A new bonds agency, which could save councils more than £1bn in borrowing costs, could be issuing bonds by April 2015 after raising half the capital needed already.
The Local Government Association (LGA) confirmed that £4.5m has already been raised to get the agency off the ground, exceeding the initial fundraising target.
The bonds agency will enable councils to directly raise money for new infrastructure and housing.
Michael Lockwood, executive director of the LGA and director of the Local Capital Finance Company, said: ‘The amount invested in the agency so far has exceeded the initial targets required to make it a feasible proposition. We’re now in the crucial final phase where we start the process of turning these ambitious plans into a reality.
‘This company will be owned by local government and will have the single purpose of reducing councils’ long-term capital financing costs.’
An interim project team of capital market professionals has been appointed to take the agency through the next phase of development.
