Tuesday 4th July saw the launch of the Housing Infrastructure Fund, a Government capital grant programme of up to £2.3 billion available from 2017/18 to 2020/21 by the Communities Secretary, Sajid Javid. The fund is part of the wider £23 billion National Productivity Investment Fund which was initially announced last year by Philip Hammond as part of the Autumn Statement 2016 and targets spending on areas critical to boosting productivity.

Javid, said: “To build the homes this country needs, we need to deliver the right infrastructure in the right place at the right time. By investing in local infrastructure, we can help unlock building thousands of new homes in the areas where they are needed most.”

Local Authorities are being encouraged to bid for the Housing Infrastructure funding which will be awarded on a competitive basis to unlock land to build 100,000 new homes in high demand areas which are currently constrained by a lack of suitable infrastructure. The programme will help to fund vital physical infrastructure projects including building of roads, bridges, schools, transport links, health care centres and to enhance digital connectivity.

There are two strands to the Fund and all funding must be committed by March 2021. The Marginal Viability Fund is targeted at those schemes where infrastructure is the only ‘missing link’ preventing completion. Bids can be made up to £10 million by single and lower tier local authorities who wish to present a business case. Once proposals have been approved, it is expected that local authorities would begin building the necessary infrastructure immediately and for the homes to follow quickly afterwards.

The Forward Fund is designed to finance a small number of strategically important infrastructure projects. Bids can be made for up to £250 million by the uppermost tier of Local Authorities, including the Greater London Authority, Combined Authorities and County Councils where they are outside London and combined authority areas, however, the bidding process is slightly longer and more complex. There is a possibility that higher levels of bids may be awarded in exceptional circumstances where it can be demonstrated a robust case for widespread and transformational delivery of new homes.

All successful bids will have to demonstrate that they are taking a strategic approach, are good value for money and can be delivered. Local Authorities can put in an expression of interest online by 28th September 2017, and Marginal Viability funding will be announced late 2017/early 2018 whilst Forward Funding will be awarded from Summer 2018.

The key to the fund’s successful delivery is selecting appropriate sites for development. There are many areas that could make a case for the grant so it is essential that the money is channelled to where it will have the greatest impact and provide the best return.

The fund will deliver new physical infrastructure to drive the supply for new housing which in turn will support growth in new and existing communities. Some argue that it is one step towards helping to fix the nation’s dysfunctional housing market. Together with the Housing White Paper which seeks to tackle failures at every stage in the system, these initiatives are welcomed by some as bridging the viability gap that currently holds back development and get attractive well-designed homes of all tenures that people want to live in, built at a pace and scale. However, others have criticised the fund for being insufficient and envisage long time lags between the Council receiving the fund and the delivery of the houses. Nonetheless, we remain hopeful for the positive effects of this fund and that new development can come forward at an accelerated pace.


Rachel May

0161 831 5871