The Budget: up to £25bn more borrowing for council infrastructure projects

The Chancellor today announced the Government will seek to increase the Public Works Loan Board borrowing limit by £25bn "to enable local authorities to continue to borrow from the PWLB".

The Government will seek the legal powers necessary to increase the £70bn limit on PWLB lending in the Finance Bill, the Budget announced. The National Infrastructure Plan published before Christmas pledged to allocate nearly £800m of borrowing at the PWLB's project rate over the coming next two financial years for Local Enterprise Partnership growth deals.

In a Budget statement that sought to underline ministers' commitment to investing in infrastructure, a deal with authorities in Greater Cambridge was today sealed that will see the councils there share in additional tax income generated by capital investment, worth up to £500m.

The Chancellor also signed off a £270m loan guarantee to support the raising of the debt finance necessary to build the Mersey Gateway Bridge, and renewed a search for private finance by publishing further information for potential investors on the potential opportunities in UK infrastructure "providing greater clarity for investors".

The guarantee for the Mersey Gateway Bridge comes after the Government pledged up to £470m in direct support, but left questions over whether the private sector could bear the risk for the scheme.