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UK set to underwrite up to £33bn of infrastructure schemes UK set to underwrite up to £33bn of infrastructure schemes
(about 1 hour later)
A string of renewable energy projects have been earmarked for possible government backing.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 Avonmouth, Gloucs, are in line for up to £33bn in government guarantees.The private schemes, including a Forth Estuary wind farm and a biomass plant in Avonmouth, Gloucs, 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.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".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 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 £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:The new projects eligible for potential support are:
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.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.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.
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.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.Guarantees are not awarded until detailed feasibility and due diligence studies have been completed and contractors are ready to approach financial markets for funding.
'First hurdle' 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.
Chief Secretary to the Treasury Danny Alexander said the government was determined to "reach out" to the private sector to help unlock investment in Britain's infrastructure. 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.
"Getting our infrastructure right means we can be globally competitive, boost growth and create jobs across the UK," he said. "The offer of a guarantee is helping to get projects going," he told the BBC News Channel.
"Having passed the first hurdle, these companies know the government is there to help if they need it. "There is a lot of infrastructure happening in this country because of this programme."
"I hope today's announcement will encourage even more businesses to consider how they can take advantage of a guarantee."
'Drift''Drift'
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.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".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."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.
But Labour said levels of capital spending had actually been cut and progress to date was not good enough.But Labour said levels of capital spending had actually been cut and progress to date was not good enough.
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, 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, the opposition said.
"At a time when we need to invest in infrastructure to create jobs and boost living standards, and strengthen our economy for the long term, this is an appalling record," said shadow Treasury minister Chris Leslie."At a time when we need to invest in infrastructure to create jobs and boost living standards, and strengthen our economy for the long term, this is an appalling record," said shadow Treasury minister Chris Leslie.
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.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.
The CBI and other business groups have also warned about the slow pace of infrastructure spending, saying it holds the key to a sustainable long-term recovery.The CBI and other business groups have also warned about the slow pace of infrastructure spending, saying it holds the key to a sustainable long-term recovery.