Scheme Types

1.0  Housing Associations have a number of development options available for the provision of either new build or existing dwellings for social housing for rent.

 

1.1  Acquisition and Works – is an arrangement whereby the Association acquires land or property and commissions the construction of new dwellings. New build dwellings generally must meet the design requirements contained in Design Standards Guide and, on completion, must have a ‘structural’ life expectancy of at least 60 years and comply with all Statutory Requirements on completion of the construction works.

More information: Band 3 – Other Schemes: new Build/ Rehabilitation/ Re-improvement/ Supported Housing/ Works only

1.2  Design & Build (Competitive Tendering) - is an arrangement whereby an Association produces a detailed brief and then advertises for suitable Design and Build contractors to apply for inclusion on a select list to be asked to tender.  The contractors are responsible for undertaking or developing the design – either in-house or by appointing consultants to undertake this task – and for the construction of the property.  Further details on Procurement.

As for Acquisition and Works, new build dwellings generally must meet the design requirements contained in Design Standards Guide and, on completion, must have a ‘structural’ life expectancy of at least 60 years and comply with all Statutory Requirements on completion of the construction works.

More information: Band 3 – Other Schemes: new Build/ Rehabilitation/ Re-improvement/ Supported Housing/ Works only

1.3  Design & Build Package Deals - is an arrangement where the land is owned by a contractor/ developer who will only sell on condition that the Association contracts with the contractor/ developer for the design and construction of the new dwellings. Important - this type of arrangement is in breach of EU Procurement regulations and, therefore, is not acceptable.

1.4  Off-the-Shelf Schemes - consist of newly completed properties, offered on the open market by a contractor/developer for a fixed price on the basis of a single conveyancing contract (a purchase contract).  Properties acquired in this way are for first-time occupation and need to meet fully the Association’s requirements as they stand – especially as the opportunity for changes will be limited by Statutory Approvals already obtained, and by the need to avoid any nugatory works and costs.

Associations must recognise that Off-the-Shelf schemes are ‘purchase contracts’ of a ‘standard product’ and must desist from requiring major changes that would invalidate statutory approvals already obtained, or require expensive alteration to work already completed.  An Association can take advice from an independent consultant on whether the proposed accommodation and features would meet the Association’s requirements, but should not go beyond this stage.  In Off-the-Shelf schemes minor changes to the specification can normally be accommodated, provided the works have not progressed beyond that stage.  The Association should bear in mind that the cost of any adjustments must be of a level to be met through the scheme on-cost allowances. Works costs cannot be claimed for this scheme type.

Examples can include: window and door specification, kitchen fittings, socket outlet provision etc.  During the construction stage, the Association should, under no circumstances, engage a Clerk of Works (COW) to regularly monitor the quality of work. Where works costs exceed the level to be accommodated through on-cost allowances the Association must amend the scheme type and appropriate TCI allowances accordingly.

More information: Band 2 Off-the-Shelf Schemes

1.5  Works Only (new Build) - involve the development of land already in the Association’s ownership and for which no acquisition costs (other than legal charges) apply. Development costs are assessed against the TCI particular to works only (new build) scheme.

More information: Band 3 – Other Schemes: new Build/ Rehabilitation/ Re-improvement/ Supported Housing/ Works only

 

1.6  Acquisition and Works (Rehabilitation) - is where existing dwellings are purchased and require substantial repair and improvement, conversion or extension for social housing for rent use.  The total works cost of each unit should exceed £10,000 (excluding VAT).  Existing dwellings generally must meet the design requirements contained in Design Standards Guide and, on completion, have a ‘structural’ life expectancy of at least 30 years and comply with all Statutory Requirements on completion of the construction works.

1.7  Works Only (Rehabilitation) - is similar to Acquisition and Works (Rehab), but where the Association contracts for the construction works only, and  involves the development of property already in the Association’s ownership which has hitherto been unimproved. For example, this scheme type would apply in the case of 'gifted' or donated property. Development costs are assessed against the TCI particular to works only (rehab) schemes

Rehabilitation ‘works only’ to a previously HAG funded scheme should be dealt with under the association’s major repairs programme.

1.8  Re-Improvement Schemes - are a category of ‘works only’ rehabilitation to Association owned property.  

1.9  Definition of Re-improvement Schemes - Improvement is generally defined as “providing something that was not there before”. Improvement works to properties requiring substantial improvement and repair may be eligible for grant aid.  However to be eligible the works must normally involve:

Examples of improvements can include: alterations to the dwelling/ block to provide additional/ reduced/ adequate dwelling/ communal space, or conversion of a dwelling or dwellings, or communal space to provide additional dwelling units.

N.B. Works to the property may be either improvement and repair, or conversion and repair, but not repairs only. Like-for-like replacements, repairs and maintenance type works are not eligible for grant-aid.

As an example, re-roofing a defective tiled or slated roof is a ‘repair’ and does not qualify for grant-aid. However, if part of the re-roofing involves the first-time provision of an underlay of roofing felt, all the associated work would qualify for grant. Similarly, replacing defective plaster would not normally qualify for grant, unless disturbed due to the necessary installation of a damp-proof course or other waterproof treatment, or necessary thermal insulation provision.

1.10  Re-improvement Schemes Eligibility Criteria - In order to be considered for grant-aid, the property must fulfil ALL of the following eligibility criteria:

1.11  Re-improvement Schemes Eligible Repair Works - Subject to meeting the definition and eligibility criteria, the following repair works can only be considered for grant if being carried out in association with ‘improvements’ or as part of a comprehensive re-improvement scheme:

A re-improvement scheme will not normally be approved less than 15 years after the date of Practical Completion of the original scheme in the case of rehabilitation projects, and not less than 30 years after the date of Practical Completion of the original scheme in the case of new build projects.  However, re-improvement schemes may be approved within shorter timescales in cases where the condition of the property is such that it is extremely difficult to let or it is causing a serious health risk to tenants.  However, the Association’s delivery of its maintenance responsibilities, as set out in the Housing Maintenance Guide, will be subject to consideration when assessing the reasonability of such requests.  In such cases, the TCI will normally be reduced on a pro rata basis to the 15 or 30 year rule.  In re-improvement schemes normally a rent increase is required to service the Private Finance element.

1.13  Re-improvement Standards - The improvement or conversion works carried out in a re-improvement scheme should, where practicable, bring the property up to current design and construction standards, having regard to the DSD’s Design and Procurement requirements (see Design Standards Guide and Procurement).  The Association should attempt wherever possible to re-improve entire buildings rather than individual units within them.  However in the case of blocks of flats and houses converted into flats, it may not always be possible to re-improve the whole property because of the problems of gaining vacant possession.  Exceptionally therefore it will be acceptable for individual flats or parts of buildings to be re-improved separately where necessary.  

More information: Band 3 – Other Schemes: new Build/ Rehabilitation/ Re-improvement/ Supported Housing/ Works only

1.14  Existing Satisfactory Purchases (ESPs) - The purchase of ESP’s can be a useful method of procurement in areas of high need where the opportunity to develop is very limited.  The Existing Satisfactory Purchase (ESP) Multiplier is used where existing satisfactory dwellings are purchased, following inspection, from the property market.  The conditions of these dwellings must be such that they do not require full rehabilitation, but may require a degree of repair/ checks/ upgrading to bring them up to an acceptable standard for letting.  In order to meet the criteria for definition as an Existing Satisfactory Purchase the estimated repair/ checks/ upgrading must not exceed £10,000.  The maximum expenditure on checks, repairs and upgrading for ESP's remains at £10,000. If an Association needs to spend over this they must progress the scheme as an Acquisition and Works rather than an ESP.

The £7,500 is the amount of money included in the TCI calculation for the checks, repairs and upgrading work. Tariff schemes get the £7,500 included in TCI regardless of whether it spends £1 or £9,999 is spent. A non-tariff scheme gets the actual money it has spent, subject to the assessment of qualifying costs and the specified ESP cost limit.

In comparing costs for TCI purposes qualifying costs include:

In looking for suitable dwellings to acquire Associations need to ensure that such dwellings are in good condition and meet satisfactory standards.  The dwellings need not meet new build standards, but generally must provide satisfactory accommodation, services, safety etc.  Although it is not essential to meet all the design requirements contained in  Design Standards Guide, it is essential that the condition and the suitability of the accommodation will fully meet the needs of the people to be housed.  For more information on ESP Design Issues

1.15  Procurement - In arranging for the repairs/checks/upgrading works to be undertaken Associations are reminded that the method of procuring the repairs/checks/upgrading works must comply with the requirements of Procurement.

1.16  Practical Completion - Associations are reminded that the actual cost of undertaking the repairs / checks / upgrading must be identified prior to application to the NIHE (DPG) for project approval, and must be on a ‘firm’ price basis as there is no provision for adjustment upwards on the application for the final Tranche.  Cost overruns will not be funded.

Grant is paid in 2 Tranches, at Acquisition and Practical Completion stages, in accordance with Claiming Payment.

An authorised statement of the repair/checks/upgrading works completed showing the actual costs is required to be submitted to support the practical completion claim.  The authorised statement should take the form of a table/list on Association headed paper showing each address, an itemised complete list of repairs for each individual property with associated costs beside each individual item.  The full works costs for each property must be individually totalled to equal full amount paid to contractor in respect of that dwelling and finally, signed by an authorised signatory for the association.  All works must be declared.  The total cost of works carried out to all dwellings in the scheme must tally with the information provided on the GP2 form. This statement is then submitted to NIHE (DPG) along with the completed GA1 payment request form.  See Claiming Payment  for details.  All relevant invoices must be retained on the association’s file for inspection as required.  N.B. The practical completion tranche can only be paid once the acquisition has completed and any works have been carried out.

N.B Grant payable will be adjusted downwards where costs come in under the approved amount. Where actual works costs exceed the £10,000 ESP threshold the scheme must be re-approved as a rehabilitation Acquisition & Works project.

More information: Band 1 ESP