Housing Minister Margaret Beckett has announced a £605 million allocation to 163 local authorities with long-term plans to increase house building to meet the needs of their communities.

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 living 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 building of new homes, from transport links and schools to the regeneration of town centres and the provision of parks and other green spaces.

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.

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"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."

Sir Bob Kerslake, Chief Executive of the Homes and Communities Agency said: "This funding will play a significant part in helping growth areas deliver not only more homes, but the vital infrastructure that is needed to underpin new communities. Through our Single Conversation model we will be working closely with these local authorities to support them, not only in the delivery of growth, but to create a single investment plan that will successfully bring forward local goals in a more integrated way.

"As part of that Single Conversation we will be looking at how the economic downturn might impact on the timing and delivery of growth proposals and how the HCA can assist in maintaining and, where possible, increasing the momentum of growth and renewal programmes locally."

The £605m Growth Fund will be one of the funding streams managed on behalf of Government by the new Homes and Communities Agency. It is in addition to the £227m already paid out for the current year, and completes an overall investment package of £832m for these local authorities.

(CD/JM)