Today, I have laid before Parliament a departmental minute setting out the details of a contingent liability that the Department for Levelling Up, Housing and Communities intends to incur under the Infrastructure (Financial Assistance) Act 2012. By expanding the capacity of the existing affordable homes guarantee scheme 2020 from £3 billion to £6 billion, the Department increases its capacity to create contingent liabilities.
The expanded affordable homes guarantee scheme—announced at the autumn statement 2023—will continue to be delivered by ARA Venn on behalf of the Department under the oversight of Homes England. The delivery partner has been managing the scheme since 2020 and was appointed through a fair, open and competitive procurement process. Contracts for the management of the expanded scheme have now been signed with the delivery partner and the expanded scheme opened for business on 12 February 2024. In delivering the scheme, the delivery partner will raise capital from bond market investors and on-lend the proceeds to registered providers of affordable housing in England. The Department will guarantee both the principal and interest cash flows to investors.
Through the scheme the Government will continue to boost investment in providers of affordable housing and support the delivery of a significant number of new affordable homes for those whose housing needs are not currently met by the market. The expansion will support a further 4,000 new homes, bringing the total estimated number of new homes supported by the scheme to 27,000. The expansion also allows eligible spend to include upgrading existing housing stock, increasing the scope of the scheme to include retrofit, decency, and building safety. This will support registered providers to meet the decent homes standard, as well as their net zero obligations, alongside developing new homes.
This expansion sits alongside the Government’s wider set of policies to support affordable housing, including our flagship £11.5 billion affordable homes programme as well as the investment of billions of pounds in infra- structure to support the delivery of new homes since the start of this Parliament through schemes including the £4.2 billion housing infrastructure fund and the £1 billion brownfield, infrastructure and land fund. Collectively, these schemes will deliver tens of thousands of new homes and unlock tens of billions of pounds in private investment.
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