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'PAYMENT FOR LOCAL INVESTMENT: NEW FINANCE MECHANISMS FOR LOCAL GOVERNMENT'

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Policy Exchange has released the report, 'Payment for Local Investment: New Finance Mechanisms for Local Government...
Policy Exchange has released the report, 'Payment for Local Investment: New Finance Mechanisms for Local Government'*, commissioned jointly with the New Economics Foundation to examine the local capital finance system in England.

This report is supplemental to previous reports published by Policy Exchange and NEF. Earlier research focused on the reform of the revenue finance system of local government which culminated in the publication of 'Nothing to lose but your chains: Reforming the English local government finance system' last year.

The report states that:

'The current system of local authority capital finance in England is not working. The Prudential Code is an improvement on what existed before March 2004, but many more changes are needed before an effective system is created.'

The report highlights areas where those changes are needed and how the current system could be reformed; in essence advocating:-

-A revised and diminished role for the Public Works Loan Board

-The encouragement of commercial sector loan finance

-The creation of the conditions necessary to allow a local bond market to flourish.

* The report is available here.

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