Homelessness Change Programme

This £37.5m capital investment programme follows on from Hostel Capital Improvement programme and the Places of Change capital investment programme of previous years. It was a major coup for the sector to have proved its worth and secured this capital in the Comprehensive Spending Review of October 2010.

The new capital fund now sits within the Homes and Communities Agency (HCA) Affordable Homes Programme which is a £4.5bn investment programme in new affordable housing. The HCA’s Investment Partners will help to deliver up to 150,000 new affordable homes.

Further details can be found at Annex 1 to the Affordable Homes Programme 2011-15 Framework document.

A supplementary guidance document for vulnerable and older people was published on the HCA website on April 8th.

The deadline for applications to the Homelessness Change Programme is 3rd May 2011.

You should use the 'Standard Offer Template' to make your application. Our advice is to complete the two cells on the spreadsheet that show your current estimate of the number of units and their cost. The programme does not go live for another year. By returning the ‘Standard Offer Template’ you will have registered your interest to receive monies. Between the 3rd of May and the 17th July you will have the opportunity to provide more detail about you proposals.
 
We have been supporting a number of providers who have raised the following concerns and queries:

Frequently Asked Questions:

Application process

Why isn’t there an application form?
In order to bid, you or your partner should make an ‘offer’ to the HCA using the 'Standard Offer Template'

Is the 3rd May 2011 the only and final deadline for the programme?
Yes.

What happens after the application deadline?  or
It looks complicated – what if my organisation cannot put everything in place by the 3rd May?
If you are only submitting an offer for the Homelessness Change Programme, you only need to complete the Provider and Other Products tabs of the standard offer template. Unlike the previous programmes where schemes needed to be fully worked up before they could be bid in, the HCA are accepting indicative offers as part of the packages for the 11-15 programme. Don’t worry if you’re still in the planning stages, our advice is to submit a basic offer (complete the provider details and then the “number bed spaces” and “HCA funding requested” cells in the “other products” tab on the standard offer template) and follow up during the negotiation period. Offers that the HCA agree to fund will be signed off under a legally binding contract.

What if I am not a registered housing provider?
Unregistered providers can still submit bids under HCP, however if they intend to be the landlord they will have to achieve registered provider status as part of the HCA framework contract. For further information on the registration process, you should contact the Tenant Services Authority.

Do prospective bidders for HCP funding need to have pre-qualified as investment partners?
Potential providers who are not already pre-qualified should either bid as part of a consortium (only the Lead Partner of a consortium needs to be qualified) or they should submit an application at the same time as or soon after submitting their package offer. Further information on applying for qualification as an HCA Investment Partner and the application forms are available on the HCA website.

Does my application need support from my Local Authority?
Yes. This is a strategic programme and will focus on local priorities. Services need to work in partnership with their LA and other relevant agencies. However, the HCA will accept indicative offers where the LA is in approval of the indicative offer rather than necessarily having a fully worked up scheme agreed with the LA.

Priorities

Who is the Homelessness Change programme aimed at?
The priority is the provision of accommodation with access to and / or space and provision for education, training or other support services. Given the priority for accommodation and limits on available funding, bids for large scale non accommodation proposals are not being sought at this time. New rough sleepers are the primary target group, the programme will: “. . .underpin other work being undertaken to end rough sleeping by providing funding to support the development and improvement of hostels to support rough sleepers, and those at risk of sleeping rough…“

What about young people?
This group will not be automatically ruled out as proposals need to respond to the local needs. But, if a scheme is exclusively for 16 and 17 year olds, or other statutory groups, then it may be more suitable to be funded under the Supported Housing programme. These issues can be discussed further after offers have been submitted. Schemes with a mix of ages from 16 upwards should be eligible where there is a connection to local need and priorities.  

How will local needs be identified?
Local Authorities know what their local priorities are and this will be supplemented by national data provided by Homeless Link from the SNAP (Survey of Needs and Provision) survey and other research information. There will not be any regional allocations or targets – individual schemes will stand on their merits.

Funding

The programme has been announced as £37.5m over three years yet the amount in the framework appendix shows only £30m. Has it been reduced by 20% already?
No! The figure has been rounded, the value of the programme is still £37.5m over three years starting in April 2012.

Is value for money the only criteria?
No, but it is very important. Providers will need to bring in match funding to supplement the funding on offer from the HCA.

What is a “blended average of unit cost” and will it work against bids for more expensive homelessness projects?
The blended average of unit cost relates to the main affordable homes programme. Although delivery of the Homelessness Change Programme is part of the larger programme and is being mainstreamed as far as possible, offers for funding from the HCP sit outside the ‘blended average’ so providers shouldn’t be concerned about the impact on their wider programme offer. However, the value for money achieved on HCP schemes in their own right remains important.

We are currently involved in difficult discussions with our commissioners and have no certainty about future revenue funding. Shall I still apply?
Yes. It is still worth discussing with your Local Authority and putting in an indicative offer that plans for the future even if there is some uncertainty at present. The programme will not start until April 2012 and you could opt to deliver your scheme in 2014 when the situation is likely to have changed. The HCA will maintain an ongoing dialogue with providers and local authorities. They will expect that by the time schemes are brought forward as firm schemes for funding they will have LA support and therefore be likely to obtain future revenue funding.

The rent for my current scheme is finely balanced with other funding streams. How will rents be affected?
In future we should assume that new rents will be up to 80% of the market rent, including service charges. Further guidance on calculating an appropriate market rent is available in the Affordable Homes Programme Framework. Currently RSL rents are exempt from the Local Housing Allowance rules. Eligible service charges in supported accommodation, and other factors are likely to affect the rent calculations. However, each scheme is unique and there is not really a good set of data to make like for like market comparisons of these elements of the rent. Therefore, this should be examined and resolved through dialogue with the HCA.

How should affordable rents be calculated for HCP funded developments?
Housing for vulnerable people will include services to support the particular needs of the client group. When setting an affordable rent, the gross market rent comparables should be based on similar types and models of service provision. Where there are insufficient comparables, providers should identify comparables from other areas and extrapolate their best view of gross market rent that would be applicable in their location and set the rent at up to 80 % of that level. In setting rents providers should also take into account wider benefit policy.

The Framework document stresses that tenancies for properties that charge the new affordable rent must be for a minimum of two years, does this apply to hostel accommodation funded under HCP?
No, although the affordable rent calculation applies for hostels, the minimum tenancy requirement won’t. Providers should continue with their usual tenancy decisions.

Other

Will VCS agencies be able to develop a dialogue directly with the HCA as schemes are being developed?
The HCA’s principal relationship is always with the agency that submits the bid. So, in the event that an agency is bidding as part of a consortium that agency’s  key relationship will be with the lead partner in that consortium and not with the HCA. Agencies that bid alone and outside of consortia will work directly with the HCA.

If you have any further queries please contact your Homeless Link regional manager or the Homelessness Change Programme manager Richard Cunningham.