HOUSING
for them and a lot of providers have wel- comed that.”
The new approach will involve local au- thorities proactively engaging with the process to decide where they need afford- able homes and of what sort.
Ratcliff explained: “We’ve done quite a lot of work through the local investment plan process, working closely with local authori- ties, more typically groups of them within a given area, and then worked out what their priorities are. Some are thematic; certain things they want to see addressed, maybe, for example around the size of homes or wanting homes for a certain group of peo- ple. Others will be geographic priorities; for example, a specific regeneration site that they want to see delivered.”
Local priorities
He continued: “There’s been a lot of work done over the last couple of years to devel- op those partnerships and getting them to a place where they really understand what the local priorities are. But equally, we’re not prescriptive; if local authorities would rather describe those priorities in a differ-
ent place or in a different way, we’re happy to work however they want to work.
“Providers are going to make offers to us in terms of programmes and the number of units they expect to deliver. They won’t necessarily know where those units are; but where local authorities have priority regeneration sites, the HCA’s role will be to facilitate that and link up providers with capacity and funding from us with priority sites for local authorities.
“We’re also introducing an extra role for the local authority; they must be actively supporting every scheme before we put any funding into it. So, we’ll agree a pro- gramme, but for an individual scheme to get the new funding, the local author- ity has to actively support it. That’s new and places more emphasis on liaison and strong relationships with local authori- ties.”
North-South divide?
Some providers have complained of a geo- graphic divide, with the affordable rent model meaning the potential new income for social landlords varies based on how large the ‘gap’ is between average social rent income and the 80% of market rent calculation. Some providers, as well as the Chartered Institute of Housing, have sug- gested this could lead to far more building in London and the South East, where ex- isting social rents are relatively low com- pared to market rents, than in areas like the North East or the Midlands, where bringing in affordable rents could actually see social landlords’ income fall.
But Ratcliff disputed that, saying: “In broad geographic terms, it’s not right to say there’s large regional discrepancies, because it’s actually about very local dif- ferences. The key point is that more ca- pacity is generated in areas where there’s a bigger gap between social rents and 80% of market rent. In areas where there isn’t such a big gap, it’s more difficult.
“Then, there’s obviously a range of places in between at lots of different gradations. The market rents can vary right down to the individual property and neighbour- hood level. The key point is that it works differently in different places, not that it doesn’t work in some places, it just oper- ates differently.
“There’s some things providers can do strategically; we’ve said people can convert to shared ownership, for example. In areas where that ‘gap’ is quite small, you can re- alise some value from selling the property
on shared ownership terms. There might be more of that happening.”
Assessment process
The HCA will have the final say when as- sessing the bids, Ratcliff confirmed, add- ing: “It’s our budget and our programme, so our responsibility to carry out these ne- gotiations, to reach deals. Our chief execu- tive is the accounting officer responsible for funding.
“Decisions will be based on four factors: firstly, that it meets local needs and priori- ties in those areas.
“Secondly, it must offer good value for money, as we want to deliver as many homes as possible and there’s only limited funding available, certainly compared to recent years.
“Thirdly, the move from a specific scheme approach to a programme approach means we’re potentially going to know less about schemes at the earlier stages, but we really do need to know it is going to be delivered, and we’ll have to test that through the negotiation process. There’s no point us agreeing a deal with a provider that look like they can deliver a lot of units if they can’t really. We need to make sure that what we’re agreeing with them is realistic.
“The final part of the negotiation is the role of the Tenant Services Authority, who need to confirm that providers currently meet their standards and will continue to do so after getting the funding. Primarily, the TSA will be looking at governance and financial viability standards.”
The HCA must receive providers’ offers by May 3, with deals likely to be concluded in July.
Social landlords are known to have mixed feelings on the reforms, partly as a conse- quence of the more constrained funding.
But Ratcliff said: “The feedback varies from provider to provider; different providers like different parts of it. But, overall, we’re getting quite a strong indication that a lot of organisations are interested in bidding and putting forward offers, but I guess we’re not really going to know until we get all of the offers in.”
homesandcommunities.co.uk/affordable-homes Jamie Ratcliff
FOR MORE INFORMATION public sector executive Mar/Apr 11 | 49
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