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Introduction
1. Difficulties in securing revenue funding for community care housing provision places greater need on strategic partners to correctly plan and operate funding mechanisms for supported housing. The introduction of development agreements should help address this issue and reinforce the principle that capital funding and revenue funding should always dovetail.
2. This paper therefore aims to help introduce arrangements that will help strengthen the commitments by funding agencies to supported housing projects, without creating legally binding agreements. It provides guidance on what development agreements should incorporate and advises local authorities, and their strategic partners, on the funding issues they need to consider when planning the provision of supported housing. It also provides examples of development agreements in use that can be tailored to suit particular circumstances.
Background
3. One of the major difficulties encountered by strategic partners in the planning and provision of supported housing is the lack of a co-ordinated capital and revenue-funding package to make a development viable. The guidance contained in this paper has therefore been produced by the Standing Forum of Supported Accommodation (SFOSA), an informal group of statutory and voluntary housing, social work and health agencies, to help overcome these difficulties.
4. The Scottish Office launched "Modernising Community Care - an Action Plan" in October 1998 and issued new guidance "Modernising Community Care: Guidance on the Housing Contribution" for consultation in December 1998. Both of these place strong emphasis on agencies working together and the need to pool financial resources to deliver effective community care projects. It is acknowledged that agencies may not yet have all the powers to pool resources so development agreements could provide one way forward in enabling agencies to jointly commit resources to supported housing projects.
What is a development agreement?
5. It is intended to be a document summarising the nature and purpose of, and funding arrangements for, a proposed supported housing project. Given the relatively long timescales between the conception and completion of a project, such an agreement, signed by all parties involved, confirms their commitment to the project and, at the same time, ties in the capital funding with the longer-term revenue funding arrangements.
Why are they needed?
6. As well as helping all parties with their own forward-planning, a development agreement aims to help avoid purpose-built developments standing empty because insufficient revenue funding - or none at all - is in place on completion of the building. Even where the provision is mainstream housing that could easily be used for other purposes, an agreement is still important to ensure that the project or service meets the need for which it was originally intended. If all partners are signatories to the agreement it will provide the necessary comfort and reassurance required to commit resources and to work together to find solutions and manage risks in the future.
The legal status of development agreements
7. While it is not the intention that the agreement should be a legally binding contract it will emphasise that real commitments have been made and must be adhered to by all partners to the agreement. The agreement will therefore be signed and dated by each party.
8. Within that framework it may be convenient for an initial development agreement to cover the development phase only. However, it should include a section covering the negotiation of a management or service agreement on revenue funding, provision of services and selection of tenants when the housing comes into operation (e.g. resource transfer agreements between Health and Social Work, contracts between the service provider and the council, and between the housing provider and the tenant).
What should be in the agreement?
9. It is likely that a development agreement would cover at least the following main sections: -
Parties to the agreement
Aim of the Agreement
Description of the housing and support/care service
Approximate timescales
Funding
Monitoring and evaluation
10. Ideally the sections should include the following main points but it is important to emphasis that the agreement is tailored to be suitable for the particular project/service and that the final format of the agreement will be have to be supported by all the parties.
Parties to the agreement
11. These should be the commissioners and funders of the housing and the service provision, the housing provider and care provider. Information should also be provided on their respective roles and who will be responsible for taking decisions on behalf of each agency. Involvement of the local area based staff should be encouraged in drawing up the agreement to ensure that they are fully committed to the project or service to be provided and that what is included in the agreement will be totally suitable in meeting the specific local need. The involvement of local staff will make it helpful in speeding up decision making as well as providing flexibility in allocating resources between this and other projects.
Aim of the agreement
12. To establish an in-principle agreement between all parties on the nature of the housing and support/care service to be provided, and each party's role in providing or funding those services.
Description of the housing and support/care service
13. This should include details of the client group, how individuals are selected and assessed, site, property or properties, the basic nature and level of service envisaged, a statement on the basic needs being met (as shown in the community care plan) the type of tenancy and whether or not the service is likely to be registered for inspection by social work.
Approximate timescales
14. This should cover the initial planning stage, the date the site will be acquired or existing houses leased or purchased, commencement on site (include key development period stages as they will be linked to the funding arrangements), the expected date of completion, and the time at which services are expected to commence. It should also include details of the timescales for different activities e.g. the selection of the care provider, the assessment of potential tenants, recruitment and training of staff, including dates by which funding decisions have to be taken by different agencies taking account of their differing decision making cycles.
Funding
15. This should set out bodies' contributions to both capital and revenue costs, attaching a statement of capital funding (showing the anticipated programme spend and funding contributions from partners) and a budget for the revenue costs for the first full year and the period prior to full occupancy.
16. The expected income and expenditure levels for the different activities within the project should have clear links to the individual partners' budgets as well as the overall project budget. The outline financial information should be presented as soon as it is available in a jointly agreed funding statement attached to the development agreement.
Monitoring and evaluation
17. The development agreement should include a commitment to monitor the project/service and which agency will take the lead role. This will keep agencies up to speed on how a project is being developed and provide an early warning system for potential difficulties. Such arrangements will require clear reporting lines, both by individual agencies and between partners. This will help inform proposals for future supported housing and help point to remedial action.
18. A steering group should be formed to finalise the wording of individual agreements and to monitor progress so the remit and the status of the group should be stated in the development agreement.
Variation Clause
19. There will be scope for varying, omitting or adding clauses, with the agreement of all partners. Variations, as shown below, inevitably happen during the development stages and may make funding agencies reluctant to enter into a binding agreement with providers. The solution may be to include a variation clause allowing the agreement to be renegotiated to take account of such changes, while leaving the main agreement, and the stability and reassurance it gives to both housing and support, and private lenders, in place. Naturally, it has to be recognised that large variations may still cause problems.
20. Variations could be as follows:
Attached examples
21. The two development agreement examples attached are based on agreements used by groups. The actual names of the organisations have been changed to keep the details of the projects/service confidential. A different approach has been taken in drawing up each of these agreements but this is a result of local preference rather than the type of project /service to be provided.
22. The examples do not cover all of the points in this guidance. They should be suitably amended to include at least the contents of the six main sections shown under the heading "what should be in the agreement?" if used by any group planning to enter into a new development agreement for a project/service.
An example of a development agreement used that has shown most of the main headings with exception of the "description of the housing and support/care service". Each of the sections shown could be expanded to include more of the main points shown in the guidance.
DEVELOPMENT AGREEMENT
HEAVENLY PROJECT
Participants to the Agreement:
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Funding Agencies: |
South Fife Health Board |
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Scottish Homes |
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Commissioning Agency: |
South Fife Council |
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Care Provider: |
Abbeyview |
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Housing Provider: |
Kelty Housing Association |
Project Description
The project will provide residential care accommodation for 8 clients who are to be resettled from long term hospital care in Strathforth Hospital.
Property/site
The two bungalows, which are for a group of people with mental health problems will be, located towards the edge of the town of Kirktoun on a site that forms part of a residential development.
The properties will be designed and built to meet both registration and barrier free requirements in an endeavour to accommodate the needs of the group. The plans and specifications submitted, however, will ensure the residential nature of the building is not disadvantaged.
The accommodation of each property will comprise lounge, dining room, kitchen, 4 bedrooms, bathroom and toilet. There will also be a staff/overnight stay room, bathroom and toilet facilities located within one of the houses. A fire alarm and communication system between the two houses will be installed.
Timescale
The site will be purchased by Kelty Housing Association and it is anticipated work will commence on site during September 1995 with completion August 1996.
Contract
The development agreement will be replaced within two months of the project's commencement date, or as soon as possible thereafter by a detailed Service Agreement between South Fife Council and Abbeyview. The replacement Service Agreement will include the provisions of this development agreement unless otherwise agreed by both parties i.e. Abbeyview and South Fife Council.
The Service Agreement will be a legal document and will be for a period of 3 years in the first instance.
A separate Resource Transfer Agreement will exist between South Fife Health Board and South Fife Council with effect from 1 April 1997. This will include details of both ongoing financial and quality monitoring arrangements for the Project.
Funding
The Health Board is committed through resource transfer to fund the recurring net revenue cost of the residential unit amounting to £140k. The revenue costs associated with the initial start-up period prior to the admission of clients and the 1996-97 part year costs are estimated at £120k will also be funded by the Health Board. The Health Board is further committed to contribute £100k towards the capital costs.
Scottish Homes is committed to contribute £100k in Housing Association Grant funding to Kelty Housing Association. Kelty Housing Association is committed to contribute a further £100k.
Selection of clients
The Resettlement Action Group (RAG) will identify the initial occupants of the residential unit from the current long stay client register at Strathforth Hospital.
Where a vacancy occurs during the initial 3 year period, priority will be given to hospital clients advised by RAG. In the event that suitable referrals are not made within a period of 4 weeks commencing on the date on which Abbeyview notified in writing to RAG that a place was either immediately available or was anticipated as becoming available. Abbeyview shall reserve the right to directly liaise with the local authority's relevant care manager and elicit referral assessments as being suitable to fill the vacancy. Thereafter, individuals who have been referred to and assessed as suitable for the accommodation by the relevant care manager, will be offered a place subject to the terms of the Kelty Housing Association tenancy lease and the approval of Abbeyview. To ensure a viable occupancy is maintained, acceptance of a client should not be unreasonably withheld by either organisation.
Evaluation
The project will be evaluated towards the end of the first year of operation via a procedure to be agreed by all participants. The evaluation will be undertaken jointly by South Fife Council and South Fife Health Board and involve the care provider, the clients and the relatives as appropriate. The working relationship between the care provider and the housing association will also be covered. The aim is to ensure the needs of the clients are being met and value for money achieved.
Monitoring
Detailed monitoring arrangements will be jointly developed over the next six months to ensure agreed quality standards are established and maintained. These will be based on the service specification for the project and individual care plans for the residents.
Signed
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on behalf of South Fife Health Board
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on behalf of South Fife Council
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on behalf of Scottish Homes
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on behalf of Abbeyview
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on behalf of Kelty Housing Association
An example of a development agreement that states separately the role and the nature of the commitment made by each organisation. The development agreement therefore does not follow the layout shown in the guidance but this presentational format may be more acceptable to some organisations. The example should, however, be further expanded to include more of the main points shown in the guidance.
DEVELOPMENT AGREEMENT
MID-LANARKSHIRE FLOATING SUPPORT SERVICE
Description of Service
To provide care and support to 30 people with learning disabilities and/or mental health problems in mainstream housing in scattered locations throughout Mid-Lanarkshire. The service, to be specified in appropriate contracts, will be provided by up to four care providers as appointed by the social work department. The individual's houses are owned by Midtown Housing Association, Allerdale Housing Association and Mid-Lanarkshire Council and one is owner-occupied.
Future service users may include people living in property owned by other landlords. 20 of the 30 houses will be made available from current stock (mostly local authority stock); six will be developed by Midtown Housing Association and four by Allerdale Housing Association.
Parties to this agreement
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Mid-Lanarkshire Council |
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Social Work Department |
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Commissioner of service |
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Part-funder of care service |
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Lead role in identification and assessment of users. |
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Appointment of care providers |
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Housing Benefit Department |
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Funder of rent and housing management support ( for people who qualify) |
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Housing Department |
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Landlord of tenants |
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Contribute to joint assessments |
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Mid-Lanarkshire Health Board |
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Provider of capital grant to Has |
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Midtown Housing Association |
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Developer of six properties |
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Landlord of tenants |
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Allerdale Housing Association |
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Developer of four properties |
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Landlord of tenants |
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Contribute to joint assessments |
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Scottish Homes Mid-Lanarkshire |
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Provider of capital grant to HAs |
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Dunfermline Building Society |
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Provider of private finance to HAs |
Nature of agreements required
Mid-Lanarkshire Council (MLC)
MLC Social Work Department community care section will need to agree to: -
MLC Housing Benefit Department will need to agree to: -
MLC Housing Department will need to agree to: -
Mid-Lanarkshire Health Board will need to agree to: -
Midtown Housing Association and Allerdale Housing Association will need to agree to: -
Scottish Homes Mid-Lanarkshire will need to agree to: -
Dunfermline Building Society will need to agree to: -
Signed
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on behalf of Mid-Lanarkshire Council
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on behalf of Mid-Lanarkshire Health Board
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on behalf of Scottish Homes
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on behalf of Midtown Housing Association
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on behalf of Allerdale Housing Association
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on behalf of Dunfermline Building Society
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