The mechanism, which was used to part-fund flagship regeneration schemes such as London's Tate Modern, was suspended in 1999 after the European Commission ruled it a public subsidy and therefore anti-competitive.
Last July, the commission granted an exemption for housing projects. Under the new version of the scheme councils, regional development agencies and the Housing Corporation will also be able to bail out troubled regeneration projects, particularly in market renewal pathfinder areas.
Steve Carr, head of economics at EP, said the Office of the Deputy Prime Minister wanted to give the power to award grants back to a range of public bodies.
He said EP would fund projects from its £521m annual budget, but that any money paid by councils and public bodies would have to come from their existing budgets.
Carr said wrangling over the availability of money was one reason it had taken a year to reinstate the process – there is no additional government cash for the scheme.
The new proposals will not place a cap on the profit margin private firms can make from the funding.
English Partnerships will publish full details of the scheme on its website next Monday for a six-week consultation period. RDAs and councils will then have the chance to work up plans for delivering the funds.
EP will offer training to organisations wanting to administer the project in October and November, and expects to have "live" schemes in place by December.
The money will only be available for schemes that are primarily to build homes for sale, to distinguish the system from the Housing Corporation's approved development programme.
A spokesman for the House Builders Federation said: "There will be some housing associations that don't react favourably to this, but anything that helps developers build on marginal sites is welcome."
Source
Housing Today
Postscript
Join in the consultation at www.englishpartnerships.co.uk
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