£3 million loan sought for road improvements
A council hopes to borrow more than £3 million to pay for road improvements that will allow major house building to go ahead.
North West Leicestershire District Council wants to improve traffic flows at the congested A42 Tesco roundabout, in Ashby, and Junction 22 of the M1 at Markfield, as well as building a new link road at Bardon which will allow 2,000 homes to be developed.
The Highways Agency has told the council there can be no more major development until the road infrastructure is improved.
Developers would normally be expected to fund work of this kind through payments known as Section 106 contributions.
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But the council says the economic slump has made house builders unwilling or unable to fund improvements up-front.
The council wants to pay for the work to unlock development of hundreds of homes around Coalville and has asked the Leicester and Leicestershire Economic Partnership (LLEP) for a £3.2 million loan.
District council deputy leader councillor Alison Smith said: "We need to do this because we have a desperate need for new homes to be built.
"The money from 106 agreements comes in once developers have sold houses, but we need it sooner. It will unlock the development of a substantial number of new homes.
"That in turn will have a knock-on effect, boosting the local economy. There will be jobs in construction and other areas."
Coun Smith said the developers' 106 cash would be collected in the long term to repay the LLEP loan.
However, the loan repayments may be required before the council can secure the developers' cash, so it has asked Leicestershire County Council to underwrite the loan.
County Hall would repay the LLEP if the district council was unable to over the loan period then recoup the money later.
LLEP economic growth and development manager Andy Rose said a decision would be made on the loan in February.
He said: "The application is shortlisted but we had 18 bids worth £38 million and we only have £14 million.
"We will have some difficult decisions to make, but this scheme looks a good one. Without the road improvements, growth in North West Leicestershire is pretty much stymied."
County Council leader Coun Nick Rushton said: "This is the sort of thing the county council should be looking to use its reserves on because this will boost the local economy.
"It may be North West Leicestershire will not need our money, but they can proceed with the LLEP loan with the knowledge we are behind them."
The county council's cabinet is set to approve the £3.2 underwriting when it meets next week.
Coun Rushton has declared an interest and will not vote because he is also the district council's cabinet finance spokesman.
North West Leicestershire District Council leader Richard Blunt also sits on the county cabinet and will not vote.