New legislation introduced by the UK Government on 6 September is intended to give a boost to investment in UK infrastructure projects.
The Infrastructure (Financial Assistance) Bill, an initiative first announced by Chancellor George Osborne in July, is set to allow the Government to guarantee £40 billion of investment in infrastructure projects, which the Government intends to use low interest rates to underwrite.
There are a few qualifying factors for these projects: they must be "nationally significant"; of benefit to the UK taxpayer; financially viable; and able to start construction within a year. The term "financial assistance" is used, defined in the Bill as meaning "loans, guarantees or indemnities, or any other kind of financial assistance (actual or contingent)."
The purpose of the Guarantee scheme is to allow infrastructure projects to progress where they are faced with difficulties accessing private finance in the current market. The Bill is intended to cover various sectors outlined in the National Infrastructure Plan including: transport, energy, communications, housing, health, education and the environment.
The Bill will also allow for £10 billion investment in new homes projects. The Government plans to guarantee the debt of housing associations and private sector developers and aid in the speed at which planning applications are processed.
The Bill is expected to have its second reading debate on 17 September 2012. More information on the Bill and its progress here.