York in need of £1bn 'war chest' to realise its economic ambitions
MAJOR investors could be asked to help amass one of York’s biggest-ever development “war chests” after it was revealed the city will need up to £1 billion to realise its economic ambitions.
A City of York Council report on how key schemes such as the York Central development and upgrades to the outer ring road could be paid for has said traditional funding methods are unlikely to be enough to ensure the city’s economy grows and demand for new homes and top-quality office space is met.
The authority’s Labour cabinet will be asked tomorrow to approve officials drawing up a business case for a “joint venture” investment scheme.
This could see private investors contribute towards projects intended to boost economic growth and get a financial return from the eventual benefits, with the council also contributing cash or assets.
Officials said that despite recent progress on schemes such as the Terry’s and the Hungate development and signs of an upturn in the market, some unnamed “key strategic sites” may not be developed without a fresh and “more proactive” investment approach.
It said the volume and pace of development was not enough to deal with a backlog of 5,000 homes, another 4,000 affordable homes and “a severe under-supply of Grade A office stock”.
The report by the council’s head of economic development, Katie Stewart, said York’s target was to be creating 1,000 new jobs a year and increase the economic worth of the city by 63 per cent by 2030, but the estimated cost of the developments needed to achieve this was between £700 million and £1 billion. It said funding cuts may also strain the council’s own resources.
Public funding could come from bids through the Leeds City Region group of councils and local enterprise partnerships.
Ms Stewart’s report said “thinking bigger” could involve approaching a European “super fund” known as JESSICA through teaming up with other Yorkshire councils or authorities along the East Coast mainline.
If approved, officers will also look at creating a council commercial fund to push developments forward, pooling income from areas such as council tax, business rates, the New Homes Bonus scheme and sales of council assets.
Coun Dafydd Williams, cabinet member for finance, said: “The ultimate aim of these proposals is to create a virtuous circle of income streams, which in turn will provide resource within the city to enable further development.”
Conservative group leader Coun Chris Steward said new funding streams would “invariably mean more debt” and strict criteria for assessing their value to the city must be laid down.
He added: “We hope any long-term projects will be on a cross-party basis.”
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