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'Welcome intervention' from government on housing-related infrastructure, says expert

Out-Law News | 05 Jul 2017 | 1:13 pm | 2 min. read

Local authorities in England can now bid for a share of £2.3 billion in funding for infrastructure projects which will help speed up the delivery of new homes.

The Housing Infrastructure Fund (HIF), which was initially announced in November, could ultimately support the delivery of 100,000 new homes by funding the new roads, schools, energy networks and digital infrastructure required to support housebuilding, according to communities secretary Sajid Javid.

Housing law expert Iain Gilbey of Pinsent Masons, the law firm behind Out-Law.com, said that the launch of the fund would "come as welcome news to those local authorities focused on joined-up infrastructure and housing delivery". However, he said that local authorities would need support, as well as funding, if the money was to meet its stated purposes.

"The responsibility for delivery of the resulting infrastructure will rest with the bidding local authorities, and that is likely to be where the real delay sits," he said. "Local authorities will need support in ensuring that they have the necessary skills and infrastructure to take these projects forward. That will, in most cases, require either a formal procurement process or partnership working with private sector development partners."

"As such, whilst increased funding is to be welcomed, the real test will be the speed at which local authorities are then able to 'tool up', deliver, and thereby unlock the related housing. The first round of bids, and their success, will be crucial," he said.

HIF awards will be made in the form of capital grants from one of two funding 'pots', according to supporting documents published by the Department for Communities and Local Government (DCLG). The first will be for 'marginally viability funding', with the idea that successful awards will be used to provide the final, or missing, piece of infrastructure funding in order to 'un-block' a particular planned housing development. The second, 'forward funding', pot, will be used for a small number of "strategic and high-impact infrastructure schemes".

Marginal viability funding will be open to all authorities, with awards of up to £10 million expected to be made. However, only 'higher tier' authorities such as the Greater London Authority (GLA) and the combined authorities will be able to bid for the forward funding, with awards of up to £250m expected to be made.

HIF funding will be made available over four years from 2017/18 to 2020/21, and all funding must be committed by March 2021. The government is currently seeking marginal viability proposals to be spent in financial year 2017/18. Local authorities must apply by 28 September 2017.

The government expects local authorities that have been awarded funding to begin building the necessary infrastructure immediately. New homes should then follow quickly afterwards, according to the announcement.

"Given the dismal picture in relation to affordable housing, the launch of the HIF is obviously good news," said infrastructure law expert Jonathan Hart of Pinsent Masons. "The fact that the government has made the important connection between housing and other, necessary, social infrastructure is also a good sign; demonstrating the potential 'joined up' approach that has been sadly lacking the past and echoing the step-change that the National Infrastructure Commission is seeking to introduce to planning for economic infrastructure."

"However, this isn't just about policy and planning - or even money, for that matter - but delivery, and bringing forward opportunities. Successive governments' routes effectively to expand the housing market are littered with false dawns and failures. It remains to be seen whether this latest development is more of the same, or something different," he said.