The initiative is certainly ambitious, and Javid has said that the funding could help deliver 100,000 new homes across England. The basic premise is that a lack of suitable infrastructure – particularly early on in development schemes – is hindering the viability of housing in areas where it is needed.
Where this is the case, the Government intends to “pump-prime” investment through grant funding for schools, transport links, healthcare centres and digital connectivity where this can make the difference between homes getting built or not.
There are two key strands to the fund; a Marginal Viability Fund targeted at those schemes where infrastructure is the only ‘missing link’ preventing completion, and a Forward Fund designed to finance a small number of strategically important infrastructure projects.
In an echo of the Conservative manifesto commitment to working with ‘ambitious, pro-development’ local authorities, DCLG have promised a ‘highly competitive’ tender process to benefit councils that come forward with bold proposals for driving up the supply of homes.
Land is the key
Taken together with the measures in the Housing White Paper to drive up supply across all tenures, this scheme is a positive step towards a holistic housing policy that understands the mix of factors needed to increase building. As we said when the policy was first announced, it could also be the best way of achieving good returns on public investment.
The initiative is also a welcome attempt to address the viability gap that holds back development, particularly in the different English regions. The crucial point is that for the scheme to work properly, appropriate sites for development need to be identified and unlocked by local authorities.
That requires long-term strategic plans, and in too many areas – notably in the south of England – those plans don’t exist. The measures put forward in the White Paper to drive such plans through are therefore vital if we are to unlock the land we need for housing.
The final point is that there needs to be a rigorous and logical process for allocating the funding where it is needed most. There are so many areas that could make a case for a grant so it is important finance is channelled to where it will make the most impact and create the best return.
As on all infrastructure projects, the cost- and project-management expertise of RICS professionals can help deliver schemes on time and within budget, getting the best value for public money.
Kindly shared by RICS