Housing Association Guide Part 1 - Appendix 9
Contents
Annexes - A to F: Grant Rate Tables on a TCI Cost Group Basis for Mixed Funded Schemes
1.01These Guidance Notes - are designed to explain the use of grant rates in Housing Association Grant (HAG) funding, and help Associations complete scheme submissions. The notes are effective from 31 October 2008, and are issued together with separate Total Cost Indicators (TCI) Guidance Notes (see Appendix 8 to Part 1, effective from 31 October 2008).
1.02Background to the Grant Rates for 2008/09 - is included in Overview of TCI, Grant Rates & Rent Benchmarks for 2008/09 (See Appendix 7 to Part 1)
1.03Enquiries – about the interpretation of this guidance should be directed to: NIHE Development Programme Group (DPG) in the first instance.
1.04NIHE (DPG) - can be contacted on: (028) 9031 8400.
2 Grant Rates - Key Objective
2.01A Key Objective - of the funding system is to achieve value for money in return for grant, and to ensure the correct level of grant is paid. Grant rates are an essential part of this system and are divided into TCI Cost Group areas (A to F) and unit types.
2.02Grant Rates - represent the maximum proportion of scheme costs which will be funded by any form of public subsidy including HAG. The definition of public subsidy in this context is contained in the Guide at Appendix: 3 to Part 2, (Annex R)). Where there are contributions of public subsidy to a scheme from sources other than HAG, the amount of HAG payable is reduced pound for pound.
3 Combined Grant Rate for Housing Schemes
3.01The NIHE (DPG) has arrangements – which allow the submission of schemes containing a combination of different Grant Rates within a single scheme. Consequently such schemes have an overall scheme Grant Rate which will be used for the tranche calculation.
3.02Advice - on the Tranches applicable to a combined General Needs and Supported Housing scheme is contained in the Total Cost Indicators (TCI) Guidance Notes (see Appendix: 8 to Part 1).
4.01All Schemes - including those funded under the Supported Housing procedures are funded by a mixture of grants and loans. The loan element for the majority of schemes is obtained privately by Associations (Private Finance). Schemes funded by such a mixture of private finance and public grant are referred to throughout these notes as “Mixed Funded”.
5.01The City/District Council Area - in which a scheme is located defines the TCI Cost Group for the scheme. A list of the City/District Council areas in each cost group is included in the Total Cost Indicator (TCI) Guidance Notes (See Appendix: 8 to Part 1).
6.01Because of the different capital and revenue costs of different dwelling types, separate grant rates are published for a range of units. The TCI multipliers which are applied to a unit define the dwelling type for grant rate purposes (See Appendix: 8 to Part 1).
7.01Annexes A to F - set out Grant Rates on a Cost Group basis which apply to mixed and publicly funded schemes.
8 Using the Grant Rate Tables8.01To use the Tables - to identify the appropriate Grant Rate, the Cost Group and the gross TCI multiplier must be identified. The Total Cost Indicator (TCI) Guidance Notes 2007/08 list the current TCI multipliers and explain their use.
8.02For Housing Units - developed using tariff funding, the gross multiplier and norm grant entitlement is calculated for each unit type on Form SFN1, then aggregated for the whole project on Form SN1/TA1. For non-tariff funded schemes, the gross multiplier and grant for each unit type is similarly calculated on Form SFN1, which is also used to derive the aggregate grant rate for the scheme on a weighted basis according to the mix of units.
8.03To identify the Grant Rate - for both tariff funded units and non-tariff funded units:
i. Find the TCI gross multiplier (rounded to 2 decimal places) in one of the ranges established by the “Lowest” and “Highest” columns at the left of the look-up tables in Annexes A-F;
ii. Determine the appropriate grant column by referring to the column headings and the key and notes below the tables; and
iii. Read off the grant rate from the appropriate column for the particular unit type.
8.04“Standard” Grant Rates - are shown boxed in Annexes A-F. These have been calculated as follows:
i. The standard rate is the rate for the unit type at the top of the column in the absence of any other design or need characteristics which, by attracting additional key or supplementary multipliers, would produce an adjusted TCI and a different gross multiplier. For example, a Category 1 acquisition and works unit, in Cost Group ‘A’ with no additional characteristics has a standard grant rate at a gross multiplier of 1.05, reflecting the fact that Category 1 dwellings attract a supplementary multiplier which is applied to the basic new building TCI.
ii. The standard rate for shared housing is calculated by applying to basic TCI the adjustment for acquisition and works schemes with between 4 and 6 bedspaces. Schemes with higher or lower numbers of bedspaces attract different supplementary multipliers leading to a grant rate above or below the standard.
8.05Grant Rates - are shown for a wide range of gross multipliers, but it is possible that a scheme may attract a multiplier outside these ranges. In such cases, the grant rate appropriate to the nearest published range should be used.
9 Grant Calculations and Cost Overruns
9.01Tariff Funding - for all projects (including supported housing) funded on a tariff funded basis, subsidy entitlement is fixed at first claim stage. There is no recalculation at project completion. Subsidy entitlement is the result of the following calculation:
- TCI for the cost group x grant rate = grant in £
The calculation is undertaken on Forms SFN1 and SN1/TA1.
9.02Non-Tariff Funded Schemes - projects above TCI will be subject to value for money assessment. Schemes will not normally be approved at more than 130% of TCI.
9.03For Mixed Funded Schemes - (including those proceeding under the Supported Housing procedures), the grant percentage is fixed at project approval stage. Grant entitlement calculated at this stage is estimated eligible cost x grant rate. The costs are reviewed at project completion and grant eligibility recalculated as eligible outturn cost x the original grant rate. Grant will not be paid on an outturn cost greater than 110% of the estimate at project approval or 130% of TCI, whichever is the lower.
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