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GOVERNMENT COMMITTED TO PHYSICAL REGENERATION, SAYS ARMSTRONG

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The government's commitment to regenerating 'brown-field' land within ...
The government's commitment to regenerating 'brown-field' land within

European state aid rules has today been reaffirmed by Hilary

Armstrong, minister for local government and the regions,

Commenting on the environment, transport and regional affairs select

committee's report on the closure of the Partnership Investment

Programme, PIP, today, Hilary Armstrong said:

'The government attaches a high priority to the physical regeneration

of contaminated or derelict land and buildings and is determined to

find a new way of delivering the type of projects which had

previously been supported by the Partnership Investment Programme.

'We were disappointed when the commission ruled that PIP breached the

state aid rules. We had explained why, in our view, PIP did not

provide state aid.

'However, we are now vigorously pursuing alternative approaches with

the European Commission and I am confident that we will find a

solution to this problem together. We have already agreed

transitional arrangements to allow over 300 projects to go ahead.

'We have allocated significant additional resources in the Spending

Review 2000 to help compensate for the closure of PIP. Regional

development agencies will receive an extra£60m this year and an

extra£150m next year to start to deliver key government and regional

development targets.

'RDAs are also receiving an additional£350m in 2002/03, and£500m in

2003/04 on top of existing programme budgets as part of the new

funding arrangements announced in July.'

Notes

1. The Partnership Investment Programme (PIP) was operated by English

Partnerships, an agency funded by the DETR. It supported

non-commercially viable regeneration projects throughout England

where the cost of development exceeded the likely end value. In the

last year PIP provided£200m worth of support to projects,

levering in£567m of private investment, which together regenerated

1,300 ha of land, created or safeguarded 29,000 jobs, built 7,500

housing units, and created 860,000 sq. m of industrial/commercial

floorspace.

2. The UK government supports the commission's stance on eradicating

any abuses of the state aid rules around the community. This will

encourage fair competition which benefits the interests of British

firms in all sectors.

3. The commission's decision was published on 22 December 1999.

4. The government will abide by the commission's decision, but is

seeking to agree a new approach with the EU over the longer term.

5. The government will formally respond to parliament within the two

months allowed.

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