Government withdraws £500m for infrastructure projects intended to help deliver 42,000 homes

The Department for Levelling Up, Housing and Communities (DLUHC) has cancelled £538.8 million in funding for infrastructure projects intended to help deliver than 42,000 homes.

In light of viability concerns, the funding allocated through the Housing Infrastructure Fund (HIF) has been retracted from 16 projects.

 After the approval of funding contracts with local authorities, five significant forward funding projects and 11 smaller marginal viability funding projects have been removed from the HIF programme.

The HIF, worth £4.2bn, was established in 2017 and offers local authorities grant funding for key infrastructure, such as transport and utilities connections, to support new housing developments.

As of January 2024, an FOI found that only £1.3bn out of the £4bn allocated through the HIF has been spent by councils. 

>> See also: Two-thirds of £4.2bn Housing Infrastructure Fund remains unspent

>> See also: DLUHC admits handing £1.9bn of housing funds back to Treasury

The fund has two strands, forward funding (FF) and marginal viability funding (MVF).

FF targets large, strategic and high-impact infrastructure initiatives that will create new homes over the medium and long term.

MVF focuses on smaller projects, aiming to unlock housing by “providing the final piece of infrastructure to unblock an existing project or allocate additional sites”.

A letter from Sarah Healey, permanent secretary of the Department of Levelling Up, Housing and Communities to Clive Betts, chair of the levelling up committee, which was published on Tuesday, Healey stated that the projects were deemed not “deliverable within the parameters of the programme or were withdrawn by the local authority”.

The letter added: “where it becomes clear that a project cannot be delivered within the Fund, it is withdrawn, and the proposed infrastructure will not be delivered at this time. However, we are continuing to work through Homes England to explore other housing and infrastructure options in these areas.”

Healey refers to the withdrawal of Thurrock Council’s Purfleet project as an example, stating that Homes England is working closely with the local council and potential developers to produce proposals that will lead to the regeneration of that part of Essex.

The five forward funding projects that have been withdrawn had been allocated £473.1m through the HIF. The 11 marginal viability funding projects were allocated £65.7m in total. 

Forward funding projects withdrawn

Marginal viability funding projects withdrawn