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Volume 5
Chapter 1 Delivering Strategically

Introduction

1.1. The Scheme of Assistance is a major part of the legislation and policy to improve the condition of Scotland's private housing. It offers the opportunity to make an impact on the very large numbers of houses that are in a poor condition and are not reached by a grant only approach, and to extend opportunities for independent living through adaptations for disabled people. Taking this opportunity demands innovation and a new outlook.

1.2. This chapter sets out the main principles and features of the Scheme of Assistance approach. The following chapters provide further detail on financial and non-financial assistance and how to bring them together into a statement of assistance. This part of the guidance sits within the wider policy context and alongside the authority's enforcement powers, as dealt with in the chapters (in volume 1) headed Policy and Setting the Local Strategy.

1.3. The Scheme of Assistance provisions in Part 2 of the Act represent a significant and radical change in legislation and policy towards helping owners repair, improve and adapt their properties. Through its various powers and duties, the Act seeks to drive through nothing short of a cultural change in the attitudes of people across Scotland towards responsible home ownership.

1.4. This part of the guidance is statutory, as provided for by section 94. But it offers local authorities greater freedom than in the past to make best use of resources and to offer solutions tailored to the needs of owners in each area. Central government proposes to stop using direct levers of control over authority decisions in the use of approved expense limits and in the administration of a test of resources to determine amounts of grant (for housing condition works). It is for local authorities to make their own decisions in line with local priorities and to justify them as necessary to their electorates.

Planning

1.5. Local authorities are obliged by section 72 of the Act to prepare and make publicly available a statement of the circumstances in which they will offer assistance.

Choosing whom to help

1.6. It is implicit in the nature of such a statement that preferential treatment will be offered to some over others. This is a necessary part of making best use of limited resources. With this comes a duty to ensure any discrimination is justified and wherever possible authorities should source statistical evidence to support their approach. Authorities should ensure, however, that any discrimination is not unlawful under the terms of equalities legislation.

Alignment with Local Housing Strategy

1.7. Authorities should seek to align their strategies for using assistance to improve house condition (to be contained in their Local Housing Strategies in terms of section 10 of the Act) with their more detailed section 72 statement of assistance both of which are necessary to comply with the Act. A successful strategy needs to show a clear understanding of the scale and nature of private housing sector problems in your local area.

1.8. Other aspects of the Local Housing Strategy will also be relevant. For example, within the overall strategy on homelessness, approaches to the prevention of homelessness are relevant in the assessment of the circumstances of disabled applicants applying for assistance with adaptations.

1.9. Authorities should seek to set their strategy along similar timeframes as those contained in their local housing strategy bearing in mind the very long term nature of housing cycles (c30 years) and the need to plan realistically over the short to medium term. To avoid operating open-ended schemes of assistance which only weakly support the strategy authorities ought to consider producing semi-detailed plans over a 5-10 year horizon, before deriving a detailed operational plan spanning 1-3 years. Resources, covered below in paras 1.49 to 1.51 should track these plans.

Alignment with housing options approach

1.10. The Scheme of Assistance should also be considered within the context of the local authority's overall approach to housing options. Information and advice on options relating to repair, improvement and adaptation should be widely accessible rather than being limited to information on applying for grant.

Setting priorities

1.11. The private housing sector issues and priorities identified in section 10 need to be clearly explained within the section 72 statement. It should strive to set out what action will be taken to achieve at an operational level those priorities as described in the local housing strategy.

1.12. Each authority must plan carefully how its Scheme of Assistance will work. It is important to consider a number of key elements, some of which are outlined below:

• What non-financial services to offer beyond simple information e.g. access to Care and Repair, advice on building works, specialist advice or advocacy to help with unusually complex or expensive issues
• How to make best use of the proposed Lending Advisory Service as a tool to help you decide who to assist further, or not at all
• What financial products from the proposed National Lending Unit to offer locally, such as subsidised, standard or home appreciation loans
• Whether to offer grant and if so, how to make it go as far as possible
• What ("priority") works will attract financial assistance (not necessarily up-front grant)
• What circumstances individuals must be in to be prioritised for assistance when undertaking priority works
• How to prioritise between different applicants once queues for assistance are established.

Principles of planning

1.13. An authority's statement of assistance should be constructed in accordance with some broad principles outlined below. These are necessary to ensure that applicants and potential applicants are treated in a way which is, and is seen to be, robust and defendable. Plans should be subject to public consultation before implementation. Principles you should consider include:

• Simplicity
• Transparency
• Consistency
• Fairness
• Equality

1.14. Local authorities should also be clear about what it is they are trying to achieve. Objectives should be driven by their Local Housing Strategy and other relevant strategies and supported by evidence. They should be measurable, achievable, backed by identified resources and set within a realistic timeframe. Where necessary these should reflect national priorities or any outcome agreements and further guidance which may be given from time to time.

Grant

1.15. Grant has been the bedrock of assistance by government to owners making repairs, improvements and adaptations for a generation. The lack of realistic alternatives and various disincentives to develop any has fostered the assumption that grant is an effective tool for encouraging virtuous behaviour by owners. When used appropriately and sparingly grant can be a very effective tool, but the ubiquitous use of grant has given rise to a widespread expectation that grant should be made available for those who need to undertake even minor repairs.

1.16. Grant under the Scheme of Assistance is the most expensive of all forms of assistance and (excepting the provisions for mandatory grant for disability-related works) its use must be rigorously justified. Other forms of assistance, including loans and non-financial assistance, should be actively considered as appropriate alternatives. In particular, mandatory grant for compulsory works is no longer required, leaving authorities with an opportunity to drive greater numbers of works while providing only (mandatory) assistance necessary to facilitate those works. The authority can decide if, and in what circumstances, this will mean grant.

1.17. In addition to its use under mandatory provisions, there are probably three primary uses of grant that, subject to the authority's policies, would be a reasonable basis on which to justify its use. These are:

• in cases of hardship, or
• in cases where works to be done are deemed a priority by the authority and where there is no realistic prospect of securing participation of the owner(s) without it, or
• in cases where grant is the only realistic method of assisting an owner, for example in cases of larger works on crofts where secured lending may be inaccessible.

1.18. The use of grant for the general subsidisation of repair and improvement works by owners is generally discouraged.

1.19. It is important to note that because the Act specifies in detail financial assistance options, the only two possible methods of directly assisting an individual financially are grants and loans.

1.20. It is likely that any grant with a condition requiring repayment would be classed as a loan under the Act and consequently would be subject to the financial rules and regulations outlined later in this volume. Grants may be recovered using conditions in certain, contingent events however.

1.21. Authorities should proactively use new lending options. Imposing repayment charges remains an option in circumstances where no realistic options are open to owners. Given the very long term nature of this route and the fact the burden of administration falls to each authority, this method of recovery of costs should be used only after lending options have been exhausted.

Information, advice and practical assistance

1.22. The contrast between the 400,000 houses in disrepair in an ageing stock and the 10,000 grants made for repair and improvement per year is stark. Information, advice and practical assistance should be the first step in an authority's strategy to make a real impact on that gap. It should be used to reach people with whom the authority would not normally have contact.

1.23. Authorities must give due consideration to the role of non-financial assistance in achieving the objectives specified in their housing strategies. Information, advice and where necessary practical assistance can play a crucial role in helping owners take responsibility for their property. Pound for pound these forms of assistance represent cost effective alternatives to financial assistance where the outcome is the same. The use of non-financial assistance is not to the exclusion of financial assistance but to be used in concert to achieve more than what is possible with either alone.

1.24. Achieving a change in the culture of households across Scotland to home maintenance cannot be achieved through financial assistance products alone. What is required is a sustained assault on attitudes and misconceptions about the need for works and the role of owners and the state in maintaining private property. Ministers will support authorities individually and as a whole to promote key messages around ownership, but day to day promotion falls to authorities.

1.25. These issues are discussed in detail in the chapter Information, Advice and Practical Assistance.

Lending

1.26. The financial assistance chapter details extensive proposals for introducing new lending options for owners who are unable to obtain a sufficient loan on fair terms from a commercial lender or for whom authorities may want to offer incentives. Lending should replace grant for many and over time should allow action by many more who would not have received grant under the present regime.

1.27. Lending is an extremely complex and potentially costly area to venture in to. The central recommendation in this consultation is to establish a new delivery unit - the National Lending Unit ( NLU) - which will service the interests of all authorities in terms of lending, replacing the need for authorities to undertake these activities directly.

1.28. The lending unit will offer loans to owners based on the policies outlined by each local authority's section 72 statement of assistance. To retain the benefits of a centralised approach e.g. cost effectiveness and simplicity, the NLU would seek some degree of consistency across councils.

1.29. It is proposed that the NLU will introduce a Home Appreciation Loan as its first product. Capital and interest and interest only loans could be made available within the first few years of the NLU. Paragraphs 3.119 to 3.152 outline the timetable for development of the NLU and its products.

Lending Advisory Service

1.30. Our proposal is for a broker service which could either be operated by existing providers in the private sector or by a new state run delivery unit. The Lending Advisory Service ( LAS) will aim to offer owners a facility to search the commercial loans market for a loan that suits their individual personal circumstances. The LAS will perform two main functions. Those deemed a priority case will be able to access the service for free as part of any award made even if this is the whole extent of their financial assistance. For others, the service will act as the gateway to public lending for those who cannot find finance elsewhere.

1.31. Although it is proposed to lend through a single unit for all authorities, the power to offer standard loans is potentially constrained by an owner's inability to access such loans from the market on 'fair' terms as defined in the Act - the LAS will assess what is 'fair' on a case by case basis. Authorities should consider how widely to make the service available based on the suggested costs involved, some of which may fall to the authority. This constraint does not however apply to subsidised loans which may be offered to applicants without reference to the LAS.

National Lending Unit

1.32. It is proposed that the National Lending Unit ( NLU) will offer standard and subsidised loans and an equity product to owners unable to obtain a sufficient loan on fair terms from a commercial lender Owners may be offered access to subsidised loans if deemed eligible by authorities.

1.33. The NLU will operate on behalf of, and take referrals from, all authorities and be run by central or local government. In advance of agreement about the need for and ownership of such a unit, it is not yet possible to specify the legal basis for its creation. Regulations or other legislation may be necessary.

1.34. The Scottish Government will look to use its own funding to support lending activities but it is likely that further resources will be required once lending options become widely used. In practice, this will mean top-slicing authorities' private sector housing grant allocations. Amounts top-sliced from each authority would be ring-fenced for those authorities to ensure those using the new system benefit the most. From 2010/11 authorities will receive funding for private sector activities with their Revenue Support Grant, and this will not be ring-fenced. Funding for lending activities in this and subsequent years would be subject to separate agreement with authorities.

1.35. Authorities will be able to target certain types of works which are considered strategic priorities and which will attract subsidised lending. We propose that while the NLU will offer loans on a non-subsidised basis, authorities wishing to offer rates below the published levels will be able to pay for the direct subsidy from their PSHG allocation. Authorities should be aware that on current figures, for every £1 spent on offering subsidised lending, between £3 and £13 would be needed to provide a grant for any given cost of works. A subsidised loan will not achieve what a grant has achieved in all circumstances but the clear cost benefits, and the removal of uncertainty for owners over funding a remaining balance after grant, particularly for larger works, should be given extensive consideration by authorities.

1.36. This approach achieves a number of things:

• It offers a commercially sound approach to lending which aims to be self-financing in time through rigorous application of good practice business principles
• It leaves authorities free to manage their strategies without the expensive and resource intensive diversion of hiring or training specialised lending staff
• It gives authorities the ability to choose from a range of lending products to offer owners, and to make variations within a defined framework, such as on whether to subsidise them and to what extent
• If able to borrow externally for loan capital, then this approach also reduces the need to top-slice authorities' PSHG allocations, leaving more in the hands of authorities for other activities.

One Stop Shop

1.37. A central theme of the Scheme of Assistance is the need to tailor assistance to the needs of the individual and to re-think services which are offered on the basis of administrative ease or as a result of long standing convention or assumptions.

1.38. Authorities are strongly encouraged to either set up or expand existing One Stop Shop approaches to delivering assistance to owners. Ministers consider this a cornerstone of successful delivery of the Scheme of Assistance and of other parts of the Act.

1.39. The One Stop Shop is intended to deliver a number of roles, some of which are discussed in the Information, Advice and Practical Assistance chapter. None of the roles are specialist or technical in nature in order to facilitate best use of existing staff within authorities. The roles are largely optional but authorities should consider each to determine if it applies in its area. Importantly, the One Stop Shop should act as the owner of the section 72 statement of assistance and should be able to handle all questions about the local authority's policy and any procedures for applications, appeals and complaints.

1.40. The One Stop Shop is also intended to reduce the number of officials an owner needs to communicate with before receiving a given type of assistance. It is expected that a well functioning One Stop Shop should be able to provide an owner with either an answer to their query directly or be able to pinpoint one further official or organisation the owner should contact.

1.41. The One Stop Shop's role extends to assessing eligibility for access to non-financial assistance such as paid-for advice or independent living support from Care and Repair. The One Stop Shop should also be able to tell a potential applicant their likely eligibility for financial assistance under the authority's published section 72 statement of assistance and should be able to help them make an application if necessary. Where an owner seeks a hardship grant or other 'last resort' financial assistance the One Stop Shop should facilitate the request, although reference to more senior colleagues may be appropriate. It is for each local authority to determine if it provides a One Stop Shop and if so, how it does so in practical terms and whether it provides it in-house. Local authorities should consider whether an enhanced role for Care and Repair is appropriate in the delivery of the One Stop Shop.

1.42. An effective One Stop Shop should work seamlessly with any Lending Advisory Service and National Lending Unit.

Adaptations

1.43. Local authorities have a duty under section 73(1)(b), similar to that in the 1987 Act, to assist a disabled applicant to adapt their property. Authorities will also need to help with the reinstatement of properties where this is requested. A disabled applicant can be an owner or a tenant, although it would be expected that the existing arrangements relating to adaptations for tenants of local authorities and registered social landlords will continue.

1.44. Authorities will need to define a clear process for assessing an application for assistance with adaptations. New regulations (The Housing (Scotland) Act 2006 (Scheme of Assistance) Regulations 2008) require authorities to award grant for most adaptations set at 80% of the cost of eligible works. Eligible works must not be less than the actual fair cost of the works required. This rises to 100% for those on certain income replacement benefits.

1.45. Local authorities will have the power to award more than the prescribed minimum percentage grant where they assess the applicant's contribution to be less than 20% (see para. 3.239 in Financial Assistance chapter). Additionally, authorities have powers and duties to provide financial assistance under community care and disability legislation. Authorities should therefore establish a corporate policy on any circumstances in which they will consider awarding more than 80% grant, for applicants not passported to 100% grant.

1.46. Adaptation work involving the provision of additional living accommodation is not subject to mandatory grant, but is subject to mandatory assistance, although in some circumstances part of such works may qualify for mandatory grant (see chapter 3 - Financial Assistance). Adaptations not covered by mandatory grant may be grant-assisted by the authority at its discretion.

1.47. In cases where an application straddles two or more of the above work types, or involves house condition works as well, authorities must treat each element separately in respect of offering or calculating assistance, to ensure compliance with the different parts of the legislation that apply. However, multiple works which clearly form part of a single request for assistance ought to be treated as a single overall application to ensure a joined-up approach to meeting the needs of the applicant. This is particularly important in respect of authorities' duty under section 2 of the Chronically Sick and Disabled Persons Act 1970 which could apply, or be invoked by the applicant, if the efforts (or inaction) of an authority in respect of any assistance (housing or otherwise) ultimately fail to appropriately address the needs of the applicant.

1.48. This system dramatically simplifies the process for calculating financial assistance for applicants seeking help with adaptations or reinstatement works. Grant awards should be adequate for the vast majority of applicants and reflect the approximate average achieved under the previous system. It is key that authorities nevertheless pay due regard to the outcomes that need to be achieved in addressing an applicant's needs rather than simply the provision of tangible materials. Chapter 3 explains further a model process for assessing and meeting need.

Resources - Private Sector Housing Grant

1.49. Local authorities receive Private Sector Housing Grant ( PSHG) as a means of funding activities to repair, improve and adapt private sector properties.

1.50. With the changing emphasis of assistance from grant to one or more of a range of assistance forms, authorities will need to consider how to fund these. It is expected the expansion of assistance may result in increased pressure on authorities' private sector budgets. It should be noted, however, that the delivery recommendations for the Scheme of Assistance attempt to make best use of existing resources such as authorities' own staff and organisations such as Care and Repair. Costs resulting directly from the introduction of the Act may be funded from an authority's PSHG allocation. From 2010/11, authorities will receive their PSHG allocation through their main Revenue Support Grant from the Scottish Government without ring-fenced conditions. It will be for each authority to determine the level of resources needed to discharge its obligations under the Act and to achieve its strategy in respect of private sector house condition and community care.

1.51. Authorities should consider the extent to which they can realistically achieve their strategies using only current funding sources such as PSHG and whether additional resources should be used to bolster activities or achieve their strategy more quickly.

Consulting, Monitoring and Evaluating

1.52. In addition to making publicly available their section 72 statement of assistance, authorities should consult on the draft statement, their updated Local Housing Strategy and any consequent plans or policies driven by the implementation of the Act.

1.53. The activities undertaken by authorities to deliver their Scheme of Assistance should be subject to appropriate monitoring procedures to ensure that the use of resources can be effectively measured and where necessary re-allocated for better effect.

1.54. The Scottish Government will continue to require authorities to submit statistical returns relating to Private Sector Housing Grant during 2008/09 and 2009/10. These will be in a simplified format from previous years and are intended to offer some guidance to authorities on what sort of information and data are useful in measuring the performance of activities.

1.55. From 2010/11 onwards, authorities will no longer be required to provide statistical returns related to PSHG, but in the longer term authorities' statistical returns to the Scottish Government will play an important role in enabling national monitoring of the impact of the Act. In advance of this authorities are strongly encouraged to develop (and share) robust and pragmatic procedures for assessing their services.

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