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Temporary to Permanent Housing

The London Centre of Excellence recently merged with London's improvement body - Capital Ambition - and London Connects, to form London's Improvement and Efficiency Partnership (IEP). The new organisation retains the name Capital Ambition, and is responsible for all former LCE projects.

A website is being created for the new Capital Ambition, but in the meantime this site continues to be updated with all the latest information on this project, as well as important legacy documents. 

The London boroughs taken together currently house over 60,000 homeless households in temporary accommodation. Much of this accommodation is good quality housing leased from private sector landlords at market rates. In practice this accommodation is largely paid for through housing benefit with no return to the public purse on the very substantial outlay involved. 

The principle behind temporary to permanent type schemes is to make use of this Housing Benefit revenue to purchase properties over a period to then be let as permanant affordable housing. 

The main difficulties in developing such schemes revolve around managing the long term risk involved during a climate of uncertain future revenue levels from temporary accommodation in the medium term and an uncertain property market. 

Civis Feasibility Study for the West and North London Boroughs

This LCE sponsored feasibility study led by the West and North London boroughs on temp to permament housing was completed in September 2006. Civis Consultants produced a substantial report entitled Review of Temporary to Permanent Arrangements clarifying the issues in developing this type of accommodation.  

The report clearly demonstrates that substantial Gershon type savings arise if temp to perm housing can be developed on a multi borough basis, and there are also major benefits if boroughs can work together to allow some procurement of accommodation in less expensive areas by boroughs where property prices are too high for the scheme to work financially.

West London Sub-regional Scheme in Development

Building on the feasibility study, the seven boroughs in the West London sub-region (LB Brent, LB Ealing, LB Hammersmith & Fulham, LB Harrow, LB Hillingdon, LB Hounslow and RB Kensington & Chelsea) moved the project into implementation phase, backed by the LCE, and again assisted by Civis. Prince Evans have been subcontracted to provide legal assistance.

The proposition is to jointly procure up to 1400 units of settled accommodation for people who are currently homeless or living in leased temporary accommodation, which will in time be available to the boroughs as permanent affordable housing stock.

Agreement has been reached on a mechanism to allow a controlled amount of out of borough procurement within their sub-region for boroughs where property price to rental values are too high for the scheme to be viable.  This agreement minimises the impact on host boroughs and, through joint working, maximises their control over how and where properties are acquired.  A compensatory reduction in leased temporary accommodation in host boroughs has also been agreed.

Settled Homes Initiative Grant

As a key element of the project, the West London boroughs put forward a combined bid for a proportion of the government's £30M Settled Homes Pilot fund.  The bid was successful and the boroughs have been awarded a £6M Settled Homes Initiative Grant with a recommendation for the Housing Corporation to add a further £4M. The total of £10M was the highest awarded to any of the SHI bids.

This funding means that it will be possible to provide up to 286 properties out of the 1400 with rents lowered to rent officer levels at which a homelessness duty can be discharged, and including a proportion of properties at affordable target rents and a proportion of shared ownership properties.

Tender Process

Because of the complexity of the project, the boroughs have followed the negotiated tender process allowed under EU procurement rules.

Following good responses to the Pre Qualification Questionnaire (PQQ) placed in the Official Journal of the European Union (OJEU), a number of providers including two consortia, and including a mix of Registered Social Landlords (RSLs) and private sector providers were invited to negotiate.

Detailed tender proposals were received from four providers by 30 August 2007 and negotiations are currently taking place.

Our intention is to select a preferred provider in time for reports to go to cabinet in each of the boroughs in December 2007, so that the procurement of properties can begin in earnest this financial year.