Magazine article Public Finance

Treasury Lending Unit 'Needs Strengthening'

Magazine article Public Finance

Treasury Lending Unit 'Needs Strengthening'

Article excerpt

A think-tank has called on the government to set up a permanent bank to finance infrastructure projects to beef up the Treasury's arm's-length lending unit.

The Treasury set up its infrastructure finance unit (Tifu) earlier this year to bail out Private Finance Initiative schemes that have struggled to secure debt finance during the credit crunch. So far, its only outlay has been a £120m loan to Greater Manchester's £4.7bn waste scheme, signed off in April.

Speculation that Tifu might be asked to contribute to the £16bn Crossrail project emerged this week. But a Treasury spokesman told Public Finance: 'The funding package agreed for Crossrail remains in place and there are no plans to alter the overall balance between private, public and fare-payer funding of the project.'

Tifu, which lends on the same terms as commercial banks, was established as a temporary solution to the credit crunch. …

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