The recipe for a successful HIF Forward Fund application

But what’s the best recipe to secure funding?

HIF has two components:

• The Marginal Viability Funding to support mature schemes to come on the ground early; and
• The Forward Fund (‘HIF FF’) to provide the necessary funds to progress the business cases for strategic and high-impact infrastructure projects unlocking housing developments.

At SYSTRA, we have extensive experience in developing and assuring business cases which support housing developments from a number of public funds which require WebTAG compliant business cases.

We have helped our clients support their case to secure funds at different stages of a scheme’s development. We have supported schemes with their planning permission in place and/or preparing their application or at earlier stages of the development where the overall scheme and solution are still emerging.

From our experience, we know that schemes are more likely to secure funding if there is evidence that the infrastructure provided increases and enhances the economic output of the development. This includes the efficient use of the transport infrastructure through the provision of safe and sustainable transport links.

Ingredients

Securing funding for a transport scheme through HIF FF requires the following ingredients:

• Strong strategic case and evidence to demonstrate the immediate need for the scheme;
• Deliverability of the scheme;
• Context-specific evidence and robustness of assessments;
• Value for money.

Preparation instructions

The first and key step required for creating a successful HIF bid is a strong strategic case. The main ingredient is being clear about your message namely ‘We need this transport scheme to deliver our housing development targets and we need it NOW’! It should be prominent within the bid that every day passing without the proposed transport scheme in place causes disbenefits to both the public and the local economy.

Furthermore, the proposed scheme should be clear of deliverability issues. This is achieved by providing a thorough project plan and risk assessment including all possible issues.

To make this message clear it needs to be set in the context of the local authority’s strategic approach. The strategic case should present the long term plans of the local authority on how it will make best use of the proposed infrastructure. The economic case presents the evidence that demonstrates the proposed housing development is dependent on the transport. This might be due to conditions within the planning permission or through the transport dependency test as outlined in TAG Unit 2.2 on induced investment (depended development); highlighting that the HIF FF to be provided will unlock this development. The case is even stronger if no housing developments can be delivered with the existing transport provision.

As with all recipes it is important to follow the instruction carefully; namely the requirements of HM Treasury Green Book (October 2018), DCLG appraisal guide and WebTAG. For HIF FF bids, the economic and strategic cases should follow the appropriate economic narrative from the TAG Unit 2.2 to build and support the scheme’s case, as well as providing a rationale for why public finance is required upfront.

The economic case, should have evidence on the cost side of the equation, explaining:
Why developers are not able to finance the cost for the infrastructure and/or land themselves;
If the local authority can recover funding from developers and delivery partners in subsequent years;
If efficiency savings can be made so this money can be retained and recycled in order to help local authorities to achieve more housing delivery in the future.

The benefits side of the equation should include:

• The welfare benefits of the standard economic assessment of transport schemes;
• The land value uplift;
• The social and environmental impacts;
• The transport externalities.

The best results are achieved with a strong and robust assessment of the above as well as a number of sensitivity tests which help to develop a resilient value for money case. This is to ensure that the investment is worth pursuing as it is providing value in any possible future scenario.

The final element to bring everything together is stakeholder engagement (Ministry of Housing, Communities and Local Government, Homes England, developers, local business, local, borough and parish councils). It is important that stakeholders are engaged early in the process to ensure their input can effectively feed into and shape the bid.

SYSTRA have experience of supporting successful funding bids that release housing through Local Pinch Point bids and through devolved funding processes with WebTAG compliant business cases. Alongside more recent work with places bidding for funding through the HIF. We have both the local and strategic modelling capability supported by our WebTAG, economic appraisal expertise and all round business case experience which enable us to develop successful funding bids; all the ingredients to help provide a great HIF FF bid.

Irineos Livadiotes