Housing infrastructure fund - local authorities should be applying for funding now

What is the Housing Infrastructure Fund?

The Housing Infrastructure Fund is a government capital grant programme of up to £2.3 billion, which will help to deliver up to 100,000 new homes in England. The Housing Infrastructure Fund forms part of the £23 billion National Productivity Investment Fund. Both funds were announced by chancellor Philip Hammond in the 2016 Autumn Statement.

Funding will be awarded to local authorities on a highly competitive basis, providing grant funding for new infrastructure that will unlock new homes in the areas of greatest housing demand.

In the DCLG publication entitled "An introduction to the Housing Infrastructure Fund", The Rt Hon Sajid Javid MP stated in his ministerial foreword "We hear time and again that putting infrastructure in early could make all the difference in making new land available and getting homes built. Without the right infrastructure, no new community will thrive – and no existing community will welcome new housing if it places further strain on already stretched local resources.

The British Property Federation policy analysis on the Autumn Statement 2016 commented "The Housing Infrastructure Fund is also welcome news as areas where housing is in greatest need tends to be in areas that desperately need improved infrastructure. The strategic linking of housing and infrastructure will help the sector develop and plan for the long-term".

What is the purpose of the Fund?

The Housing Infrastructure Fund will:

• Deliver new physical infrastructure to support new and existing communities;
• Make more land available for housing in high demand areas, resulting in new additional homes that otherwise would not have been built;
• Support ambitious local authorities who want to step up their plans for growth and make a meaningful difference to overall housing supply; and
• Enable local authorities to recycle the funding for other infrastructure projects, achieving more and delivering new homes in the future.

How does the Fund work?

There are two separate funding streams open to bids from local authorities in England: a Marginal Viability Fund to provide broadly-defined ‘infrastructure’ funding to get additional housing sites allocated or existing sites unblocked, and a Forward Fund (only available to top tier local authorities such as the Greater London Authority, combined authorities or single and upper tier authorities, where they are outside London and combined authority areas) for a small number of strategic and high-impact infrastructure projects.

Bids can be submitted for up to £10m for Marginal Viability proposals, and for up to £250m for strategic Forward Funding proposals.

The Fund is available over four years from 2017/2018 and all funding must be committed by March 2021.

Eligible bids and what they need to demonstrate

The bid must:

• require grant funding to deliver physical infrastructure (not defined but detailed as including transport and travel, utilities, schools, community and healthcare facilities, land assembly, site remediation, heritage infrastructure, digital communications, green infrastructure (parks) and blue infrastructure (flood defences and sustainable drainage systems)) and provide strong evidence that the infrastructure is necessary to unlock new homes and cannot be funded through another route.
• support delivery of an up to date plan or speed up getting one in place.
• have support locally
• provide for the funding to be spent by 2020/21.

The bids should demonstrate how well they meet the following criteria:

• adopting a strategic approach, with strong local leadership and joint working to achieve higher levels of housing growth in the local area, in line with price signals, and supported by clear evidence.
• the proposal is value for money, on the basis of an economic appraisal following the principles set out in the Green Book and the DCLG Appraisal Guide.
• the proposal can be delivered i.e. delivery of the infrastructure and how that will in turn lead to the delivery of new homes. It also means all the key delivery partners need to be working together.

Deadlines for applying for funding

Marginal Viability bids will be assessed through a one stage process. Eligible local authorities can submit business cases online by 28 September 2017. These will be assessed and funding awards announced from late 2017 or early in 2018.

Forward Funding bids are much bigger and will go through a two stage process. Eligible local authorities can put in expressions of interest online by 28 September 2017. These will be assessed and the best will go through to stage two. In stage two, DCLG will provide access to experts and constructive challenge. Local authorities will then develop business cases and submit these in Spring 2018. These will be assessed and funding awards announced from the Summer.

For further information including a "quick start" guide and detailed online guides for the bids, please click here.