Clearing the funding bar
The bar to securing HCA affordable homes grant is unusually high, says Rupert Wilson, senior associate at Lewis Silkin
Have you done enough to get your grant funding?
Under the framework delivery agreement, the Homes and Communities Agency and housing providers will deliver an agreed programme of new affordable homes for the period 2011 to 2015. Most organisations, if their bids were successful, have now entered into a contract with the HCA.
As with all contracts, the devil is in the detail, but for many organisations this can be overwhelming. Naturally, there is no substitute for familiarising oneself with the terms of the agreement in entirety. There are, though, certain key requirements and obligations to be aware of that will lead to the housing provider successfully being able to draw down grant funding.
Most importantly, grant funding is now paid on practical completion, not start onsite. What is more, any schemes that do not reach practical completion by 31 March 2015 will not qualify for grant funding, whatever the reason for the delay.
Schemes will also need to satisfy certain conditions:
- They will need to be submitted through the HCA’s investment management system within 10 business days of start on site and a building contract must be signed;
- They must be deliverable in accordance with the agreed timetable and standards;
- A scheme must have the support of a local housing authority;
- The grant recipient must have a secure legal interest in the site: this can be the freehold or long leasehold ownership or a binding contract for purchase which is not conditional on matters which are not within the control of the housing association (so this needs to be factored into budgets); and
- All consents required for the scheme must be in place - for example, planning permission.
Monitoring and reporting
Under the agreement there is a rigorous procedure for monitoring and reporting, which includes advising the HCA of milestone events and certifying delivery performance.
There is a requirement for quarterly meetings with the HCA to review performance against the agreed programme and annual meetings to review changes to the programme and allocations of grant to schemes made in the previous financial year.
All of this means there is a great deal for development professionals to do.
The HCA does not have to pay grant:
- Before the scheme completion date confirmed through the investment management system, even if practical completion is early;
- Where a scheme has not been delivered in accordance with approved details;
- If various events have occurred, such as insolvency or if registered provider status is withdrawn; or
- Where there is any material breach of other obligations.
Is there any flexibility with this?
There is a mechanism for dealing with changes to the agreed programme, but the HCA does not have to agree a change which would cause it to exceed available grant for the year. Changes can be requested by both parties and must be agreed by both parties.
Milestone dates can be extended on building projects, but this does not have a bearing on the 31 March 2015 cut-off date.