CIH 'disappointed' as housing left out of Government's guarantee scheme for infrastructure projects

Published by Jon Land for 24dash.com in Central Government and also in Housing

The Chartered Institute of Housing (CIH) has expressed disappointment that investment in housing has been left out of the list of projects in the Government’s new guarantees scheme for major UK infrastructure projects.

Under the scheme, announced today by the Treasury, the Government is offering to guarantee up to £40bn of private investment for “nationally significant” large infrastructure projects such as transport and energy.

Given that one of the other criteria for applications is that projects must be ready to start within 12 months, CIH director of policy and practice, Gavin Smart believes that not including housing could be considered "a missed opportunity".

Smart said: “It’s important not to be too downhearted. There is a chance that government will look to issue further guarantees with housing being one of the areas targeted.

"CIH will certainly be encouraging government to continue to look at the impact that guarantees for housing investment could have and making the case for the economic benefits.”

Housing Minister Grant Shapps told 24housing on Monday that housing would not feature in the UK Guarantees scheme, despite media speculation, but it is understood a separate announcement is likely to follow "in the weeks to come".

Under the UK Guarantees scheme, the Government will aim to ensure that where major infrastructure projects are struggling to access private finance because of adverse credit conditions, these projects can go ahead.

Applications can be made from today to Infrastructure UK, the HM Treasury body focused on prioritising and enabling investment in UK infrastructure.

Around £40 billion of projects could qualify for the provision of guarantees. These projects could come from a range of sectors including transport, utilities, energy and communications. Eligible projects will be subject to charges, due diligence and as a minimum must meet five key criteria:

• Nationally significant, as identified in the Government’s National Infrastructure Plan 2011. The Government will also consider other exceptional projects of national or economic significance on a case-by-case basis, such as university infrastructure;
• Ready to start construction within 12 months from a guarantee being given and having obtained (or about to obtain) necessary planning and other required consents;
• Financially credible, with equity finance committed and project sponsors willing to accept appropriate restructuring of the project to limit any risk to the taxpayer;
• Dependent on a guarantee to proceed and not otherwise financeable within a reasonable timeframe; and
• Good value to the taxpayer, assessed by HM Treasury to have acceptable credit quality, not present unacceptable fiscal or economic risks and to make a positive impact on economic growth.

The Government says it will consider the most effective form of guarantee on a case-by-case basis using a robust assessment and approvals process.