Bidding for social housing grant … MADE SIMPLE

Getting Housing Corporation
social housing grant is crucial to the business of many housing associations – and could become vital to housebuilders if the government proposal to extend grant to private developers gets the go-ahead. But the process can be confusing for those not directly responsible for putting together that winning bid. Here are a few guidelines:

ADP bidding
The corporation's approved development programme social housing grant is distributed via an annual bidding round, starting in September or October. At the moment, it lasts for only a few weeks although the corporation is considering a move to continuous bidding.

Bids are submitted to the corporation's Investment Management System on its website (www.housingcorp.gov.uk). Access to the site must first be obtained from the relevant regional office. At the moment, bidders must be registered social landlords with Client Charter status and no black marks for financial performance. In some regions, bids that involve section 106 planning gain agreements between councils and developers may not be accepted. About seven out of 10 ADP bids are rejected, but this can vary significantly.

To help bidders, the corporation publishes annual Regional Housing Strategy Statements explaining its priorities and requirements for each council. There is also a guide to the allocation process, a capital funding guide and Circular R2-02/02 for calculating rents on supported housing schemes, which can be tricky. It also publishes, in August or September, the total cost indicators for projects and grant rates in the coming year, which are incorporated into a grant calculator on a Microsoft Excel spreadsheet.

How and when to get started
Successful bids must be presented as helping with one or more of the regional priorities. When suitable sites in locations with adequate demand are identified, you should consider buying the land in advance. This can improve your chances because funders prioritise bids that they consider deliverable. Owning a suitable site makes the project more viable, and helps to obtain planning permission. It also gives you a known cost that can be demonstrated to be in line with total cost indicators.

For September bidding, you should contact the corporation and the local authorities involved in early February. In both cases, every contact should briefly mention your successful track record involving corporation, local authority social housing grant or other funding. You should also say how your bids match one or more corporation and local authority priorities in areas with sustainable demand, and will help you and your clients.

Briefly mention if you expect or have local authority backing, and tell the council that your bid justifies its backing as a priority. Don't forget to give the location and size of your bid scheme(s), to say if they are part of a section 106 agreement and if you own sites and/or have planning permissions. Finally, every contact should say if you expect build costs to be less than 110% of the total cost indicator, and mention any appraisal showing that your proposed schemes are financially viable. You should be able to fit this on one page, including a request for a meeting to discuss the proposal. Any details such as costs, support statements and financial appraisals should be attachments.

Buying the land in advance can improve your chances because funders prioritise bids that they consider deliverable

At this point, it is more important to get a response from the local authorities. The corporation will be very busy in March and early April, so if you want to update it on your bid, leave this till mid-April. No news may be good news – it means it sees no problems that merit discussion.

You can chase the corporation in May or June by email or phone, asking for a response only if it foresees problems with the details supplied. You should also ask councils if they have discussed your bid with the corporation, which may be the only pre-bid discussion the corporation needs.

Close to the actual bidding period, during which details are entered into the IMS, the National Housing Federation runs an online discussion group to deal with IMS problems, which is worth checking daily.

Before inputting bids, it can help to put them through the corporation's Excel grant calculator or a scheme appraiser with a compatible grant calculator, such as GoScheme or Pamwin. If appraisal shows that you can afford it, your bid can be helped by going with starting rents slightly below target rent and a grant amount slightly below maximum grant.

What to do if the answer is no
If your bids fail, the Housing Corporation runs additional grant processes, such as the starter homes initiative and the Challenge Fund. These may last for one year only, can be launched at any time and the bidding often differs from the ADP process. Initial bids that can help with a specific problem area might have to be submitted within weeks of the initiative's announcement.

Full bid details may not be required in that timescale and bids may be accepted that only partly address the problem.