What is the Housing Infrastructure Fund and why is it needed?
The recently launched £2.3 billion Housing Infrastructure Fund (HIF) is designed to help local authorities finance infrastructure development that can accelerate housebuilding and help to deliver 100,000 new homes in England. HIF is part of the government’s wider £23bn National Productivity Investment Fund, announced in the Autumn Statement 2016, which targets spending on areas critical to boosting productivity. Given the scale of the national housing crisis, HIF has been widely hailed as a ‘step in the right direction’ and recognition of the important role housing plays in facilitating growth – a theme regularly identified in ekosgen’s work.
Across the North of England in particular, we find that there is an ongoing need for grant funding to unlock schemes and address viability challenges where high jobs growth targets are sought, new homes are needed to accommodate a growing (and at times changing) workforce and infrastructure investment is required to facilitate development. Insufficient levels of housing development poses a significant risk to economic growth and sustainability and, alongside planning reforms. HIF could be a helpful addition to the range of tools available to support delivery of local economic ambitions.
What does the fund offer?
The fund is open to local authorities to bid for a share of the funding which is divided into two parts:
A Marginal Viability Fund is a welcome attempt to address the viability gap which holds back development. The fund is designed to get housebuilding started quickly on sites where the upfront costs of putting in the infrastructure are financially prohibitive. These schemes will be well advanced – typically with planning permission in place for the infrastructure and the housing, and the majority of funding already secured or identified. The Fund will be used to provide the final, or missing, funding injection required to enable infrastructure to build out soon after schemes have been awarded funding, and for new homes to follow at pace.
A Forward Fund seeks to support a small number of strategic and high-impact infrastructure projects. This may include committing the first element of the funding package, which then gives the market confidence to provide further investment and make more land available for development and future homes. A Forward Funding scheme could support a development as large as a new garden city or town, an urban extension, or the development of a number of brownfield sites that will deliver a significant number of homes.
How can local authorities apply?
The fund is available over four years from 2017/18 to 2020/21 and local authorities are invited to submit bids for up to £10 million for Marginal Viability proposals (single and lower tier authorities) and up to £250 million for Forward Funding Proposals (uppermost tier local authorities only, e.g. combined authorities to reflect the strategic nature of schemes sought). Eligible bids must:
How can ekosgen help you?
HIF is expected to be highly competitive, and applicants have been encouraged to develop ‘bold’ proposals. In order to deliver transformational change, HIF will need to be targeted in the areas where it can deliver maximum impact, and business cases will be closely scrutinised to ensure they offer value for money and unlock wider benefits.
ekosgen works with a diverse range of clients to help them shape their proposals and secure external funding or investment. We are regularly retained to prepare business cases and appraisals for all types of project for both public and private clients including large-scale infrastructure investment and complex regeneration projects. We work closely with our clients to present compelling cases for intervention which meet funders’ requirements, and which are supported by robust research, market testing, options appraisal, risk assessment, financial modelling and quantification of outcomes and impacts.
The online application forms are due to go live this month. Business cases for the HIF Marginal Viability Fund are due by 28th September 2017, and by Spring 2018 for the Forward Fund.
If you require support with preparing a business case for HIF or other investment, please contact a member of our consultancy team in Sheffield or Manchester on 0845 644 5407 or 0845 644 3023.