Affordable Housing Supply Programme: process and procedures MHDGN 2022/02

Introduction

Housing to 2040 – Scotland’s first long term housing strategy – sets out the Scottish Government’s ambitions for how it wants the housing and communities of the future to be, with actions on how to achieve that.  The strategy shows how integral housing is to the Scottish Government’s objectives of tackling poverty and inequality, creating and supporting jobs, meeting energy efficiency and decarbonisation aims as well as fuel poverty and child poverty targets, and creating connected, cohesive communities.  That is why A Fairer, Greener Scotland: Programme for Government 2021-22 commits that 110,000 affordable homes will be delivered across Scotland by 2032, with at least 70% of these in the social rented sector and 10% in remote, rural and island communities.

This guidance note therefore (a) details the process for planning the delivery of grant-funded homes for social rent, mid-market rent and new supply shared equity through the Affordable Housing Supply Programme and (b) outlines the procedures to be followed by grant applicants, grant recipients and grant providers when delivering these homes.  It supersedes MHDGN 2020/02 and takes immediate effect.

The main changes between this guidance note and MHDGN 2020/02 are as follows:

• the circumstances under which individual ‘second-hand’ residential dwellings can be  purchased through the programme have been expanded
• information is given on the additional quality measures that are being phased - in to homes delivered through the programme
•  the current set of affordable housing investment benchmarks is reflected in this guidance note, alongside illustrative examples showing how these work in practice
•  for the time being, proposed rents for Registered Social Landlord (RSL) social rented  homes at the point of first let will not be compared against RSL social rent benchmark assumptions (which have been removed from this guidance)
• the requirement for grant recipients (excluding local authorities delivering projects which are not new build, local authority arms-lengths external organisations, and RSL subsidiaries) to participate in a programme of continuous improvement as a condition of grant (Annex F)
• no tender offers of grant will now be issued until the following information is  submitted within all tender applications captured by this guidance:
• a fully completed housing tender return should be provided for all new build projects, including those delivered through a section 75 agreement
• for those projects containing automatic fire suppression systems, and/ or heating systems which produce zero direct emissions at the point of use, a cost breakdown should be provided in the format prescribed within this guidance note, and
• the Fair Work First commitments that individual grant applicants will meet
• local authorities and local authority arms-length external organisations may now apply for funding to deliver homes for mid-market rent – and RSL subsidiaries, local   authorities and local authority arms-length external organisations may now also apply for funding for cost over-runs and pre-completion adaptations, all within the terms set out in this guidance note
• local authorities may now apply to recycle grant, again within the terms set out in this guidance note
• mid-market rent grant recipients are now expected to arrange for an electronic survey to  be completed when mid-market rented tenants collect the keys or have access to their property, and for every subsequent let of the property, and
• a checklist setting out some of the key pieces of information that need to be  submitted to the grant provider is now provided at Annex G (this should not however be taken as a comprehensive list of information requirements). 

Throughout this guidance note the following terms are used:

•  ‘grant applicants’ and ‘grant recipients’ – this refers to local authorities, RSLs, local      authority arms-length external organisations and RSL subsidiaries, and
• ‘grant provider’ – this refers to Scottish Government More Homes Division       area offices  or, in the case of Edinburgh and Glasgow, the City Councils  (known throughout the guidance as ‘TMDF authorities’). 

Any questions about this guidance note should be directed to the relevant grant provider.