WITH cash from developers rapidly evaporating in the economic downturn and central Government debt spiralling in the wake of the systemic failure of the banking system, Cambridgeshire needs innovative ways of replacing funding for vital infrastructure pro

WITH cash from developers rapidly evaporating in the economic downturn and central Government debt spiralling in the wake of the systemic failure of the banking system, Cambridgeshire needs innovative ways of replacing funding for vital infrastructure projects.

The county, and in particular Huntingdonshire, could lead the nation in proving that locally-raised tax revenues are most-effectively spent locally, rather than becoming diluted in the Treasury pot, according to key speakers at Cambridgeshire Horizons' annual conference last Wednesday.

At stake is the £4.1billion identified as needed to provide infrastructure - roads, railways, schools, water supplies, sewers, healthcare and social facilities - needed to support more than 50,000 extra homes in the county in the 20 years to 2021.

Horizons, the not-for-profit company set up by public and private sector organisations to deliver the infrastructure to make an expanded Cambridgeshire a decent place to live, now accepts that it must trim on some of the more expansive detail - but insisted that it is not prepared to compromise longer-term quality because of short-term financial problems.

These may seem brave words, but they are principles that come from Horizons' chairman, Sir David Trippier, a former housing Minister in a Thatcher Government, and its chief executive, Alex Plant, a former Treasury civil servant. Neither could be expected to be spendthrift.

Economist Kate Barker, keynote speaker at the conference, whose 2004 review of housing needs led to the requirement for the 50,000 new homes, acknowledged that where they were built might have to reflect better use of existing infrastructure than investment in new.

Even if that were accepted, the idea that new homes could be built in "dumbed-down" communities - without sufficient jobs, public transport opportunities, healthcare and social facilities - was simply not acceptable, Mr Plant emphasised. Trimming for the short term would inevitably lead to longer-term failure.

"It would be a huge mistake to sacrifice the quality of developments that will be with us for decades, simply to pursue a numbers game," said his chairman, Sir David.

Mr Plant has been working for more than a year on a number of schemes to supplement or replace cash from major developments, known to planners as Section 106 agreements, under which developers help to pay for additional pressure put on transport, schools and health and social services by new residents.

He believes all new homes, not just large developments, should pay at least part of their way. He has suggested a scheme of tariffs - now homes in Cambridge would contribute more than those in Huntingdonshire or Fenland - so that the one-in-three homes that currently get a free ride from S106 contributions also chip in.

Huntingdonshire District Council, which has done pioneering work on devising a framework for this, is likely to be at the heart of a trial that could see it rolled out across the country.

Mr Plant is also keen to tap into local capital projects as a means of keeping business rate revenue locally, instead of feeding directly into the Treasury's Great George Street monolith in Westminster.

The idea is that, when councils fund projects such as the soon-to-open guided bus link between St Ives and Cambridge, local companies that benefit should have part of their business rates diverted towards off-setting councils' borrowing on the project.

In that [purely theoretical] example, company premises in business parks near the busway in St Ives would become more attractive simply because of the public investment, so part of their business rates should go directly to the county council to offset interest on the capital cost.

Further coverage of the Cambridgeshire Horizons conference can be seen on our Business Page next week.