DD2336 Homebuilding Capacity Fund Allocations

Type of decision: 
Director's decision
Code: 
DD2336
Date signed: 
03 April 2019
Decision by: 
David Lunts, Executive Director Housing and Land and Interim CEO of OPDC

Executive summary

In September 2018 MD2363 approved using £10m from the Business Rates Retention Pilot for the Build for London project and delegated detailed project level approval to the Executive Director - Housing & Land. This project is designed to support the delivery of the Mayor’s housing and planning policies and includes the creation of a revenue fund – the Homebuilding Capacity Fund (HCF) – which will support councils to deliver their housing targets and support a pipeline of new affordable homes. Bidding for the fund closed on 25 January 2019. This decision form seeks approval for the proposed allocations of HCF funding.

Decision

That the Executive Director - Housing and Land approves:

1. Expenditure of £9,764,000 in 2019-20 and 2020-21 of revenue funding allocations to councils for Homebuilding Capacity Fund proposals that form part of the Build for London project; and

2. Expenditure of up to £40,000 to commission an impact study to detail the impacts and outcomes of the Fund.

Part 1: Non-confidential facts and advice

Introduction and background

Background

  • In order to address affordability pressures and rising housing need, the draft London Plan sets a target of 66,000 new homes a year to be built in the capital over the next 10 years.  In the shorter term, the Mayor has also committed to start building 116,000 genuinely affordable homes by March 2022.  Achieving these targets will require innovative and ambitious approaches to delivering homes including a significant increase in council homebuilding and new approaches to planning that deliver good growth by maximising the proportion of genuinely affordable homes in new developments, optimising density, and encouraging development of small sites, as set out in the draft London Plan.
  •  
  • The London Housing Strategy sets out the central role that councils will play in achieving the step-change in housing supply that London requires, both in their role as homebuilders and as local planning authorities. However, with council budgets for planning and development falling by 50 per cent since 2010, many lack the resources and capacity to adopt the new skills and approaches required to deliver on their ambitions.
  •  
  • MD2363 (to be published on 29 March 2019) allocated £10 million funding from the Business Rates Retention Pilot to deliver the Build for London project and delegated detailed project level approvals relating to this funding to the Executive Director – Housing & Land.  £236k has been top sliced from the allocated £10m funding to employ the HCF Programme Officer and Construction Skills Officer leaving a net available fund of £9.764m. The Build for London project is designed to support implementation of the Mayor’s housing and planning policies and includes the creation of a revenue funding programme using the remaining £9.764m – the Homebuilding Capacity Fund – which provided local authorities with the opportunity to bid for funding to build skills and capacity across their housing and planning teams.
  •  
  • The GLA published a prospectus for the Homebuilding Capacity Fund (the “Fund”) in October 2018.  It invited councils to bid for revenue funding to support proposals contributing to one or more of fund’s four priorities:
  •  
  • Delivering a new generation of council homes;
  • Increasing housing supply by supporting the development of small sites;
  • Proactive planning in areas with significant growth potential; and
  • Ensuring optimal density of new residential developments

 

The GLA invited councils to submit up to five individual proposals each as part of their bid.  In addition, councils could submit bids jointly with other councils for additional proposals.   

 

Bidding for the Fund opened in November 2018 and closed on 25th January 2019.  In total, 32 councils, including five joint bids, bid for GLA funding across 109 proposals, with the £10m of available funding significantly over bid. 

 

Assessment and allocations

 

​​​​​​​Following the bidding process, GLA officers from both the Housing & Land and Planning Directorates assessed proposals using assessment criteria outlined in the Homebuilding Capacity Fund prospectus:

  • Strategic fit (40% weighting);
  • Value for money (30% weighting); and
  • Deliverability (30% weighting).

​​​​​​​

Senior managers from both the Housing & Land and Planning teams agreed the successful proposals at a moderation meeting in March 2019.

 

This report seeks approval for the expenditure of £9.764m (approximately £6m in 2019-20 and the balance in 2020-21) in the form of revenue funding allocations to councils as set out in the following table. In addition, the first call on any underspend of the Fund will be to commission an impact study (costing up to £40,000) to detail the outcomes and impacts of the completed proposals and overall programme (in the event of no underspends funding will be found from other Housing and Land budgets).

 

Local authority

No. of HCF proposals supported

 Proposed allocation

City of London*

1

£43,377

City of Westminster Council

1

£180,000

Croydon Council

2

£521,000

London Borough of Barking and Dagenham*

2

£313,377

London Borough of Barnet**

3

£217,500

London Borough of Bexley

2

£290,000

London Borough of Brent

2

£628,000

London Borough of Camden

1

£157,000

London Borough of Ealing

4

£547,381

London Borough of Enfield

2

£554,474

London Borough of Hackney*

3

£168,377

London Borough of Hammersmith and Fulham

1

£230,000

London Borough of Haringey

3

£546,000

London Borough of Harrow**

6

£587,500

London Borough of Havering*

1

£43,377

London Borough of Hounslow

3

£500,000

London Borough of Islington

1

£180,000

London Borough of Lambeth

1

£239,418

London Borough of Lewisham

3

£525,000

London Borough of Merton

1

£366000

London Borough of Newham*

2

£335,377

London Borough of Redbridge*

2

£163,377

London Borough of Southwark

2

£572,696

London Borough of Sutton

1

£70,000

London Borough of Tower Hamlets*

3

£138,377

London Borough of Waltham Forest*

3

£493,380

London Borough of Wandsworth

1

£100,000

Royal Borough of Greenwich

2

£650,012

Royal Borough of Kensington and Chelsea

1

£200,000

Royal Borough of Kingston upon Thames

1

£203,000

 

61

£9,764,000

 

*Waltham Forest is the lead bidder on a joint training and skills proposal including Hackney, Redbridge, Tower Hamlets, Newham, Havering, City of London and Barking & Dagenham totalling £347,019. **Barnet is lead bidder on a joint town centre SPD proposal with Harrow totally £175,000. The funding has been divided equally between the LAs in this table.

 

 

Governance

  1. The GLA will use the Open Project System to make payments and to manage the delivery of the Fund and its outputs. Local authorities will be required to enter into funding agreements detailing the scope of the proposals, outputs, timescales and funding bid for.  Minor changes to proposal outputs and/or funding (for example timescales slipping or amendments to outputs which remain within the scope and purpose of the proposal) will be approved by the Executive Director - Housing and Land in accordance with the general delegation to senior members of staff contained within the Mayoral decision-making framework (“Mayoral Decision Making in the Greater London Authority”).[1] To ensure there is an appropriate audit trail in place for these decisions, GLA officers will keep a Record in Writing of decisions (as defined in the framework).
  2.  
  3. Significant changes to agreed proposals or substitution of proposals in the event of a Council being unable to proceed will be subject to a fresh Director decision to reallocate funds.

 

Objectives and expected outcomes

The objectives of the Homebuilding Capacity Fund are to:

• Develop a sustainable increase in the capacity and skills of both housing and planning departments within councils;
• Promote the Mayor’s good growth principles in housing delivery across London;
• Diversify the range of homebuilders, development models and sites for new homes in London; and
• Support the delivery of housing targets set out in the London Plan and the Building Council Homes for Londoners programme; and the Mayor’s long-term target of 50 per cent of new homes being affordable.

The key proposed outputs in the successful proposals include direct employment of new staff (including planning, urban design, housing development, programme management, procurement), creation of masterplan and capacity studies to deliver new homes, training and skills capacity building.

This is a new approach for GLA funding and as such it is felt important that the impact is carefully evaluated. It is proposed that the first call on any underspend of the Fund should be to commission an impact study (costing up to £40,000) to detail the outcomes and impacts of the completed proposals and overall programme. If there are no underspends, then this funding will be found from other Housing and Land budgets. The impact study will be commissioned in late 2020 from an appropriately experienced consultancy and be procured with support from TfL Procurement in line with the GLAs Contracts and Funding Code with the final report to be delivered in March 2021.

Equality comments

Under section 149 of the Equality Act 2010, as public authorities, the Mayor and GLA are subject to a public-sector equality duty and must have ‘due regard’ to the need to (i) eliminate unlawful discrimination, harassment and victimisation; (ii) advance equality of opportunity between people who share a relevant protected characteristic and those who do not; and (iii) foster good relations between people who share a relevant protected characteristic and those who do not. Relevant protected characteristics under section 149 of the Equality Act are age, disability, gender re-assignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation, and marriage or civil partnership status (all except the last being “relevant” protected characteristics).

The Homebuilding Capacity Fund aims, by supporting councils’ capacity to deliver new build Council-owned homes, including Council rented housing, intermediate rented housing, intermediate housing for sale, private rented housing, and market sale housing. Delivery of new Council rented housing is likely to have a positive impact on individuals in temporary accommodation as well as those who are vulnerable to homelessness. Data suggests that women , young people, and BAME communities are over-represented among those living in temporary accommodation. Furthermore, individuals with these protected characteristics as well as those who identify as LGBT+ and individuals with disabilities are known to be vulnerable to homelessness. As such, it is reasonable to anticipate a positive impact on people with these protected characteristics.

Delivery of mixed tenure developments will enable the Councils to foster good relations between communities by facilitating diverse and sustainable communities.

The proposed impact study will in part, consider the equalities impacts on individuals with protected characteristics, identifying where the Fund has delivered positive and negative equalities outcomes and impacts so that future funding can be targeted can better address equalities issues/eliminate negative impacts.

Other considerations
  1. Risk management issues

Risk/issues

Mitigation

Councils may wish to use the allocated funding for projects or purposes other than those outlined in their initial proposal.

Funding will be paid on achievement of milestones in arrears and the grant agreement will specify that the funding must be used for the purposes and projects agreed.  However, in recognition of the fact that the funding will be used over a two-year period and that circumstances may change during this time, this DD proposes that changes to proposal outputs and/or funding will be approved by the Executive Director for Housing and Land in accordance with the general delegation to senior members of staff contained within the Mayoral decision-making framework (“Mayoral Decision Making in the Greater London Authority”). [1] To ensure there is an appropriate audit trail in place for these decisions, GLA officers will keep a Record in Writing of decisions (as defined in the framework).

Councils will not spend all the funding provided.

GLA Officers will monitor the progress of projects closely, so that any potential underspend is identified early, and appropriate measures taken to address this.

Timescales proposed by councils in their proposals will slip, particularly if there are any delays with contracting.

Deliverability was one of the key criteria as part of the assessment process.  In addition, bids which could identify significant milestones within the first year of funding were marked more highly, meaning that even if some delivery slips, significant outputs should still be achieved within the first two years.

Councils will not be able to recruit the staff we have provided funding for due to skills shortages in the sector.

The GLA has suggested that boroughs look at alternative/innovative methods of recruitment such as Public Practice.  The funding is also spread across four different priorities which will require different skillsets, which should lessen the impact on staffing shortage. 

  1. The Homebuilding Capacity Fund is specifically designed to support councils to achieve the targets set out in the London Housing Strategy and draft London Plan. 
Financial comments

This decision seeks approval for expenditure of £9.764m over 2019-20 and 2020-21 in the form of revenue funding allocations to councils, for Homebuilding Capacity Fund proposals that form part of the Build for London project and up to £40k, for an impact study.

The expenditure will be funded from the H&L Homebuilding Capacity Fund (HCF) Build for London fund allocation as approved in MD2363, with an approximate spend of £6m in 2019-20 and the balance in 2020-21.

Activity table

Activity

Timeline

Confirmation funding allocations

March 2019

Sign grant agreements with successful boroughs

April-July 2019

First payments

July 2019

Ongoing monitoring

March 2019-March 2021

Impact study commissioned

November 2020

Impact study completed

March 2021

Funding for proposals ends

March 2021


Share this page