UK set to underwrite up to £33bn of infrastructure schemes
A string of renewable energy projects have been earmarked for possible government backing.
The private schemes, including a Forth Estuary wind farm and a biomass plant in Bristol are in line for up to £33bn in government guarantees.
The Treasury has agreed to step in and underwrite part of the building costs if they cannot get funding elsewhere.
Ministers said it would boost growth and jobs, but Labour said their record on infrastructure was "appalling".
The Treasury has announced details of 13 energy, transport and education schemes that could get government backing if they do not attract financial backing by other means.
The £40bn UK Guarantee Scheme, launched by Chancellor George Osborne last year, is part of ministers' efforts to encourage private sector investment and to boost spending seen as vital to the economy's long-term development.
The new projects eligible for potential support are:
- £300m biomass energy generation plant in Avonmouth, Bristol
- £400m gas-storage facility in Islandmagee, County Antrim
- Two gas-fired power plants in Lincolnshire and Essex
- Mixed-used development of homes, offices and shops in Aberdeen
- Wind farm on the Forth Estuary
- Renewable energy port facility in North Lincolnshire
- Chinook Energy renewable energy plants across UK
- Gasrec low-carbon fuel plant for commercial vehicles
- development of the University of Roehampton campus, Surrey
- wood-fired generation plant in Tilbury, Essex
- relocation of Northampton University
- Five Quarter Energy gas plant in the north-east of England
- ethane storage facilities at the Ineos Grangemouth plant near Falkirk, Stirlingshire
Should the projects fail to attract commercial funding, the government has agreed to step in to underwrite part or all of the capital spending - charging the contractors a fee for doing so.
The government has previously announced that it is prepared to guarantee the proposed £16bn nuclear power station at Hinkley Point in Somerset, due to be built by French firm EDF, with support from Chinese investors.
End Quote Danny Alexander Treasury minister
Getting our infrastructure right means we can be globally competitive, boost growth and create jobs across the UK.”
The extension of the Northern Line Tube network in London and the Mersey Gateway bridge have also been offered guarantees, in principle, as have 24 other projects whose details have not been released for commercial reasons.
Guarantees are not awarded until detailed feasibility and due diligence studies have been completed and contractors are ready to approach financial markets for funding.'Creative'
Chief Secretary to the Treasury Danny Alexander said the government was the first ever to use the strength of its balance sheet to facilitate infrastructure projects.
He defended the number of projects that had been backed so far, saying the mere offer of a guarantee had helped some projects to get alternative sources of funding.
"The offer of a guarantee is helping to get projects going," he told the BBC News Channel. "There is a lot of infrastructure happening in this country because of this programme."
In 2010, the government pledged to spend £200bn on major infrastructure projects by 2015, with an emphasis on delivering key projects on time and on budget. It has also announced additional spending after 2015.
The Institute of Civil Engineers welcomed Tuesday's announcement and said the guarantee scheme had enabled "viable projects to secure finance in difficult market conditions".
"It is an excellent example of government making creative use of its resources to get projects moving," said the organisation's director general Nick Baveystock.'Drift'
But Labour said the government had wasted the past three years.
The opposition said only one project - the £700m partial conversion of the Drax power plant in North Yorkshire from coal to biomass - had actually taken advantage of the UK Guarantee scheme to date while, in total, work had only begun on one in five of infrastructure projects.
"There's lots more that could be done but they just don't seem to have their heart in it," said shadow Treasury minister Chris Leslie.
"The energy isn't there and there's a question of competence now about whether they can deliver on some of these infrastructure promises that they're making."
Labour has called for an independent commission to be set up to end what it says are "decades of drift and delay" on major infrastructure decisions.
Business groups have also warned about the slow pace of infrastructure spending, saying it holds the key to a sustainable long-term recovery.
"Despite the scale of the UK Guarantee Scheme, only around a third of firms are aware of it, so this announcement will help raise awareness to other projects struggling to find finance," said the CBI's Rhian Kelly.
"The government now needs to push more of these pre-qualification projects through the approval stage so that they can get off the drawing board."