Local Authorities: bidding for new build

Bidding Rounds 1 & 2 for Local Authority new build have now closed

£100 million was announced as part of the Budget to fund local authority new build, to be split broadly 50:50 between grant and cover for prudential borrowing which would be raised by local authorities and serviced from rental income from the properties built. Further funding was subsequently announced as part of the Building Britain’s Future package.

The outcome of round one bids was announced on 9 September confirming allocations made to 49 Local Authorities. This will allow councils to deliver over 2,000 new homes, building on their own land. Homes will be for social rent, built to high environmental standards.

Round two (announced 11 January) has resulted in more allocations made to 73 councils to deliver a further 1,930 homes for social rent.

Funding model

Local authority new build funding, delivered through the Homes and Communities Agency, makes available Social Housing Grant (SHG) and provides capital cover for the consequential prudential borrowing serviced by rental income from the properties. The money is broadly split 50:50 between the two elements.

It is a simple model to fund development whereby local authorities contribute land at nil value, the HCA provides grant, and the local authority borrows prudentially against the future rental stream from the properties.

Outcome of Bid round one

Bid Round two

Guidance

The guidance document covers the parameters for our funding, the assessment criteria for the programme and describes the process. Please note in particular the information that is required in relation to apprenticeships and training, and that we will require all round 2 bidders to set out their plans in this area, which will form part of our selection criteria and be a delivery requirement for successful round two bids.

Grant Agreement

The grant agreement details the terms and conditions to which Local Authorities will need to sign up to if their bid is successful.

Questions and Answers

The Q & As detail various queries that we have received from Local Authorities regarding the bidding for grant and are updated on a regular basis.

Pre Qualification Questionnaire

If your organisation is not already an approved investment partner through our National Affordable Housing Programme you will need to complete the Pre Qualification Questionnaire (PQQ) and related documentation.


Exclusions from HRA Subsidy System (Section 80B Agreement)

In line with Section 80B of the Local Government and Housing Act 1989, Local authorities can apply to exclude specified properties from the operation of the HRA Subsidy System by agreement with the Secretary of State (such properties remain within the housing revenue account).

The guidance document provides more information on applying for a Section 80B Agreement and applications for a Section 80B Agreement should be made to the Homes and Communities Agency (HCA) using the application form below.

Please note – Applications ONLY needs to be submitted for non grant funded sites. Sites in receipt of funding from the National Affordable Housing Programme (NAHP) receive AUTOMATIC recommendation by the HCA for exclusion from the Housing Revenue Account (HRA)

 

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Last updated: 11 January 2010

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