The European Commission has given a boost to brownfield development by approving two new government gap fund schemes designed to partially replace the Partnership Investment Programme.
The funding schemes aim to regenerate derelict and disused land and will focus on developments with a known end user and on those for the open market.

Announcing the EC approval this week, Hilary Armstrong, minister for local government and the regions, said the schemes were now in effect and would enable land and regeneration projects to be moved forward with the private sector.

She said: "Regional development agencies and English Partnerships will be able to support a wide range of land and regeneration projects.

"Under gap funding, the public sector bridges the gap between development costs and the likely end value, allowing property developers to bring contaminated, derelict and disused sites back into full economic use." The move follows a December 1999 ruling by the European Commission to close the Partnership Investment Programme for being in breach of state aid rules and incompatible with the principles of the common market.

Three other schemes also announced include a direct development initiative and community and environmental regeneration schemes. The RDA's £371m land and property budget will fund the schemes.

From 2002, the RDAs will support these schemes from a single budget, worth £1.55bn in 2002/03.