Growing Places cash 'attracts £2.6bn of extra investment'

New government figures suggest that £652 million of money from an infrastructure delivery fund committed to business-led local enterprise partnership-backed projects has generated £2.6 billion in further funding.

Kris Hopkins (pic courtesy DCLG)
Kris Hopkins (pic courtesy DCLG)

A Department for Communities and Local Government update on the £730 million Growing Places Fund published today said the money so far offered to 305 economic development schemes had attracted £1.8 billion from the private sector and a further £774 million in other public sector funding.

Eighty-two per cent of the Growing Places cash is being awarded on a loan basis, rather than in grants.

The report said 159 of the supported projects were now under way, even though - as of a few weeks ago - 103 of them had not received their allocations.

Developers and housebuilders accounted for £1.3 billion of the additional private-sector backing DCLG said Growing Places had generated, with local authority contributions of £352 million making up the largest single source of the additional public sector money.

The report noted that the £652 million nominally allocated by LEPs included a combined overspend of £53 million thought to represent an expectation on the part of LEPs that not all schemes would progress beyond due diligence.

It said the lead local authorities responsible for LEPs’ funding decisions would ultimately be liable for actual overspends.

Local growth minister Kris Hopkins said he was pleased to see the extent to which the fund was generating private-sector investment, adding that the fact that more than 80 per cent of the funding was being made in loan form meant the money would be returned with in interest to support other projects.

"We gave LEPs not just the money but the powers to end their dependency on Whitehall and drive their own economies," he said.

"I am pleased to see them using this funding with energy and imagination to support businesses, create jobs."

LEP Network chair David Frost said the funding had been "instrumental" in unlocking key investment sites across England.

Among the projects to receive support are £3 million from Cheshire & Warrington LEP for infrastructure works designed to progress Miller Developments' Omega North industrial site; and a £3 million loan to the Huntington Link Road project, backed by Greater Cambridgeshire and Greater Peterborough LEP.

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