Scottish Government

This section of the website sets out the general process and criteria for the RSL funding stream. These are set out in the following letter to RSLs.

Applicants should note that this does not include Glasgow and Edinburgh TMDF (Transfer of Management of Development Funding) programmes ( see below).

These proposals only apply to 2011-12, for which the Budget has been published. We expect the resources available to Scottish Government to remain very tight over the coming years and will review arrangements for future budgets later this year.

The Scottish Government's objectives in managing the new £50m fund in this competitive way are to maximise:

• Innovation;
• Collaborative working; and
• Value for money to Scottish Government.

The overall aim of the programme is to maximise the number of new houses built of good quality, of the right size and type and in the right places. This funding arrangement is a step away from funding individual affordable housing schemes towards getting increased leverage from government funds and improving value for money.

Grant level and assessment criteria

Discussions have taken place between key stakeholders and the Scottish Government. The Scottish Government has developed the principles and processes that will be used in allocating the funding and also the level of subsidy to be offered per unit where we intend to set a benchmark of £40,000 (based on a three-person house). Whilst all projects will be assessed against this benchmark, we will encourage proposals requiring less grant, but will retain flexibility to consider higher subsidy.

Applications will be considered against the principles provided in this section of the website. The overarching principles for the use of this funding are as follows:

• RSL has ability to manage and maintain new stock effectively.
• Development is affordable to the RSL and for the prospective occupants at available levels of grant.
• The new homes are prioritised to contribute to meeting evidenced housing and/or regeneration need and homelessness targets.
• RSL demonstrates well developed plans to ensure delivery of the proposed new housing.
• The number of units that are built is maximised within the resources available but not at the expense of having to compromise on design quality and quality of place.

Guidelines within which registered social landlords can apply for this funding.

Guidance for the format of submissions which will allow for the comparable assessment of all bids.

Process

Applications will be invited from RSLs for the provision of funding for affordable housing as follows:

• Individual applications should be returned to the relevant local Scottish Government office in a pre-agreed format on a Proposal form. This will involve the provision of one form per submitted proposal. We advise that RSLs contact and speak to their relevant local authority prior to submitting an application. Scottish Government officials will circulate all applications that are received to the relevant individual local authority. A summary table which details all the applications received will be made available on the Scottish Government website.
• Applications for each local authority area will be considered jointly by officials from the relevant local authority and local Scottish Government officials to provide a bid overview document which, in summary, takes account of the proposed project, value for money and fit with the Local Housing Strategy. Applicants should note that the assessment of applications will require all of the overarching principles to be met. For feedback purposes, each applicant will receive a copy of their bid overview document(s).
• All proposals which meet all of the overarching principles will be prioritised and agreed jointly by the relevant local authority and local Scottish Government officials and recommendations made to Ministers who will decide national allocations, based on the merit of proposals and on their contribution to meeting housing needs.
• Successful RSLs will be required to complete a more detailed Approved Proposal Form prior to an Offer of Grant being made. This will be no more than is currently required at HAG tender return stage for a streamlined project and, unless there has been a change in the number or mix of units, will not result in any change in the proposed grant award. Where a change in unit numbers/mix is proposed grant may be altered proportionately. Where the change is considered to be significant, the allocation of funding may be reviewed by Scottish Government and, following consultation with the local authority and RSL, may be rescinded.

Timescales

Details of key steps in the decision making process and indicative timescales are provided below.

• March 2011 - letters issued to all RSLs inviting applications
• 31 May 2011 - deadline for RSL applications
• July/August 2011 - Ministers to decide on allocations to RSLs
• End August 2011 - Planned announcement of funding awards

If you decide to apply for funding from the Scottish Government, please respond by 31 May 2011 to the relevant contact as noted in the Contacts section.

Funding agreements

Funding agreements will be reached with each RSL based on the specifics of its proposal and available resources. RSLs will be responsible for assessing the full cost of projects and also the associated risks. This assessment should include the RSLs own costs, as development allowances will no longer apply. Additional funding for cost overruns or reductions in projected income will not be available. In planning your proposed development, you should also note that Scottish Government subsidy will only be provided once the development is complete.

If we receive insufficient bids meeting the criteria we propose to allocate funds to other parts of the Innovation and Investment Fund (2011/12).

The Scottish Government's local office contacts will be available to provide procedural advice on the preparation of applications but will not be able to offer advice on proposed projects.

It should be noted that the budget described in this letter for the RSL element of the Innovation and Investment Fund, does not include Glasgow City and City of Edinburgh councils. Glasgow City and City of Edinburgh councils will however offer the same opportunities for RSLs to bid for grant funding from within their Transfer of Management of Development Funding (TMDF) budgets and the two councils will write separately to RSLs on this matter. This is consistent with the current approach to the devolved management of funding administration which involves compliance with Scottish Government funding processes.

Please click here to read points of clarification and responses to questions.