Ministers have pulled together a £500m pot to create local funds across England to develop key infrastructure and drive growth, a senior Liberal Democrat has announced.
Chief secretary to the Treasury, Danny Alexander, told the Liberal Democrat party conference the Growing Places fund would provide a “one-off up-front capital investment to kick start developments” that are stalled due to cash flow problems or lack of confidence.
The Times reported half the funding will comes from unspent reserves in the Department for Communities & Local Government and Department for Transport budgets while the rest will come from Treasury funds normally reserved for times of war.
Mr Alexander said the fund was about “putting local areas in the driving seat, enabling local government to invest in the key strategic infrastructure projects that they have identified as priorities and getting people into work”.
Mr Alexander also confirmed that councils needing to buy their way out of the housing revenue account subsidy system are to be offered special finance arrangements, as revealed by LGC earlier this month.
The Public Works Loan Board will offer reduced interest rates which will create “a £100m boost for local authority housing”.
He said: “I have listened to local authority concerns that this is a one-off transaction within the public sector and should be financed as such.
“This will free up £100m a year that councils involved in this transaction will be able to reinvest in housing.
“Unlocking local growth by freeing business to grow, driving forward local infrastructure, and freeing councils to support housing. Liberal Democrats in government, on your side.”.