Region’s £50m to kick-start growth

Ministers hope the work will clear the way for housing developments and building parks which have stalled in the economic crisis to finally be built, unlocking millions of pounds of investment from developers.

It will be the first serious amount of money made available to the four council and business-led Local Enterprise Partnerships in the region and is part of a £500m fund announced in September.

The Government is intent on handing out the funding by January as they desperately seek to find ways of reviving the flagging economy amid criticism over the lack of growth, but a senior Labour MP warned the impact will be “minimal” because the cash is too little.

Today, Ministers will announce that one tenth of the entire fund has been earmarked for this region. Leeds City Region is set to be the biggest winner, collecting £23.9m, while Sheffield city region has been earmarked £12.3m. York and North Yorkshire has been allocated £6.2m and the Humber £5.8m.

Chief Secretary to the Treasury, Danny Alexander, said: “The £500m Growing Places fund will kick-start local developments across the country. This is a flexible fix-it fund that will make a real difference on the ground.

“From building strategic link roads to reducing congestion, the investment will set businesses free and create jobs.”

The fund was first announced by Mr Alexander at the Liberal Democrat party conference and is designed to fund new roads, flood defences or other infrastructure work which has been a barrier to construction projects going ahead.

Despite the rate of housebuilding slowly improving in the region, there were still only 2,140 homes started in the second quarter of 2011 – less than half the 5,310 started in the first three months of 2007.

Improving the rate of construction could have a significant impact on the economy.

Local Enterprise Partnerships will decide which schemes should go ahead, although Ministers will be keen for them to ensure the money is spent quickly.

While the public money will be used to carry out the preparatory work, developers will be expected to repay it when their project is complete so the funding can be re-used to unlock another scheme.

Lord Christopher Haskins, chairman of the Humber LEP, welcomed the funding. “Improving the Humber’s infrastructure is essential for growth, so it is good news that we will be able to allocate this according to our area’s priorities.

“We will look to prioritise options quickly and start delivering this as soon as we can.”

With the economy stuttering, Ministers have been keen in recent months to try to fast-track infrastructure schemes because of their job-creating potential.

Deputy Prime Minister Nick Clegg has vowed to identify the 40 most important projects being carried out by the Government to ensure they are delivered on time.

The Government has also just announced £950m for schemes which will create thousands of jobs across the country through a second round of money from the Regional Growth Fund. Twenty four projects in Yorkshire and the Humber are in line to receive £143m over the next three years, creating up to 17,000 jobs.

But Clive Betts, MP for Sheffield South East and chairman of the Communities and Local Government select committee, said: “This seems to have given Danny Alexander a nice announcement but in reality one or two schemes might be built which might not otherwise have been built – which is welcome – but its impact is going to be minimal.”