Fund details

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Applications for this round of funding has now closed

 

Brownfield Land Release Fund

The delivery of new homes across England is a national priority for central government. Local government is equally committed to supporting housing development. Local authorities have established more than 150 housing development companies, demonstrating that local government is taking an increasingly hands-on role in developing their local area.

Since 2017, OPE has partnered with MHCLG to deliver the Land Release Fund (LRF). The LRF has accelerated the release of local authority-owned land for housing to help increase the public sector contribution to land supply and innovation in housebuilding. The LRF currently supports 69 local authority projects which are on track to release land for more than 6,000 homes. Successful projects from a second application round are due to be announced shortly.

The LRF is a unique programme. It targets small sites where viability issues have prevented the release of local authority-owned land for housing delivery. Previous rounds have shown LRF-funded projects can deliver at pace by bridging viability gaps to accelerate the release of land for housing.

The BLRF will support the release of local authority-owned brownfield land for housing, and in addition, the fund will also seek to support self and custom-build projects on both brownfield and greenfield sites.

The BLRF is offering up to £75 million of capital grant funding to unlock and accelerate the release of these sites. Of this, £25 million will be allocated for self and custom-build projects that meet the gateway criteria set out below.

All English local authorities are eligible to apply, with the exception of the seven Mayoral Combined Authorities and their constituent lower tier authorities that have already had the opportunity to receive funding under the £400 million Brownfield Fund. (Greater Manchester, Liverpool City Region, North of Tyne, Sheffield City Region, Tees Valley, West Midlands and West Yorkshire).

The aims of the Brownfield Land Release Fund are to:

  • release local authority owned land by the end of March 2024 for housing development that otherwise would not come forward during that period
     
  • encourage the use of public assets to drive innovative delivery, through SME support, bespoke delivery models, high-quality design and modern methods of construction
     
  • demonstrate a return for Government investment into these small sites
     
  • enable schemes to deliver within the funding timescale.

We expect this funding to be attractive to sites typically accommodating up to 250 homes, but larger sites may be considered by exception. The funding will provide upfront capital to address viability issues arising from abnormal costs of the proposed development. The types of abnormal costs requiring funding may include:

  • site levelling, groundworks, demolition
  • provision of small-scale infrastructure
  • highways works or other access challenges
  • addressing environmental constraints.

Please note that this is not an exhaustive list.   

Self and custom-build

The housing market is dominated by a small number of volume builders and to reach the ambition of delivering 300,000 additional homes per year we must maximise delivery across new and existing sub-sectors, catalysing new tenures and giving consumers greater choice over housing products.

Self and custom-build housing harnesses the power and initiative of individuals to instigate building projects giving them control over the look and feel of their home. Often utilising small sites of little interest to major builders, the sector brings forward housing projects delivered through SMEs and specialist builders, helping to build a more diverse and resilient housebuilding sector, and improving the design and quality of homes as they are built by the people who will live in them.

The Government is committed to increasing the number of self and custom-build homes in this country and to establish this route as a mainstream option for people to access housing or move home.  A key challenge for self and custom builders is the lack of supply of serviced plots. There are often competing priorities for the use of the land and a lack of available capital and revenue funding to bring them forward which can cause demand to outstrip supply. The Self-build and Custom Housebuilding Act (as amended 2016), known as the Right to Build, places a duty on local authorities to support the provision of serviced plots, requiring them to hold a register of people who want to self and custom-build in their area and permission sufficient serviced plots to meet demand within 3 years. The BLRF self and custom-build funding provides support to councils to bring forward serviced self and custom-build plots on their own land.

£25 million of the BLRF fund will be allocated for self and custom-build projects.

We will consider applications for self and custom-build schemes on both brownfield and greenfield sites.

The aims of supporting self and custom-build are to:

  • release local authority owned land by end March 2024 for housing development that otherwise would not come forward during that period. Release of land for self and custom-build plots is the point at which disposal of the first plot takes place.
     
  • provide replicable exemplars for delivery of serviced plots for self and custom-build housing on local authority land and stimulate wider delivery of serviced plots 
     
  • demonstrate a return for Government investment into these small sites
     
  • be confident these schemes will deliver within the funding timescale.

    Funding should address viability issues and market failure in bringing forward serviced plots. The types of costs requiring funding may include:

    • site levelling, groundworks
    • provision of small-scale infrastructure
    • highways works or other access challenges
    • addressing environmental constraints
    • providing services to the plots

    Please note that this is not an exhaustive list.   

    Assessment of applications

    BLRF is open to local authorities across England, other than those in Mayoral Combined Authority (MCA) areas that had the opportunity to receive funding under the £400 million Brownfield Fund.

    Applications should be coordinated by the OPE Partnership and submitted via the designated accountable body of the local OPE programme. We welcome concise, clearly-structured, and well-referenced proposals.

    Our assessment will be based on the material provided within the application template, basic details form and technical annex which contain further guidance. We also encourage applicants to review the FAQs provided, where further information and definitions can be found.

    All applications will be jointly assessed by Cabinet Office, the LGA and MHCLG on a competitive basis. Self and custom-build projects will be assessed separately.

    Applications will be evaluated by applying the following criteria:

    1. Gateway criteria

    We will only consider projects which pass our gateway criteria.

    2. Full assessment against LRF/SCB criteria

    Applications will then be assessed against the full LRF/SCB criteria as below.

    Criteria Weight
    Value for money (see Technical Annex)  
    Benefit Cost Ratio (BCR) based on land value uplift and non-monetised benefits 30%
    Gross Value Added (GVA) per hour worked 10%
    Strategic Case 30%
    Deliverability Assessment 20%
    Innovation 5%
    Public Sector Equality Duty 5%

     

    3. Ranking

    Once the applications have been assessed and scored against the assessment criteria, they will be ranked competitively.

    BLRF reserve list

    Because the BLRF is a finite pot of funding, only the top-scoring applications up to a maximum allocation of £75 million will be offered funding.  However, a ‘reserve list’ of any remaining applications which successfully met the allocation criteria but were unable to be funded in the initial allocation will be maintained.

    If a successful application is later unable to proceed, the funding notionally allocated to that project will be released and offered to the first highest-scoring application(s) on the reserve list.  The actual amount offered will be subject to the amount of funding available at that time.

    Further details of the evaluation criteria are set out below.

    Brownfield Land Release Fund

    1. Brownfield LRF gateway criteria

    Applications will only be considered if the following ‘gateway’ criteria are satisfied:

    • the land to which the application relates is brownfield land, fully owned by the local authority. For schemes of mixed land ownership funding would only be available to support work that delivers local authority land release
    • the project must be undertaking capital works on local authority-owned land only
    • funding must enable the release of the land for housing by end March 2024 or earlier, and must address market failure
    • the works for which funding is sought are deliverable and within a timeframe that will enable the land to be released in time
    • A threshold of 1.5 for Benefits Cost Ratio (BCR) + non-monetised benefits must be reached to proceed further

      The project must provide a BCR of 1.0 or higher. The BCR is calculated using the LRF Technical Annex.

      - Where the BCR is 1.5 or greater, a project will have achieved the gateway criteria

      - Where the BCR is between 1.0-1.5, non-monetised benefits will also be considered as part of the gateway assessment.

      An assessment of non-monetised benefits (with evidence of the scale of the benefit(s)) should be included for all projects as the non-monetised benefits score will form part of the project’s overall score

      All non-monetised benefits will be scored and a maximum of 0.5 can be added to the project BCR

        - BCR + non-monetised benefits will be assessed following the principles set out in the Green Book and the DCLG Appraisal Guide, 2016.

    • Sufficient evidence in support of these assertions must form part of the application
       
    • The applicant is not one of the seven Mayoral Combined Authorities or constituent lower tier authorities that have had opportunity to receive funding under the £400m Brownfield Fund.

    Land is released when:

    a) an unconditional contract, development agreement or building licence with a private sector partner is signed or freehold transfer takes place (whichever is sooner)

    b) it has transferred to a development vehicle owned, or partly owned, by the local authority, this could be a local authority wholly owned housing delivery vehicle or a public–private joint venture

    c) if (A) or (B) have not happened, the point at which development begins on site.

    2. Value for money assessment

    The value for money assessment will carry 40% of the overall weighting by which applications will be ranked. This will take into account benefit cost ratio, non-monetised benefits and gross value added per hour worked.

    Benefit Cost Ratio (BCR) + non-monetised benefits - 30%

    Evidence must be provided to demonstrate that applications represent good value for money on the basis of an economic appraisal and an assessment of non-monetised benefits, following the principles set out in the Green Book (as amended November 2020) and the DCLG Appraisal Guide, 2016. These two elements are described below.

    Economic Appraisal Part 1: Benefit Cost Ratio (BCR)

    Part 1 of the economic appraisal will be based on the present value economic benefits of a scheme divided by its present value costs to government. This will generate a benefit cost ratio.

    a) Economic benefits

    The BLRF is targeted at releasing local authority-owned brownfield land suitable for housing development. The economic benefits of releasing this land will be quantified using land value uplift, which represents the economic benefits of converting land to a more productive use. Land value uplift is calculated by the difference between the value of the land in its new use, minus the value in its previous use. A BLRF Technical Annex has been published alongside the prospectus to be completed as part of the application.

    b) The total land value uplift on a site will provide the gross economic benefit. It will then be necessary to estimate how much of this economic benefit is additional; that is, how much development would have occurred in the absence of the intervention. Therefore your application should include:

    • demonstration of clear site-specific market failure, including, where relevant, evidence that the works would not have been undertaken by the private sector
    • evidence that releasing land for residential development on the site will not displace activity elsewhere, for example due to:

      - market displacement – increases in housing supply that will be off-set by reduced supply elsewhere in the same housing market, due to a limit on the level of private supply that the market can support

      local plan substitution – increases in land allocated for housing that will result in reductions in allocated land elsewhere in the same local authority.

    c) Costs

    In appraising costs, we will only take into account any pre-development costs to central government. This will reflect both spending through the BLRF, and any other funding that has been received from central government. This will not reflect the local authority’s own investment. All costs and benefits will be discounted at the standard rate of 3.5 % p.a.

    Economic Appraisal Part 2: Non-monetised benefits

    Part 2 of the economic appraisal will be based on the non-monetised benefits that can be attributed to the scheme. Non-monetised benefits are economic benefits that have not been monetised in Part 1 of the economic appraisal (BCR) because it was either not possible or was not considered proportionate to do so. Examples of non-monetised benefits include visual amenity benefits from developing a brownfield site, where there is evidence of benefit to existing households in the area, and benefits from the provision from affordable housing, which are additional to the benefits of new housing supply captured through land value uplift. Non-monetised benefits should not double-count those which have been included in the BCR, i.e. land value uplift.

    Applicants should consider the non-monetised benefits that the project will deliver and must ensure they are compliant with HMT Green Book methodology (as amended November 2020).

    Non-monetised benefits should be described as clearly as possible within the application; the assessment will focus upon the impact of the non-monetised benefits, their scale, and evidence to support this.

    All applicants should set out the non-monetised benefits that their project will deliver, showing how they will contribute to the Value for Money score of the project. Please refer to the FAQs for an example of a non-monetised benefit and further information on what is expected from applicants.

    Gross value added (GVA) per hour worked- 10%

    GVA per hour worked is a measure of average productivity of an area and supplements the assessment of value for money using BCR and non-monetised benefits. Regions will be ranked by GVA and will be awarded higher scores if they have a lower GVA and lower scores if they have a higher GVA as part of the assessment. For information, the GVA per hour worked for the project, based on the Nomenclature of Territorial Units for Statistics (NUTS2) region the local authority selected lies within, is produced within the technical annex.

    Applicants are not required to provide any further detail.

    3. Strategic case

    The strategic case carries 30% of the overall weighting which will be assessed against the opportunity and links to local and national government priorities.

    Priority will be given to applications that align with the Government’s ambition to level up and the degree to which projects will support deprived areas of the country. We also expect to see the degree to which projects will: support economic recovery; provide skills and apprenticeships opportunities; commit to local employment and reduce unemployment; commit to local suppliers; and meet a particular need e.g. key worker or affordable housing, a mix of tenures, for older people, or schemes that will benefit ex-service personnel, homeless or ex-offenders.

    4. Deliverability assessment

    The deliverability assessment carries 20% of the overall weighting. Funding must enable the release of land for housing before the end of March 2024. Proposals will be assessed based on the assurance of deliverability which has been provided within the application template. 

    We expect to see a detailed project plan identifying key milestones, alongside a clear forecast of outputs.

    You may also wish to consider providing supporting evidence including:

    • a development appraisal produced by an appropriately qualified professional (external or in-house) demonstrating the viability gap on the site
    • evidence of costed works proposed to be covered by BLRF grant funding, by an appropriately qualified professional/external professional body.

    Our assessment will also consider risk. We expect to see a detailed assessment of key risks associated with the project with appropriate mitigations alongside risk management processes.

    5. Innovation assessment

    The innovation assessment carries 5% of the overall weighting.  Projects will be assessed based on innovative models of delivery. Within this, all projects should explain how they will maximise the use of SMEs in order to help demonstrate positive local economic impact. Other areas of innovation could include:

    • proposals to take forward development at pace
    • proposals to work with private developers who are taking forward modern methods of construction/innovative design
    • a commitment to net-zero carbon opportunities
    • joint ventures
    • a commitment to net-zero carbon opportunities
    • joining-up across local authority boundaries.
    6. Public sector equality duty

    This carries 5% of the overall weighting. Schemes which highlight a positive impact for people who share one or more protected characteristics (as defined in the Equality Act 2010) in the local area who struggle to attain appropriate housing will be given a 5% increase to their overall score. Examples of a positive impact could include:

    • proposals to bring forward development in areas where those share one or more protected characteristics have disproportionately low home ownership
    • proposals in areas where those share one or more protected characteristics suffer disproportionately from overcrowding.

    Self and custom-build

    1. Self and custom-build Gateway Criteria

    Applications will only be considered if the following ‘gateway’ criteria are satisfied:

    • The land to which the application relates must be fully owned by the local authority. For schemes of mixed land ownership, funding would only be available to support work that delivers local authority land release. The land can be both brownfield and greenfield land
    • The project must be undertaking capital works on local authority-owned land only
    • funding must enable the sale of the first self and custom-build plot for housing by end March 2024 or earlier, and must address market failure
    • the works for which funding is sought are deliverable and within a timeframe that will enable the land to be released by March 2024.
    • A threshold of 1.5 for Benefit Cost Ratio (BCR) + non-monetised must be reached to proceed further.

      o The project must provide a BCR of 1.0 or higher. The BCR is calculated using the LRF Technical Annex

      o Where the BCR is 1.5 or greater, a project will have met the gateway criteria

      o Where the BCR is between 1.0-1.5, non-monetised benefits will also be considered as part of the gateway assessment.

      o An assessment of non-monetised benefits (with evidence of the scale of the benefit(s)) should be included for all projects as the non-monetised benefits score will form part of the project's overall score

      o All non-monetised benefits will be scored and a maximum of 0.5 can be added to the project BCR

      o BCR + non-monetised benefits will be assessed following the principles set out in the Green Book (as amended November 2020) and the DCLG Appraisal Guide, 2016.

    • sufficient evidence in support of these assertions must form part of the application
    • the applicant is not one of the seven Mayoral Combined Authorities or constituent lower tier authorities that have had the opportunity to receive funding under the £400m Brownfield Fund.
    2. Value for money assessment

    The value for money assessment will carry 40% of the overall weighting by which applications will be ranked. This will take into account benefit cost ratio, non-monetised benefits and gross value added per hour worked.

    Benefit Cost Ratio (BCR) + non-monetised benefits - 30%

    Evidence must be given that applications represent good value for money on the basis of an economic appraisal and an assessment of non-monetised benefits, following the principles set out in the Green Book (as amended November 2020) and the DCLG Appraisal Guide, 2016. These two elements are described below.

    Economic Appraisal Part 1: Benefit Cost Ratio (BCR)

    Part 1 of the economic appraisal will be based on the present value economic benefits of a scheme divided by its present value costs to government. This will generate a benefit cost ratio.

    a) Economic benefits
    The fund is targeted at releasing local authority-owned land that is suitable for housing development. The economic benefits of releasing this land will be quantified using land value uplift, which represents the economic benefits of converting land to a more productive use. Land value uplift is calculated by the difference between the value of the land in its new use, minus the value in its previous use. A BLRF Technical Annex has been published alongside the prospectus to be completed as part of the application.

    b) The total land value uplift on a site will provide the gross economic benefit. It will then be necessary to estimate how much of this economic benefit is additional; that is, how much development would have occurred in the absence of the intervention. Therefore your application should include: Demonstration of clear site-specific market failure, including, where relevant, evidence that the works would not have been undertaken by the private sector Evidence that releasing land for residential development on the site will not displace activity elsewhere, for example due to:

    - Market displacement – increases in housing supply that will be off-set by reduced supply elsewhere in the same housing market, due to a limit on the level of private supply that the market can support

    - Local plan substitution - increases in land allocated for housing that will result in reductions in allocated land elsewhere in the same local authority.

    c) Costs
    In appraising costs, we will only take into account any pre-development costs to central government. This will reflect both spending through the BLRF, and any other funding that has been received from central government. This will not reflect any money spent or recovered by the local authority. All costs and benefits will be discounted at the standard rate of 3.5 % p.a.

    Economic Appraisal Part 2: Non-monetised benefits

    Part 2 of the economic appraisal will be based on the non-monetised benefits that can be attributed to the scheme. Non-monetised benefits are economic benefits that have not been monetised in Part 1 of the economic appraisal (BCR) because it was either not possible or was not considered proportionate to do so. Examples of non-monetised benefits include visual amenity benefits from developing a brownfield site, where there is evidence of benefit to existing households in the area, and benefits from the provision from affordable housing, which are additional to the benefits of new housing supply captured through land value uplift. Non-monetised benefits should not double-count those which have been included in the BCR, i.e. land value uplift.

    Applicants should consider the non-monetised benefits that the project will deliver and must ensure they are compliant with HMT Green Book methodology (as amended November 2020).

    Non-monetised benefits should be described as clearly as possible within the application; the assessment will focus upon the impact of the non-monetised benefits, their scale, and evidence to support this.

    All applicants should set out the non-monetised benefits that their project will deliver, showing how they will contribute to the Value for Money score of the project. Please refer to the FAQs for an example of a non-monetised benefit and further information on what is expected from applicants.

    Gross value added (GVA) - 10%

    GVA per hour worked is a measure of average productivity of an area and supplements the assessment of value for money using BCR and non-monetised benefits. Regions will be ranked by GVA and will be awarded higher scores if they have a lower GVA and lower scores if they have a higher GVA as part of the assessment. The GVA per hour worked for the project, based on the Nomenclature of Territorial Units for Statistics (NUTS2) region the local authority selected falls into, is produced within the technical annex.

    Applicants are not required to provide any further detail.

    3. Strategic case

    The strategic case carries 30% of the overall weighting which will be assessed against the opportunity and links to local and national government priorities.

    Priority will be given to applications that align with the Government’s ambition to level up and the degree to which projects will support deprived areas of the country. We also expect to see the degree to which projects will: support economic recovery; provide skills and apprenticeships opportunities; commit to local employment and reduce unemployment; commit to local suppliers; and meet a particular need e.g. key worker or affordable housing, a mix of tenures, for older people, or schemes that will benefit ex-service personnel, homeless or ex-offenders.

    Applications will also be assessed as to whether the projects may be promoted as exemplars, showcasing self and custom-build as a deliverable option in a range of settings - including rural and urban, and high / low density; sharing learning and experiences with other authorities to encourage understanding in delivery of self and custom-build.

    4. Deliverability assessment

    The deliverability assessment carries 20% of the overall weighting. Funding must enable the sale of the first plot for housing before the end of March 2024. Proposals will be assessed based on the assurance of deliverability which has been provided within the application template. 

    We expect to see a detailed project plan identifying key milestones, alongside a clear forecast of outputs. Local authorities that can demonstrate a strong track record of delivery will score more highly.

    You may also wish to consider providing supporting evidence including:

    • A development appraisal produced by an appropriately qualified professional (external or in-house) demonstrating the viability gap on the site
    • Evidence of costed works proposed to be covered by grant funding, by an appropriately qualified professional/external professional body.

    Our assessment will also consider risk. We expect to see a detailed assessment of risks associated with the project with appropriate mitigations alongside risk management processes. A development appraisal produced by an appropriately qualified professional (external or in-house) demonstrating the viability gap on the site Evidence of costed works proposed to be covered by grant funding, by an appropriately qualified professional/external professional body.

    5. Innovation assessment

    The innovation assessment carries 5% of the overall weighting. Projects will be assessed based on innovative models of delivery. Within this, all projects should explain how they will maximise the use of SMEs in order to help demonstrate positive local economic impact.  Other areas of innovation could include:

    • Proposals to take forward development at pace
    • Proposals for development to be taken forward by small and medium enterprises
    • Proposals to work with private developers who are taking forward modern methods of construction/innovative design
    • A commitment to net-zero carbon opportunities
    • Joint ventures
    • Joining-up across local authority boundaries
    • Adoption of design policies, design codes
    6. Public sector equality duty

    This carries 5% of the overall weighting. Schemes which highlight a positive impact for people who share one or more protected characteristics (as defined in the Equality Act 2010) in the local area who struggle to attain appropriate housing will be given a 5% increase to their overall score. Examples of a positive impact could include:

    • proposals to bring forward development in areas where those share one or more protected characteristics have disproportionately low home ownership
    • proposals in areas where those share one or more protected characteristics suffer disproportionately from overcrowding.