Referral of Refugee Housing Programme Scheme by the Greater London Authority

The Subsidy Advice Unit (SAU) has accepted a request for a report from the Greater London Authority concerning the proposed Refugee Housing Programme (RHP) scheme.

From:
Competition and Markets Authority
Published
26 July 2023
Case type:
SAU referral
Case state:
Closed
Market sector:
Public markets
Opened:
30 March 2023
Closed:
16 May 2023
SAU referral type Mandatory referral
SAU referral state Closed
Sector Real estate activities
SAU referral opened 30 March 2023

Administrative timetable

Date Action
16 May 2023 SAU’s report to be published
18 April 2023 Deadline for receipt of any third-party submissions (submissions after 5pm on this date cannot be taken into account)
30 March 2023 Beginning of reporting period

Final report

16 May 2023: The SAU has published its report providing advice to the Greater London Authority concerning the Refugee Housing Programme scheme. The report sets out our evaluation of the Greater London Authority’s Assessment of Compliance of its proposed scheme with the requirements set out in the Subsidy Control Act 2022.

Request from Greater London Authority

30 March 2023: The Subsidy Advice Unit (SAU) has accepted a request from the Greater London Authority (GLA) concerning its proposed Refugee Housing Programme (RHP) subsidy scheme. The request relates to a Subsidy Scheme of Particular Interest (SSoPI).

The SAU will prepare a report, which will provide an evaluation of the GLA’s assessment of whether the subsidy scheme complies with the subsidy control requirements (Assessment of Compliance). The SAU will complete its report within 30 working days.

Information about the RHP Scheme provided by the GLA

Up to £126,183,294 will be made available to all local housing authorities in London, Non-profit and For-profit Registered Providers of Social Housing (with only grants to the latter two categories of beneficiary considered to be a subsidy).

The grants will assist beneficiaries to provide suitable affordable accommodation in London for recent refugees and those who have recently resettled to the UK, who are homeless, at risk of homelessness or living in unsuitable temporary accommodation. The scheme is limited to are those who are on:

  • Homes for Ukraine

  • Ukraine Family Scheme

  • Ukraine Extension Scheme

  • Afghan Relocations and Assistance Policy

  • Afghan Citizens Resettlement Scheme

The funding will be used to deliver 600 homes in London, including over 100 larger homes for those in Home Office bridging accommodation (due to the average household size of this group). This will be a time-limited grant to address the financial viability gap of delivering an affordable home. Costs covered include:

  • Refurbishment and/or conversion of existing dwellings or non-residential buildings owned by the beneficiary.

  • Acquisition of property with works – including refurbishment/conversion/repairs of dwellings or non-residential buildings.

  • Acquisition of dwellings without works where the dwellings are fit for occupation immediately.

  • Development of new build dwellings on a site either owned by or to be acquired by the beneficiary recipient for this purpose.

Eligible costs funded could include the purchase price, stamp duty land tax, works costs, surveying, legal and other fees, refurbishments, energy efficiency measures, decoration, furnishings, or otherwise preparing the property for rent and potentially irrecoverable VAT incurred on these items.

The subsidy will be available in the financial year FY2023/24. Beneficiaries must make best endeavours to have exchanged contracts (where a property involves acquisition of property) or started on site (for non-acquisition projects) for all homes delivered by 30 November 2023, and the GLA shall not be obliged to agree any extension beyond 31 March 2024.

Beneficiaries will be contractually required to use the subsidy towards delivery of a specified number and tenure of affordable homes in line with the objectives and programme requirements as set out in the Funding Guidance. The GLA may recover the grant should a beneficiary not use the subsidy in line with programme requirements, if milestones are missed, if affordable homes are not delivered, if the agreed tenure is not provided, if the homes are available to the relevant cohort for a shorter period than agreed, or if there is a subsequent change of use or disposal of a grant-funded affordable home which is not in line with programme requirements. The Recovery of Capital Grants from Registered Providers and Recycled Capital Grant Fund (Greater London) General Determination 2017 will apply.

Grants for any project will be limited to a maximum of 50% of the costs of delivering the affordable housing (40% for homes with less than 4 bedrooms). Grant will also be capped at the relevant ‘grant rate cap’ for Inner London / Smaller (3 or fewer bed) Homes, Inner London / Larger (4+ bed) Homes, Outer London / Smaller (3 or fewer bed) Homes, or Outer London / Larger (4+ bed) Homes, as relevant, unless the GLA agrees otherwise in its absolute discretion.

Bidders will be required to provide details of expected costs, income, any profit and any other sources of public sector funding, for each proposed project prior to the GLA approving the grant amount. The GLA will not approve a grant amount which, when accumulated with any other public sector funding in respect of the project, would be in excess of the cost/income gap in relation to the delivery of the affordable housing plus a reasonable profit for the project.

Information for third parties

If you wish to comment on matters relevant to the SAU’s evaluation of the Assessment of Compliance concerning RHP, please send your comments before 5pm on the date stipulated in the timetable above. For guidance on representations relevant to the Assessment of Compliance, visit the section on reporting period and transparency in the Operation of the subsidy control functions of the Subsidy Advice Unit.

Please send your submission to us at SAU-GLA-RefugeeHousing2023@cma.gov.uk, copying the public authority: AffordableHomes@london.gov.uk

Please also provide a contact address and explain in what capacity you are making a submission (for example, as an individual or a representative of a business or organisation).

Notes to third parties wishing to make a submission:

  • The SAU will only take your submission into account if it can be shared with the GLA. The SAU will send a copy of your submission to GLA together with its report. This is to allow the public authority to take account of the submission in its decision as to whether to grant or modify the scheme or its assessment. We therefore ask that you provide express consent for your full and unredacted submission to be shared. We also encourage you to share your submission directly with the GLA using the email address provided above.

  • The SAU may use the information you provide in its published report. Therefore, you should indicate in your submission whether any specified parts of it are commercially confidential. If the SAU wishes to refer in its published report to material identified as confidential, it will contact you in advance.

  • For further details on confidentiality of third-party submissions, see identifying confidential information in the Operation of the subsidy control functions of the Subsidy Advice Unit.

Contacts

Published 26 July 2023
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