Government has allocated £32.5 million to the South East LEP from the national Growing Places Fund. The Growing Places Fund has been designed to unlock stalled projects by providing investment capital to stimulate growth. The funds are for capital expenditure, although up to 2% is available for revenue purposes to support administration and management costs.
Government has stated that the Fund should be used to:
The funds need to be allocated in the current financial year and government has asked all areas to complete a PQQ by 20th December 2011 which outlines how they intend to manage the funds. The South East LEP Board has considered governance options for the management of the fund and is now asking local authorities and their partners to propose potential projects which could be supported by the Fund.
The Fund will be un-ringfenced capital grant but government has made it clear that funds should be used to help establish sustainable revolving funds. Projects will therefore need to demonstrate that the injection of funding addresses a cashflow problem and is not ‘gap’ funding. As projects are developed, it is expected that developers would use receipts or a proportion of land value uplift to repay the fund.
Government has also made it clear that the fund should move quickly. Allocations will be made to the Lead Authority in 2011-12 and it is expected that funds will be applied to stalled sites which can progress quickly. Projects therefore need to demonstrate that there are no barriers or constraints in relation to land ownership, planning and other approvals, and that funding is in place to enable development to proceed.
The Growing Places Fund will be primarily used as a loan fund with returns/interest based on the level of risk and security available. A standard form of agreement is being drawn up which will be entered into between local authorities and Essex County Council, as accountable body on behalf of the the SELEP.