Independent Living Programme 12 November 2015 Essex County Council

Contents INNER CIRCLE CONSULTING BACKGROUND AND CONTEXT SIX FACTORS OUTCOMES AND NEXT STEPS

Situation INNER CIRCLE CONSULTING Summer 2014 360 existing Units – Extra Care No consistent model of delivery Target of 2,500 units 200 in pipeline

Complication INNER CIRCLE CONSULTING Limited resources Falling revenue funding Increasing demographics Care Act Personalisation Changes to housing benefit

Question INNER CIRCLE CONSULTING Why, given the accepted benefits to the service users and councils, wasn’t more extra care development coming forward? What could ECC do to increase the amount of extra care development coming forward?

Answer INNER CIRCLE CONSULTING To answer these questions the Council commissioned an intensive eight month programme of activity, involving extensive engagement and consultation with the districts, developer/providers and other councils to develop an action plan. A strategic business case was produced in Autumn 2014 setting out the barriers and challenges that needed to be overcome. An outline business case was produced in Summer 2015 demonstrating how the barriers and challenges had been overcome and seeking endorsement for significant revenue and capital investment to deliver the programme.

Six Key Factors to Accelerating Delivery INNER CIRCLE CONSULTING FACTOR OUTCOME DEFINITION A precise explanation of the purpose, eligibility and features of Independent Living. DEMAND Demographic demand articulated by ECC and endorsed by Districts. Involvement programme to build user demand. DELIVERY MODEL Delivery model identified and being tested CARE Care model identified and being tested. RENTS Appropriate and affordable rent levels PLANNING Embedding in the Districts planning policies and procedures the demands for Independent Living. CONTEXT Strategic Business Case taken to CPMB November 2014 set out the rationale for exploring alternative capital delivery models and identified significant non-capital barriers blocking delivery of Extra Care Housing Extra Care Programme was established February 2015 to, by August 2015: Deliver a coherent plan with named partners and costed deals to deliver circa 2,500 Independent Living beds and meet any ongoing annual growth in demand. This includes exploration of capital models that enable delivery at scale and provide ECC with more control over delivery. Address the non-capital barriers including demand projections, care model, revenue funding, approach to sharing of risk and reward between ECC and all partners and branding / marketing. Demonstrate in detail the revenue savings associated with the delivery of Independent Living. Three months into a six month programme significant progress has been made; there is a working hypothesis for future delivery established and being tested with partners Output to July CPMB - single overarching business case for increased capital investment in Independent Living

Definition INNER CIRCLE CONSULTING For people aged 55+ Attractive, self-contained housing . A mixture of 1 and 2 bed apartments 24/7 care and support should be based on the site Scheme size typically from 40-300 units Ideally schemes would be in a large town or large village in close proximity to public transport links to access a larger urban centre. Broadly, an even balance of low or no care need (0 – 9 hours/week), medium care need (10 – 15 hours/week) and high care need (15+ hours/week) should be maintained. ECC will require a minimum of 6 hours/week of assessed care need for an individual to be eligible for a unit.

Demographic Demand INNER CIRCLE CONSULTING BACKGROUND Districts identified poor demand data as one of the key factors slowing development Data produced by ECC Insight and Analysis and endorsed by Districts 57% of 5007 eligible clients are owner/occupiers Therefore need to create a housing product that would be more suitable to them – hence shared ownership

Delivery Model(s) INNER CIRCLE CONSULTING Delivery model is dependent on source of land The grant funding model supports delivery of schemes being brought forward by developer/ providers on land that they have sourced Where land is sourced by a public sector organisation ECC does not have an efficient way to access the developer/ provider expertise and capacity to turn that piece of land into an operational independent living scheme Decision taken to set-up a developer/ provider framework that will be used to efficiently appoint developer/providers to take forward schemes on land owned by the public sector. Still possible to undertake one-off procurements if schemes come forward quickly Long list of delivery models explored: Direct Development (& retain) Direct Development (& sell on) Joint Ventures Local Asset Backed Vehicles Charitable / Social Trust Public-private partnership Developer Panel Framework Framework Agreement (single developer-partner) Extra Care Investment Fund Institutional Investment Models Conditional Land Disposal PFI

Viability of Independent Living per Unit #1 INNER CIRCLE CONSULTING Delivery of an Independent Living scheme is dependent on both capital and revenue viability. Capital viability is dependent upon land and build costs, tenure mix, rents and sales values. A key factor specific to independent living schemes is whether or not the social rented properties qualify as exempt accommodation. Qualification as exempt accommodation means that the landlord can charge rents above the level of housing benefit which can in turn be claimed from Central Government from the District. Higher rents improve viability.

Viability of Independent Living per Unit #2 INNER CIRCLE CONSULTING Revenue viability is based upon how care is commissioned and how much the County pays for the care A key factor specific to independent living schemes is who contracts with the provider on the provision of care and how this relates to personalisation. If ECC contracts through a block care contract then the tenants have been denied an element of personal choice and that block contract will need to be tendered within 3-5 years. In the event that the developer/provider loses that contract another care provider could provide care services in the building owned by another provider; an issue highlighted by the market as a barrier to development If the individuals contract with the care provider (receiving direct payments and support and guidance from ECC) then personal choice has been exercised and, whilst the developer/provider has to continue to deliver a high quality service or risk individuals changing provider, they do not have the medium term risk of the re-procurement of the block care contract

Viability of Independent Living per Unit #3 INNER CIRCLE CONSULTING Tools to bridge capital viability gap: Land donation HCA grant ECC grant Cross-subsidy from ownership units Increase proportion of ownership units Development value £20k Development value £10k Development cost Development cost Development cost £80K-100K Development value Social rented unit Shared ownership unit Private sale unit

Influencing Planning Policy INNER CIRCLE CONSULTING In order to increase the pipeline of sites available on which IL housing can be built, work has been undertaken to influence emerging planning policy documents to recognise IL as a distinct housing type and land use Currently planning policies do not reflect Independent Living, in that sites are not allocated for its use, and as demand isn’t specified, LPAs are not proactively seeking provision through either policy or development management We are working with the ECC Spatial Planning and Infrastructure teams to embed Independent Living within the planning policy framework of each District FURTHER INFORMATION Therefore a Position Statement has been produced which provides: A definition of Independent Living Demand information by district Site characteristics for Independent Living developments This will equip LPAs with the information and evidence they require to identify sites for Independent Living, and encourage and monitor the delivery of it as a distinct housing type through development management In addition to this, engagement has been undertaken with ECC planning officers and with districts through the Essex Planning Officers Forum.

Capital Investment and Revenue Savings INNER CIRCLE CONSULTING Average capital cost to ECC is likely to remain at circa £30k per unit for affordable rented units The projected annual net revenue saving per unit is £4,475. FURTHER INFORMATION Therefore a Position Statement has been produced which provides: A definition of Independent Living Demand information by district Site characteristics for Independent Living developments This will equip LPAs with the information and evidence they require to identify sites for Independent Living, and encourage and monitor the delivery of it as a distinct housing type through development management In addition to this, engagement has been undertaken with ECC planning officers and with districts through the Essex Planning Officers Forum.

Outcomes and next steps INNER CIRCLE CONSULTING ECC endorsed the programme Outline Business Case in July which included: Circa £28m of capital investment over next 5-7 years £1.8m revenue investment over next 3 years The move to a system of direct payments Work has continued on: Refining and improving the way ECC manages IL schemes Scoping the developer provider framework Building the pipeline of schemes (currently at circa 2000 units) Engagement with districts and the market Working proactively with districts and developer/providers to take schemes quickly forward. FURTHER INFORMATION Therefore a Position Statement has been produced which provides: A definition of Independent Living Demand information by district Site characteristics for Independent Living developments This will equip LPAs with the information and evidence they require to identify sites for Independent Living, and encourage and monitor the delivery of it as a distinct housing type through development management In addition to this, engagement has been undertaken with ECC planning officers and with districts through the Essex Planning Officers Forum.

Independent Living Programme 12 November 2015 Essex County Council