Government to provide 拢1bn guarantee to Battersea Power Station development as well as 拢1bn for roads schemes and 拢10bn of infrastructure guarantees
The government will guarantee a 拢1bn loan to the Battersea Power development as well as provide a 拢1bn boost to roads as part of a fresh infrastructure push unveiled by George Osborne today.
He said the government would guarantee a 拢1bn loan, through the UK Guarantees scheme, to extend the Northern Line to Battersea Power Station - a piece of infrastructure critical to enabling the development to proceed. Osborne said this would 鈥渟upport a new development on a similar scale to the Olympic Park鈥�.
The Treasury said the UK Guarantee would allow the Mayor of London to borrow 拢1bn at a new preferential rate to support the Northern Line Extension to Battersea scheme, 鈥渟ubject to due diligence and the agreement of a binding funding and development agreement with developers鈥�.
The Treasury said: 鈥淣orthern Line extension to Battersea is key to the redevelopment of Battersea Power Station and the regeneration of a historic part of London.
鈥淕overnment intervention has the potential to enable an 拢8bn investment at the Battersea Power Station site, supporting the wider redevelopment planned for Vauxhall, Nine Elms and Battersea, which could create up to 16,000 new homes and up to 25,000 new jobs,鈥� he said.
Osborne also said that 拢10bn worth of major infrastructure schemes had pre-qualified for government-backed guarantees under the UK guarantees scheme.
The Treasury said the UK Guarantees scheme had received 75 enquiries from project sponsors to date, of which projects with a capital value of 鈥渁round 拢10bn have been prequalified as eligible for consideration of a guarantee鈥�.
A Treasury spokeswoman said this 拢10bn comprised 14 separate projects, including the Battersea development, plus the guarantee for Crossrail rolling stock previously announced.
She would not identify the 12 other projects, but said they did not include the 拢4.1bn Thames Tideway Tunnel, dubbed the London 鈥榮uper sewer鈥�, which has been tipped as a project likely to be given a guarantee.
the government also announced 拢980m to expand 鈥済ood schools鈥� and build 100 new free schools and academies, as part of a 拢5.5bn capital boost.
The Treasury said this additional funding would be invested before the end of the parliament, and 鈥渋ncludes enough funding for 100 new academies and free schools, as well as investment to expand good schools, in the areas experiencing the greatest pressure on places鈥�.
The Government will also provide an additional 拢270m for capital investment to improve further education (FE) colleges in England, which is to be
targeted 鈥渨here it will have the biggest impact on growth, and on colleges with the greatest needs鈥�.
Osborne said the government would also commit 拢1bn to four major road projects, including four major schemes: upgrades to key sections of the A1; bringing the route from London to Newcastle up to motorway standard; linking the A5 with the M1; dual the A30 in Cornwall; and upgrade the M25, to support the Thurrock port development.
Osborne also announced a 拢600m boost for the UK鈥檚 scientific research infrastructure. The Treasury said this would be focused on Research Council infrastructure and facilities for applied research and development (R&D). 鈥淭his investment will support the development of innovative technologies and strengthen the UK鈥榮 competitive advantage in areas such as big data and energy efficient computing, synthetic biology and advanced materials,鈥� the Treasury said.
The chancellor said the 拢5.5bn capital boost would be funded through cuts across Whitehall departments, with departments asked to cut their budgets by 1% in 2013-14 and 2% in 2014-15.
This is expected to release 拢1bn in the first year, and 拢2.5bn in second year, leaving 拢1.5bn of savings still to be finalised.
Osborne also announced:
- A further 拢350 million towards the Regional Growth Fund, to provide support for jobs and growth across England until the end of this parliament
- The government would make available a new concessionary public works loan rate to an infrastructure project nominated by each Local Enterprise Partnership (LEPs), excluding London, with the total borrowing capped at 拢1.5 billion
- The Government will devolve a greater proportion of growth-related spending on the basis of the strategic plans developed by LEPs, with the aim of creating a single funding pot for local areas from April 2015, as well as providing 拢10m per year for each LEP to build their capacity
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