Funding tool backers admitted recession flaw

In a report last November, the British Property Federation (BPF) said that Tax Increment Financing (Tif) does "better when the economy is buoyant and development can be attracted more readily".

But a separate BPF report in May this year said that Tif could plug the funding gaps caused by the economic downturn.

Tif allows a local body to borrow to invest in an area by securing the loan against rises in tax revenue expected to be generated by the investment.

A BPF spokesman said: "Tifs do work very well in a booming market. But ... we think that the principle behind Tifs still stands, and we think it is a tool that will bring us out of the economic downturn."

A report this week from cross-party body the all party urban development group says the recession will damage renewal prospects unless Tif is introduced.

- Regeneration and the Recession is available via www.regen.net/doc