Acting as lead consultant for the Housing Infrastructure Fund

The £5bn Housing Infrastructure Fund (HIF) is one of the Government’s flagship programmes geared towards supporting the delivery of 300,000 new homes a year. The £4bn+ Forward Fund (FF) component of the scheme has been designed to increase housing supply by unlocking new homes through a better coordinated approach to strategic infrastructure planning, investment and delivery.

Local Authorities submitted FF EOIs in September 2017 and around 70 bids, covering 45 local authority areas, were shortlisted by MHCLG and Homes England. Shortlisted bidders were required to develop full business cases during a period of ‘Co-Development’ (working in partnership with Homes England and MHCLG) and to submit their final cases in one of three bidding windows: September 2018, December 2018 and March 2019. Around 50 business cases were submitted at the final window. A small number of successful bids have been announced and the remainder of bids are currently being moderated, pending funding decisions anticipated in later 2019.  

Given the high proportion of funding requested in relation to transport infrastructure and the potential impact of the new homes on the transport network, MHCLG has been working closely with DfT in developing and appraising the bids.

Phase 1 Co-development (June 2018-March 2019)

Steer Economic Development was appointed by Homes England and MHCLG to provide Lead Consultant services to provide technical housing economics support for c. 70 HIF projects. The purpose/scope of our role included:

• support development of Economic Cases, as part of the preparation of wider business cases to help ensure consistency in the interpretation and application of HIF Guidance, which combines MHCLG and DfT (WebTag) appraisal guidance;
• interrogate and challenge bidder assumptions, in particular in relation to additionality assumptions and Land Value Uplift calculations and also around market failure, risks and optimism bias;
• build technical housing and transport economics capacity within local authorities and their project teams including through provision of ongoing technical support to advise on methodological queries;
• help ensure alignment between the Economic Case and other dimensions of the Business Case; and
• provide an interface between local authority bidders and the MHCLG/Homes England economics teams.

Phase 2 Moderation (April 2019-February 2020)

Steer Economic Development was appointed by MHCLG to provide Lead Consultant services to provide technical housing economics and programme management support to lead the moderation of c.50 HIF bids (submitted at the March deadline). The purpose/scope of our role was to:

• prepare and present robust Value for Money Assessments to the cross-departmental HIF Investment Panel;
• challenge, clarify and moderate core assumptions within the Economic Cases, most notably around establishing dependency, additionality and LVU calculations;
• provide technical housing and transport economics support to a team of housing economists to ensure consistency in bid appraisal; and
• provide the interface between MHCLG economists and local authority bidders.