Chancellor George Osborne announced multiple measures to fund major infrastructure projects today, which he claims could lead to £50bn of spending in the economy.
New loan guarantees and lending for big building projects are among the measures outlined by Osborne and Treasury Chief Secretary Danny Alexander at Crossrail.
The UK Guarantees scheme will use the government’s financial credibility to boost lending, funding “nationally significant” infrastructure projects that may have stalled because of adverse credit conditions.
"The credibility the government has earned through tackling the deficit is already helping millions of British families and businesses through keeping down the cost of borrowing,” said Osbourne.
"Now UK Guarantees will use that hard-won fiscal credibility to provide public guarantees of up to £50bn of private investment in infrastructure and exports.”
Up to £40 billion worth of projects could qualify for UK Guarantees and, subject to legislation, the first guarantees are expected to be awarded in the autumn.
Applications opened today and borrowers must start building within 12 months of receiving a guarantee.
A temporary lending programme will also allow developers to borrow money directly from government departments to support partly-funded projects such as housing, hospitals or new schools.
"Investment and exports will be the dual drivers of future growth in the UK and this scheme should help fire up both engines," said John Cridland, director general for the Confederation of British Industry (CBI).
“This announcement marks a big step towards unlocking the £250 billion of investment needed to renew our national infrastructure, two-thirds of which has to come from the private sector. The government has produced a package of measures that will use the public balance sheet to underwrite private finance, building on the ideas put forward by business."
Cridland concluded: "We now need to focus on project models to ensure delivery of the world-class infrastructure this country needs."