Applications are now closed
Self and Custom-Build is a growing sector which the Government is committed to supporting. 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 causes demand to outstrip supply. The Bacon Review recommends the use of suitable public land for the creation of serviced building plots in order to support the development of this emerging housing market. This funding provides support to local authorities to bring forward serviced self and custom-build plots.
Building on the first round of S&CB funding, we are now seeking further projects to come forward. The fund targets small sites facing viability issues which have prevented the release of local authority-owned land for S&CB housing delivery.
The S&CB2 fund is offering c.£20 million of capital grant funding to unlock and accelerate the release of these sites.
All English local authorities are eligible to apply and both brownfield and greenfield sites will be accepted.
The aims of supporting self and custom-build are to:
- release local authority owned land by end September 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.
- 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.
In response to feedback received from the first round, the fund’s eligibility criteria has expanded and is now open to all local authorities in England, including Mayoral Combined Authorities.
Self and Custom-Build (S&CB) applications
The S&CB fund is open to all local authorities in England. This now includes LAs who are constituent members of MCAs (Mayoral Combined Authorities).
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 DLUHC on a competitive basis. Applications will be evaluated by applying the following criteria:
Gateway criteria
Applications will only be considered if the following ‘gateway’ criteria are satisfied:
- the land to which the application relates can be both brownfield and greenfield land, but 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 project must be undertaking capital works on local authority-owned land only
- funding must enable the sale of the first S&CB plot for housing by end September 2024 or earlier
- funding must address market failure for the scheme
- the works for which funding is sought are deliverable and within a timeframe that will enable the land to be released by September 2024.
- A total Benefit Cost Ratio (BCR) + non-monetised benefit gateway of 1.5 must be reached for a project to proceed to assessment.
- The project must provide an S&CB Technical Annex BCR of 1.0 or higher.
- Where the S&CB Technical Annex BCR is 1.5 or greater, the project will have achieved the BCR criterion.
- Where the S&CB Technical Annex BCR is between 1.0-1.4, non-monetised benefits will be necessary to reach the 1.5 gateway.
- Evidence should be provided for all non-monetised benefits, including the scale of the benefit.
- All non-monetised benefits will be scored and a maximum of 0.5 can be added to the S&CB Technical Annex BCR.
- The BCR and non-monetised benefits will be assessed following the principles set out in the Green Book (as amended November 2020) and the Department for Communities and Local Government Appraisal Guide, 2016.
- sufficient evidence in support of these assertions must form part of the application. Further information and examples of best practice can be found in the FAQs.
Full assessment against S&CB criteria
Applications will then be assessed against the full S&CB 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% |
- 1. Value for money assessment
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The value for money assessment will carry 40% of the overall weighting by which applications will be ranked.
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.
Applications will be ranked competitively, and those with sufficient value for money and the best overall scores will be more successful.
Benefit Cost Ratio (BCR) economic appraisal
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. These two elements are described below.
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. An S&CB Technical Annex has been published alongside the prospectus setting out in detail what information local authorities should provide. 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 genuinely additional; that is, how much development would have occurred in the absence of the intervention. This 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.
b) Costs
In appraising costs, we will only take into account any pre-development costs to central government. This will reflect both spending through the S&CB, 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.
Benefit Cost Ratio (BCR) non-monetised benefits
Non-monetised benefits are economic benefits additional to social welfare that have not been monetised in the appraisal, either because it was not considered proportionate to monetise these benefits or it is not feasible to do so. Non-monetised benefits should also not double count with benefits included in the BCR, i.e. land value uplift.
Applicants should consider the non-monetised benefits which the project will deliver and which are compliant with HMT Green Book methodology.
Non-monetised benefits should be described 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 these non-monetised benefits their project will deliver as 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 for information.
Applicants are not required to provide any further detail.
- 2. Strategic case
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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; and commit to local suppliers.
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 meeting local housing need.
- 3. Deliverability Assessment
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The deliverability assessment carries 20% of the overall weighting. Funding must enable the sale of the first plot for housing before the end of September 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.
- 4. Innovation assessment
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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.
- 5. Public sector equality duty
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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.
Ranking
Once the applications have been assessed and scored against the assessment criteria, they will be ranked competitively.
Reserve list
Because S&CB funding is a finite pot, only the top-scoring applications up to a maximum allocation of £20 million will be offered funding and invited to proceed to contract. 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 released at that time.