Estate Regeneration 2021 Funding Opportunity: Prospectus

We will use the information you submit to calculate a Benefits Cost Ratio (BCR) for your project. This will be based on a local land value uplift forecast for the project resulting from net additional housing and replaced or refurbished housing units which the funding supports delivery of, adjusted by an additionality factor for your area. The additionality factor will be calculated using your submitted answers. New commercial space will also be considered.

In appraising costs, we will take into account any costs to central government in realising completion of new housing, replacement housing or refurbishment which the funding is also supporting. This will reflect both estates regeneration grant and any other funding that has been received from central government. This will not reflect any money spent or recovered by the local authority. All costs and benefits will be discounted at the standard rate of 3.5 % p.a.

Projects have the opportunity to include Non Monetised Benefits (NMBs) in order to increase their value for money score. Applicants should consider any relevant NMBs the project will deliver and must ensure they are compliant with HMT Green Book methodology (as amended November 2020).

Examples of NMBs include:

• visual amenity benefits from developing a brownfield site, where there is evidence of benefit to existing households in the area, and
• an increase in quality of life and wellbeing from physical regeneration
• improved energy efficiency directly linked to better household and community wellbeing and savings in energy costs
• a reduction in overcrowding in households leading to improved educational attainment
• reduction in Category 1 hazards which result in productivity and health benefits

NMBs should be described as clearly as possible within the application. The assessment will focus upon the impact of the non-monetised benefit/s, their scale, and evidence to support this. Please refer to the FAQs for an example of a non-monetised benefit and further information on what is expected from applicants.



All projects will be considered regardless of their Benefits Cost Ratio score and assessed based on the value for money demonstrated.

This will be based on the applicant’s ability to provide confidence that the project is well-developed and will be well-managed; that there is sufficient governance and resource available; that costs are identified and evidenced; that relevant partners are signed up; that the project connects to the local planning system; that any necessary additional funding is in place (or a clear strategy to securing it); that risks are identified and will be properly managed and mitigated; and that funding will be spent by end March 2022.

This will be based on the applicant’s ability to demonstrate the broader rationale and objectives of the project, the benefits expected (whether economic, social, financial), its fit with wider Government and local policy priorities, such as Levelling Up, the project’s impact on the place, locality and community, and the need for capital funding now in order to accelerate the project and/or cover funding gaps in the overall project. Applications should also show how the project will help to meet housing requirements for the local area, including existing residents, and articulate reasons for any change in housing tenure.

This will be based on the applicant's ability to act as a national exemplar. It could include for example: innovative delivery models, construction techniques (including Modern Methods of Construction and sustainable materials), wider sustainability and environmental impact, quality of design (both housing and repurposing environment/open space), and methods of community engagement and involvement.

Projects which highlight a positive impact for people who share one or more protected characteristics (as defined in the Equality Act 2010) in the local area who struggle to attain appropriate housing will be given a 5% addition to their score.

Examples of a positive impact could include:

• Proposals to bring forward development in areas where those who share one or more protected characteristics have disproportionately low home ownership.
• Proposals in areas where those who share one or more protected characteristics suffer disproportionately from overcrowding.

If you have specific queries, you can contact the Estate Regeneration team at [email protected].

No, only those councils who successfully passed our expression of interest (EOI) stage and were then invited to apply should submit a full application.

No new projects will be considered at this stage. 

Applicants will be expected to demonstrate a requirement for grant funding. We will consider any reasonable capital cost for the project. Application amounts will vary according to project need. This could include (but is not limited to):

• demolition and site remediation
• tenancy buy-outs
• decant and temporary accommodation costs. 

All awarded funds will need to be spent in 2021/22. 

There is no limit on the intervention level but the process is competitive and there must be a justification for the level of funding sought.

We aim to fund a small number of estate regeneration projects across the county, subject to demand and fit with the funding available.

You must complete an Excel application form which was sent to you when you were invited to apply. The application template can also be found on the OPE webpage.

All projects must demonstrate the following gateway criteria:

• there is a funding gap for the wider estates regeneration project, and will provide added value
• community and political support for the project is in place
• grant funding can be spent by end March 2022.

Supporting evidence may be provided but should not be relied on to make the case.

In order to calculate a Benefit Cost Ratio, a residential land value uplift will be calculated for additional new homes and refurbished or replacement homes. Applicants should enter the number against each of these categories, where applicable, in the application form and the profile of delivery by financial year.

This would not include homes which have already been delivered as part of the wider estates regeneration scheme, or housing in future phases whose delivery could not be directly linked to the funding intervention.

For example, an application for funding demolition of existing buildings is part of a three phase scheme which will ultimately comprise 900 homes. 300 homes have been completed in phase 1,300 are planned in phase 3, and an application for phase 2 is being made which will demolish 50 homes, refurbish 100 homes, and provide 200 new. In this example, the applicant would enter the number of homes relating to the application (phase 2), so 150 homes as replaced / refurbished and 150 homes as new additional.

Additionality reflects the amount of development which would have occurred in the absence of funding intervention. The higher the additionality, the more dependent both the project and overall development in the area is to the funding intervention. Applicants should reflect the site-specific market failure in selection of additionality and the in the accompanying narrative, along with detail as to any alternative funding available.

Market failure occurs where the market alone cannot achieve an economically efficient outcome. In the case of Estates Regeneration, this will occur when there is a need for the capital works that no developers would be able or willing to fund to deliver the housing. Equally, those works would have been deemed too costly by the (public sector) land owner creating a funding gap which leaves the project stalled.

Yes.

In appraising costs, we will only take into account any costs to central government. This will reflect both spending through the Estate Regeneration Fund, and any other funding that has been received or is required from central government for delivery. This will not reflect any money spent or recovered by the council. All costs and benefits will be discounted at the standard rate of 3.5 % p.a.

All projects will be considered regardless of their BCR score.

We will use the information you submit to calculate a BCR for your project. This will be based on a local land value uplift forecast for the project resulting from net additional housing and replaced or refurbished housing units, adjusted by an additionality factor for your area.

Projects have the opportunity to include Non Monetised Benefits (NMBs) in order to increase their value for money score. Applicants should consider any relevant NMBs that the project will deliver and must ensure they are compliant with HMT Green Book methodology (as amended November 2020).

The combined BCR and NMB scores will be ranked - highest to lowest - in order to allocate up to 30% of the total marks available.

The HMT Green Book (Annex A1 non-market valuation and unmonetisable values) and DLUHC appraisal guide provide examples of non-monetised benefits. 

Applicants should select the category against which the non-monetised benefit applies within the application from the following list:

• environmental and natural capital 
• land values
• energy efficiency and Greenhouse Gas (GHG) values 
• life and health 
• travel time 
• affordable housing/housing tenure mix
• visual amenity impacts

NMBs should not double-count those which have been included in the BCR, i.e. land value uplift for the phase of the scheme for which funding is sought.

Applicants are also encouraged to put forward other identified non-monetised benefits for assessment where they provide sufficient positive impact on value for money that can be well evidenced. 

Some hypothetical examples of non-monetised benefits below:

Life and health

“Site B is an estate which will be regenerated increasing housing numbers, including the provision of different types and sizes of affordable housing. The application is able to provide evidence of significant overcrowding in the local authority area as well a high demand for social housing with reference to a strategic housing need assessment and/or reference to current planning policy. The application is also able to make reference to research linking overcrowding and educational attainment as well as evidence of poor educational attainment in the estate area.”   

Visual amenity impact

“Site A is an estate with visual amenity impacts for local residents. The site is significant in the local area, vacant and in a very poor state of repair, as demonstrated by photography and an indicative site plan. The application is able to provide evidence that a significant number of local residents are affected by this blight through the use of maps and photographs of the site showing significant amounts of housing and community facilities adjacent to the site, together with an estimate of the affected population, with evidence of local support. This application would score highly, having demonstrated a clearly detrimental impact on a sizeable community.”

No, but ideally house-building should commence by March 2024.

Projects which highlight a positive impact for people with protected characteristics (as defined in the Equality Act 2010) in the local area who struggle to attain appropriate housing will be given a 5% increase to their overall score. Examples of a positive impact could include:

• Proposals to bring forward development in areas where those with protected characteristics have disproportionately low home ownership.
• Proposals in areas where those with protected characteristics suffer disproportionately from overcrowding.

Applications should be made using the linked form. All applications should clearly demonstrate how they meet the gateway and assessment criteria.

Applications should be submitted directly to DLUHC via email [email protected] by 12:00 noon 15 October 2021.

You should ensure that the local authority Chief Executive or s151 officer has approved the application, and that the One Public Estate partnership for your area is aware.

Unfortunately, we cannot accept late applications. 

Announcements of successful projects are expected by the end October.

Payment to successful applicants will be made by s.126 of the Housing Grants, Construction and Regeneration Act 1996 to the lead council. Councils will need to sign a Conditions of Funding letter to release payment.

Successful applicants will need to agree to regular monitoring and reporting of the project to Government. This requirement will be set out in a condition of funding letter.

As part of the deliverability assessment we will be seeking confirmation from councils that they will spend funding in the current financial year (2021/22).