The Department for Communities and Local Government (DCLG) fund, launched by former housing minister Grant Shapps last May, offers cash to community groups that want to prepare submissions for Community Right to Build (CRB) orders.
Part of the Localism Act that came into force last April, the CRB allows communities to grant planning permission for new buildings, sidestepping the normal planning application process.
However, the proposals must be independently examined and receive the backing of more than 50 per cent of voters in a local referendum before they are approved.
Applications to the fund are handled by housing and regeneration quango the Homes & Communities Agency (HCA) and the Greater London Authority (GLA), outside and inside the capital respectively. The HCA manages £17 million of the funding, with the GLA managing the remaining £3 million.
Both organisations told Planning they have received only two applications each, though they would not reveal the identity of the four applicants or the bid values.
In contrast, according to the latest figures from the DCLG, 296 community groups have begun the process of drawing up a neighbourhood plan, another part of the Localism Act.
A DCLG spokesman said: "Specific support for Community Right to Build began in May 2012, later than neighbourhood planning.
"Local communities are currently considering how they could potentially use the new powers.
"Unlike neighbourhood planning, the policy is site-specific, so we would expect there to be a different pace to the take-up rate."
A spokeswoman for Locality, which runs a CRB advice service, said it had received about 900 enquiries concerning the initiative but admitted that progress in developing the orders "remains slow".
The spokeswoman said it was "still early days in terms of the right coming into force, so many organisations are in the first stages".
She went on to say that interest in the initiative and enquiries "remains high", but added: "Progress in developing Community Right to Build orders remains slow.
"It is felt that this is due to the complexity related to community-led development in general, alongside understanding and using the new right."According to the DCLG, the funding, which is open to applicants until 2015, would not cover development costs but must be used towards the costs of preparing a submission for an order, such as consulting in the local area or developing a business case.
At the time of the announcement, the DCLG envisaged that communities would use CRB orders to build family homes to sell, affordable housing to rent, sheltered housing for older people, shops or community facilities.
Consultant Tony Burton, who specialises in neighbourhood planning advice, said that CRB orders had generated much less interest than neighbourhood plans because of the "added complexity of working through the details of what is effectively a planning consent".
He also said there was "continuing confusion over what they are and what they do", as well as "limited support" available to community groups in comparison to the funding to support neighbourhood planning.
Michael Wellock, managing director of consultancy Kirkwells, said it was still "early days" in the process, but agreed with Burton that community groups would find CRB "relatively complex and quite daunting." He added. "It doesn't surprise me that there haven't been too many applications."
Wellock said that the "significant wedge of cash" provided by the government indicated "ministerial backing", but there had been some "naivety" about how the initiative would be received.
He said: "Grant Shapps seemed to sell it like you could get up on Monday morning, start work on the order and then by Friday you could complete it.
"That was never going to happen."
Two groups bidding for the funding
London-based Brixton Green, which registered as an industrial society in 2009, is understood to have submitted a bid to the Community Right to Build order fund. Its proposals include 250 homes and a creative hub for three arts organisations, as well as a children's nursery, training facilities for young parents and an integrated health centre. The organisation says it wants to develop a large neglected site near the town centre. A Brixton Green spokesman said: "I confirm that we have submitted our application to the GLA and we continue to be in active co-production with Lambeth Council."
Hulcote and Salford Parish Council
Hulcote and Salford Parish Council is considering making a bid to the CRB order fund to build four affordable two-bedroom houses in the village. According to the council, local house prices are out of the reach of many villagers. It says the land, a brownfield site, has been provided by a local landowner, while Grand Union housing association is "agreeable" to carrying out construction and managing development. Council chairman Alf Murphy said: "We have a council meeting (about the issue) in March and then we propose to make an application to the community Right to Build fund after that."