1. The South West’s 2008/11 Affordable Housing Programme Phil Deacon April 2008

2. 2007/08 Outcome Start ofDelivered year Target Expenditure£155.018m£176.554m Start on Sites Rent1,6753,297 LCHO 6001,441 Total2,2754,738 Completions Rent2,7813,036 LCHO1,0251,670 Total3,8064,706 Allocation£143.5m£190.6m Rent£155.1m (81%) (3,673 homes 63%)) LCHO£34.3m (17%) (2,068 homes (37%)) Average grant per home Rent£42,251 LCHO£14,298 But very blackloaded

3. 3,000 → 4,000 → 7,500 → 10,000 Question: Are we – the HC/HCA, Local Authorities, Providers – up for, up to, creating & seizing the opportunities for a step-change? Answer: Too soon to tell ……. ….. but NOW would be good

4. The four over-arching criteria Deliverability Fit with national/regional/local policies Quality Value for money (£HC grant per home)

5. £ AHP resources £711m cash (86% of the Regional Housing Pot) Generating an overall programme of £760m Remaining to be allocated (Est.) 08/09 £236m£154m 09/10 £274m£241m 10/11 £250m£238m

6. Efficiency targets (annual) aka reductions in grant-per-home (inc nil-grant schemes) Social RentNBHB South West7-9%6-8% South East6.5-8.5%5-7% West Midlands6-8%6.5 – 8.5% London8-10%

7. Key targets Overall outputs from new programme – A minimum of 70% rent 15,400Rent homes1,989 (13%) allocated 6,000LCHO homes1,513 (25%) allocated Allocated to date £127m (16%) for 16% of output But ratio is not right Completions in 08/11Allocated (est.) 12,900Rent completions5,700 (44%) 5,700LCHO (Intermediate)3,100 (54%) Immediate challenge of 08/09 3,429 rent and 1,794 low cost home ownership Supported and Older People – 10 % of rent homes Allocated 12% Larger dwellings (3B Plus)- Rent 25%- Allocated 29% Homebuy20%-Allocated 19%

8. Spatial Distribution targets Distribution between settlement types Strategically significant cities and towns 60-70% of AHP – only 45% allocated (1,319 homes) Overall rural (< 10,000) – 4,500 homes  Small rural (<3,000) – 2,200 homes Allocated 437 (15%) – but will have to increase  Market towns (3-10,000) – 2,300 homes Allocated 538 (18%) (Other Urban Areas – 648 homes) Distribution between sub-regions  North 42%35% allocated  South East18%15% allocated  Peninsula40%50% allocated

9. Specific messages (1) Tenure balance – Rent, Intermediate Rent, Homebuy – 72/28 ratio needed to meet outputs. Met in the first round But Supported housing/older people  On track but a lot to do  Costs  Older people accommodation size  Move-on accommodation

10. Specific messages (1) cont Larger dwellings targets - exceeded rent, marginally behind on Homebuy Lifetime homes – a disappointing 9% Small flats (1B 1P, <40m 2 ) - justification CSH Level 3 – Delivered. Remember very limited transition terms - 2,436 homes allocated to Level 3 or higher

11. Specific messages (2) Homebuy New Build Homebuy incomes:  60% <£25k  40% > £25k Measures: Average rent on unsold equity is 2.39% compared to national standard of 2.75% and average first tranche sale is 43% compared to 50% previously Keyworkers  Priority group (after social renters)  Not a quota  Marketing  Standardised definition (‘KWL’)

12. Specific messages (3) Completions – 08/09  Still very significant numbers to achieve targets  Committed programme slippage  In year delivery challenge to deliver 08/09 targets. But there’s more to come in 09/10 and 10/11 Grant per home  Rent ok for 3 years (£42.3K) but 08/09 a major challenge (£48.1k)  Homebuy (£15.9k) a better picture but a little tight for 08/09 (£19.5k)  Impacted on the scale of programme we were able to allocate to

13. Why?  Nil grant Low proportion of nil grant bids Bidders holding back? Changes to partnership terms  S106 schemes  Strategic sites – where are they?  Cost efficiencies and HA contributions – need to improve on  OPS – reasonably proportionate to levels allocated but need to maximise potential in future rounds. Ditto RCGF/DPF

14. Specific messages (4) Development pipeline –  engaging between RMEs  particularly S106 sites Impact on spatial distribution Growth Support (Affordable Housing) Fund

15. Planning a long way to go, to a changing destination Key to our deliverability assessment Key to our s106 VFM assessment: HC grant is for additionality to the nil-grant position  consistent with local policy,  validated by economic appraisal (demanding but not choking)  a fair share between Affordable Housing and Infrastructure (draws on other funds, not gold-plated) Thresholds – gradients not cliffs

16. For large/significant schemes twin-track S106 & HC grant discussions Advance signal of HC grant  Schemes  Wider area?

17. Housing growth is needed, is coming Work with us (our money, our expertise) to deliver better Affordable Housing outcomes Work with us in particular by deploying resources in value-adding combinations with ours  Planning  £  Land Or we’ll go where the opportunities are

18. Next steps Held Seminars and had 1:1 feedback/dialogue with major providers and some LAs. Next RME formally opens 14 April and closes 9 May. Announcements w/c 24 June. Quarterly thereafter. Regions will set RME priorities in Investment Statement. Supplementary guidance coming out but NAHP prospectus continues to provide framework System changes to simplify bidding Will continue to seek LA view on proposals

19. Issues & Risks £633m (83%) remains to be allocated £502m (71%) of spend 87% of new homes for rent and 75% of homes for sale remain to be allocated 69% rent and 46% of homes for sale required to meet 08/11 completion targets Efficiency targets and outputs: –S106 bids –Zero grant bids –Major strategic sites –Other sources of subsidy SSCTs and development pipeline Significance of next two RME rounds

20. Some questions to consider Are we ready for the step change? What do we need to do to improve delivery? How do we speed up the delivery of the region’s major strategic sites/growth point numbers? Can we cost effectively increase our rural delivery (<3000 population) to deliver our share of the 10,300 homes target? How can we help?