By John Challen

Costs are an ever-present hurdle for clients to overcome when planning projects, and any help is welcomed. WSP, through its Funding Identification and Application Team (FIAT), assists clients with sourcing and obtaining private sector funding, including using the tax increment funding (TIF) approach.

“It’s about using existing revenue streams, such as stamp duty levy, council tax and business rates that have been used, [for example], for the extension of the [London Underground] Northern Line up to Battersea,” says Chris Whitehouse, Technical Director, WSP. “In terms of my work area and projects in the UK, there’s not so much TIF at the moment. But we have worked with BusinessLDN to put it on the agenda and highlight that the current tools weren’t sufficient for some of the big mayoral priority schemes.”

Whitehouse believes that the main benefit of private funding is that it offers a stable and ongoing return. He adds that while there are always risks with borrowing against future revenue streams, the general view is that housing is a solid bet in the UK, especially in London. 

“The Northern Line extension to Battersea is an interesting case study in that it was very much focused on commercial development, with the business rates providing the revenue stream that pays back some of the funding,” he explains. “But over time, Battersea has become more of a residential development and so if you’re reliant on a certain revenue stream, it becomes more of a challenge.” 

Finding the revenue stream

A further obstacle related to direct investment is that the beneficiaries of transport can be quite broad. “It’s about trying to work out who wins from an improved transport network – and whether an investment into a certain project would support the bottom line,” claims Whitehouse. “Investment on a smaller scale in which a company contributes to a certain aspect of a transport project – such as adding an arm to a roundabout or access to a site – is more understandable, because it unlocks the land and gives them the access to it.

“But I suspect that for larger infrastructure projects that benefit more people, the cost becomes a more significant factor. If there was a clear revenue stream from part of the development being opened up, that would be more attractive.”

Whitehouse describes funding as ‘a perennial struggle’ and also doesn’t believe that anything in that area will change massively in the future.

“It really would be small evolutions of existing ideas or organisations biting the bullet and introducing measures such as road user charging,” he concludes. “What people need to remember is that transport isn’t funded for its own sake. It’s more about the power it has to unlock development and economic growth within society.

“Whatever method you use to fund projects, it’s about the opportunities it can deliver and how it ties in with the government’s wider fiscal agenda. If you can align it to public or private funds and the ambitions of the government, then we can hopefully move things along.”