COUNCILLORS will decide today whether to respond to the economic downturn with a £5 million capital investment in the local economy.

The proposal, which goes before Devon County Council's executive, is aimed at encouraging economic growth by supporting key projects.

The funds will be allocated over three years with £1.7 million proposed for Devon Employment Space Strategy, £1.4 million for Skypark, £700,000 towards ICT Strategy; £450,000 for Renewable Energy for Devon and £750,000 for community infrastructure in coastal towns.

Brian Greenslade, leader of Devon County Council, said: "The current economic climate demands a positive response. The council is determined to fulfil its leadership role within the community and with this investment, we are doing our bit to boost the local economy at what is a difficult time."

Councillor Humphrey Temperley, executive member for strategic planning, regional and international affairs, said: "By concentrating on a small number of vital schemes, this capital investment can have maximum impact on employment levels and Devon's economic development.

"We are committed to doing what we can to support the local economy and this significant investment demonstrates that."

Tim Jones, chairman of Devon and Cornwall Business Council, welcomed the funding. He said: "This is a timely intervention that recognises the gravity of the current economic circumstances.

"Strategic investment in these sectors will give a massive boost of confidence to kick-start the initiatives and encourage the private sector to follow suit." The projects will aim to unlock the potential of brownfield sites for employment. Skypark is expected to generate about 7,500 jobs to the east of Exeter and the Devon Employment Space Strategy will identify sites for future growth.

The council hopes investment in ICT and renewable energy will overcome problems faced by businesses in remote rural areas and on the dependence of imported energy. The aim is to create a series of hubs providing broadband access to reduce commuter miles.

Renewable Energy for Devon (RE4D) is the council-led pilot project offering capital grants to communities and small businesses to install renewable energy technologies. The £450,000 for the project will support about 80 new installations in what is the county's fastest-growing priority sector and would attract a further £1.5 million investment.

After the recent success in attracting grants from the Commission for Architecture and the Built Environment (CABE) Sea Change fund for schemes in Teignmouth, Westward Ho! and Ilfracombe, the funding for coastal communities is aimed at encouraging regeneration groups in other seaside towns including Dawlish, Seaton and Exmouth.

At a later date, the county council executive is expected to look at accessing EU funding to help small businesses.