New pilot city-regions in Greater Manchester and West Yorkshire were announced in the Budget to support regeneration and the Government will work with them and with other local authorities to allow funding of infrastructure spending by using increased property tax income that results from the improved infrastructure.
The Budget report says the Government will work with councils to explore the feasibility of such an approach.
The New Local Government Network welcomed the move and said it is vital that ministers make early progress on specifying their investment in local economies.
It also welcomed the progress towards "tax increment financing" - the front loading of infrastructure investment.
"I hope they will come to earlier decisions and not delay any pilots for another year," said NLGN director Chris Leslie.
All told action on the environment was limited by the recession. £435m is earmarked for buildings' energy efficiency and £535m for offshore wind.
But the chancellor once again ignored the possibility of cutting VAT on building repair and renovation despite the recent move by the European Union to ensure that it could do so.
"Making this cut, and levying VAT at 15% on building on greenfield land, could have boosted urban regeneration, while protecting our countryside from indiscriminate bulldozing by under-pressure developers," said Campaign to Protect Rural England head of campaigns Ben Stafford.
