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Minister for London Tony McNulty has welcomed the announcement of new Government funding for house building, which will benefit nine boroughs in the capital.

Housing Minister Margaret Beckett today announced a £600 million allocation to local authorities across the country with long-term building plans.

Between them, the boroughs of Barnet, Brent, Croydon, Enfield, Hackney, Haringey, Islington, Redbridge, and Waltham Forest have been allocated £60 million to support their plans to increase house building that meets the needs of their communities. Up to 2016, the new funding is expected to produce a net addition of nearly 110,000 houses in these London Growth Areas combined.

Despite the current condition of the housing market, the long-term need to build more homes remains - the population is continuing to grow, people are continuing to live longer, and there are more single households.

Over the next two years, this money will enable local authorities with ambitious plans for growth to invest in the essential services that need to accompany the construction of new homes, from transport links and schools to the regeneration of town centres and the provision of parks and other green spaces.

Minister for London Tony McNulty said:

"Today's announcement demonstrates the Government's support for housing growth in London. The capital has the potential to deliver a large number of new homes which will help address the urgent need for housing.

"Although these are difficult times for the economy, I am pleased that today's announcement recognises the commitment of the north London Boroughs and Croydon. The Government's announcement confirms that all the relevant London Authorities will receive an increase over the indicative allocations that were announced in December 2007."

Housing Minister Margaret Beckett said:

"In these difficult economic times we must not lose sight of the long-term need to build more homes. Yet if the support for these new homes is not in place, their construction will be delayed when we need them most, hampering the economy's recovery. This means we need to be investing today in tomorrow's infrastructure, while allowing local authorities to decide their own local priorities for spending this money. Today's announcement delivers on both fronts.

"This money is targeted at those local authorities with the most ambitious growth plans. As well as helping to build the new homes we need, it will ensure we have the support and infrastructure in place so that these homes become part of the existing community, not a burden on their resources."

Today's funding will be distributed to the 163 local authorities in the Growth Points and Growth Areas schemes by the new Homes and Communities Agency. It is in addition to the £227 million already paid out for the current year, and completes an overall investment package of £832 million for these local authorities. Several have expressed an interest in building new developments that deliver the highest environmental standards, and £12 million of this investment is being held back to be prioritised for those schemes that deliver the greenest approaches.

In addition, it will soon be announced which of these local authorities will get a share of a further £200 million to pay for transport improvements through the Community Infrastructure Fund. Both the Growth Fund and the Community Infrastructure Fund will now be managed by the Homes and Communities Agency.

1. The 163 local authorities with Growth Point or Growth Area status have signed up to deliver 1.3m new homes by 2016, 30% more than previously planned.

2. The £832m Growth Fund allocations are part of the Growth Areas and Growth Points programmes. More information can be found here: http://www.communities.gov.uk/housing/housingsupply/growthareas

3. This announcement follows the December 2007 announcement of £224m allocated in 2008/9 with indicative awards of £336m for 2009/10/11. Today's announcement confirms the 2009/10 and makes provisional awards for 2010/11. It includes the £172m which was held back to be distributed following the Growth Fund consultation and the £100m announced in July for the second round Growth Points. Government's response to the consultation can be found at http://www.communities.gov.uk/publications/housing/growthfundresponse.

4. This funding comes with increased flexibility for local authorities. Instead of funding individual projects, the Growth Fund provides non-ringfenced block funding to local authorities and partnerships based on an assessment of their Programmes of Development. As a non-ringfenced grant, with the exception of reflecting the split between capital and revenue there will be no grant conditions about how or when it is spent. It is for local authorities to prioritise how the funding is used in their area.

5. The Government will also shortly be announcing the results of the bids for funding from the Community Infrastructure Fund, run jointly with Department for Transport, for £200m for transport schemes to support housing growth projects. Taken together this makes a total of over £1bn for housing growth over the next three years. Since 2003, Communities and Local Government has provided over £1.5bn to support delivery to the Growth Areas and Growth Points complemented by £2.2bn of transport spending from DfT.

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