DLUHC ‘confident’ it will spend £4.2bn fund after just 30% allocated in six years

News03.01.244.30 PM by James Riding

The Department for Levelling Up, Housing and Communities (DLUHC) is “confident” it will spend all £4.2bn of its Housing Infrastructure Fund (HIF), despite news that more than two-thirds remain unspent after six years.

Department for Levelling Up, Housing and Communities’ headquarters in London

DLUHC shares its headquarters with the Home Office in London (picture: Alamy)

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DLUHC ‘confident’ it will spend £4.2bn fund after just 30% allocated in six years #UKhousing

DLUHC is “confident” it will spend all £4.2bn of its Housing Infrastructure Fund, despite news that more than two-thirds remain unspent after six years #UKhousing

The HIF was set up by DLUHC in 2017 to offer local authorities grant funding for key infrastructure, including transport and utilities connections.

However, a Freedom of Information request made by local government researcher Jack Shaw, and reported by the Financial Times this week, has revealed that just £1.3bn – or 31% – of the fund has been spent to date.

In addition, the government confirmed that work had begun on fewer than one in 10 of the promised homes and that it had downgraded the fund’s delivery target from 340,000 to 270,000 homes.

A DLUHC spokesperson told Inside Housing: “We are confident that we will provide all £4.2bn of the Housing Infrastructure Fund to local authorities across all regions of England, unlocking up to 270,000 homes. More than 23,000 homes have already started construction and expenditure is on track.”

The spokesperson continued: “Major infrastructure projects understandably take time to deliver, and we recognise the challenging backdrop that capital programmes have experienced due to cost pressures and other factors.

“We continue to work very closely with Homes England to make sure all the programme budget is spent and the maximum possible housing capacity is unlocked.”

It is understood that a number of schemes withdrew from the fund or had funding pulled after rising build costs led developers to put their plans on hold.

In December, DLUHC pulled funding from a £170m council-led housing scheme in Medway, Kent, over concerns it was no longer deliverable under its current budget.

Meanwhile, inflation has caused projects across the housing sector to stall in recent months. In July, it was reported that DLUHC had handed back hundreds of millions of pounds budgeted for 2022-23 to the Treasury, including £255m of programmed spending for the affordable homes programme for the year.

Many housing associations have lowered their housing delivery targets due to economic pressures.

Last year, large landlords such as Great Places Housing Group and Aster Group renegotiated their strategic partnerships with Homes England to secure more grant funding as a result.