Three local authorities have now dropped out of the Government's flagship Housing Infrastructure Fund (HIF), it has emerged.

Homes England, the Government's housing agency, confirmed that bids for Essex CC's Colchester Braintree Borders garden community, Suffolk CC's strategic highways works east of Ipswich and London's regeneration of Old Oak have all been withdrawn.

The councils walked away from receiving ‘forward funding,' which had been due to be targeted at large, strategic and high-impact infrastructure projects aimed to ‘unlock' new homes in the medium and longer-term.

Two other successful bids – £29.4m for Rutland CC's St George's Barracks garden village and £14.7m for Leicestershire CC's Melton Mowbray southern distributor road - have yet to finalise contracts almost four years after the fund was first announced.

One reason for projects failing to get across the line – cited by some Rutland councillors - could be the wide-ranging pre-contract conditions imposed by the Ministry of Housing, Communities and Local Government (MHCLG) – such as for funding to have been drawn down by the end of 2024.

This led Rutland to reject the cash, with one councillor warning the council would be financially liable and ‘risked bankruptcy' if the scheme could not be completed by the deadline.

An evaluation scoping report for the Government, published last month, warned: ‘If local authorities are not able to complete these pre-funding activities there would be a risk that funding will never be made available.'

Shadow minister for housing and planning, Mike Amesbury, said: ‘Like so many of this government's housing promises, the HIF is shaping up to be a promise the Tories couldn't deliver.

'The £5bn HIF is the latest poorly-designed policy, which is now unravelling.'

In an essay collection for think-tank Localis last year, chairman of the Local Government Association's housing board, Cllr David Renard, called on the Government to ‘expedite payment of outstanding HIF allocations, relax conditions so that councils can focus on delivery, and extend deadlines and flexibilities on completion timescales'.

MHCLG has described the HIF, which originally awarded funding to 34 local authorities, as an ‘integral part of measures to facilitate increased housing supply'.