A US model for funding infrastructure favoured in Barack Obama’s home state of Illinois could be the answer to kick starting struggling regeneration projects in the UK, the BPF will argue today at MIPIM in Cannes.

The model – known as tax increment financing (TIF) – raises finance by borrowing against future increases in property taxes to fund current development.

Developers in the UK are increasingly interested in setting up pilots in the UK as concerns mount that regeneration could be stalled if alternative sources of funding can not be found in the recession.

The TIF system works on the basis that new development in a TIF district will generate more tax revenue in future, which can then be used to repay the cost of the infrastructure that enabled the development to go ahead.

Speaking at the PricewaterhouseCoopers-hosted debate, the head of the British Property Federation Liz Peace will say: ‘Tax increment financing is a flexible tool that could be used to help a wide range of regeneration schemes that do not currently stack up because of the upfront infrastructure spending needed. The TIF approach is gathering an increasing range of support across the UK, with strong backing from many of the country’s leading cities and developers.

‘At a time when development is at such a low ebb the Government should be paving the way for TIFs and other vehicles which could kick-start the regeneration sector as soon as the recession eases.’