Surging costs are jeopardising and delaying highway projects connected to new housing supported by Homes England.
The agency provides financial support for new homes and infrastructure projects that open up sites for development, including through the Housing Infrastructure Fund (HIF).
Delayed and shelved schemes include a £10m plan to add a junction to the A361 at Tiverton in North Devon to support the development of 500 homes. Alun Griffiths completed the first phase in 2018 and a year later Homes England agreed to provide Mid Devon District Council with £8.2m from the HIF.
In August 2021, the council warned that the cost had risen by £1.9m but the funding gap reached £3m when contractors sent in bids and the scheme is on hold.
A £30m Southern Connector road linking a development of 8,000 new homes in the New Eastern Villages scheme with the A419 has a £19m HIF grant but has gone £10m over budget and has been delayed.
Homes England has stepped in with extra money on some projects such as the £38.8m Ash Road Bridge in Surrey. The agency provided an extra £13.9m to take total HIF funding to £23.9m, allowing work to progress, but on other schemes councils have stepped in to bridge the funding gap and keep work going.
The A606 North and East Melton Mowbray distributor road will support the development of more than 4,500 homes and was awarded £14.7m HIF funding but costs on the 7km relief road have doubled to £127m. At the end of last year, Leicestershire County Council decided to increase its contribution to £51m towards the scheme to keep work going.
Homes England acknowledged the problems caused by what it called ‘tailwinds from Covid-19 and wider sectoral challenges’ in its 2022 annual report, saying: ‘There have been a handful of scheme withdrawals, and a number of slippages experiences on our Housing Infrastructure Fund.’
Homes England said it was providing local authorities with ‘advice and capacity funding to resolve technical and resourcing issues, where possible’.
To try and gauge the depth of the problem, Highways submitted a Freedom of Information (FOI) enquiry to Homes England last September. The agency was asked to provide a list of all infrastructure projects allocated HIF funding between January 2000 and September 2022, where the recipient has asked for more funding.
FOI requests are due a reply in roughly a month but on four consecutive occasions, Homes England has asked for more time to respond.
In January 2023, the agency said: ‘Homes England is dealing with a high volume of requests at this moment in time, which has had an impact on meeting our response deadline to you.’
Homes England is a major source of highways and infrastructure funding.
Freedom of Information requests from Highways, which have been answered, show that between the start of October 2019 and the end of September 2022, Homes England provided loans totalling £860.1m to ‘unlock’ the development of 69,452 homes.
Private developers that have benefited from infrastructure loans in the past include Keepmoat, St Modwen, Templegate and Wintringham Partners.
With some major housebuilders slowing new project starts due to concerns in the wider economy, this could have the knock-on effect of further slowing highways and infrastructure schemes.
