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Manchester in funding jam

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The fog of confusion surrounding Greater Manchester’s transport strategy shows no sign of lifting after local leaders vetoed proposals to raise money through a supplementary business rate.

Following voters’ rejection of the city region’s congestion charge plans (LGC - 18/12/09), officers at the Association of Greater Manchester Authorities (AGMA) have been working on alternative proposals to raise the billions of pounds of funding for transport investment across the conurbation.

But at a meeting of AGMA’s executive board, leaders of the 10 boroughs rejected plans to raise extra money from local firms already hit by the recession.

“There was some discussion of levying a supplementary business rate across the 10 authorities, to which I responded it is the wrong time to be placing any additional burdens on businesses,” said Susan Williams (Con), leader of Trafford MBC. “I think there was broad agreement and it has been scotched as an idea.”

Instead, she predicted AGMA would focus its lobbying activity on getting at least a partial repatriation of business rates.

The reluctance to consider new ways of raising revenue for transport investment highlights the bind Greater Manchester is in following voters’ rejection of congestion charging.

Under the original package of proposals - worth almost£3bn - the region would have received£1.5bn in government Transport Innovation Fund (TIF) cash in return for implementing the congestion charge. Revenue from the charge would have supported borrowing totalling£1.15bn.

The meeting examined alternative proposals for a transport fund to support borrowing to pay for local schemes. However, to get anywhere near the original amount of borrowing planned, significant funding sources were required.

A supplementary business rate could have raised about£45m per year, enough to support borrowing of around£1.2bn by 2018-19. But without any new revenue streams, the city region would be reliant on local transport plan funding, likely to support a maximum of£184m by 2018-19.

To add to the gloom, ministers appear to have quashed hopes of the city region getting its hands on the£1.5bn TIF funding.

Speaking at an event in Manchester last week, transport minister Lord Adonis said: “It was always clear that the proposals were contingent on congestion charging.”

Dermot Finch, director of the Centre for Cities thinktank, called on the government to release TIF funding regardless of the ‘no’ vote.

“If the DfT wants to create jobs from building transport infrastructure, it should free up the TIF funding,” he said.

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