1. Policy and delivery context

2. HCA purpose and vision

3. Delivering our priorities

4. Programme delivery

Contents

Continued limits on public funding but

long term certainty and commitment

Emphasis on housing supply across all

tenures and on economic growth

Localism, innovation and tailored

solutions

Risk, diversification and complexity

Bedding in of key policy changes

1.1 Complex delivery landscape

1.2 Continued support for housing

Housing positioned alongside infrastructure

as driver of economic growth

Continued political focus on housing

Reflects government confidence in the

sector and in the HCA

New programmes and extra funding:

– £3.3bn for affordable housing up to 2018

– Extra £6bn for Help to Buy to 2020

– £525m Builders Finance Fund

– LIF Large Sites extended to 2020

– Increased focus on public land

– Housing Zones, Locally Led Garden Cities,

Estate Regeneration, Custom Build…..

2.1 HCA purpose and vision

Throughout a period of change, the HCA’s

core purpose and vision remains ….

To help create successful places with

homes and jobs

Working with people and places to help

deliver homes, economic growth and jobs

Delivering programmes of investment and

market interventions, making significant

contribution to overall supply of homes

Making best use of public land and

developing economic assets

Undertaking effective and proportionate

regulation of social housing providers

A national Agency working locally

– Aligning investment and support with local

need and aspiration

– Working with partners to deliver

Retaining a core focus on housing supply

– Mix of grant and recoverable investment

2013/14 another successful year

– Hit all targets (again)

– Includes supporting c54,000 new homes

(c50% of all homes built in the year)

In 2014/15 we will continue to support Government priorities

– Support delivery of c70,000 new homes

– Prepare for new programmes and growing public land role

2.2 Continued focus on delivery

Investment in affordable and specialist housing

remains a core part of HCA’s business:

– 29,000 completions in 2014/15, contributing to

Government’s overall 170,000 SR target

– 2015-18 AHP to contribute to 165,000 new

affordable homes by 2018

– New programmes including Hostels, Platform for

Life, Affordable Rent to Buy, Care and Support

Specialised Housing

– Continued support for local authorities to bring

remaining stock up to Decent Homes Standard

3.1 HCA priorities:Delivering and maintaining affordable housing

On course to meet housing delivery targets for

2014-15

Delivery to end of Q2 was slow

Too much slippage affecting partner

performance

Impact of procurement arrangements on delivery

Forecast starts still in bulk

Too many completions in Q3 and Q4

Resource implications to process claims

Bring forward claims and process early

March 2015 is the deadline

3.2 HCA priorities:2011-15 AHP delivery

-

5,000

10,000

15,000

20,000

25,000

0

20,000

40,000

60,000

80,000

100,000

120,000

Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15

SOY Forecast Spend YTD Actuals Spend (as of 10/09)

Cummulative SOY Forecast Cummulative YTD Actuals

East & South East All affordable programmes (AHP, NAHP and AHGP)

Expenditure (£000)

4.1 Programme Delivery – Expenditure

• Includes AHP 11–15, NAHP and AHGP

• YTD Actuals as of 10/09/14

-

100

200

300

400

500

600

700

800

0

500

1,000

1,500

2,000

2,500

3,000


SOY Forecast Starts YTD Actuals Starts (as of 10/09)



Starts (Units)

4.2 Programme Delivery – Starts



-

500

1,000

1,500

2,000

2,500

3,000

0

2,000

4,000

6,000

8,000

10,000

12,000


SOY Forecast Completions YTD Actuals Completions (as of 10/09)



Completions (Units)

4.3 Programme Delivery – Completions



0

10,000

20,000

30,000

40,000

50,000

Q3 2012-13 Q3 2013-14 Q3 2014-15 Q4 2012-13 Q4 2013-14 Q4 2014-15

SOY Forecast Spend Actual Spend


Expenditure (£000)

4.4 Quarterly Profile - Expenditure



0

1,000

2,000

3,000

Q3 2012-13 Q3 2013-14 Q3 2014-15 Q4 2012-13 Q4 2013-14 Q4 2014-15

SOY Forecast Starts Actual Starts


Starts (Units)

4.5 Quarterly Profile – Starts



0

1,000

2,000

3,000

4,000

5,000

6,000

Q3 2012-13 Q3 2013-14 Q3 2014-15 Q4 2012-13 Q4 2013-14 Q4 2014-15

SOY Forecast Completions Actual Completions


Completions (Units)

0

1,000

2,000

3,000

4,000

5,000

6,000

Q3 2012-13 Q3 2013-14 Q3 2014-15 Q4 2012-13 Q4 2013-14 Q4 2014-15

SOY Forecast Completions Actual Completions


Completions (Units)

4.6 Quarterly Profile - Completions



0

10,000

20,000

30,000

40,000

50,000

60,000

2014-15 2015-16 2016-17 2017-18

Grant Allocation

East & South East AHP 2015-18 Programme - Bids Accepted

Grant Allocation (£000)

4.7 AHP 15-18 Allocations - Expenditure

• Includes Firm and Indicative schemes

• Bids Accepted as of 1st July 2014

Delivery! Delivery!! Delivery!!!

4.8 Conclusion

Successful places

with homes and

jobs

Successful places

with homes and jobs

A NATIONAL

AGENCY

WORKING

LOCALLY

2015-18 Affordable Homes

Programme

Welcome and Introduction

Contents

Initial bid round outcome & recap

The Grant Agreement

Continuous Market Engagement

Systems Update

Affordable Housing Programme

2015 -18 £2.9bn investment for affordable

housing over period 2015-18

announced in Spending Round

funding outside London - £1.7bn

Allocations announced 22 July

£886m allocated

43,800 homes – c. 37,700

funded; 6,100 – nil grant

160 investment partnerships

Over 75% on firm schemes

Affordable Homes Programme

2015-18: shape

Affordable Rent (and shared

ownership)

Programme can include:

– Hostel accommodation

– Travellers’ pitches

– Former empty properties brought

back into use as affordable housing

Supported, elderly and rural

housing

AHP 2015-18: themes -

construction

Driving efficient procurement and

construction innovation

Innovation and OSM

– Cross tenure but with AHP a place

to demonstrate potential:

especially for speed of delivery (at

right price)

– Different scales

– Different products

– Consumer acceptance

Share knowledge/experience (eg

Accord)

Continuum of funding and other

opportunities

CME for guarantees programme –

(grant) funding now almost all allocated

Announcement of initial 2015 AHP

allocations and move to CME = bridge

between programme periods

Reported interest in CME – fits with

progressing schemes – timing of bids?

Suited to how providers and local areas

operate – working up schemes in line with

business plans and meeting local priorities

£200m Rent to Buy loan fund –

prospectus now published

Not forget focus on delivery of current

programmes (in year end mode)

Grant Agreement

2015-18

Grant agreement briefing

How we got here

– 2011-15 FDA partner feedback

– Development of 2015-18 Heads of Terms

2015-18 grant agreement

– Fundamentals

– Key principles & obligations

– Contract management

– Contract types

– Getting into contract

2011-15 FDA feedback

“Pluses”

– Took a “Programme Approach”

– Facility to agree change

– Firm Schemes

– Positive HCA approach to contract management

– 140+ signed in first 8 months of programme

“Minuses”

– Agreed Payment Rate

– Attributed & non-attributed grant

– Programme Offer - sometimes lengthy progression to a “tangible” Firm Scheme

– Programme approach sometimes too “woolly”

– Insufficient “gradation” of default measures from “minor” to “nuclear”

– Required additional Sign-off of Funding Conditions

2015-18 Heads of Terms

Published early 2014

Responded to providers’ concerns

– 11-15 Agreed Payment Rate

• 15-18 Firm scheme grant

– 11-15 Attributed & non-attributed grant

• 15-18 Firm scheme grant

– 11-15 Programme Offer - sometimes lengthy progression to a tangible

Firm Scheme

• 15-18 Indicative schemes have transition date

– 11-15 Insufficient “gradation” of default measures from “minor” to

“nuclear”

• 15-18 four categories

– Funding Conditions all within contract

– Balanced, standard form contract


Fundamentals

– All 15-18 Affordable Homes Programme delivered through the grant

agreement; and

– Required to offer properties at an Affordable Rent (new supply and

conversions to Affordable Rent)

– Does not impact Provider wider asset management strategies

– Requires Investment Partner status to receive grant

– Offers simplicity over 11-15 FDA and greater clarity on delivery for

Provider and HCA

Four standard forms

– Registered Provider (former RSL)

– RP (former RSL)-led consortium

– New RP (from April 2010)

– Private (unregistered) house builder (grant at completion)

First contracts issued

– First signed and completed September


Key principles

– Approved Bid

– Indicative Schemes

– Firm Schemes

– Changes to Firm Schemes (inc substitution & addition)

– Delivery Obligations

– Grant claim

– Review Monitoring & Reporting

– Approach to default, withholding and repayment of grant

Approved Bid

Input by Provider to IMS

– New Schemes

– Indicative schemes (if applicable)

– Three years (but can be added to)

– Costs, contributions, conversion capacity, timings and grant required

– Allocated Grant (max required for Approved Bid)

– Approved by HCA at bid stage

– Forms grant agreement Schedule 1

Approved Bid can be:

– Varied

– Amended

– Substituted

– All via IMS

Indicative Schemes

Can be in original Approved Bid or subsequently submitted by Provider

to IMS and approved by HCA

Each Indicative Scheme has:

– Transition Date by which it will become a Firm Scheme

– Transition Longstop Date applies of 31 May 2016 circa half-way into

programme period

Provider to use reasonable endeavours:

– To bring forward as a Firm Scheme by Transition Date

If delayed:

– Provider can propose alternatives up to 40 days before TD

All Indicative Schemes must be Firm Schemes by Transition Longstop

Firm Schemes

Each New Scheme input to IMS ready for HCA acceptance as Firm

Scheme not less than five days before Start on Site

Provider warrants:

– Is deliverable to timetable

– It has secure legal interest in site

– Has all consents in place

– All recorded in Firm scheme details

HCA can only pay grant on Firm Schemes

– Two tranches and HCA can vary proportions

– Firm Schemes cannot complete after 31st March 2018

Changes to Firm Schemes

Provider can propose changes at any time

– Always via IMS

Pre-start change

– HCA can accept or reject and may recalculate grant as required

– Provider has option not to proceed, revert to original or withdraw

Post-start change

– HCA can accept or reject and may recalculate grant as required

– Provider has option not to proceed, revert to original or withdraw

– If withdrawing scheme Provider repays first tranche grant

Firm Scheme substitution & addition

If a scheme becomes undeliverable Provider can propose via IMS a

Substitute Scheme

HCA will review proposal

– VFM

– Consistent with Approved Bid

– Provider’s performance on other Firm Schemes

– Can be delivered by 31 March 2018, or earlier

– Local Authority support

If accepted, it becomes a Firm Scheme

HCA will also consider Additional Schemes: CME

– Same basis as Substitutes

HCA cannot approve Substitute or Additional if no available funding

Delivery & operational obligations

For each Firm Scheme

– Procure works and deliver to timetable

– Market and dispose or let homes asap after practical completion

– Use reasonable endeavours to deliver commitments on: procurement

efficiencies, employment & skills & construction innovation statements

– Comply with Regulator’s Tenancy Standard

– Tell HCA: start on site achieved and any event or circumstance that

may have material adverse effect on scheme

For the Approved Bid

– Complete the Permitted Conversions

– Not convert/dispose of more homes beyond the number required to

create the Conversion Capacity

– Note: does not impact Provider wider asset management strategies

Grant claim procedure

Grant claim via IMS after achieving start on site

– Provider repeats Firm Scheme reps & warranties

– Start on site achieved

– Retains status as Registered Provider and Investment Partner

– No Withholding Event occurred e.g. a consent has been withdrawn or a

Prohibited Act

Grant claim via IMS after practical completion

– Similar approach to start on site claim

HCA shall pay First & Second Tranche grant within 15 days of receipt of

satisfactory application

HCA cannot pay before start on site or practical completion

HCA cannot pay if practical completion not reached by 31st March 2018

Note: unregistered e.g. house builders all grant at completion

Review Monitoring & Reporting

Requirement for timely IMS updates

Quarterly Contract Review Meetings

Key component of delivery management

Provider sends Officer’s Certificate to Agency (via IMS) within 5

days of Quarter end

Within 10 days of receipt HCA and Provider hold Review Meeting

Meeting is a look back and forward at delivery

May result in agreeing Scheme and or Approved Bid changes

– But changes can be agreed at any time

Approach to default

Key principle to allow Providers ample opportunity for remedy

Default and termination is “back-stop” for Providers that

consistently fail to deliver

15-18 clearer “grading” of default: means focus is on

proportionate actions for Provider and HCA to resolve matters

Opportunities for remedy exhausted before further sanctions

applied (last resort) for any default

Approach to default

Scheme default

– Usually capable of remedy and always scheme-specific

Specified Default

– Capable of remedy and applying to Approved Bid level obligations e.g.

reporting or other operational obligations

Bid default

– HCA determines (acting reasonably) proper progress not made

Fundamental Default

– Less likely they can be remedied e.g. Prohibited Act

Withholding of grant

11-15 contract seen as “blunt instrument”

15-18 approach to default applies i.e. clear “grading” of measures

– Grant withholding events GW1-3 operate at Approved Bid level

– GW1: usually capable of remedy e.g. problem with reporting or repayment

– GW2: more serious e.g. loss of Investment Partner status but still opportunity

to remedy

– GW3: serious e.g. prohibited act

– Scheme withholding events SW1-3 are scheme-specific

– SW1: failure to deliver scheme in accordance with scheme details

– SW2: e.g. material breach, consents withdrawn, in delivering scheme and

steps taken have not provided remedy

– SW3: failure to deliver scheme to timetable

Repayment of grant

Future grant recovery through “Recovery Determination”

– Triggered by “Relevant Events” e.g. disposal “outside sector”

Adjustments to grant

– Delivery not in accordance with scheme details means HCA can recalculate grant

– Provider has opportunity to consider and option to withdraw the scheme

– Results of post-completion compliance audit may result in repayment of balancing

amount

Repayment upon termination (extremely rare event)

– But can allow some schemes to continue – distinction between “Scheme

Termination” and “Total Termination” events

– “Grading” of Fundamental “A” Default - e.g. prohibited act means all grant repaid

– Fundamental “B” Default e.g. serious but allows grant to be left in completed

schemes

Consortia

Same approach as 11-15

Liabilities depend on role in consortium

Liabilities of Lead Partner dependent vary if

– A developer for members;

– A manager/co-ordinator

Consortium members have opportunity to remedy default by others

– But not contractually liable for failures of others

Add and release members via simple deed

First agreements issued October 2014

Standard conditions

Standard obligations in line with Govt. policy including:

– Open Book

– Transparency

– State Aid

– Data Protection

Getting into contract

Via Contract Manager

– Issue contract to Providers

– Agree Schedule 1 Approved Bid

– Issue documents for signing

Completed contract allows

– Firm scheme approvals

– Re-let conversions to Affordable Rent

2015-18 contracts this year for Providers with starts this year

– “Ex-RSL” “standalone”

– Ex-RSL consortia

– “New” RPs

– House builders

Questions


2015-18

AHP CME Bidding

requirements

Opened for bids via CME from October 2014

Bidding online via IMS

15-18 AHP Prospectus and Design addendum continue

to apply

In additional to the priorities outlined in the Prospectus

we are keen to see schemes for:

– Advanced housing manufacture (OSM)

– Rural housing

Who can bid?

15-18 AHP CME is open to all Investment Partners and

those who intend to qualify, including

– Registered Providers

– Local authorities (HRA borrowing/free resources) and their

ALMOs

– House builders and private sector developers working with

RPs

– Community groups, Community Land Trusts, Co-ops,

Almshouses etc.

Partners can develop in their own right or as part of a

consortium

New providers are encouraged to join existing

development partner consortia

First time bidders

If you are a new partner you can apply for IMS access by

contacting the HCA IT Service desk at

[email protected] or telephone 01908-353604

First time bidders that are not already qualified will need

to become a qualified HCA Investment Partner before we

can pay grant

Note that there is no requirement to qualify in advance of

submitting a bid

Guidance for bidding, including for the submission of

supporting statements, and for qualifying as an

Investment Partner is available on our website

mailto:[email protected]

Partners with 15-18 allocations

CME offer lines can be added to existing 15-18 AHP

offers

Offer level information, including supporting statements

should also be updated

Updated information on conversions and disposals will

be collected quarterly as part of the quarterly contract

review

No requirement to submit a revised FFR

Regulation

Any provider who intends to be the landlord of completed

properties delivered through the AHP must be a

Registered Provider

Details on how to register are on our website

Note that there is no requirement to register in advance

of submitting a bid, but we will want to understand the

arrangements for carrying out the landlord function for

completed grant funded affordable housing at the time of

bidding

Unregistered providers are advised to start discussions

with the regulator about registration as early as possible

Accelerated starts on site

To ensure a smooth transition between programmes

providers who have 15-18 allocations for schemes that

can start in 14/15 are encouraged to do so and discuss

with OA the budget requirements

Once in contract for the 15-18 AHP, and budget

confirmed accelerated starts should be claimed through

a cut-down version of 11-15 IMS scheme processing

Guidance is available on the website

It may be a cut-down process on IMS, but all contractual

requirements for claiming a start on site milestone still

apply!

Housing Standards Review:

HCA Design and Quality standards

Prospectus for new affordable homes programme published January 2014

HSR Ministerial announcement 13 March

Prospectus addendum published 27 March

2007 Design and Quality standards and compliance regime remain in place for the 2011-15 AHP.

Land disposals, standards determined locally

2nd HSR technical consultation published Friday 12 September through a further WMS; closes on 7 November 2014

What does this mean for the HCA?

The HCA will no longer require specific design and sustainability standards as a condition of funding.

Standards will be applied through the Building Regulations (for energy, security and waste) with optional requirements being introduced in the Building Regulations for the first time (accessibility and water efficiency).

HCA will monitor partners’ performance on space, internal and external layouts through IMS data returns.

What does this mean for HCA Partners?

Responsibility for the application of optional standards in the Building Regulations will pass to Local Authorities with compliance passing to Building Control.

Responsibility for the Nationally Described Space Standard will pass to Local Authorities.

With effect from the time that the Deregulation Bill is passed (expected early 2015), Local Authorities will not be able to require higher energy requirements than the Building Regulations through the Code for Sustainable Homes (which will be wound down). From the time of the Statement of Policy new plan policies should not refer to the CSH.

Housing Standards Review

Next steps

HCA opened for CME – October 2014

Make contact with the local HCA team to discuss your

proposals for CME and accelerated starts

Register for IMS access (if required)

Read the prospectus and design addendum & Level 1

space standard

Make contact with the Social Housing Regulator’s

registration team (if appropriate)

Any questions to [email protected] or contact

your local HCA team

IMS Help is available through the IT Service desk at

[email protected] or 01908-353604



Questions

Investment Management System

Update

IMS Update

Accelerated Starts


AHP 2015/18 - Profiles and Schemes

– Key changes

– Process flow

– Functions under each phase of delivery

2015-18 AHP - Accelerated Starts

IMS was updated in September

Interim solution to pay the Start on Site tranche for allocations in the 11/15

programme period

Process remains the same – Offer, Profile, Schemes

All accelerated starts submitted through this route must

– start before the end of December 2014

– forecast completion between April 2015 the end of March 2018.

Once the facility for processing schemes from 15/18 allocations is

developed we will need to move any interim payments to the new 15/18

schemes

Schemes under accelerated starts must NEVER be progressed to

completion as 11/15 Schemes

System Guidance available on line

Accelerated Starts

New Offer type called “AHP 2015-18 Accelerated Starts”

Accelerated Starts

New Offer line must be linked to the 15/18 Offer lines

Accelerated Starts

Simplified Capital Details

screen

Accelerated Starts

No HQI scores required


IMS opened for CME in October 2014

All new Offer lines (under new and existing Offers) to be marked as

CME through “Offer Line Source” indicator

Same process as 15/18 bids

Same data entry, but with additional questions on demolitions

Supporting Statements are versioned so able to submit a version 2 (if

the offer is already accepted)

Any un-submitted AHP 15-18 Offer Lines converted to CME Offer Lines

System guidance will be made available

CME – Line Source

‘Offer Line Source’

description added to

filter and on Offer Lines

CME – Demolition Data

Offer Line

Products tab,

Firm schemes

Processing

routes

Acquisition

and Works

Package

Deal

Works Only

AHP 15/18 - Key changes

AHP will be delivered through a combination of both

– Profiles – current design (Centura)

– Schemes – new design (.Net)

Processing will follow the same basic method of data entry required

to meet each milestone.

However the biggest change is that scheme data maintained in one

place i.e. Profiles, and no longer in Schemes.

Benefits

– Data can be updated on an on-going basis

– If there are no variations it is a simple submission and approval

– Updates will be versioned, showing a clear progression of data

– Reduce confusion between different sections of the system

Overview process1. Scheme Profile Line

- Acquisition & Planning Milestones- Organisations

- Capital Contributions & Costs- Unit & Unit Mix

- Equalities and Quality - Business Rule Validations

Underpinned by versioningProvider Submission

2. Create Scheme

3. SOS Achievement and Payment

4. Update data in Profiles

5. PC Achievement and Payment

Funder Approval

Provider Submission Funder Approval

Provider Submission Funder Approval

Data maintained in Profiles anytime

Profiles

Schemes

Delivery Phases

Phase 2/3 will enable

– Start on Site Payments

– Pre-requisite data – including Scheme Profile lines, Planning,

Acquisition and Start on Site Milestones

Aim to be deliver December 2014

Phase 4 will enable

– Practical Completion Payments

– Pre-requisite data – including full scheme data, Completion

Milestone

– Post completion data

To be delivered in early 2015

Phase 2/3 - Profile changes

Profiles will be updated to include all data entered at bids stage

– For Firm Schemes this will generate a scheme profile

– Profiles for Indicative Offer Lines will allow scheduling out of firm

schemes including entry of all firm scheme detail

– New data fields on Modern Methods of Construction and

Equalities in firm schemes

‘Request to Change Approved Bid’ will replace Programme Change

Notifications and are identified as Material and Non-material

Acquisition and Planning Milestone achievement

Phase 2/3 - Scheme Changes

Create new scheme either directly from Scheme Profile Line or main

menu

Required data for create scheme:

– Modern Methods of Construction data must be present

– Equalities data must be present

– Acquisition and Planning Milestones must have been achieved

– Forecast Dates must not be lapsed

Data will no longer be copied across from Profiles

New Summary ‘Profile Information’ task

NOTE - Once a scheme is started the forecast dates cannot be

changed until Phase 4 is delivered

AHP Scheme Design

Phase 4 – Profile Changes

Profiles

Additional data capture required for Scheme completion

– Quality data (scheme level and at unit level)

– detailed Cost breakdown and Revenue Detail

Versioning to support changes to firm scheme data (revised

approvals)

Schemes

Practical Completion milestone achievement and approval

Practical Completion payment

Initial Sales

Update Scheme Forecasts

Questions

Keeping in touch

homesandcommunities.co.uk

// /HCA_UK

/homes-&-communities-agency

East South East partner meeting October 2014

Government & Nonprofit

Transcript of East South East partner meeting October 2014