One Public Estate: Brownfield Land Release Fund (BLRF2) Round 1 details: July 2022 - Round 1 funding now closed

Useful links

• One Public Estate: Brownfield Land Release Fund (BLRF2) July 2022
• How to apply
• Frequently asked questions

One Public Estate (OPE) is a partnership between the Office of Government Property (OGP) in the Cabinet Office (CO), the Local Government Association (LGA) and the Department for Levelling Up, Housing and Communities (DLUHC). Our joint aim is to bring public sector bodies together in order to create better places by using public assets more efficiently, creating service and financial benefits, and releasing land for development to create new homes and jobs in local areas.  

Since 2017, OPE has partnered with DLUHC to deliver the Land Release Fund (LRF) and subsequent Brownfield Land Release Fund (BLRF), a programme that enables councils to bring forward their surplus land for new homes. 

At the Spending Review 2021, the Chancellor announced a £1.8 billion package of investment to regenerate communities and level-up the country, unlocking new homes on derelict and underused brownfield land.

As part of this, up to £180 million Brownfield Land Release Fund 2 (BLRF2) capital grant funding is available to all English councils over a three-year period to support the release of council-owned brownfield land for housing. Mayoral Combined Authorities (MCAs) and the Greater London Authority (GLA) are eligible, as are their constituent councils. 

The BLRF2 will support levelling up ambitions by releasing land for new homes. The fund will support regeneration in places that need it, restoring a sense of community and local pride and spreading opportunity across England so that every place can realise its potential.

OPE Partnerships are now invited to coordinate applications within their areas for the first £40m of BLRF2.

If you have projects that aren’t suitable for BLRF2, we encourage you to consider other funding sources, such as the Levelling-Up Fund, the UK Shared Prosperity Fund and programmes administered by OPE and Homes England. 

OPE Partnerships are now invited to coordinate applications within their areas for BLRF2.
If you have projects that aren’t suitable for BLRF2, we encourage you to consider other funding sources, such as the Levelling-Up Fund, the UK Shared Prosperity Fund and programmes administered by OPE and Homes England. 

To find out more about past BLRF projects, including case studies of successful projects, visit www.local.gov.uk/onepublicestate.

The delivery of high quality new homes across England is a national priority for the UK government and is supported by many councils who are increasingly taking a more hands-on role in the delivery of homes, in order to meet local needs and address their placemaking priorities.  

BLRF2 will enable councils to unlock land for new homes, and at the same time support the UK government’s levelling up ambition by regenerating local places, reducing geographical inequalities, and empowering local leaders to build pride in place.

Since 2017 LRF and BLRF have accelerated the release of council owned land for 2,308 homes to help increase the public sector contribution to land supply and drive innovation in housebuilding. The programme currently supports 284 council projects that are on track to release land for a further 13,000 homes. 

The programme is unique in targeting council-owned small sites that have been previously developed and where viability issues have prevented their development. BLRF allows councils to determine the type, tenure and delivery mechanism for the new homes, drawing on their understanding of local needs. Funding support can enable delivery at pace by bridging these viability challenges and accelerating the release of land for new homes.

The aims of BLRF2 are to: 

• release council-owned land within three years of receiving the funding, for housing development that otherwise would not come forward during that period
• encourage the use of public assets to drive innovative delivery, where possible supporting small and medium-sized enterprises (SME) / Low and Medium Volume Builders (LMVBs), creating new delivery models, supporting high-quality design and adopting modern methods of construction
• demonstrate a return for government investment into these small sites.

The funding will provide up front capital to address viability issues arising from abnormal costs of the proposed development. The type of abnormal costs requiring funding may include but are not limited to:

• site levelling, groundworks, demolition, remediation
• provision of small-scale infrastructure
• highways works or other access challenges
• addressing environmental constraints.

Following on from Self and Custom Build (SCB), BLRF2 will continue to support councils to bring forward serviced self and custom build plots on brownfield land where this can be delivered in line with the fund criteria. Specifically, OPE will look to support councils who can provide replicable exemplars for delivery of serviced plots for self and custom-build housing on council land and stimulate wider delivery of serviced plots, as well as demonstrating support to the SME sector.

Please refer to the FAQs for the UK government’s definition of self and custom build. 

BLRF2 will offer up to £180 million of capital grant funding over three years from 2022/23 to 2024/25 to unlock and accelerate the release of homes. Up to £40 million will be available in 2022/23. 

There is no fixed lower or upper limit for each application. As a guide, the average size of a BLRF project is 57 homes, while the median is 33 homes. Applications will need to detail and evidence their funding requirement against compliant capital costs.  

BLRF2 Round 1 is now closed to applications.

The fund will be open for applications for three years with at least three assessment points during that time. Partnerships may submit an application at any time up to the assessment point. If an application is received later than the assessment point deadline it will be considered under the next one.

Assessment point one - 2022/23

The application timetable is as follows:

• fund opens
• £40 million available
• first assessment point, deadline for applications - 23:59 19 August 2022
• decision on applications and announcement of funding awards - Autumn 2022
• land release milestone - 31st March 2026 . 

Future assessment points - 2023/24 and 2024/25

Future assessment points will be confirmed in due course. Indicative dates are outlined below. Please note these are given for illustrative purposes only and may be subject to change.  

2023/24

• £60 million available
• Assessment point two, deadline for applications - early Spring 2023
• Decision on applications and announcement of funding awards - late Spring 2023
• Land release milestone - to be confirmed 

2024/25

• £80 million available
• Assessment point three, deadline for applications - early Spring 2024
• Decision on applications and announcement of funding awards - late Spring 2024
• Land release milestone - to be confirmed.

BLRF2 is open to all councils across England, specifically: Borough, County, District, London Borough, Metropolitan Borough, Unitary Councils, the GLA and Mayoral Combined Authorities.

Applications must be coordinated by the OPE Partnership and submitted via the designated accountable body of the local OPE Partnership. 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. We will also use publicly available placed-based information, produced by the Office for National Statistics, to help prioritise applications from places most in need of levelling up. 

We encourage applicants to review the FAQs provided, where further information and definitions can be found. The FAQs will be updated throughout the application window as queries are raised by applicants. When applying, applicants should read the fund details, technical annex, FAQs, application form and other supporting documents as a whole, completing the application form and technical annex based on the guidance set out in this suite of documents.  

All applications will be jointly assessed by the OGP, LGA and DLUHC.

The evaluation process will follow three stages:

1. Eligibility criteria (pass/fail)

• The land to which the application relates is defined as previously developed land (brownfield land).
• The land is in council ownership.
• The project must be undertaking capital works on council owned land only.
• The project timings must ensure works contracts for BLRF2 funded activity are signed by 31 March 2023 and evidence of this can be provided by 14 April 2023.
• The project must be able to release land by 31 March 2026. 
• The council can demonstrate a general or specialised housing need. 
• The council or OPE Partnership has informed relevant local MPs of proposed projects and agree to keep them informed of the progress of any application. 
• The project meets One Public Estate’s pre-selection criteria (see below).

2. Gateway criteria (pass/fail)

Applications that meet the stage one eligibility criteria will progress to the gateway stage. This stage will consider:

• evidence of value for money
• evidence of market failure
• evidence of deliverability and mitigation of risk.

3. Project prioritisation criteria

After applications have passed the eligibility and gateway criteria, they will be prioritised and assessed based on the following weighted criteria:

• place based metrics (50 per cent)
• strategic case (35 per cent)
• innovation (10 per cent)
• Public Sector Equality Duty (five per cent).

Further detail on each stage is outlined below. 

Applications will only be considered if the following criteria are satisfied:

1. The land to which the application relates is categorised as brownfield land, i.e. previously developed land (brownfield land) as defined in the Glossary (Annex 2) of the National Planning Policy Framework. 
2. the land is in council ownership at the point of application. For BLRF2 applications that are part of a larger project, or a project where there may be multiple landowners involved, BLRF2 can only fund works on the council owned land.
3. The project must be undertaking capital works for council owned land only.
4. The applicant must ensure any works contracts for BLRF2 funded activity are signed by 31 March 2023 and evidence of this should be provided to to OPE by 14 April 2023. All councils awarded funding will be required to sign a Grant Funding Agreement (GFA). (template GFA available to download shortly). 
5. The project must be able to release land by 31 March 2026.
6. The council can demonstrate a general or specialised housing need. 
7. The council or OPE Partnership has informed relevant local MPs of proposed projects and agree to keep them informed of the progress of any application. 
8. The OPE Partnership must: 
   1. operate an effective partnership board
   2. update all land and property assets (except social housing stock) owned by partnership councils and public sector partners on the ePIMS Lite system (or its successor) by 31 March 2023 and annually thereafter
   3. agree to adhere to reporting arrangements which provide data on project progress and benefits delivery updates
   4. include the council’s S151 officer or chief executive’s sign-off in the application.  

If the project passes the eligibility criteria, it will be considered against the following gateway criteria:

Value for money

A project’s value for money(VfM) is determined using the technical annex.   Applications must achieve a “low/acceptable” value for money category. This is when a project is consistent with a benefit cost ratio (BCR) of 1.0 or above, after both the benefit cost ratio (BCR) and non-monetised impacts (NMIs) are taken into account. There is no minimum BCR score for this assessment. Under BLRF2, this metric is a gateway criterion, where achieving this minimum value for money score allows a project to pass to the next stage of assessment.  

Value for money is assessed through a combination of impacts that are monetised (and estimate a BCR) and a NMI assessment. The BCR will be based on land value uplift and health/distributional benefits related to the provision of any additional affordable housing. This will provide an initial value for money category. NMIs are those impacts that are not monetised in the BCR but may still impact the application’s value for money. Applicants will need to provide information about the impacts applicable to a project; the scale of these impacts, and a proportional amount of evidence to support them. The collective impact of NMIs alongside the BCR score can change the final value for money category and this will be assessed upon submission.

The value for money assessment is undertaken using the published technical annex to be completed as part of the application, and will follow the principles set out in the Treasury five case green book (as amended 2022) and the DCLG Appraisal Guide, 2016. 

Economic appraisal part 1: Benefit Cost Ratio (BCR) 

Part 1 of the economic appraisal will be based on the present value economic benefits of a project, divided by its present value costs to central government. This will generate a benefit cost ratio.

The BLRF2 is targeted at releasing council-owned brownfield land suitable for housing development. The economic benefits of releasing this land will primarily be monetised 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. Health and distributional impacts around the provision of any additional affordable housing will also be monetised. 

It is then necessary to estimate how much of this economic benefit is additional: that is, how much development would have occurred in the absence of the intervention. The application should include evidence to support applicants’ responses to the additionality assessment within the technical annex where relevant, such as: 

• demonstration of clear site-specific market failures, including, where relevant, evidence that the works would not have been undertaken by the private sector
• demonstration that the viability/funding gap could not be solved by reasonable changes to the specification of the project that would be acceptable to the council
• details of existing landowners that might complicate land assembly.
• details of how delivery will be accelerated by this funding.

We only take into account any pre-development costs to government when appraising costs. This will reflect both spending through the BLRF2, and any other funding that is required from central government for the project to go ahead. This will not reflect the council’s own investment.

Economic appraisal part 2: Non-Monetised Impacts (NMIs)

Part 2 of the economic appraisal will be based on the NMIs that can be attributed to the project. NMIs are economic impacts that have not been monetised in Part 1 of the economic appraisal (BCR) because it was not possible or considered proportionate to do so.

Further guidance on NMIs can be found as a downloadable document in the how to apply webpage. 

NMIs should not double count those included in the BCR i.e. land value uplift. They must demonstrate the impact is likely to be additional, that is, would not happen on the site anyway, or displace activity from elsewhere. Applicants should consider the NMIs of the project when completing the technical annex and must ensure they are compliant with Treasury five case green book methodology (as amended 2022). 

NMIs should be described as clearly as possible when completing the technical annex, as the assessment will focus on the scale of the impact and evidence applicable to your application. Please refer to the NMI guidance for examples of a NMI and further information on what is expected from applicants.

Market failure

BLRF2 provides grant funding where viability issues have prevented the release of council-owned brownfield land. Funding is available to unlock a site where market failures are preventing housing from being delivered. Evidence of market failure would include a viability gap, that is to say where the costs associated with unlocking a site are more expensive than the value it generates. The fund cannot be used to support viable projects.

The BLRF2 application should provide evidence of site-specific market failures, including, where relevant, evidence that the site in the present condition would not be delivered by the private sector without public sector funding support. Previous unsuccessful marketing exercises or soft market testing results can be used to support the case. The application should make clear how the funding will address the identified market failures and how, with the funding, these can be mitigated.

Proportionate evidence should be submitted to justify why the project requires government financial support. Ideally, especially for larger projects, a Royal Institute of Chartered Surveyors (RICS) compliant development appraisal should be submitted as part of the application to show the project is currently unviable. Smaller projects could provide alternative evidence of market failure. We recognise that the collation of such evidence can be both time consuming and add additional costs to a project, so we stress that the level of evidence should be proportionate to the size and nature of the project. 

This evidence may include:

• current estimated site value and a short narrative on how this was calculated.
• estimated remediation/abnormal/other costs and a short narrative of how this was reached. This could include direct quotes for work if available, comparable costs for similar works or estimations using standard data sources.  
• estimated site value following BLRF2 funded works and a short narrative on how that figure was reached. The estimated value should be based on a “clean site” with no further costs. The narrative should also state what the planning status of the site will be when sold.    
• for projects over 100 homes and/or requesting more than £750,000 we would normally expect a RICS compliant appraisal. If that cannot be provided, we would need other evidence to understand why that site was not viable.

Where any viability/funding gap could be met by reasonable changes to the specification of the scheme the appraisal should set out how those changes have been considered and why they have been disregarded. Such reasoning would include compliance with a range of council policies and commitments. 

The appraisal should confirm how the total viability gap will be met. If this is to be fully funded by BLRF2 grant funding this should be clearly outlined. If it is to be partially funded by BLRF2, details are required to confirm where the remaining gap funding will come from, whether it has already been secured, and outline details of associated conditions/timescales.

Risks associated with unlocking the site, market failures, viability and development appraisal assumptions should be identified and appropriate mitigation measures included.

Deliverability and risk

Applicants are expected to demonstrate that the land will be released by 31 March 2026. Contracts for works should be signed by 31 March 2023 and evidence of this should be returned to OPE by 14 April 2023. The following delivery aspects should be fully addressed within the application. 

Planning permission

BLRF2 applications must include a short planning statement outlining the planning policy position and planning history for the site. The statement should identify the key planning considerations to be addressed in delivering the BLRF2 funded project.

If the site already has planning permission for the intended BLRF2 project, a copy of the decision notice and s106 agreement is required. If there are conditions still to be discharged or s106 agreements to be signed post decision, timescales for securing planning permission need to be included.

If the proposed route to market is to sell or transfer the site with full or outline planning permission, then the planning statement should specify details of how that consent will be achieved. We would expect to see a project plan for achieving planning permission, including:

1. any pre-application submission work timescale
2. planning submission date
3. determination period
4. estimated decision/committee date
5. planning permission secured date.

The risks associated with securing a timely and deliverable planning consent should be identified and appropriate mitigation measures included.   
We would expect the information around planning to be proportionate to the size and nature of the proposal. 

Works

The BLRF2 funding will provide upfront capital investment in order to create a viable project and can cover abnormal costs that may include:

• site levelling, groundworks, demolition, remediation
• small-scale infrastructure
• highways and access works
• environmental constraints which may include off site works or mitigation.

The funding cannot be used for resource spend (e.g. officer time) or planning application fees and associated costs. BLRF2 covers capital costs for abnormal works that address the defined market failures and will unlock the site for development within the specified timescales. 

Evidence of the cost and duration of works to be covered by BLRF2 should be provided. For larger projects delivering significant on site or off-site infrastructure, quotes for the work with any supporting information would be helpful. If this information is currently unavailable, indicative budgets should be supported by evidence of comparable works or information from other recognised data sources to justify these assumptions.  

The application must specify the way the works are to be procured and the associated timescales for procurement, leading to entering a contract for the works, and when the land will be released for development and construction/completion of the homes to accord with BLRF2 timescales. This may include details on whether the applicant has already procured a contractor; whether they will use a procured contractor panel; or proceed with a full works procurement process. The procurement should be conducted in line with the council's procurement policy.  Applicants should recognise the potential for cost inflation between the date of application and the delivery of works and should base cost estimates on the projected delivery period. The BLRF2 programme will not cover cost overruns.  

The application should also include a project plan (Gantt chart or similar) outlining the procurement process and delivery of the works, as well as how this relates to the marketing and disposal of the site in order to release it for development. We draw applicants' attention to the wording in the example grant funding agreement, which is attached to the prospectus with respect to required timelines for spending the grant.

The risks associated with undertaking the timely and effective procurement and delivery of the works should be identified, and appropriate mitigation measures included. 

Disposal

The project must undertake capital works on council-owned brownfield land. If possible, a copy of the title documents confirming the land is owned by the council should be submitted, together with information on any title issues that require resolution ahead of the site being marketed. 

The funding must enable the release of the land within BLRF2 timescales, or earlier, and address the original market failures. Where a copy of title is not available in order to proceed with the application, a senior council official, such as the S151 officer, is required to confirm the site is in the councils’ ownership.

We would draw councils’ attention to the fact that the Land Registry is currently experiencing delays in registering sites. Should a title need to be registered in order for land to be transferred, even to a wholly council-owned development vehicle, this should be factored into the overall project plan and undertaken early in the project process.   
 
An initial outline of how the council is proposing to market the site and select their delivery partner should be submitted. This should include an indication of the associated timescales for the disposal. 

For applications submitted by 2022/23 assessment point one (19 August 2022), funding must enable the release of the land for housing by 31 March 2026, or earlier. 

Land is released when either:

a) an unconditional contract, development agreement or building licence with a private sector partner is signed or land transfer takes place (whichever is sooner), or;
b) it has transferred to a development vehicle owned, or partly owned, by the council. This could be a council wholly owned housing delivery vehicle or a public–private joint venture, or;
c) if either of the requirements above have not happened, the point at which development begins on site.
d) in the case of self and custom-build, if (a), (b) or (c) do not apply, land is released when contracts are exchanged on the first plot.

Risks associated with disposal of the site in a timely and effective manner should be identified and appropriate mitigation measures included.

If the project passes both eligibility and gateway criteria, it will be prioritised for funding using the following criteria:

Place Based Metrics

Place based metrics carry 50 per cent of the overall weighting.

Both deprivation and productivity data will be used to provide a place based metric score, which will be automatically applied to the application. Applicants are not required to provide evidence to support this element of the application. 

Further details of how this will be calculated are provided below:

• Deprivation: the proportion of lower super output areas in a council that are in the 10 per cent most deprived lower super output areas nationally as per the Index of Multiple Deprivation 2019 – a widely used way of measuring deprivation. This enables the identification of areas with particularly concentrated deprivation that will benefit from holistic regeneration to address complex problems and provide a new economic purpose.
• Productivity: Gross Value Added (GVA) per hour worked (2019), a widely used labour productivity measure. This enables the identification of areas that are performing less well economically than other parts of the country, and which will benefit from regeneration that creates spaces fit for the modern economy.

  These two metrics have been weighted 75:25 per cent in favour of the Index of Multiple Deprivation and ranked. Subsequently, this ranked list was used to calculate the below corresponding score between 0 – 50. The Place based list can be found in the How to apply area

Strategic case

The strategic case carries 35 per cent of the overall weighting, which will be assessed against the opportunity and links to local and national government priorities.

Projects should articulate how, and the degree to which they will: 

• contribute to the delivery of the council’s housing strategy, demonstrate how the proposals meet the up to date local plan objectives including regeneration, design and density and/or meet other relevant council strategies  
• contribute to the delivery of the council’s housing strategy and local plan aspirations, including regeneration, design and density
• support economic recovery
• provide skills and apprenticeships opportunities
• commit to local employment and reduce unemployment
• commit to local suppliers
• meet a particular need e.g. key worker or affordable housing, a mix of tenures, for older people, or projects that will benefit ex-service personnel, homeless or ex-offenders.

Evidence

In assessing the strategic case for a project, to demonstrate a good strategic fit, we would seek evidence of a clear connection between the project and relevant policy/objectives across several key policy areas/objectives such as housing regeneration and economic development.  Project outcomes would clearly contribute to monitored policy goals/outcomes, such as those that support affordable housing. 

Furthermore, supporting documentation would have gone through a process of external consultation and/or scrutiny before becoming official council policy by an appropriate democratic  process. Documents should be as up to date as possible and reflect wider relevant national policy and guidance. For example, where a project meets the requirements of a number of housing and regeneration policies/objectives in an adopted Local Plan, the Local Transport Plan and the council’s Housing Strategy then we would anticipate that such evidence would support a strong strategic fit. 

Evidence needs to be as precise and focused as possible referencing exact policies and objectives rather than broad policy areas/sections or whole documents. Ideally a description of policy names/numbers, a page reference to the document, plus a brief reasoning why they are relevant to the project should be provided.  

Applicants are asked to demonstrate through the Strategic Case that their proposals strongly align with up to date local plan objectives.  The highest possible score for the strategic case will  be awarded to authorities that:

• have an up-to-date Local Plan in place (adopted within the last five years); or
• have completed their Local Plan Review within the 5-year window and determined that their plan remains in date; or 
• who have submitted their Local Plan for independent examination.

And that the project outcomes for each application clearly align with these policies.

Innovation

Innovation carries 10 per cent of the overall weighting.

Projects will be assessed based on innovative models of delivery. Within this, all projects should articulate how they will demonstrate positive local economic impact where possible maximising the involvement of SMEs. Other areas of innovation could include: 

• proposals to take forward development at pace
• proposals to work with private developers who are taking forward modern methods of construction/innovative design
• joint ventures
• joining-up across local authority boundaries
• a commitment to net-zero carbon opportunities
• self and custom build.

Public Sector Equality Duty

The public sector equality duty carries five per cent of the overall weighting.

Projects that guarantee ownership or tenure 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 five per cent increase to their overall score. Examples could include guaranteed ownership or tenure:

• in areas where those sharing one or more protected characteristics have disproportionately low home ownership; and/or 
• in areas where those sharing one or more protected characteristics suffer disproportionately from overcrowding. 

Where applications have not been successful we will work with councils to identify how these can be strengthened, or if there may be other opportunities for development that could be supported through later rounds of the fund. Where an application has passed the gateway criteria but was not funded due to higher prioritised projects, we would welcome a conversation with the council about how best to proceed for future assessment points.

All councils will be required to report on progress of their project. Councils will be required to report against 6 milestones three times a year.  They are:

1. Procurement of infrastructure works; Contractor Commencement Date. This refers to the Funded Works, i.e the infrastructure and remediation works the Grant supports, in accordance with the Bid

2. Commencement of BLRF funded works date. This refers to the first of the Funded Works, if multiple.

3. Completion of BLRF funded works date (last of the Funded Works, if multiple)

4. Date land is to be released
Land can be defined as “released” when:

i) An unconditional contract, development agreement or building license with a private sector partner is signed, or a freehold or leasehold transfer takes place

ii) Land has transferred to a development vehicle owned, or partly owned, by the local authority; or

iii) The point at which development begins on site if (a) and (b) have not happened. 

iv) In the case of self and custom-build, if (a), (b) or (c) do not apply, land is released when contracts are exchanged on the first plot.

5. Expected start on site (new homes)

A “start” is an excavation for strip or trench foundations or for pad footings; digging out and preparation of ground for raft foundations; vibro-flotation, piling, boring for piles or pile driving; or draining work specific to the scheme. 

6. Expected development end date (final housing unit completion).

A template Grant Funding Agreement which includes details on the reporting arrangements is available in the How to apply area.