Notice

Guidance on payments (updated section 6.3 of competition guidance)

Updated 2 October 2023

Applies to England

This guidance supersedes section 6.3 (Conditions of Payment) of the Social Housing Decarbonisation Fund Wave 2.1: Competition Guidance Notes.

This payment process will begin once the Grant Funding Agreement (GFA) has been signed by both parties.

Payment Process

1. On the 10th working day of each month, Lead Applicants will be required to:
   a. Submit their delivery report, including an up-to-date financial forecast report for the project. This forecast should be based on previously received payments and their knowledge of spend to date. The forecast should show overall spend and the proportion being requested as grant funding, recognising that grant spend should be in line with the provision in the GFA - see below.
   b. Submit a grant drawdown request for that month equal to the amount forecasted in the preceding month’s delivery report.
   
2. Lead Applicants will be paid by the end of each month, following receipt of the grant drawdown request.
   
3. If the grant drawdown request is not submitted by the 10 working day, BEIS cannot guarantee payment by the end of the month.
   
4. Until kick-off meetings have taken place, payments will be made on the basis of the forecast set out by Lead Applicants in their application form (table 10).
   
5. The final payment will be made once all grant spend has been reconciled and accounted for.

Reconciliation

1. Three times a year, Lead Applicants will be required to submit a summary statement of the actual eligible expenditure that has been incurred to date.
   
2. This summary statement should contain a high-level overview of payments that the Lead Applicant has made in relation to delivery of Wave 2, including to consortium partners and as part of any work on their own stock.
   
3. Based on the reconciliation, the forecast for the remainder of the project will need to be updated in line with the process outlined above.
   
4. A template for the summary statement will be provided and will require high level overview of payments as per point 2.

Evidence Check

1. At the end of every reconciliation exercise, BEIS, and third parties working on its behalf, will conduct an evidence check.
   
2. A sample of invoices will be requested from each Lead Applicant, who will have 5 working days to provide the invoice evidence to be checked. BEIS, and any third parties working on its behalf, will work proactively with the Lead Applicant during this time.
   
3. To assist this process, alongside any checks required by the Lead Applicant’s own governance, we require all information pertaining to costs incurred during the project are recorded and evidenced.
   
4. BEIS reserves the right to request a full evidence check at any point during delivery and will work proactively with the Lead Applicant to carry this out in appropriate timescales.

Grant Funding Agreement

Payments will be only made by BEIS after the Grant Funding Agreement (GFA), Grant Offer Letter (GOL), and associated agreements have been signed between the Lead Applicant (Grant Recipient) and BEIS. Further details on payments and financial requirements will be provided by BEIS as part of the GFA. These will include the requirement for detailed statements of expenditure and requests for funds in a specified format. Applicants must satisfy the due diligence, financial and organisational checks required prior to receiving public funds.

A draft GOL and GFA have been provided as part of the competition process for Lead Applicants to review. Some key provisions that are included in the GFA are outlined below:

1. Grant funding awarded to each Lead Applicant must be spent by 31 March 2025, and Lead Applicants will lose their opportunity to claim grant funding after this date.
   
2. Lead Applicants are required to plan to spend around 40% of their grant funding in FY23/24 and around 60% of their grant funding in FY24/25. The exact percentage split for each project will be subject to agreement between BEIS and the Lead Applicant, and reflected in the GFA agreed outputs, before execution.
   
3. Lead applicants that underspend against their agreed baselined grant funding in each financial year may not receive this underspent grant funding in the following financial year, and requests to move funding between financial years will be dealt with on a case-by-case basis.
   
4. Eligible costs incurred between the launch of the Wave 2.1 competition and the signing of the GFA may be counted towards a project’s co-funding requirement, should the project be successful. This spend will be at risk of the Lead Applicant and evidence of eligible co-funding spend will be required by BEIS once the GFA has been signed.
   
5. Where there is reasonable and explicit need, a one-off upfront payment of up to 10% of the project grant funding or £1 million, whichever is smaller, may be made. BEIS will consider requests for a one-off upfront payment on a case-by-case basis and in line with Managing Public Money guidance. If approved, this payment will be made within 7 working days of signing the GFA.

Additional information

1. These processes will be reviewed after 8 and 18 months as a minimum and may be reviewed more frequently if required.
   
2. Eligible expenditure must have been incurred by the Lead Applicant or approved Consortium Partners (i.e. paid or invoiced, not solely contracted).
   
3. Lead Applicants must confirm expected in-year financial spend by the end of February in each FY to enable BEIS to manage spend across financial years.
   
4. BEIS reserves the right to pause or reduce payments subject to poor delivery performance. This will be based on an assessment by the Delivery Partner based on the monthly reporting data and other performance indicators and will be signed off by BEIS. The Lead Applicant is expected to work with the Delivery Partner and relevant consortium partners to resolve issues.