Form

Fair Chance Fund: questions and answers

Updated 19 May 2014

This form was withdrawn on 9 June 2014

This information is no longer current.

Applies to England

Clients

Q. If clients are 24 when referred onto the scheme and turn 25 do they have to leave the scheme?

A. No. Clients need to be 24 at point of referral onto scheme.

Q. Are young people living in supported housing eligible for the Fair Chance Fund?

A. No. The Fair Chance Fund is meant to assist homeless people. Also, supported housing for this age group would normally already be expected to provide support to help residents into education, work or training.

Q. Are young people who have been evicted from or abandoned supported housing eligible for the Fair Chance Fund?

A. Yes if they meet the other criteria. Grant conditions will however prohibit any policy of moving people out of supported accommodation in order to qualify for the Fair Chance Fund.

Q. Are young people living in night shelters or short term hostels eligible for the Fair Chance Fund?

A. Yes if they have less than 28 days left in the accommodation and meet the other Fair Chance Fund criteria including that they would be difficult to accommodate in longer term supported housing.

Q. Can supported housing qualify for accommodation outcome payments under the Fair Chance Fund?

A. Existing supported housing cannot qualify for outcome payments if it is the first accommodation a person moves into after being referred to the Fair Chance Fund. This is because the Fair Chance Fund is designed to help people who cannot ordinarily be accommodated in supported housing.

It is recognised, however, that it may well be that after a period of support through the Fair Chance Fund, a young person who was previously not able to cope in existing supported housing may be able to do so, so a planned move into existing supported accommodation as a second stage could count.

The possibility is also recognised that new supported housing might be created for the Fair Chance Fund, or a decommissioned scheme reopened for example. In principle, such accommodation could count if it is additional to current provision.

Q. Is the scheme for England only?

A. Yes.

Q. Can clients move straight from prison onto a Fair Chance Fund Scheme?

A. Yes. As long as you can demonstrate that you are not displacing statutory or existing services.

Q. Would referrals from prison need to be re-routed via the local council housing options teams, as this could mean a duplication of work and delay?

A. What is important is that the referral mechanism is credible, has safeguards, and is endorsed by the local authority. It is not necessary it is actually carried out by the housing options team – although we expect they would need to be a partner in the process.

Q. Do all young people on the scheme have to meet all criteria?

A. All young people have to meet the headline criteria we have set out in the specification documentation, but there will be variations in their particular needs and circumstances. In some areas providers may want to work with a particular cohort (for example offenders or gang members).

However, the Cabinet Office are considering offering match funding to allow local authorities to extend the scheme to include a wider group. The local authority would have to be prepared to pay half the outcome payments if they wanted to consider using this mechanism.

We are seeking views on how this match funding mechanism could work as part of the Expression of Interest phase, so please do consider submitting an Expression of Interest if there is a group you are particularly interested in working with and have a local partnership that may be prepared to jointly fund your work

Q. Where concerning care leavers the literature states that local authorities have a duty to support and house care-leavers up to 21. This is not the case. Rather, the responsibility is up to 18, with new conditions for young people ‘staying put’ only in foster care until 21 (which may not always be the case) as a result of the Children and Families Bill. As such are care-leavers actually eligible for this fund at 18+?

A. The homelessness legislation has two priority need categories dealing specifically with care leavers. These are: v) a person under 21 who was (but is no longer) looked after, accommodated or fostered between the ages of 16 and 18 (except a person who is a ‘relevant student’); vi) a person aged 21 or more who is vulnerable as a result of having been looked after, accommodated or fostered (except a person who is a ‘relevant student’);

We would expect local authorities to secure accommodation for homeless care leavers who are ‘former relevant’ or ‘qualifying’ care leavers, unintentionally homeless and in priority need. Joint protocols should set out local arrangements between Children’s Services Authorities and Housing Authorities to prevent homelessness and secure suitable accommodation for ‘former relevant’ or ‘qualifying’ young people.

This group would not qualify for the Fair Chance Fund. The exception to this could be where they are deemed to be intentionally homeless by a Housing Authority and are therefore not owed the main homelessness duty.

However, care leavers under 21 might be eligible for Cabinet Office matching local authority outcomes funding where they are a local priority.

Q. Would asylum seekers over 18 with no recourse to public funds fit in this scheme?

A. No.

Q. Are young people living in supported housing, but in danger of being evicted, eligible for the Fair Chance Fund?

A. No – unless the local authority that acts as the referral gateway for your bid deems the individual to be’ threatened with homelessness’ (using Part 7 of the Housing Act 1996 as a measure. ‘The Homelessness Code of Guidance for Local Authorities’ 2006, chapter 8, sets out how an authority should reach a decision on homelessness).

Where extra support is needed to prevent eviction, this could be a group that the Cabinet Office would consider match funding a local authority contribution additional to the Fair Chance Fund. We are seeking views on how this match funding mechanism could work as part of the Expression of Interest phase so please do consider submitting an Expression of Interest if this is a group you are particularly interested in working with.

Support

Q. Do apprenticeships and traineeships count?

A. Apprenticeships and completed traineeships will be eligible for outcome payments. Finalised outcome payments and details of evidence requirements under each outcome will be published as part of the invitation for full bids in May.

Q. Would clients still be entitled to claim housing benefit for their accommodation whilst participating in the scheme?

A. The same rules for claiming benefits would apply as currently. Outcomes payments are not intended to replace Housing Benefit.

Q. Is this scheme suitable for Registered Providers who wish to convert houses in low demand into a scheme for the client group?

A. That could be helpful. For this hard-to-help client group, it would also require quite intensive support if they are to maintain their tenancies successfully and gain education, employment and training outcomes.

Claims

Q. Do we have to evidence how we’re achieving something, as well as that we are?

A. Not as a matter of course to be able to claim for outcomes payments. However, we will expect bids to go into some detail about the methods you intend to employ, and you will be expected to act in an ethical manner in delivering the scheme. We will also require successful bidders to participate in an evaluation of the scheme which we expect will want to look in some detail at different methods of achieving the outcomes in order to learn as much as possible for the future provision of services to this group.

Q. Will those referred onto the Fair Chance Fund need to housed within the boundaries of the referring local authority?

A. Young people referred onto the Fair Chance Fund are likely to face a number of barriers to sustainable accommodation. In some cases moves into other areas will be necessary or appropriate (for example where individual has been involved in gangs locally). Clients are unlikely to maintain tenancies where suitability has not been properly considered. The statutory homelessness guidance provides guidelines on considering suitability and we would recommend providers use these guidelines in securing accommodation.

Social investment and finance

Q. Do we have to have a social investor lined up before we submit an expression of interest?

A. No. The Expression of Interest form does not ask you specify how you will fund the work for the Fair Chance Fund. Ability to attract social investment will be one of the criteria bids are assessed against at full application phase. We expect to open the full application phase in May 2014.

Q. What percentage return are investors looking for?

A. It will depend on the investor and their assessed levels of risk in your proposal. Different investors will be looking for different returns and be prepared to take differing levels of risk on their investment.

Q. Do we need social investment?

A. No. But this scheme aims to do two things: support vulnerable young homelessness people into accommodation and work, and expand the social investment market in this area. Ability to attract social investment will be one of the criteria bids are assessed against at full application phase. We expect to open the full application phase in May 2014.

Q. How will outcomes payments be made and when?

A. We will make payments quarterly from April 2015 via a grant from the Department for Communities and Local Government to the body identified in your bid to manage the scheme.

Successful schemes will have to provide evidence of outcomes achieved before payments are made. Evidence will be spot checked. Details of evidence requirements will be made available when we invite full bids on May.

The grant mechanism used may depend on the nature of the partnership you submit a bid with but, again, more details on how the grant will work will be provided in May.

Q. Can an organisation use purely its own finance to deliver services?

A. If there is no investor then delivery would be under a straightforward payment by results agreement. It is possible to submit this type of bid but it will not be eligible for the Social Impact Bond weighting.

Q. Can a provider in a bid be part funded by a social investor and partly use its own balance sheet to fund its activities?

A. Yes. In most cases social investors will prefer it if the provider organisation puts some of their own money at risk as this will align incentives and reduce the cost of capital. However in order to get the Social Impact Bond weighting bidders would need at least 50% of total working capital to come for a social investor.

Q. Can a small organisation be funded by a larger organisation that doesn’t necessarily class themselves as a social investor?

A. For this scheme the investor organisation does not have to call itself a ‘social investor’. However, one of the benefits of social investment as opposed to standard investment is that with the former the investors are just as interested in achieving positive social outcomes as they are in making a financial return. This reduces the risk of perverse incentives and makes long lasting positive outcomes more likely. Hence we would encourage organisations to explore their propositions with social investors.

Q. Can a provider use a loan instead of investment that depends on outcomes delivered?

A. An important element of a Social Impact Bond is that the risk of not delivering outcomes is held primarily by the social investor and not the delivery organisation. This enables smaller organisations to deliver services in Payment by Results contracts. Therefore to get the Social Impact Bond weighting most of the risk would need to be held by the investor. If a provider takes a loan that they need to repay regardless of the outcomes they deliver there is not the required level of risk transfer.

Q. Is there a cap on the return a social investor can make?

A. There is no cap on investor return although we would not expect excessive profits made by social investors.

Bids/Expressions of Interest

Q. Can local authorities support more than one expression of interest?

A. At Expression of Interest phase, yes, very much so. We will be assessing Expressions of Interest against a floor as opposed to in competition with each other. A number of organisations in one area may be successful at expression of interest phase. They may then want to work together on a larger scale bid.

Q. If our operations span several counties, would we need to do a separate application for each centre we wish to put forward?

A. If you are one organisation that works across a range of areas, one Expression of Interest is sufficient. You will need to provide detail of the support you intend to offer and where for your full bid.

Q. Do I need local authority support from all the districts my proposal covers?

A. All we need at this stage is support from one local authority for your bid, which can be either district or county or unitary. We are expecting that Expressions of Interest with support from one area initially may well end up leading to full bids covering more than one area.

Q. Is there a particular idea on the numbers we are expected to assist? Most local authorities will have a small cohort and progress on these alone would be valuable. Do we have to assist at least 50 a year?

A. There is a minimum contract size of £500,000, so if you expected to achieve outcomes worth an average of £10,000 per person, then that would mean 50 people (who would probably need to be referred in the first year to allow outcomes to be achieved before the scheme closes). Where there are not enough clients in a particular local authority area to get to the minimum bid size, we are hoping that bids will be able to work across local authorities.

Q. Is it possible for organisations to submit more than one Expression of Interest?

A. Yes. Larger organisations may want to submit quite different bids for different groups or in different areas or you may want to be part of a partnership Expression of Interest and submit an individual Expression of Interest too. We will only be able award full Fair Chance Fund schemes to partnerships that include providers successful at Expression of Interest phase.

Q. How can small organisations, who operate well below the minimum grant level, participate in the scheme?

A. We encourage small organisations to partner with others to deliver a wider range and support and services.

Q. If we are planning to work across areas with different provider organisations, would we need to do a separate application for each area?

A. At the Expression of Interest stage it is the provider that will be assessed to determine whether the Expression of Interest passes. If there are different providers working in different areas then separate applications are recommended. If there are different providers working in the same area then each of the providers are assessed in turn. We will only be able award full Fair Chance Fund schemes to partnerships that include providers successful at Expression of Interest phase.

Q. Do I need to form a group to achieve the scale parameters of the fund? If so I may need to talk to other like minded groups within the area?

A. Bids need to be between £500,000 and £3 million in outcomes payments. We expect that in many cases local areas will need to work in partnership to achieve this scale. Given the nature of the group we want to support we think that larger geographic areas are appropriate in terms of developing viable schemes. At Expression of Interest stage, however, we only require the support of one local authority.

Q. Can I access the fund if I already deliver services to the cohort but want to expand these services to meet a growing demand for my services?

A. Yes – essentially. As long as you have local authorities signed up to act as a referral gateway and can demonstrate that the services are clearly for additional demand.

Q. Can a provider or partner provider be a Further Education College or an Arm’s Length Management Organisation?

A. In terms of Arm’s Length Management Organisations, local authorities play an important but neutral role in this scheme. We are asking LA’s to support bids and provide the referral gateway. In this case, it is important that they are not also the provider because otherwise they could potentially have an interest in referring quick wins or ‘creaming skimming’. Given the wide variety of roles and responsibilities of Arm’s Length Management Organisations I’m afraid we cannot accept bids from them as Fair Chance providers. However, we expect some providers will want to work with Arm’s Length Management Organisations in developing bids.

There is no reason why a Further Education College could not be part of a bid, but we would not want to duplicate existing funding through the Fair Chance Fund, so evidence of additionality would be important.

Q. Do all the outcomes have to be met by the Third Sector providers or can some be met by other sectors. If so how does that affect the outcome payment?

A. It is up to you how you support the individuals in the scheme and what you bid to charge us for outcomes. If you want to use existing services to offer support then you will be able to put in a full bid with lower outcome payments. One of the criteria full bids will be assessed against is cost – so this could advantage your bid. If different types of organisations are offering support, bidders will need to arrange how they are paid. This could be based on results or on a fee for service basis. But the fund will only make payments to the lead bidding organisation.

This organisation could be a service provider, but could also be a partnership involving one or more social investors and/or one or more providers. It is not necessary for that kind of partnership to be formed at Expression of Interest phase - as long as you can demonstrate that you have a track record in delivering successful education, employment and training and/or housing support to a relevant client group, then there is a good chance your Expression of Interest will get through.

We will also assess bids on whether they can demonstrate additionality. If a provider already delivering services for this group paid for from the public purse and wants outcome payments from the Fair Chance Fund, they will have to demonstrate that the bid is delivering something additional.

Q. How will areas be prioritised? How will you ensure that rural areas are not penalised because of the diffuse nature of the cohort in those areas?

A. Bids will be evaluated on their respective strengths, regardless of where they are targeted. We anticipate that different areas may need to develop differently structured services depending on factors such as existing service provision, local availability of accommodation, transport issues etc. The key factor we are interested in is helping young people who need a service to turn their lives around, but who are not getting one because their circumstances make this difficult.

Wider issues

Q. Could a local authority provide a fee for service funding, on top of the Fair Chance Fund, to allow the project to work with harder-to-reach individuals who need more intensive support?

A. In principle, yes. There is nothing that stops the Fair Chance Fund partnership working for a range of commissioners.

Q. Will benefits sanctions make volunteering more difficult?

A. We will expect providers to work within benefits rules and to liaise with Job Centre Plus, Work Programme Providers and others as necessary to achieve the best outcomes for clients.

Q. Will education or training reduce benefits?

A. We will expect providers to work within benefits rules and to liaise with Job Centre Plus, Work Programme Providers and others as necessary to achieve the best outcomes for clients.