A new £32m fund is set to be created by Southampton City Council with the aim of “accelerating economic growth”.

The Labour-run local authority has published details of a revolving regeneration fund (RRF) as part of its capital strategy for the next five years.

If approved by full council next week, £8 million will be invested across the city per year up to 2028/29.

An officer report on the capital strategy said: “This fund will be a catalyst for transformative regeneration projects, leveraging public and private sector investment to revitalise key areas and create sustainable development.

“By establishing a RRF, Southampton City Council can unlock its full potential, drive sustainable economic growth, and create a vibrant, prosperous city for future generations.

“At the same time this fund should drive increased council tax and business rate bases.”

Initial investment in 2025/26 would be a “seed fund” to kick start the scheme.

This will demonstrate to external investors that the local authority is serious about the delivery of the recently launched renaissance masterplan, the report said.

Expected outcomes from the fund include job creation, economic growth, increased tax revenue and improved quality of life.

Deputy leader and cabinet member for finance Cllr Simon Letts said the fund represented a “significant” capital scheme which aimed to bring external investment into the city, leading to homes being built and businesses opening.

“We are looking at targets, in line with government policy, to grow our business rates and council tax through city growth,” Cllr Letts said.

The first two years of the RRF would be financed from council capital resources, with investment in 2027/28 and 2028/29 assumed to be self-funding through a proportion of the increased business rates and council tax revenue,  as well as capital receipts from the sale of assets and increased external funding.

A formal review on the effectiveness of the programme would take place after two years, while each investment project would be subject to business case approval from the council’s capital board.