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Nigel WilsonNigel is the Chief Executive Officer of Gentoo Group having joined in January 2019 from Wythenshawe Community Housing Group in M ...more
We are a ‘strategic partner’ in all but name
Strategic partnerships are not the only game in town, writes Nigel Wilson
News in the chancellor’s Autumn Budget of the successful recipients of strategic partnership funding should be warmly welcomed by the sector.
Yet while the 17 partners chosen in waves one and two are set to build thousands of homes, where does that leave the vast majority of developing landlords?
The answer, pleasingly, is that there are still many opportunities via Homes England’s continuous market engagement in the 2016/21 shared ownership affordable homes programme [SOAHP].
At JV North - a consortium of housing associations in the North West that came together 11 years ago to make building Government-supported properties more efficient by pooling resources - we recently received further grant of £51.6 million to build 1,550 more homes.
The new funding is in addition to the £87.3 million we received in 2016 and will see us build a total of 4,310 homes by 2021.
“Strategic partnerships are over a longer period and it’s a balance of weighing that up against the potential risks of not being able to deliver large programmes so far into the future”
There is clear need to build more high quality homes quicker than ever before and our members are answering the call.
We have never ‘over promised and under delivered’ and through each affordable homes programme, we’ve always made ambitious initial bids increase them via continuous market engagement (CME) where we can.
Given we have over 4,000 homes to build, our members are forging ahead and for the first six months of this financial year, have started onsite building the equivalent of two-and-a-half homes every working day.
When assessing our programme following Mr Hammond’s announcement and analysing the amount of grant and the number of homes, it is very similar to some strategic partnership allocations and in many ways we are delivering exactly the same objectives.
When coupled with our excellent relationship with Homes England nurtured over many years, we view ourselves as a strategic partner but without the name above the door and our funding coming from a different pot.
The advantage of strategic partnerships as we see them is certainty of allocation of funding compared to bidding through continuous market engagement
Strategic partnerships are over a longer period and it’s a balance of weighing that up against the potential risks of not being able to deliver large programmes so far into the future, especially while there is still uncertainty around the implications of Brexit and next year’s spending review.
But social housing never stands still and we have to build.
We are comforted by Homes England telling us that CME will continue so there is potentially more funding available if we have any more capacity to build.
We are also buoyed by the additional flexibilities the strategic partnerships would appear to offer especially as it is stated in Homes England’s strategic five-year plan that its new approach will be passed down through existing development partner contracts and we hope to benefit from this.
“Regardless of which fund government grant comes from, the same challenges remain”
Homes England’s new approach will allow us to operate with more liquidity to meet housing needs rather than be tied to a policy or tenure that in the case of the 2016/21 SOAHP, could be five-years-old by the time the final properties are delivered.
Regardless of which fund Government grant comes from, the same challenges remain, most notably being able to identify firm development opportunities and guarding against unhealthy competition between providers where the biggest winner becomes the landowner.
There is also a challenge around capacity and not just in the construction sector but within social housing; there’s a scarcity of skilled, experienced development staff who need to deliver thousands of homes across the country.
Ultimately, it’s important we recognise the benefit of multiple approaches and the more opportunities to build the better - whether that is as a strategic partner or a partner operating strategically to tackle the housing crisis.
Nigel Wilson, chair, JV North and chief executive, Wythenshawe Community Housing Group
A guide to strategic partnerships and the deals announced so far
Under strategic partnerships, housing associations agree to increase their development programmes by a specified number of homes in return for extra funding for the government.
Unlike some other government funding programmes, they can use the new funding flexibly across their development programme, determining the tenure of affordable homes closer to completion following negotiations with Homes England.
The following housing associations were confirmed as strategic partners on 30 January 2019:
| Housing association | Grant | No of additional starts to March 2022 |
|---|---|---|
| Bromford | £66.4m | 1,400 |
| Curo and Swan | £51.1m | 1,067 |
| Liverpool Mutual Homes and Torus | £66.4m | 1,757 |
| Longhurst and Nottingham Community Housing Association | £71.7m | 1,685 |
| Together Housing Group | £53m | 1,152 |
| WHG | £38.7m | 1,000 |
| Yorkshire Housing | £61.8m | 1,300 |
| Your Housing Group | £87.5m | 2,315 |
Homes England announced the following partnerships in October 2018:
| Housing association | Grant | No of additional starts to 31 March 2022 |
|---|---|---|
| Guinness/Stonewater | £224m | 4,500 |
| Optivo | £44.9m | 1,000 |
| Orbit | £128.8m | 2,762 |
| Platform Housing Group | £71.8m | 1,800 |
| Southern Housing Group | £55.1m | 1,005 |
| Thirteen | £40m | 1,000 |
| Vivid | £88.2m | 1,408 |
Table published by Homes England on 31 October 2018
Homes England also earlier this year confirmed the following partnerships:
| Housing association | Grant | No of additional affordable starts to 31 March 2022 |
|---|---|---|
| EMH Group | £30.5m | 748 |
| Great Places | £29.2m | 750 |
| Home Group | £85m | 2,300 |
| Hyde | £95.4m | 1,623 |
| L&Q | £85m | 1,724 |
| Matrix Partnership | £77m | 2,257 |
| Places for People | £74m | 2,603 |
| Sovereign/Liverty | £111.5m | 2,275 |
Table published by Homes England on 3 July 2018
Autumn Budget 2018 - the key housing policies at-a-glance
- £1bn to help fund the implementation of Universal Credit over the next five years
- £500m in Housing Infrastructure Fund to unlock a further 650,000 homes
- The next wave of strategic partnerships with nine housing associations, which will deliver 13,000 homes
- British business bank guarantees for SME house builders
- ‘Simplification’ of process to convert commercial properties to new homes
- Providing funding to empower 500 neighbourhoods to allocate homes to local people in perpetuity
- Help to Buy equity loan scheme extended by two years to 2023 and limited to first-time buyers
- Retrospective inclusion of first-time buyers of shared ownership in stamp duty relief
Autumn Budget 2018 - full coverage
All our Autumn Budget 2018 coverage in one place:
The Autumn Budget lacked the ambition we need Philip Hammond’s Budget fell short for housing, writes Melanie Rees
There were no big fireworks but the Budget offers an opportunity to deliver The Budget leaves associations facing a choice and we must now deliver, argues David Montague
Names of new housing association strategic partnerships revealed Homes England has released the names of the eight housing associations that have just signed strategic partnerships with the government.
Budget a missed opportunity on housing, says NHF Reaction to the Autumn Budget from several organisations, including the National Housing Federation
Budget small print reveals significant announcements for housing Housing policies contained in the Autumn Budget and background documents published yesterday will have a large impact, if they actually go ahead, writes Jules Birch
Hammond’s extra Universal Credit cash is welcome – but we need homelessness specialists in Job Centres too The Autumn Budget must not become a missed opportunity to put in place measures to prevent homelessness, argues Ruth Jacob of Crisis
Hammond announces extra funding for Universal Credit: Philip Hammond has announced plans to pump more money into Universal Credit in the Autumn Budget today.
Help to Buy equity loan scheme extended to 2023 for first time buyers:The Help to Buy equity loan scheme will be extended two years to 2023 for first time buyers only, with new price caps set for each English region.
Housing Live - the Autumn Budget 2018 as it happened: Live-blogging from Jules Birch reveals how the Autumn Budget unfolded and what it means for housing
OBR: scrapping council borrowing cap will deliver only 9,000 new homes: Scrapping the borrowing cap will deliver only 9,000 new homes over the next five years, the Office for Budget Responsibility (OBR) has said.
Letwin: builders of large sites must accept more ’diversity’ of tenure: Builders should be required to accept suggested levels of affordable housing for large sites in order to receive government support, including Help to Buy, a major review of housebuilding has concluded.
Chancellor announces strategic partnerships with nine housing associations: Nine housing associations have signed new strategic partnerships with the government to deliver over 13,000 homes, Philip Hammond has announced.
Stamp duty scrapped for buyers of shared ownership homes worth up to £500,000: Stamp duty will be scrapped for first-time buyers of homes for shared ownership, the chancellor has announced.
