Funding and financing inclusive growth in cities

How cities can unlock more investment for inclusive growth policies

Cities have a crucial role to play in supporting inclusive growth. But with few powers to control or raise taxes locally and after nearly a decade of spending cuts from central government, it is becoming increasingly difficult for authorities to fund policies to address these issue.

In this context, it is important that cities find ways to increase revenues, leverage returns on their investment, encourage investment from other stakeholders, and coordinate the spend of organisations within cities to support better outcomes for residents at all levels of the income distribution.

This report explores the funding and finance options available to cities, setting out four approaches that cities could potentially take to fund and finance inclusive growth policy:

  1. Taxes and fees – raising or retaining income from taxes, charges and fees
  2. Partnerships with financial intermediaries – entering into financial partnerships to support inclusive growth and generate revenue streams.
  3. Asset and property management – ways of leveraging investment from the private sector to support economic regeneration
  4. Convening private investors – maximising collective spend within cities and city-regions, and leverage further co-investment

It also argues that every city should establish an Inclusive Growth Investment Commission, with three main objectives: 1) identify barriers to achieving inclusive growth, 2) develop financial mechanisms to address inclusive growth priorities, and 3) coordinate spend within the city or combined authority.

Finally, the report examines the ways in which national government can help widen cities’ access to funding and finance to support better outcomes for their communities.

You can also find an online tool which sets out the most effective ways to fund and finance inclusive growth in cities