of three Regional Infrastructure Funds

We manage three RIFs established by Regional Development Agencies:– SWRIF (£36.6m)– AWM (£9.6m) – SEEDA (£15.1m)

First round investments of the funds have unlocked more than 24,000 homes and employment space, accommodating more than 31,000 jobs

Revolving Infrastructure Funds - concept

£FUNDFunds infrastructure

By Developer

or By L. A.

Enables development

Residential

Or Business

space

Dev. R

epay

s Fu

nd

Or L

A via

CIL

,

TIF,

NHB

Devel

oper

via

S106/

cont

ract

paym

ents

SW Regional Infrastructure Fund

£36.6m fund launched in March 2008 by SWRDA (£30m DfT,£6.6m SWRDA)

RIF is not gap funding Forward funding, repayable as

development proceeds The RIF can:

- Lever in additional private sector resource

- Share risk between local authorities and developers

Five major investments to date will unlock more than 15,000 homes and more than 700,000 sq m of employment space

Case study – Cranbrook new community

Largest individual growth area designated within the South West

A self-sufficient, low carbon new community

A population of 18,000+ in 6,550 homes by 2026 (30% affordable)

11,000 jobs at Cranbrook, Exeter Science Park and SkyPark

Total investment £1.6bn+ Public sector funding of £45m

including RIF, NAHP, Growth Point, Community Infrastructure and Low Carbon Infrastructure funding

Total RIF £12m - main local route, primary school and Clyst Honiton Bypass

Partners are Hallam Land, Persimmon and Taylor Wimpey

Repayment £8,000 per completed residential unit until total is repaid, with minimum fixed payments from 2013 onwards

Case Study – Cranbrook new community

Case Study - Twin Sails Bridge, Poole

Key project enabled by second harbour crossing

Unlocks seven sites, a total of 26 ha of brownfield land

Delivers 2,000 homes, 63,500 sq m of offices, retail, community and leisure facilities

Potential to create 2,000 jobs £700m in private sector investment

£9.96m RIF investment to Borough of Poole

The RIF secured the delivery of the Twin Sails Bridge and provided certainty of DfT funding for associated infrastructure, which is delivered earlier

£8.9m is to be repaid by 2016 from developer contributions, including Community Infrastructure Levy

Fixed annual minimum payments of £1m start in 2013/14

Case Study - Twin Sails Bridge, Poole

Key considerations

What is planning status of development sites? What economic benefits will be unlocked by investment? How deliverable is the related development? What is the realistic timescale for repayment? Is there any risk of default? What security is offered? What is the risk/reward profile? How will the fund be managed in the long term? Have all legal/procurement issues (including State Aid

issues) been considered?

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