Bids for the Public Works Loan Board’s new local infrastructure rate will be capped at £100m per authority, the Treasury has announced.
In his autumn Budget last year, chancellor Philip Hammond announced that £1bn would be made available to councils at the new rate of gilts plus 60 basis points.
The government this week unveiled details of how authorities can bid for the cash — which will be equally split between two funding rounds — the first from 1 May to 31 July, the second from 1 January to 31 March next year.
In a statement, the government said: “The Local Infrastructure Rate bidding process is designed to help incentivise local authorities to construct infrastructure that otherwise would not be considered to be affordable.
“The government will look favourably on projects where supporting evidence is provided to demonstrate that they can begin quickly once funding is agreed.”
According to the government’s bidding guidance, councils will be able to submit more than one bid per bidding round.
However, when assessing bids, the government will look at each council’s highest priority bid first. Only after these applications are considered will lower priority bids will only be considered.
Bids should not bundle together lots of different proposals into a single bid, according to the guidance.
The government said that it is looking to use the new rate to support transport, energy, flood defence, water, waste and digital communications projects.
The Treasury document said: “The government believes that it is important to support local authorities in delivering infrastructure investment.
“In many cases, local authorities are best-placed to understand local infrastructure needs, but high costs of borrowing could prevent them from delivering projects to meet these needs.”
Meanwhile, PWLB data released this week shows that councils and other public bodies had almost £70bn of outstanding debt with the body at the end of the 2017-18 financial year.
The outstanding principal balance of £69.980bn was up 5% from £66.591bn at the end of 2016-17.
The current cap on total PWLB borrowing is set by the Treasury at £85bn.
