UK Housing Awards 2011

Transcription

1 UK Housing Awards 2011 Excellence in Housing Finance and Development: Finalist North Lanarkshire Council: Building For The Future Summary North Lanarkshire Council has been proactive in establishing, developing and implementing Building for the Future, a programme of house construction, during a time of financial austerity. The challenge to support growth in the local economy and provide support to the construction industry in one of the most challenging economic periods has been a supplementary undertaking to the principal objective to address local housing needs within North Lanarkshire. The council has approved a 75m new build programme of 500 properties built to Housing for Varying Needs standards, funded through additional borrowing, innovative use of existing resources and prudent management of income and expenditure. This programme will provide 50% of the shortfall of 1,000 affordable homes in North Lanarkshire identified by The Glasgow and Clyde Valley Housing Need and Demand Assessment.

2 It has provided new opportunity of work within the construction industry and contractors supply chains over a five-year period as part of a Framework Agreement and has delivered 16 full-time jobs to local unemployed people through training initiatives over the course of the first three sites. What did you set out to achieve? The key housing challenges in North Lanarkshire, outlined in the Consultative Draft Local Housing Strategy include: Meeting housing need and demand with projected growth of 24,800 additional households by 2033 To increase the supply of affordable homes The projected increase in the older population and single person households influencing types of housing and support To make housing more accessible for older people and those with disabilities; To minimise the risk of households living in fuel poverty Reducing homelessness across North Lanarkshire. Over the last 20 years, housing has changed with the growth of home ownership via Right to Buy and private sector housing building. The total North Lanarkshire housing stock of 148,000 includes: Owner-occupation 65% Council housing 25% Housing Association 6% Private Renting 4%. The majority of the housing stock is in the private sector. Key growth components since 2001 being Right to Buy and private renting. The Glasgow and Clyde Valley Housing Need and Demand Assessment indicated reduced growth in the private sector over the next 15 years. The effect of current economic conditions includes: A reduction in house completions in the private sector Reduced demand for home ownership driven by financial constraints Increased number of applicants on the North Lanarkshire Common Housing Register. The HNDA indicates a shortfall of affordable housing to meet identified needs equivalent to nearly 1,000 affordable homes during Our vision is to deliver high quality affordable housing because we recognise that an affordable, warm and accessible home is the foundation for a

3 successful life, providing the platform for improved employment, education and health outcomes. Building for the Future seeks to achieve high quality, accessible homes to address housing demand issues while demonstrating efficient and costeffective use of available resources. How were these aims and objectives met? To meet our goals, we: Maximised the potential for investment in new affordable rented housing Sought and delivered Scottish Government subsidies Identified development locations, without compromising the availability of sites to RSLs or the private sector for AHIP funding Examined housing supply and demand data for North Lanarkshire Established an inter-service New-Build Working Group to oversee Building for the Future Developed a Framework Agreement to minimise risk and promote cost efficiency, quality control and wider community benefits Established development sub-groups to progress sites Promoted pre-submission discussion between Framework Partners and Planning & Roads staff teams. The council has identified approximately 2.34m of revenue resources per annum to finance new build capital investment of 75m, comprising: 700,000 savings on professional fees 1.404m identified through budget setting process 236,000 additional income from Council tax discount on empty houses and second homes. CFCR funding has enabled the council to minimise the level of borrowing during early years of the programme thereby reducing financing costs overall and maximising the number of units deliverable. Full advantage of external funding has occurred with three successful bids to the Scottish Government securing 5.625m with a further bid submitted in round four for 3m. New-build completions in North Lanarkshire since 2003 have been in decline since 2005/06. The Social Rented Sector provided 33% of new-build completions in 2010/11. The affordable housing programme will require funding models which ensure supply to meet the additional affordable housing needs as AHIP reductions are likely to continue. The Glasgow and Clyde Valley Housing Need and Demand Assessment indicated a shortfall of affordable housing of 1,000 affordable homes during The council s Building for the Future programme is committed to

4 supplying 500 units over the five-year period from What challenges did the project face, and what lessons were learned? Establishing a Funding Framework A 30-year cash flow model was developed to determine what investment could be made available to Building for the Future : 700k pa savings in fees on capital programme 1m pa recurring growth 236k pa council tax discount monies. In addition, it was established that these resources available could be augmented by: grant of 5.625m from Scottish Government for 218 units A rent premium of 20% on new build properties. Identifying sites A joint working group considered a variety of locations accounting for: Local Housing Supply and Demand AHIP requirements of other housing providers Site suitability, ground conditions and access Potential benefits to wider areas. Establishing Design Criteria Design specifications were developed by: Consultation with other housing providers regarding good practice Discussion with property maintenance staff Advice from Community Safety Partnership and RoSPA Adoption of Housing for Varying Needs Liaison with Social Work Services, principally Occupational Therapists. Establishing Procurement Strategy The approach to procurement was reliant on: Sound Financial Planning Development of a Construction Framework Agreement Selection of partners via competitive tendering based on cost and quality. Economic Downturn The coincidence of a global economic downturn necessitated: A Framework to provide opportunities to Partners over a five-year period

5 Appointment of 3 Framework Partners to reduce risk Training & Employment conditions to support the local economy Requirements to source local employment and materials to support local economy. By working in partnership with other services and agencies, it was identified that prudent use of resources and subsidy could fund borrowing requirements in a cost-efficient, effective and sustainable manner. This added to multidisciplinary working allowed a broad aspect to be achieved in developing solutions to the challenges presented. How was the success of the project measured? Units completed and committed to: 170 properties are either completed, under construction or committed to a site, with a further 72 properties in preparation for tenders to be awarded First two completed sites: 38 new properties have generated 84 new lets, including 11 people / families housed from Homeless List All houses are barrier free and Varying Needs Standard, with Secure by Design and Eco-Homes Rating of Good Safe design has been recognised by RoSPA Fuel Efficient, high efficiency boilers in all homes Solar technology being introduced at Laburnum Road, Viewpark, and Mechanical Ventilation Heat Recovery Systems in Moodiesburn. Satisfaction results: Positive responses to first completed site from two conducted surveys with 100% of residents either Satisfied or Very Satisfied with their new home The only requirement after survey has been for a car parking sign to be installed at one location Satisfaction survey being issued to second completed site which has just been let Pilot Co-Production Group for integrating people with disabilities has visited one site to observe completed dwellings and indicated satisfaction with design and accessibility, even for wheelchair users in non-wheelchair standard houses. Training & employment success: Sixteen unemployed people have been provided with employment. Twelve of these were as part of a combined training programme on-site and an 11 week training course at Motherwell College. This was Highly Commended in the Community Partnership of the Year category at the Scottish Home Awards 2011 Two other unemployed people were employed directly by one of the contractors.

6 Wider community benefits: Contractors at all sites adjacent to schools have provided community safety education information Local Charity Made4UinML2 received refurbishment to their premises by Wates St Maurice s High School, Cumbernauld will have Lecture Theatre refurbished by Wates Owner-occupiers neighbouring the site in Clarkston, Airdrie have had Japanese Knotweed and Giant Knotweed removed from their gardens as this was potentially contaminating the council owned site Four Secondary pupils have received work experience placements with Wates and Coltart Earley, with a commitment to seek future work placements. What were the key positive outcomes? The core elements of the Building for the Future programme could be utilised by others as a model for good practice in social rented house construction. The design specification was initially achieved via discussion and examination: of good practices within RSL housing development adoption of Housing for Varying Needs guidance liaison with property maintenance staff in the council liaison with architects within Council s Design Services agreement with the council s Community Safety Partnership inclusion of RoSPA safety guidance discussion and agreement with Occupational Therapists. After completion of each development site, amendments to design specification for next projects based upon Review and analysis of: tenant feedback Framework Partner construction team feedback Framework Partner Architect Feedback. Prior to Planning Applications being submitted: pre-submission discussions with Roads and Planning officials with Framework Partners to establish acceptable design solutions. Use of Framework Agreement Provides element of comfort to risk in having a number of Partners Provides competitive prices as each site contract is tendered among Partners Provides opportunity and a degree of comfort to work availability over a number of years for Partners

7 Provides balance to maximise cost and quality benefits to contracts. Training & Employment Clause Achieves contribution to council s corporate objectives to support local economy Assists local people to attain work and training opportunities Supports council Learning & Leisure Services Secondary School Work Experience Programme Integrates Partners with local community. Wider Community Benefits Provides support to local communities Assists Third Sector (Voluntary) activities. How can you demonstrate that you have optimised the funding opportunities available? The council has identified approximately 2.34m of revenue resources per annum to finance new build capital investment of 75m. This comprises: 700,000 savings on professional fees 1.404m identified through budget setting process 236,000 additional income from Council tax discount on empty houses and second homes. It was identified as a priority within Building for the Future that savings and efficient use of existing resources be utilised to benefit from Capital Funded From Current Revenue (CFCR). The revenue allocation within the Prudential Borrowing framework enables existing resources to be utilised to greatest effect. The extent to which investment is CFCR funded has enabled the council to minimise borrowing in the early years of the programme thereby reducing financing costs overall. In addition to these resources we have taken full advantage of all opportunities to obtain external funding for our new build programme. Currently three successful bids have been made to the Scottish Government securing 5.625m with a further current bid submitted in round four for 3m. The evaluation process for the selection of framework partners optimised funding with 70:30, Cost : Quality selection criteria, to ensure at the earliest stage that cost-efficient partners were identified before committing to site specific tenders. Tender evaluations reverted to 60:40 for Cost : Quality split to ensure the quality on each site is not under-valued, but maximising resources in a cost effective approach.

8 In order to maximise resources, council owned sites have been identified as priority development targets. Use of land belonging to Housing & Social Work Services removes the need for land purchases and maximises investment in the production of housing. Where sites belonging to other services are used, careful consideration to identification of abnormal site costs (e.g. remediation of contamination) is deducted from the acquisition costs. How has your initiative helped to maximise the supply of new housing in your area? Examination of New-build completions in North Lanarkshire since 2003, indicates that there has been a decline in the total number of completions, year on year since 2005/06. The Social Rented Sector accounted for 33% of all new-build completions in North Lanarkshire in 2010/11. The core AHIP allocation for in North Lanarkshire was 9.6m, against a national core budget of 471m (2%). This represents a 45% reduction on the 2009/10 budget of 17.66m. Over the last 20 years, the tenure mix of housing has changed with the growth of home ownership via Right to Buy and private sector housing building being the Key growth components since The Glasgow and Clyde Valley Housing Need and Demand Assessment has indicated reduced growth in the private sector over the next 15 years. This will be strongly contributed to by the current economic conditions leading to a reduction in house completions within the private sector and reduced demand for home ownership driven by financial constraints. It is anticipated that these factors will result in an increased number of applicants on the North Lanarkshire Common Housing Register. With reductions within the AHIP budget allocations being expected to continue, it is clear that the affordable housing programme is now operating in a very different financial climate and there will be a need to look at funding models which ensure a supply to meet the need for additional affordable housing. The Glasgow and Clyde Valley Housing Need and Demand Assessment indicated a shortfall of affordable housing of 1,000 affordable homes during The council s Building for the Future programme is committed to supplying 500 units over the five-year period from The use of sites outwith the current AHIP programme protects programmed supply to ensure that council completions supplement the agreed RSL affordable housing provision. How does your project help address either a current challenge, faced by many providers, or meet a current priority in your part of the UK? The desire to meet shortfalls in affordable housing provision is shared by local

9 council s and RSL s alike, particularly such as in areas where Pressured Area Status exists (e.g. Cumbernauld & Moodiesburn). Affordable housing providers, like any other organisation, are affected by the current economic climate in which limited access is available to finance either from lenders or the availability of government subsidy. To this effect, Building for the Future aims to provide additional support to the delivery of new affordable homes within areas of identified need within North Lanarkshire. Building for the Future provides a supplement to RSL provision from the AHIP programme. It targets development opportunities out-with the North Lanarkshire SHIP to ensure AHIP resources are utilised, as programmed, while supplementing this provision of affordable new homes via new capital investment derived from prudent use of existing council resources and additional Scottish Government subsidy. As previously indicated, Building for the Future will provide 500 new affordable rented homes. This will supplement more than 800 properties identified by other housing providers within North Lanarkshire Council s SHIP over the five-year period from These developments will deliver good quality accommodation to seek to address the identified shortfall of 1,000 affordable Homes within the Glasgow and Clyde Valley Housing Need and Demand Assessment. Is your project influencing the way other providers work, will it help deliver improvements beyond those immediately involved? It is still early to determine the full extent of interest by other parties in the methods and outcomes of Building for the Future. Individual elements of the programme may not in themselves appear revolutionary, however we believe that a comprehensive package of activities and approaches are the key to the success that has been achieved so far. The package, in summary, involves: Consultative approach to design specification (and its organic growth from project to project) with internal services, other housing providers and service user representatives Innovative use of cost savings, good budgeting practice, Prudential Borrowing and Scottish Government grant to maximise development capacity; A Framework Agreement to minimise potential risk and maintain competitive approach Integrated Training & Employment clauses within the Framework and each tender award Defined approach to site identification to protect existing AHIP opportunities for RSLs. Clyde Valley Housing Association (CVHA) has been of assistance in the early

10 stages of Building for the Future to provide project management services. CVHA has shown interest in some of the design developments that have evolved as part of the design process. Perth & Kinross Council has shown interest in the Framework Model and Midlothian Council has requested information relating to the successful Training and Employment Initiative that has been developed as part of the programme. Particular interest appears to be the integration of this within the Framework Agreement and tenders which enabled the development of a training initiative by one of the Framework Partners at Motherwell College.