Housing Development Plans in Wales - Decides Whether or Not

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1 KEY DECISION NOTICE SERVICE AREA: SUBJECT MATTER: DECISION: SOCIAL CARE AND HEALTH SERVICE AREA (Housing and Community Regeneration Services) Equity Release Scheme That authority be given to sign the Service Level Agreement with West Pennine Housing Association to make the equity release scheme available to Tameside Residents subject to the Service Level Agreement providing for a break clause every 6 or 12 months (which ever is most practicable) to allow for the Council to avoid incurring further administrative costs being paid to West Pennine Housing Association in the event of low take-up by Tameside Council residents. DECISION TAKER(S): DESIGNATION OF DECISION TAKER(S): Councillor John Taylor Cabinet Deputy for Personal Services DATE OF DECISION: 29 th November 2005 REASON FOR DECISION: ALTERNATIVE OPTIONS REJECTED (if any): CONSUL TEES: FINANCIAL IMPLICATIONS: (Authorised by Borough Treasurer) LEGAL IMPLICATIONS: (Authorised by Borough Solicitor) To introduce assistance for Homeowners who cannot access commercial lending but whose homes fail to meet the Decency Standards. As explained in the report there are no viable alternative schemes available at this point in time. The only other option is a "do nothing" one. This is unacceptable as it will not be possible to meet Government Targets on Decent Homes without suitable financial products that enable improvements to be carried out to ensure poorer private sector stock is brought up to standard. Anchor Staying Put Age Concern The scheme will assist the Council in achieving one of its LPSA2 targets by increasing the number of decent homes in the private sector. Given the limited amount of loan capital available from the capital programme [ 538,000] loans should be restricted to works to bring up to the decent homes standard. A detailed agreement has been negotiated with West Pennine Housing ASSOCiation, which is more comprehensive than any SLA that WPHA have worked with previously, and will need to be monitored in conjunction with internal audit. The council's general power under the Regulatory Reform (Housing Assistance)(England and Wales) Order 2002 to provide assistance to adapt, improve or repair living accommodation must be exercised in accordance with the council's current Public Sector Housing Renewal Policy. The Policy refers generally to loan schemes, and therefore when appropriate the Policy should be updated to refer specifically to the Scheme in the Policy, and the report states that this will be achieved when it is reviewed in 2006/7. Authority is required under Procurement Standing Orders to award a contract to West Pennine without a competitive tender process before this decision can be implemented. CONFLICT OF INTEREST: None Eli/ai/executive decision/equity release_5805 Page 1 0[14

2 DISPENSATION GRANTED BY STANDARDS COMMITTEE ATTACHED: REFERENCE DOCUMENTS: N/A Appendix 1 :Tameside Policy for Eligibility Background papers from Andrew Leah SUM (Housing Strategy & Renewal) by contacting i 1/( /". /; //bt fj Signed...;)~.~%... Dated: Clli-John TaYlOr - Cabinet Deputy for Personal Services 29/11/05 Bli/al/executive decision/equity release _5805 Page 2 of14

3 KEY DECISION REPORT SERVICE AREA: SUBJECT MATTER: DATE OF DECISION: DECISION TAKER REPORTING OFFICER: REPORT SUMMARY: RECOMMENDATIONS: JUSTIFICATION FOR DECISION: ALTERNATIVE OPTIONS REJECTED (if any): CONSUL TEES: FINANCIAL IMPLICATIONS: (Authorised by Borough Treasurer) LEGAL IMPLICATIONS: (Authorised by Borough Solicitor) SOCIAL CARE AND HEALTH SERVICE AREA (Housing and Community Regeneration Services) Equity Release Scheme 29 th November 2005 Councillor John Taylor Assistant Executive Director (Housing) The report explains the changes introduced by the Regulatory Reform Order 2002 and the Government's view that local authorities should make greater use of loans to recycle scarce resources. The report then outlines the proposal to make use of an equity release scheme developed by West Pen nine Housing Association, which gives homeowners access to the equity that they hold in their properties to facilitate proper maintenance. That authority be given to sign the Service Level Agreement with West Pennine Housing Association to make the equity release scheme available to Tameside Residents. The need to introduce some form of loan was identified in the Private Sector Housing Policy made under the Regulatory Reform Order 2002 as a replacement for a grant system, which was repealed at that time. As explained in the report there are no viable alternative schemes available at this point in time. The only other option is a "do nothing" one. This is unacceptable as it will not be possible to meet Government Targets on Decent Homes without suitable financial products that enable improvements to be carried out to ensure poorer private sector stock is brought up to standard. Anchor Staying Put Age Concern The scheme will assist the Council in achieving one of its LPSA2 targets by increasing the number of decent homes in the private sector. Given the limited amount of loan capital available from the capital programme [ 538,000] loans should be restricted to works to bring up to the decent homes standard. A detailed agreement has been negotiated with West Pennine Housing Association, which is more comprehensive than any SLA that WPHA have worked with previously, and will need to be monitored in conjunction with internal audit. The council's general power under the Regulatory Reform (Housing Assistance )(England and Wales) Order 2002 to provide assistance to adapt, improve or repair living accommodation must be exercised in accordance with the council's current Public Sector Housing Renewal Policy. The Policy refers generally to loan schemes, and therefore when appropriate the Policy should be updated to refer specifically to the Scheme in the Policv, and the redort states that this will be achieved when it Bli/ai/executive decision/equity release _5805 Page3 0[14

4 is reviewed in 2006/7. Authority is required under Procurement Standing Orders to award a contract to West Pennine without a competitive tender process before this decision can be implemented. RISK MANAGEMENT: LINKS TO COMMUNITY PLAN: REFERENCE DOCUMENTS: Monies for the equity release loans are only passed to West Pennine on completion of an individual loan agreement. The major risk is not recovering funding when a property is sold. The Service Level Agreement covers the registering of a charge with UK Land Registry and how West Pennine ensure the monies are re-invested in Tameside on repayment. It also covers how repayments are dealt if the contract is terminated in the future. The Service Level Agreement also contains a number of safeguards including audits and other termination provisions. The fee for each year is not recoverable once paid and therefore there is a risk that if clients do not take up the scheme the fee could be considered to be wasted. Whilst take up cannot be guaranteed the experience in Oldham and Rochdale has shown it to be popular. We also have a significant number of potential clients already for whom there is no realistic alternative for assisting them to carry out necessary works to their homes. There is an accepted gap in the market for people who cannot access commercial funding and in the absence of grants cannot deal with maintenance and improvement problems, which has resulted in the Government promoting the development of this type of scheme. Survey work in the regeneration area shows that many people in Tameside fall into this category including those older clients of "Staying Put" for whom we have no current solution, referred to earlier in this paragraph. The fact that no repayments are required mean that it is an affordable solution for applicants and although take up cannot be guaranteed our knowledge of our potential clients and experience where the scheme is already running lead us to believe that this is a minimal risk. It should also be noted that the capital programme monies being used were previously given out as grants and the Council are trying innovative ways to make this money go further and this proposal allows money to be recycled which hasn't happened previously. The fees we are talking about are equivalent to two grants under the old system, the risks here are minimal when weighed against the potential benefits financially and this far outweighs the risks relating to doing nothing and having no assistance for people and effectively failing to undertake our statutory duty to develop an adequate toolbox to provide for the needs of the most vulnerable residents of the Borough. There is a greater risk around the implications of clients on our waiting lists living in unsatisfactory conditions. The scheme contributes to the theme of Supportive Communities and a Prosperous Society outlined in the Community Strategy. Service Level Agreement Lending Guidelines Tameside Policy for Eligibility [Attached to this Report) RIVa//execulive decision/equity re/easej805 Page 4 oj14

5 Report The Regulatory Reform [Housing Assistance] [England and Wales] Order 2002 repealed nearly all forms of Housing Grants Assistance with the exception of Mandatory Disabled Facilities Grants. In its place local authorities were given a general power to provide assistance, however, published guidance advised that where possible, assistance should be in the form of a loan and grants should only be available as a last resort. The guidance encouraged organisations to develop and support the development of "new tools" to deliver loans particularly where commercial lending was problematic. All local authorities had to publish a new Policy under this order by 1 st July 2003 to be able to continue to operate and offer any form of assistance to residents. In Tameside's Policy, we outlined our intent to embrace such a scheme as the opportunity arose. A number of organisations nationally have started to develop schemes and these have tended to be located geographically. In this area, West Pennine Housing Association have led the way in developing an equity release scheme within the Oldham/Rochdale Housing Market Renewal Pathfinder. The scheme is now being offered to other authorities within Manchester and Merseyside. West Pennine Housing Association have led the way in this area in developing and getting Office of Fair Trading approval for an equity release scheme in the Oldham and Rochdale Housing Market Renewal Pathfinder. The scheme fits our requirement perfectly. A Service Level Agreement is now drafted" the eligibility criteria and lending guidelines are in place. There is no suitable alternative scheme in existence that we have access to. Other schemes are being developed in other geographical areas but are not available to ourselves as yet. The scheme offers a low risk method of householders accessing their equity in order to carry out essential maintenance and improvement to their homes. In simple terms, the owner borrows a percentage of their equity to carry out an agreed schedule of works. The works would be those required to bring the property up to the standard of decency in our version of the scheme. When the house is sold, the same percentage of equity is repaid from the proceeds subject to a cap on the amount of growth over the original loan amount of no more than 6.5% per annum. The householder makes no monthly repayments and is protected if property values fall because it is based on a percentage of the equity. The cap provides protection against excessive charges if property values increase by huge amounts. The loan is registered as a charge against the property and is repaid upon disposal. There is no limit of time as in a grant scheme. West Pennine provide an agency service to organise the works for the householder or alternatively residents may be offered the agency service of the Councilor Anchor Housing Trust depending on how they access the scheme. The scheme would be available to residents whose properties fail to meet the standard of decency and are unable to access commercial lending. In the initial period, Tameside Council Officers will survey and assess the viability of referring the client to the WPHA scheme. The issue of whether improvement is uneconomic will be dependent upon other Housing activity in the area. WPHA will employ the services of a valuation professional for each application and the cost of this is added to the loan. The client can borrow [in certain cases] up to 80% of the free equity in the property. The agreement with the client will set out the terms by which the loan is to be agreed and how it is repaid. This is also described in the SLA. West Pennine have got all the necessary "Office of Fair Trading" approvals which the Council would have to obtain separately if it tried to recreate the scheme itself. They are already providing the scheme in other areas and have the required knowledge and experience. An annual fee to cover West Pennine's administration will be paid. This will not exceed 50,000pa for the initial contract period to cover the costs of a technical officer including overheads and other associated admin charges. This amount should come down as more authorities sign up and the costs are spread.. Eli/aI/executive decision/equity re/ease_5805 Page 5 0//4

6 538,000 has been made available within the Council's Capital Programme to initially fund the loans and fees for the first two years of the contract. At present, we are providing all the capital as it is part of the Commissioning Bid funds. As the scheme develops and as loans are repaid from within the whole of the WPHA Equity Release Scheme, the funds will be used to finance new loans. Loans repaid within Tameside will not be used to fund schemes in other Boroughs. It is hoped that as more authorities sign up, a consortium will be able to borrow money from the private sector to fund loans in the future and reduce the burden on individual Council's Capital Programmes. The current Private Sector Housing Renewal Policy doesn't specifically refer to this Equity Release Scheme but does refer in general terms to similar schemes, which may be developed by the Council. It is in our view in accordance with our Private Sector Policy however, to make this absolutely clear, specific reference will be made to this scheme when the wider Policy is reviewed in 2006/07. Conclusion This is the only scheme available in the area, which allows us to offer a low risk loan, which does not place a heavy repayment burden on householders. It enables the Council to target and assist vulnerable people in non-decent housing in the private sector, therefore delivering Government Housing Policy and filling the void for low income householders left by the repeal of the Housing Grant system. An exception is required under PSOs in order to award the contract to West Pennine Housing Authority and implement this decision, which is the subject of a separate report to Borough Solicitor and Cabinet Deputy. Bti/al/executive decision/equity release _5805 Page 6 of14

7 Appendix 1 Persons Eligible to Apply for the Scheme: TAMESIDE METROPOLITAN BOROUGH COUNCIL EQUITY RELEASE POLICY Applicants to the scheme must reside in the Borough of Tameside. Applicants must be over the age of 18. Applicants must be homeowners with equity in their property. The property must not have been built, or provided by conversion less than ten years ago. The applicant must have a prior residence and ownership qualification period of one year. The applicant must be the owner of the property for which the application is being made. All other persons registered as part owners of the property must sign the legal charge. Applicants to this scheme must not be the owner of any other properties. The applicant must live in the property where the legal charge is to be registered or intend to live at the property as their main residence once the works requested through the Equity Release Scheme have been completed. The promotion and delivery of the scheme will be agreed with the Local Authority to enable targeting. Financial and Works Applicants must be in receipt of a benefit as identified by the definition of vulnerable people in the decent homes standard. Householders can borrow [in certain cases] up to 80% of the free equity in a property. They must have at least sufficient equity to cover the cost of works plus a further 20% free equity in their property calculated on the estimated improved value. Applicants registered as Bankrupt will be excluded from this scheme?? Applicants are restricted to type of works defined by Local Authority Policy. Essential works to the property must be addressed in order to bring the property up to decent homes standard before desirable works are addressed. Where the Warm Front criteria conflicts with Tameside MBC's definition of necessitous circumstances' e.g. where the benefits is non-means tested, an assessment of the clients income and outgoings must be performed in accordance with Tameside MBC' low income assessment as set down in Tameside MBC's Lending Guidelines. Where benefits are partially means tested e.g. Child Tax Credit and Working Tax Credit, the number of dependants must be taken into consideration. Families in receipt of tax credits with an household income below 14,200 will automatically qualify. Above 14k household income a scale will be used, based on number of financial dependants. Suggested figures: 2 children = income below 16,200 3 children = income below 18,200 4 children = income below 20,200 This figure will increase by 2,000 increments per child Where works are required to bring property up to the decent homes standard, no maximum will apply. Where property already meets the DHS then the maximum loan available will be 5,000. Where applicants to the scheme wish to address desirable works in addition to works required to bring up to DHS, this will be limited to 10,000 total [Le. if 6,000 is needed to bring house up to DHS then there will be a further 4,000 available to spend on desirable works]. The minimum loan is 2,500. This will ensure that at least the fees associated with setting up the loan will be recouped within 5years. Bli/al/executive decision/equity release _5805 Page 70f14

8 Priority will be given to applicants in the following order. Where the customer requires works that fall into multiple categories, priority will be given in accordance with the highest priority requirement. Where the Equity Release application is to fund the applicant contribution in support of a Local Authority Grant Equity Release prioritisation listed above will not apply. However, additional work required which is not being addressed by the grant will be subject to the normal criteria. Priority 1 - works required pose a danger to Health and Safety [either own or third party] Priority 2 - Property does not meet the Fitness Standard. Priority 3 - Property does not meet the Decent Homes Standard Priority 4 - Essential repairs not covered by Priorities 1, 2 and 3. Priority 5 - Desirable works. Exclusions to the Scheme Creation of garages/parking spaces, except where the client is disabled [or disabled person resides) and mobility is an issue. Creation of storage space - except where storage space is needed for medical equipment, or disabled aids. Extensions to properties where necessary to meet DHS [e.g. inadequate kitchen space). Decorating, except where the requirement for redecoration has arisen as a result of other works being carried out under the loan. Fitted carpets [or floating floors e.g. laminate), wardrobes or other 'furnishing' items. Repairs required as a result of malicious damage, caused by the occupants. Any subsequent application for a loan within 5years of original loan [from date of completion of works]. Applicant Information The application is advised to have buildings insurance and to increase the cover in line with the works to be undertaken. Any applicant providing false information or withholding information may have the loan cancelled and be liable to prosecution. All information provided by the applicant will be checked thoroughly and may be shared with other organisations handing public funds in order to detect and prevent fraud. Bti/a//executive decision/equity release _5805 Page 8 oji4

9 PROCUREMENT STANDING ORDERS WAIVER DECISION NOTICE SERVICE AREA: SUBJECT MATTER: VALUE OF CONTRACT: DECISION: DECISION TAKER(S): DATE OF DECISION: (To be inserted by Borough Solicitor once signed by all authorising persons) REASON FOR DECISION: ADULT SOCIAL CARE AND HEALTH Housing Strategy & Renewal Equity Release Scheme EQUITY RELEASE SCHEME - EXCEPTION TO PSO A2.1 AND C3 - CONTRACT WITH WEST PENNINE HOUSING ASSOCIATION Therefore authority is given that an exception is made to PSO C3 to permit the award of a contract to West Pennine Housing Association as described in the report, and that an exception is made to PSO A2.1 to remove the need for West Pennine Housing Association to comply with those aspects of the Council's PSOs which are incompatible with West Pennine Housing Association's procurement policy, subject to the conditions set out below. Sandra Stewart - Borough Solicitor Cllr John Taylor - Cabinet Deputy for Personal Services The report seeks authority to enter into a contract (referred to as a service level agreement) with West Pennine Housing Association for the provision of an Equity Release Scheme in Tameside. The scheme provides access to loans to members of the public who need to improve or repair their homes but who cannot access commercial lending. Loans will be secured by charges on properties, with the loan amount recycled back into the scheme once it is recovered. The provision of loans rather than grants is encouraged by government, and is referred to briefly in the council's Private Sector Housing Policy (June 2003) made under the Regulatory Reform (Housing Assistance)(England and Wales) Order West Pennine Housing Association's scheme has obtained the approval of the Office of Fair Trading in respect of its consumer credit implications. ALTERNATIVE OPTIONS The report states that although other schemes are in REJECTED (if any): development, the West Pennine Housing Association scheme is the only viable scheme that is currently available locally, which has all necessary approvals in place and does not require monthly repayments from borrowers. To do nothing would leave the Council exposed to criticism in respect of statutory duties. REASONS OF BOROUGH SOLICITOR'S DECISION The issues that this contract raises under PSOs are as follows: Procurement by the Council of West Pennine Housing Association as the contractor for this service Procurement by West Pennine Housing Association in Bti/al/executive decision/equity release _5805 Page 9 of14

10 accordance with their procurement rules rather than the council's PSOs. Procurement of West Pennine Housing Association The report states that although other schemes are in development, the West Pennine Housing Association scheme is the only viable scheme that is currently available locally, which has all necessary approvals in place and does not require monthly repayments from borrowers. Under the terms of the proposed Service Level Agreement, the Council will pay to West Pennine Housing Association up to 50,000 per year in respect of the administrative costs of running the scheme. Administrative costs are shared across local authorities and will apparently reduce if other councils also participate in the scheme. Over a 3-year contract this will result in a maximum contract value of 150,000. The proposed Service Level Agreement has been drafted by the Council's Strategic Procurement Solicitor, with input from internal audit, and is more robust than those currently in place with other councils. Procurement by West Pennine Housing Association West Pennine Housing Association will be awarding building contracts in respect of the works required to properties. These will be tendered under West Pennine Housing Association's procurement rules, a copy of which is annexed to the Service Level Agreement. They stress the need for competitive processes and value for money, for instance requiring that 3 tenders are invited for all contracts valued in excess of 2,000. The Council's approved contractors can be added to West Pennine Housing Association's approved list. Procedural aspects of tender processes, such as arrangements for the return of tenders, will clearly be different from the Council's PSOs. Nevertheless the Association's PSO are sufficiently robust. The report makes the point that it is not practicable for a scheme, which operates across local authority boundaries to comply with each council's PSOs in each council area. PSO A3.2 states that no exception to PSOs may be permitted unless the Borough Solicitor is satisfied that: 1. There are exceptional circumstances justifying departure from PSO requirements. In this respect, the report states that no other viable scheme is available locally that will meet the council's requirement. 2. The exception will not contravene any legal requirement, including the Public Contract Rules. According to the report, the contract value will not reach the Public Services Contracts Threshold of 153,376. The Council's Private Sector Housing Policy contemplates loan schemes, although this particular of scheme is not referred to in detail. 3. The report provides evidence that the exception is necessary to achieve the council's objectives and will achieve Best Value for the council. In this respect, the report states that it is urgent to get this scheme in place in order to deliver the council's LPSA2 targets and deliver decent homes in the borough. Bti/al/executive decision/equity release _5805 Page 100/14

11 4. In terms of Best Value, the report refers to the sharing of administrative costs between participating authorities, the recycling of the repaid loans and the fact that works to properties will be procured by competitive tenders. It is legitimate to regard this as an exceptional procurement scenario, assuming the report is correct in stating that the Equity Release Scheme is the only viable scheme available to the council. There would seem to be no benefit to the council in tendering its requirement in these circumstances. In addition, there is evidence in the report that satisfies the other requirements of PSO A2.. There seems to be no benefit to the council in insisting that its PSOs apply to procurement by West Pennine Housing Association. Indeed, in some respects (such as tender thresholds) West Pennine Housing Association's procurement rules are more prescriptive than the Council's. Therefore authority is given that an exception is made to PSO C3 to permit the award of a contract to West Pennine Housing Association as described in the report, and that an exception is made to PSO A2.1 to remove the need for West Pennine Housing Association to comply with those aspects of the Council's PSOs which are incompatible with West Pennine Housing Association's procurement policy, subject to the Conditions: that the Service Level Agreement should allow for a break clause every 6 or 12 months (which ever is most practicable) to allow the Council to avoid incurring further administrative costs being paid to West Pennine Housing Association in the event of low take-up by Tameside residents. the value of the Service Level Agreement must not exceed 150,000, nor should any extension or renewal of the Service Level Agreement be agreed, as this is likely to infringe the Public Contracts Regulations. CONFLICT OF INTEREST: REFERENCE DOCUMENTS: None 1. Waiver Report attached 2. Procurement file which can be obtained from Andrew Leah SUM (Housing Strategy & Renewal) by contacting ', i /.0, /'/1 7.1'/11/.;i?; 29/11/2005 Slgned.... 'tt,f~/:tj:;1!!... Dated: 29/11/2005 Cllr,John Taylor - Cabinet Deputy for Personal Services./ Bti/al/executive decision/equity release _5805 Pagellof14

12 REPORT TO: Borough Solicitor Cabinet Deputy for Personal Services DATE: 29 th November 2005 REPORT OF: Huw Davies, Assistant Executive Director Housing and Community Regeneration SUBJECT: Authorisation Orders required under Procurement Standing CONTRACT/PROJECT: CONTRACT VALUE: REPORT SUMMARY: Equity Release Scheme in Partnership with West Pennine Housing Association 50k per annum over three years The report sets out our proposal to provide access to equity release loans to clients needing to improve or repair their homes but who are unable to access commercial lending. This proposal has been developed in line with Government Policy following the Regulatory Reform [Housing Assistance] [England and Wales] Order 2002, which encourages local authorities to offer loans instead of grants as a form of assistance. A small number of schemes are being developed nationally and are becoming available on a geographical basis. The West Pennine Scheme is the only viable scheme currently available locally, which has all the necessary approvals in place and provides assistance to people without the need for a monthly repayment. The provision of this type of scheme was included within our Private Sector Housing Policy adopted by the Council in June RECOMMENDATION: BASIS FOR SEEKING: NEED FOR DECISION: That authority be given to waive Procurement Standing Orders. The relevant parts are C3 [Contract value in excess of 60k but below the Public Contract Rules Thresholds] and A2.1 [a requirement that third parties comply with our P.S.O.'s when awarding contracts on our behalf]. These schemes are being developed with encouragement from Central Government to reduce the burden on the taxpayer of supporting improvement and maintenance of privately owned properties by replacing grants with loans. The schemes are being created for people who will not be able to access the normal commercial lending market. The scheme developed by West Pen nine, which has received Office of Fair Trading approval, is the only equity release scheme available to us currently apart from developing our own in-house, which would have SUbstantial resource implications. To introduce the equity release scheme into Tameside, it is necessary to enter a Service Level Agreement with West Pennine Housing Association. This agreement requires the Council to pay a share of the administration costs of operating the scheme. These costs will be Sli/allexeculive decision/equity release_5805 Page 12 ofi4

13 approximately 50,000 per annum for the three years of the contract. Council funding will also be used to finance the loans made to individual residents. West Pennine will appoint contractors to carry out the works, which are the subject of these loans. Most of the individual loans will be small, however, a number could be of a size to fall within our procurement standing orders. West Pennine Housing Association have their own extensive P.S.O.'s but inevitably they differ from our own in some degree. However, they are more than adequate for the purpose of our scheme, which is already operating in neighbouring Boroughs. To simplify the administration burden of working across local authority boundaries, it is felt to be advantageous to waive the requirement for West Pennine to follow our P.S.O.'s. West Pennine accept full responsibility for works undertaken by contractors appointed by them. Bli/al/executive decision/equity release _5805 Page/30J/4

14 1. Background The Regulatory Reform [Housing Assistance] [England and Wales] Order 2002 repealed the system of Housing Grants set out in the Housing Grants, Construction and Regeneration Act 1996 with a general power to give assistance. The associated guidance stressed the requirement to recycle funding by offering loans and encouraged the development of innovative ways of providing assistance. It soon became clear that the financial institutions were not interested in providing loans direct to clients and the burdens of developing new tools fell to local authorities and their partners. In our Housing Policy developed under the R.R.O., we set out interim arrangements and created a budget for the introduction of a loan package when one could be developed. West Pennine Housing Association have led the way in this area in developing and getting Office of Fair Trading approval for an equity release scheme in the Oldham and Rochdale Housing Market Renewal Pathfinder. The scheme fits our requirement perfectly. A Service Level Agreement is now drafted, the eligibility criteria and lending guidelines are in place. There is no suitable alternative scheme in existence that we have access to. Other schemes are being developed in other geographical areas but are not available to ourselves as yet. 2. Procurement Standina Order seeking to Waive I Authorisation to proceed It is now urgent to get the equity release scheme in place in order to deliver our LPSA2 targets and the successful commissioning bid for delivering decent homes in the Borough. It is therefore necessary to be given a waiver under Procurement Standing Order C3 and A2.1 to allow West Pennine to appoint Building Contractors using their own standing orders. This is required because Council funding will be used to finance the loans and some of the loans will be within the financial thresholds of our standing orders and because procurement will be undertaken by West Pennine on behalf of the client using their normal procurement procedures. West Pennine's standing orders are more than adequate for this purpose although they are not an exact replica of ours. The scheme will be running across local authority boundaries and would be over complicated if every authority's standing orders had to be taken account of. 3. Value of Contract 150,000 over life of contract; maximum of 50,000 per annum. 4. Grounds upon which Waiver I Authorisation to proceed sought There is currently no viable alternative scheme available and the West Pennine scheme has been developed so that fees cover administration costs only. West Pennine's standing orders are as robust as ours, although they vary in the detail. The scheme is operating across local authority boundaries and would be unwieldy if it had to work exactly to each local authorities standing orders. 5. Reasons why usual requirements of Procurement Standing Orders need not be complied with but Best Value and probity still achieved The scheme provides best value in a number of ways. Firstly the administrative costs are shared by a number of authorities and it allows for limited capital resources to be recycled as loans are repaid. Secondly, building ~k' carrii" out are still subject to a competitive process. Signature Huw Davies Assistan Executi...J....'.~1!.v.J... 1X:i... Dated.:?\.~..L9..?'... irector Housing and Community Regeneration Bli/al/executive decision/equity release_5805 Page 140/14