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Government promises local infrastructure development funding but denies £5bn spending boost


A new infrastructure development fund will reserve half a billion pounds to "kick start" the local economy, the Government has announced.

Addressing the Liberal Democrats conference, Treasury Secretary Danny Alexander said that the new Growing Places fund will "deliver key infrastructure and create jobs".

"In South Gloucestershire £300 million of private investment, 3,000 jobs and 2,200 homes is being unlocked with £6 million of public money to build a link road. Just think what we will be able to do with £500 million," Alexander said.

Local Enterprise Partnerships will be able to apply for the funding which can be used to help with the initial funding of projects including transport, housing and fast broadband internet access in rural areas, Alexander said.

Alexander also denied press reports this week that the Government was planning a £5bn spending boost on major infrastructure projects.

"I just don't recognise the numbers involved or the process as described," he told BBC Radio 4's Today programme on Wednesday.

"There are things we are doing on capital spending because of course investment in infrastructure is something very important to the UK economy. I am engaged with Cabinet colleagues to make sure the projects we have funded are delivered on time and to budget."

In a speech on UK economic growth at the London School of Economics earlier this month, Deputy Prime Minister Nick Clegg said that up to 40 of the biggest infrastructure projects would be "hand picked" and "rigorously examined" by Alexander's team to remove barriers to completion such as funding obstacles or planning problems.

However these projects will be funded through prior spending commitments and using existing funds, Clegg said.

Construction expert Barry Francis of Pinsent Masons, the law firm behind Out-Law.com, urged the construction industry not to get carried away until a formal announcement was made.

"History shows that there can be some gap between political rhetoric and translating this into action," he said.

Private sector investment would be needed to top up the funding in any event, Francis said. £5bn could cover the building cost of ten large hospitals or less than 200 miles of motorway, he said.

"On its own £5bn doesn't buy a lot, so attracting private sector investment is crucial," he said.

"Industry will be looking for practical commitments to efficient procurements if they are to commit the necessary resources to bid and finance these deals."

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