Notice

Social Housing Decarbonisation Fund Wave 2.1: Clarification questions and responses (updated 28 October 2022)

Updated 2 October 2023

Applies to England

Management of the scheme

1. What is the purpose of the competition guidance document?

The competition guidance outlines the full policy requirements of the SHDF Wave 2.1 scheme, as well as setting out some of the high-level terms and conditions attached to projects that receive funding. It is not a legal document, nor is it a detailed view of how BEIS will manage the scheme and the processes projects will need to follow during delivery.

2. How will BEIS manage the scheme?

BEIS will appoint 3rd party organisations, including a Delivery Agent and a Delivery Partner, to act on its behalf in management of the scheme. Grant Recipients will be required to work collaboratively with all organisations working on BEIS’ behalf. Within the competition guidance and FAQs, references to BEIS stand not just for BEIS but also any 3rd party organisations that act on BEIS’ behalf.

Eligible applicants

3. I am a small landlord with fewer than 100 homes, can I apply?

Bids must include a minimum of 100 social homes below EPC C, however this can be as part of a consortia bid with different partners each contributing fewer than 100 homes. Landlords with small amounts of stock are encouraged to bid as part of consortia and there is support to do so through the SHRA.

4. Can I bid if I am not a Registered Provider? (updated 29 September 2022)

Local Authorities, Combined Authorities, registered providers of social housing (including housing associations and arms-length management organisations (ALMOs) that are registered providers) and registered charities that own social housing will be able to apply to Wave 2.1 of the SHDF, either directly or as part of a consortium led by an organisation that is eligible to lead a bid. ALMOs that are not registered providers can apply as part of a consortium led by an organisation that is eligible to lead a bid.

Registered charities that are non-registered providers will be required to provide evidence that their properties fall under the definition of social housing as defined by the Housing and Regeneration Act 2008 (sections 68-70).  This should include evidence of rent rates for the properties being considered for retrofit, with a market rate comparison, and should be included as an annex to the bid application.

We recommend that Registered Charities who wish to apply engage with the Social Housing Retrofit Accelerator as early as possible to access support for their bid.

5. Are combined authorities or other non-stock holding local authorities able to bid on behalf of a consortium?

Non-stock-holding local authorities and combined authorities may bid as the lead of a consortium on behalf of eligible stock-holding applicants under Wave 2.1 of the SHDF to support the installation of energy performance measures in social homes in England.

UK subsidy control rules

6. How should subsidy control be managed in consortium bids? (added 29 September 2022)

BEIS will be carrying out an assessment against the subsidy control principles as the public authority giving the grant. Whilst BEIS will undertake an assessment for the whole scheme, each partner in a consortium will be responsible for understanding their own subsidy requirements, as these change dependent on the organisation. We recommend potential applicants engage with their legal and finance teams to understand and review the provisions for grants as laid out in the UK-EU Trade and Cooperation Agreement (TCA) and the domestic Subsidy Control Act 2022. Information can be found here about complying with the UK’s international obligations on subsidy control.

7. In terms of subsidy control, is there a ceiling on the amount of grant that can be applied for over a period of time? (added 29 September 2022)

BEIS will be carrying out an assessment against the subsidy control principles as the public authority giving the grant. Whilst BEIS will undertake an assessment for the whole scheme, each partner in a consortium will be responsible for understanding their own subsidy requirements, as these change dependent on the organisation. We recommend potential applicants engage with their legal and finance teams to understand and review the provisions for grants as laid out in the TCA and the domestic Subsidy Control Act 2022.

Refer section 2.3 of the competition guidance for further information on subsidy as it applies to Wave 2.1, including the Small Amounts of Funding Exemption. Guidance on subsidy control regime can be found here.

8. How should subsidy control be managed for non-Registered Providers of social housing? (updated 29 September 2022)

If your consortium contains a non-registered provider of social housing or a registered charity, your application will be assessed in accordance with the subsidy Principles in the TCA. Applicants are again advised to declare the level of state support, if any, supplied to each consortium member on application. The Small Amounts of Funding Exemption also can apply to consortia.

Refer section 2.3 of the competition guidance for further information on subsidy as it applies to Wave 2.1, including the Small Amounts of Funding Exemption. Guidance on subsidy control regime can be found here.

9. Please can you provide specific criteria which housing cooperatives and associations must meet for compliance with subsidy rules? (added 29 September 2022)

Compliance with subsidy rules is based on an assessment made against the Principles in the TCA and the Subsidy Control Act 2022. The Principles are not specific criteria as such. Analysis needs to be undertaken to make sure that any subsidy given is consistent with the Principles.

Refer section 2.3 of the competition guidance for further information on subsidy as it applies to Wave 2.1, including the Small Amounts of Funding Exemption. Guidance on subsidy control regime can be found here.

Eligible properties

10. Can I retrofit a home in SHDF Wave 2.1 that I retrofitted in a previous wave of the SHDF?

No – SHDF Wave 2.1 grant funding cannot be used to fund works or activities that were funded as part of a previous wave of the SHDF. We will continue to revisit this position for future waves.

11. Will there be a cap on the number of homes that start at EPC D?

There is no cap on the number or proportion of EPC D homes that can be applied with.

12. What happens if we have e.g. a small site office (i.e. non social home), as part of a block of social housing that e.g. needs external wall insulation - can the EWI be funded on that specific part of the building? (added 2 August 2022)

SHDF Wave 2.1 funding is reserved for social housing stock as defined by the Housing and Regeneration Act 2008 (except in the purposes of infill for non-social homes, as outlined in section 2.5.2 of the competition guidance) and cannot be used for other purposes.

Works to non-domestic buildings or parts of buildings would need to be 100% funded by applicants and cannot be used as part of your co-funding contribution.

13. Are tenanted bedsits in sheltered accommodation eligible for Wave 2.1 funding? (added 2 August 2022)

SHDF funding is reserved for social housing stock as defined by the Housing and Regeneration Act 2008 (except in the purposes of infill for non-social homes, as outlined in section 2.5.2 of the competition guidance). If the tenanted bedsit falls under this definition, it is eligible for Wave 2.1 funding.

14. Are communal spaces within a social home (e.g. a social care home) eligible for SHDF funding? (added 2 August 2022)

If a communal space (e.g. living room) is within self-contained social housing accommodation, this would be eligible for SHDF funding.

15. What if I’ve already started a project, but I have homes in the project that work is yet to begin on? Can I apply with these homes? (added 2 August 2022)

SHDF Wave 2.1 funding may only be used for homes where installations of measures have not yet commenced. If preparatory work has already occurred (for instance teams set up, overarching plans in place, tenants engaged, designs developed, remedial/enabling works undertaken, etc), this does not preclude the project from bidding for Wave 2.1 funding.

16. Are projects based around void properties viable? (added 2 August 2022)

Yes, projects based around void properties are acceptable – although landlords should consider whether prioritising immediate benefits to in-situ tenants is more appropriate when selecting stock to apply with. We recognise that forecasting what properties will be void may be a challenge – therefore, bids submitted on the basis of expected void archetypes will be acceptable, but you will need to demonstrate how you’ve modelled that data in your application. Recognising the challenging nature of developing these bids, we recommend taking a realistic approach to the deliverability, and ensure you plan your projects with contingency. If in reality the number of voids you applied with do not occur, an alternative plan should be in place to fulfil your commitment at bid stage – so for instance, bids still need to include a tenant engagement plan.

17. Are properties owned by a private individual/organisation but leased to e.g. a registered provider of social housing/registered charity eligible for SHDF funding? (added 29 September 2022)

No, properties must be owned by an eligible organisation (Local Authority, Combined Authority, Registered Provider of social housing, or Registered Charity who owns social housing) to be eligible for funding, except for non-social housing included for the purposes of infill, as outlined in section 2.5.2 of the competition guidance.

18. We have a number of properties that are EPC D but already meet the 90kwh/m2/year target. Can these be included in an application? Is there a ratio of this sort of property that would seem reasonable in the bid? (added 29 September 2022)

All social homes below EPC C are eligible to be included in a bid looking to improve them to EPC C, including homes already at 90kwh/m2/year. There is no ‘cap’ on inclusion of such homes in a bid. As with all bids, applicants applying with such homes need to ensure they are delivering good value for money retrofits. In such a case, measures installed through SHDF grant funding should be installed with the primary goal of delivering value for money retrofits towards reaching EPC C rather than of further improving the space heating demand.

Works to non-social homes and homes at EPC C or above

19. Is installation of communal heating (e.g. shared ground loop) within a mixed tenure block eligible for funding?

It is anticipated that the only measures covered by the infill policy on non-social homes will be external wall insulation and associated ventilation. Any additional measures, including installation of communal heating systems, would need to be accompanied by a clear argument for why they require a full block application. In the case where non-social homes would still maintain access to their original heating source following the installation of the communal heating system, funding will not be provided and connection costs would need to be provided separately.

20. Are non-social homes funded under infill policy on non-social homes required to meet the same performance targets as social homes?

No, non-social homes are not expected to meet the performance targets required of the social homes.

21. Is co-funding required on non-social homes included as part of infill policy on non-social homes?

No, co-funding is not required on non-social homes being included as part of the infill policy on non-social homes. It should be noted that if a contribution from the leaseholder, freeholder, or shared ownership is withheld or refused, the Applicant may be required to underwrite this.

22. Where there are non-social homes the guidance states ‘Low Income – OO Only (<£31K gross household income) – SHDF will fund 100% of costs of the infill measure.’ Does this mean that there would be £20k available to this property (if it was a solid wall EPC D) or does it mean SHDF will pay all the costs needed to get up to the same standard as neighbouring properties that are being retrofitted (next door could potentially be having more than £20k spent on it split between the social landlord & SHDF)?

All works on non-social homes funded by SHDF Wave 2.1 will be capped at the value indicated by the ‘total spend if utilising maximum grant funding and associated minimum co-funding’ column in Table 1, based on the starting EPC and wall type. Where a contribution is required as defined by the infill policy on non-social homes (Private Rental Sector or Owner Occupier with a <£31k gross household income homes), the SHDF will fund the value outlined in Table 1 minus the contribution. Any additional spend will need to come from the Applicant.

23. What is an example of a measure that is not an infill measure?

An example of a non-infill measure is a Solar PV being installed on each roof of a terrace consisting of both social and non-social homes – the installation of solar PV on the non social homes would not be on an ‘infill’ basis.

24. The guidance states: “Where a small number of properties in a block or terrace are non-social homes (for instance – a tower block/low rise with a small number of non-social homes, with the vast majority of homes in the block being social homes), they can be included where they enable effective works to social housing.” Does “the vast majority” mean 90% / 70% for homes at EPC C or above and non-social homes respectively? Or is it to be determined on a case-by-case basis? (added 29 September 2022)

The intended purpose of SHDF funding is to improve the energy performance of social homes below EPC C up to that level. Following engagement with the sector, BEIS recognises that in some cases some homes that do not fit into that category are required to be retrofitted on an infill basis, to allow for effective retrofits of below EPC C social homes. However, to ensure SHDF Wave 2.1 supports retrofit of as many below EPC C social homes as possible, it is a requirement that any such ‘infill’ retrofits are kept to the absolute minimum required - with strong justification for these retrofits required for a bid to be successful. For consortia applications, it is expected that all members will abide by the principle of focusing on the delivery of below EPC C social homes.

For an application to be successful, the 90%/70% requirements do not have to strictly be adhered to in all individual blocks of homes within a wider application so long as the wider application meets the % requirements on below EPC C social homes stipulated in section 2.5 of the guidance - however, the broad principle of focusing on delivering retrofits to below EPC C social homes at scale would still apply on a block basis, so BEIS would not be expecting applicants to apply with a block of homes that had a proportion of homes that were either EPC C+ or non-social homes that was significantly higher than the levels outlined for the application as a whole in section 2.5 of the guidance. As part of the assessment process, BEIS will ask for the highest proportion of homes in any single block/terrace in the application that are infill . Landlords wishing to retrofit infill homes may choose to fund them entirely through their own funding, with this funding not being counted towards the co-funding contribution. In this case, they would not have to be included in the number of infill homes outlined in tables 4 and 6 of the application form– supplementary tables, or in this question about proportion of homes on a block basis.   See the response to clarification question 28 for how to fill out the application form in such a case.

25. Under infill policy for homes at EPC C or above, would semi-detached properties be eligible in small numbers on a street where we were carrying other works to EPC D or lower properties? What about a block where there are 2 poorly performing social rent homes where the other 8 are ineligible? (added 29 September 2022)

The infill principle is designed to facilitate retrofits of below EPC C social homes at scale. Retrofitting semi-detached homes, one of which is not a below EPC C social home, or retrofitting a block with a high percentage of homes included on an infill basis as in the example, would not be in alignment with this principle.

As part of the assessment process, BEIS will ask for the highest proportion of homes in any single block/terrace in the application that are infill . Landlords wishing to retrofit infill homes may choose to fund them entirely through their own funding, with this funding not being counted towards the co-funding contribution. In this case, they would not have to be included in the number of infill homes outlined in tables 4 and 6 of the application form– supplementary tables, or in this question about proportion of homes on a block basis.   See the response to clarification question 27 for how to fill out the application form in such a case.

26. From my understanding, infill measures are judged at a block level. Where the ‘vast majority’ meet the criteria ineligible properties can be included to allow works to the other eligible properties. My question is at what point does this stop being ‘infill’ and just become an ineligible block? Or is it just bid wide? Can you include a block where there is 1 or 2 poorly performing social rent homes where the other 8 are ineligible? (added 29 September 2022)

The infill principle is designed to facilitate retrofits of below EPC C social homes at scale. Retrofitting a block with a high percentage of homes included on an infill basis as in the example, would not be in alignment with this principle.

As part of the assessment process, BEIS will ask for the highest proportion of homes in any single block/terrace in the application that are infill . Landlords wishing to retrofit infill homes may choose to fund them entirely through their own funding, with this funding not being counted towards the co-funding contribution. In this case, they would not have to be included in the number of infill homes outlined in tables 4 and 6 of the application form– supplementary tables, or in this question about proportion of homes on a block basis.   See the response to clarification question 27 for how to fill out the application form in such a case.

27. Does inclusion of infill apply to only properties seeking grant funding? If we include necessary infills of C and fully fund them, do we have to state them in the bid numbers/projects we wish to undertake? (added 29 September 2022)

Applicants wishing to retrofit properties on an infill basis which are funded entirely by the applicant, with this funding not being considered in the SHDF Wave 2.1 co-funding contribution, may do so. If funded entirely by the applicant (i.e. no grant funding would be used on these homes, and the applicant funding used not being counted in the SHDF Wave 2.1 co-funding contribution), these homes would not need to be included in an SHDF bid – either the costs involved, or as a contribution to the number of homes retrofitted. Landlords doing so should outline the retrofit of these homes in written response to either question 2.11 or 2.14 (depending on nature of infill) of the Word application form, without including these entirely self-funded homes in the Excel tables relating to these sections.

Bid size

28. Is there a maximum number of homes per bid?

There is no maximum number of homes per bid. Wave 2.1 signals a significant scale up in funding and bidders are encouraged to think about large-scale projects. Bids must include a minimum of 100 social homes below EPC C.

29. Is there a minimum bid size in terms of bid value?

There is no minimum bid size in terms of the amount of funding requested. Bids must include a minimum of 100 social homes below EPC C and costs must fall within the cost parameters set out in the guidance.

Funding will need to be proportionate and limited to what is necessary to achieve the objectives of the scheme. BEIS reserves the right to review the distribution of funding across England comparative to the number of social homes per region and allocate funding in line with this.

30. What happens if fewer than 100 homes are delivered due to resident refusals? (added 2 August 2022)

Positive tenant engagement is a critical aspect of successful delivery and we expect to see clear strategies and plans for how this will be achieved. In addition, projects are expected to have contingency plans in place to address tenant refusals. All changes that are submitted beyond your application need to be approved by BEIS, or third parties acting on BEIS’ behalf, via the change control process.

Eligible installers

31. Our tender process will allow for us to select a main contractor to oversee the work, this main contractor will purely be there for a health and safety/management point of view, they will then employ a sub contractor who will have the necessary Trustmark registration (or equivalent) and follow PAS2035 standards. The main contractor is unlikely to have Trustmark registration but the installer (sub-contractor) will. Could you confirm that this would be acceptable?

Yes, this would be acceptable. There are multiple different models for a successful delivery, but all projects must ensure they have in place the required PAS2035 roles with suitably qualified people (as set out in PSA2035 Annex A) and the installers of energy efficiency measures are qualified and registered in line with PAS2030:2019 requirements including the use of any sub-contractors. Whilst the PAS2035 Retrofit Co-Ordinator may or may not be employed by the main contractor, they must be registered with one of the Trustmark (or equivalent)-approved Retrofit Coordinator schemes.

32. Please could you confirm the requirement for the Installer/Contractor to be Trustmark accredited? Our appointed installers are registered for an assessment with their accreditation body however this assessment may not take place prior to the launch and submission of the SHDF application. Does the Competition require the Contractor to be Trustmark registered prior to the submission of the SHDF application or prior to commencement in March 2023? Would proof of the Contractors registration for assessment suffice at the point of application? (added 29 September 2022)

Before an installer engages with customers or undertakes any work, they should be TrustMark registered and PAS certified.

It should be noted that if your appointed installer fails the assessment, or the assessment is delayed, they will be unable to do any work under the scheme.

33. Is it possible for the main contractor not to adhere to all appropriate safety and construction standards, but the sub-contractors to? (added 29 September 2022)

The main contractor overseeing the work does not need to be PAS 2030/2035 / MCS certified but they must use suitable businesses to lodge and install the work.

The work must be lodged in the Data Warehouse by the TrustMark registered retrofit coordinator in accordance with PAS 2035. The retrofit coordinator may be employed or subcontracted by a main contractor who may or may not be PAS certified.

The retrofit coordinator who is lodging the work must state the installer business for each measure.

The named installer business for any measure must be PAS 2030 or MCS certified and is responsible for the quality and compliance of that measure.

TrustMark may not have sight of who the local authority contracts to deliver the work, but they have sight of the retrofit coordinator who is overseeing the work and the installer who is responsible for the work.

In addition to installers being PAS/MCS certified, installations must also be compliant with building regulations

34. Could you confirm if the Principle Contractor looking to install High Retention Electric Storage Heating via a fully accredited sub contract installer is also required to be NICEIC registered? For clarity the sub contract installers used by the Principle Contractor will be fully NICEIC registered and accredited. (added 29 September 2022)

All installations must be notified appropriately in line with Building Regulations. Government encourages contractors to register with Competent Person Schemes (e.g. NIC EIC) so that they can self-certify their work.

Performance outcomes

35. I would like to install a heat pump, but this makes the space heating demand of the home worse due to assumptions in SAP about heat pump running time. Will stopping short of 90kwh/m2/year for this reason adversely affect my application?

The space heating demand level of 90kwh/m2/year is a consideration ‘where reasonable and cost effective’ – it will not be mandatory for applications to hit 90kwh/m2/year for homes, so long as they appropriately justify the end energy performance the homes will reach bearing in mind consideration of the 90kwh/m2/year, and the ‘reasonable’ and ‘cost effective’ considerations in the application. The justification outlined in this question may be one reason that some applicants give for not hitting the 90kwh/m2/year level in some instances – although the application will also need to appropriately consider the fabric levels of a home as part of the justification of end energy performance of the home.

36. What are the air tightness/ ventilation performance requirements?

Airtightness testing can be a very useful tool to measure and identify potential sources of leakage and heat loss or to as part of checking the adequacy of the ventilation. For specific performance requirements such as the requirement to undertake airtightness tests or the need to address the adequacy of the ventilation bidders should refer to PAS2035 standard and have a Retrofit Co-Ordinator who will ensure the requirements are identified as part of the risk assessment process.

37. What is an example of it not being good value for money to reach the 90kwh/m2 space heating demand? (added 29 September 2022)

BEIS have published some case studies outlining considerations around value for money on the space heating demand level, which should be considered alongside the published guidance and the specific details of the stock applied with.

38. What justification would be acceptable to demonstrate that fabric is sufficient pre-retrofit so that I can install low carbon heating without fabric? (added 29 September 2022)

A description would be required of why the home is suitable for a heat pump, and why applying with a heat pump alone would be an appropriate value for money solution for the home. As with all applications, landlords should outline how the 90kwh/m2/year has been considered as part of the retrofit design, including on whether reaching this level would be a reasonable and cost-effective approach for the properties in question. Applicants should not try to implement a retrofit that achieves 90kwh/m2/year without considering whether this would be reasonable and cost effective. Applicants applying to SHDF Wave 2.1 with just a heat pump alone as a single measure will still need to reach EPC C (or EPC D for homes starting at EPC F/G that cannot reach EPC C – see guidance section 2.9).

39. The guidance states that “Low carbon heating in homes on the gas grid may [be installed]…if performance outcomes are reached using less than the maximum grant funding”. Is low carbon heating acceptable if it is needed to meet the performance outcomes (e.g. to provide additional SAP points to reach EPC band C)? (added 29 September 2022)

Yes – low carbon heating can be installed to help reach SHDF performance outcomes on-grid (e.g. if replacing an inefficient gas boiler, where the introduction of low carbon heating leads to additional SAP points to reach EPC C). See further published clarifications if considering installing just low carbon heating without additional measures.

40. If I plan to go beyond the SHDF performance outcomes, should these measures and their impacts be reported in full, or should the application just outline SHDF-funded works? (added 29 September 2022)

It is expected that the grant funding for retrofit works applied for (along with associated co-funding) will be that required to achieve the performance outcomes for SHDF Wave 2.1 (EPC Band C, with appropriate consideration of 90kwh/m2/year, bearing in mind reasonableness and cost effectiveness). For Applicants wishing to go beyond these levels, it is expected that they will only use grant funding to fund a maximum of 50% of the eligible costs to reach EPC Band C, with appropriate consideration of 90kwh/m2/year, bearing in mind reasonableness and cost effectiveness. All eligible costs to install measures to reach a higher performance target will need to come from co-funding. Cost, and justification of costs, will be considered in the Value for Money section of the application form.

All eligible costs should be included in bids to SHDF Wave 2.1. This includes costs on eligible measures to be installed on below EPC C social homes that landlords are installing through additional co-funding if they wish to go beyond SHDF performance targets. The expected end result of retrofits should be outlined in Table 3 of the application form supplementary tables, and should be the expected end performance resulting from all eligible costs. For example, if landlords wish to improve homes to EPC C (with appropriate consideration of 90kwh/m2/year) through SHDF grant funding + 50% co-funding, then install additional measures entirely through additional co-funding to reach an end target of EPC B to hit an internal landlord target, then EPC B (along with associated bill savings, energy savings, etc) should be recorded for those homes in table 3.

All costs should also be included in relevant tables of the application form -  the costs of going beyond the SHDF performance outcomes should not be accounted for in grant funding, and instead should be included exclusively in the cells requiring details of co-funding.

41. How far does going beyond the SHDF performance outcomes apply? If I install measures to get a property to a low EPC Band C, but could install additional measures to increase it to a higher EPC band C, are these additional measures eligible if they improve the property’s space heating demand? (added 29 September 2022)

It is expected that the grant funding for retrofit works applied for (along with associated co-funding) will be that required to achieve the performance outcomes for SHDF Wave 2.1 (EPC Band C, with appropriate consideration of 90kwh/m2/year, bearing in mind reasonableness and cost effectiveness). For Applicants wishing to go beyond these levels, it is expected that they will only use grant funding to fund a maximum of 50% of the eligible costs to reach the SHDF Wave 2.1 performance outcomes – with co-funding covering the remaining costs to reach the SHDF performance outcomes, and any funding for going beyond the performance outcomes coming from additional co-funding above the 50% minimum. Cost, and justification of costs, will be considered in the Value for Money section of the application form. BEIS considers both grant funding and co-funding when assessing the value for money of retrofits

For clarity, if a home could reach EPC C through a given retrofit approach, but a further appropriate, value for money, eligible measure installation would be needed to reach 90kwh/m2/year, then that could also be partially funded by grant funding. Applicants should not try to implement a retrofit that achieves 90kwh/m2/year without considering whether this would be reasonable and cost effective – see the published case studies for support in thinking on this area.

42. Will applicants be penalised for going beyond the SHDF performance outcomes? (added 29 September 2022)

Landlords who wish to do so may improve their properties to a level beyond the performance outcomes of SHDF Wave 2.1, by using additional co-funding (see the guidance section 2.11.2 – ‘going beyond the SHDF performance outcomes’).

Applicants will not be penalised as a result of going beyond the SHDF performance outcomes. Landlords should ensure that all proposals, including those going beyond the performance outcomes of SHDF through the use of additional co-funding, deliver value for money. BEIS considers both grant funding and co-funding when assessing the value for money of retrofits.

43. Will bids that aim to address hard to treat properties be penalised? (added 29 September 2022)

‘Hard to treat’ social homes below EPC C will be eligible for SHDF funding. Applications with such homes will be expected to show that retrofits applied with are appropriate, deliverable and value for money as with all other applications. There will be opportunity to justify the costs applied with in the application form in question 4.2. All applications should consider how best to deliver at scale towards the improvement of social homes below EPC C – this may lead applicants to consider whether appropriate to include some homes requiring lighter touch treatment in their application alongside hard to treat homes.

44. Will my bid score better if I include a high proportion of hard-to-treat homes? (added 29 September 2022)

No – it is not mandatory for homes to be hard to treat, and BEIS recognises that many homes will not need a significant number of measures to reach the SHDF performance outcomes. All applications should consider how best to deliver at scale towards the improvement of social homes below EPC C.

45. When BEIS asks for ambition from applicants, do you mean ambition in terms of delivering homes to EPC C at scale, or in terms of going beyond EPC C using a deep retrofit approach? (added 29 September 2022)

Applicants are encouraged to take an ambitious approach to delivering social homes below EPC C to that standard at scale.

BEIS recognises that some landlords may wish to improve their homes to a level beyond the SHDF Wave 2.1 performance targets – landlords wishing to may apply to do so using additional co-funding (see the guidance section 2.11.2 – ‘going beyond the SHDF performance outcomes’). However, going beyond performance outcomes is not a requirement from BEIS, and many landlords will not wish to go beyond these performance outcomes.

Eligible measures

46. Will BEIS prioritise projects proposing fabric over those with low carbon heating, even if the justification for only doing low carbon heating fitted their definition of reasonable?

Evaluation criteria are designed in alignment with the guidance provided to landlords – a landlord that applied with just an appropriate low carbon heating measure (see section 2.10.1 of the competition guidance) would not be disadvantaged compared with one that also/instead included fabric in their application, unless the retrofit approach was not sufficiently justified.

47. Do I have to apply with fabric measures, or can I apply with just non-fabric measures (e.g. low carbon heating or solar PV) on some or all homes?

A fabric first approach to works is required. However, if the level of fabric is sufficient pre-retrofit, then an application with only non-fabric measures (e.g. low carbon heating or solar PV alone) on some/all homes can be considered, with significant justification required. If sufficient justification is not provided, the application is unlikely to score well on strategic fit or value for money.

48. Would failed CWI/loft insulation extraction and refill on a home starting below EPC C be eligible for funding if other measures are installed to make it an EPC C, given it would increase resident experience? And what evidence is required to support this? (added 29 September 2022)

If this is necessary for effective retrofit of the home then this would be eligible for funding, as outlined in the guidance section 2.11.3. However, costs for this purpose should be kept to a minimum - any inclusion of spend on this would need to be proportionate, with value for money on retrofits delivered being a key driver of SHDF funding award. Consequently, bids with these costs as a high proportion of overall costs may score less well on value for money. Written justification of the reason for extraction of CWI being included in costs for an SHDF bid would suffice as evidence – applicants should briefly outline why this approach has been undertaken for the stock applied with in response to question 2.6, and justify why it is a value for money approach, including the cost levels incurred for this purpose, in response to question 4.2.

Homes where this approach is taken would still need to reach the SHDF performance outcomes (see guidance section 2.9).

Funding and eligible costs

49. If measure costs inflate, will grant cost caps inflate along with them/does BEIS hold the right to raise cost caps post award?

For Wave 2.1, the cost cap levels are those outlined in section 2.11.2 of the competition guidance and it is expected that these will not be adjusted for any 20inflation. There will be a change control process to consider any changes that arise during delivery, but this is not expected to result in an increase to the cost caps. The expectation is that bidders use the certainty provided by the longer delivery windows for Wave 2.1 to secure a contract within the stipulated grant funding levels (plus co-funding) over the delivery period. Bidders are expected to provide as accurate costs as possible at bid stage – including through engaging with the supply chain, but also factoring in any estimates of inflation. If costs do increase during delivery, then landlords may input more co-funding to cover these.

50. What will be the process if my costs go up due to inflation, particularly where I could not anticipate this at application stage?

BEIS will not increase the grant funding allocated to a project. Projects will be held to account for the contents of their application.

Applicants are expected to provide as accurate costs as possible at bid stage – including through engaging with the supply chain, but also factoring in any estimates of inflation. Projects should control their costs as much as possible by maintaining accurate estimates and implementing financial controls and good procurement practices.

Any changes to the agreed project scope will be subject to the change control process.

51. Do the cost caps include VAT and if so, what do we assume VAT to be? 10% 5% or 0%?

The cost caps include VAT. Grant applicants are expected to seek their own advice on VAT (e.g. internal finance team/HMRC) before application. Inaccurate submission of VAT is a potential blocker to effective delivery.

52. Should costs for non-SHDF eligible measures be included as co funding?

No – only SHDF eligible measures should be included as co funding. Any non-eligible measures must be funded by the applicant in addition to the 50% co funding requirement for eligible measures, and should not be included in the application.

53. Can I carry out modelling or start works before I receive grant funding? If so, what can I spend funding on? (updated 29 September 2022)

All eligible costs that are incurred by a project between competition launch and signing of the GFA can be claimed against the overall co-funding requirement should the project be successful in grant award. BEIS does not take on any risk or liability for funds spent in this period, including if a project is not successful in competition.

BEIS does not take on any risk or liability for funds spent in this period, including if a project is not successful in competition.

Activities that are necessary pre-requisites for writing a high quality bid cannot be claimed, including work to understand the eligibility of stock such as EPC assessments or modelling. This principle is designed to incentivise early project kick off and utilisation of the time between competition launch and GFA signature.

BEIS would anticipate that many uses of digitalisation funding would be a cost for putting together a high quality bid, and therefore not possible to be claimed as co-funding if spent between competition launch and signing of the GFA. The exception to this is if digitalisation funding is used for meeting PAS requirements necessary for delivery.

Question 2.1b provides applicants with guidance on stock identification for an SHDF bid. There will be a change control process to consider any changes that arise during delivery, through which all changes that are submitted beyond your application need to be approved by BEIS, or third parties acting on BEIS’ behalf.

54. How will the process for counting pre-GFA activity towards co-funding work?

Eligible costs incurred between the launch of the Wave 2.1 competition and the signing of the Grant Funding Agreement (GFA) may be counted towards a project’s co-funding requirement. Eligible costs are described in section 2.11 of the competition guidance and defined in the GFA. Projects should keep a record and evidence of any spend incurred. Once the GFA has been signed, projects will be required to evidence their co-funding spend in the first monthly reporting cycle. This spend will be at the project’s risk pending successful award and projects carry the risk for any contractual arrangements that they would not be able to uphold if they are unsuccessful in the SHDF competition.

55. We are hoping to receive funding from Homes England’s Building Safety Fund to upgrade existing cladding and external wall insulation on Council owned tower blocks. These tower blocks are also being considered for a SHDF Wave 2.1 bid. Would these properties still be eligible for SHDF Wave 2.1 funding if HE funding was awarded? If these funding streams could work in tandem, would these properties be looked upon favourably in a SHDF bid, as evidence of greater value for money for BEIS? (added 2 August 2022)

SHDF funding may be used alongside funding from other schemes, as long as the same measure is not funded twice. We recognise that in exceptional circumstances value for money investments may be made where other Government funding is used as an appropriate part of co-funding for SHDF Wave 2.1 works, for example to support building safety work. However, we would not anticipate that the majority of the co-funding for a project would come from these sources – and any ‘blended funding’ that were to be considered for co-funding would need to be spent on an eligible cost of SHDF Wave 2.1, as outlined in the guidance document.

Whilst the SHDF is open to blending funding across schemes, the applicant must ensure that any funding awarded through the SHDF Wave 2.1 meets SHDF Wave 2.1 objectives. Funding from other schemes must be used correctly and in line with the eligibility criteria of that scheme. SHDF is not responsible for ensuring the correct use of funding from other Government schemes. Any blended funding from another scheme has to be secured by the point of application to SHDF, and evidenced in the SHDF application, rather than being assumed that it will be secured at a later date at the point of application to SHDF.

The Grant Funding Agreement will require grant recipients to declare that acceptance of the grant offered will not result in double funding of a single measure, for example, they are receiving funding from another source for the same or similar activity.

56. Can you clarify whether the 15% Admin and Ancillary budget, and the optional 2% digitalisation costs, are subject to the 50% match funding requirement, or does the 50% match funding only apply to the Capital costs? (added 29 September 2022)

A&A and digitalisation are both to be included within the cost levels from which the co-funding amount is calculated. See the application form – supplementary tables (Excel) Tables 15 and 16 for details on the calculation of the co-funding percentage.

57. Would SHDF fund any decoration costs (to make good after works have caused mess or disruption)? (added 29 September 2022)

It is not expected that decoration costs would be funded through SHDF funding – these would have to be provided by landlords, and should not be included in the co-funding amount provided in the application form due to not being an eligible cost.

58. Is there to be a standardised approach for applications to inflation, or should landlords use their own expertise? (added 29 September 2022)

The cost breakdown provided in the application form should be an accurate reflection of actual costs that will be seen in delivery. If not possible to secure a fixed price for works at bid stage that will still be valid at award stage, applicants are expected to use their knowledge of the market to ensure cost variances are factored into the bid. These considerations are anticipated to include inflation. The rate at which inflation is factored in will be left at the discretion of the bidder but must be supported by evidence which may include, but is not limited to, recent experience on construction projects,  or recent price changes seen in the market.

59. Is value for money to be based entirely on the lowest cost options available? (added 29 September 2022)

The value for money section of the application form provides opportunity for applicants to provide cost levels, as well as a justification of those cost levels. The cost breakdown provided is expected to be an accurate reflection of actual costs that will be seen in delivery. No decision on funding award will be made on cost levels alone.

BEIS will carry out a value for money assessment of bids, including a cost benchmarking exercise (i.e., comparing equivalent costs against costs seen in other bids) – with the aim of ensuring that bids represent good value for money but also are evidence based. Bids with poor cost justification will receive a low value for money score. The value for money assessment, including cost benchmarking, will be considered at portfolio review stage, to supplement the written response to this question – with the suitability of bids exhibiting relatively very high costs (i.e. potentially not exhibiting value for money) or very low costs (i.e. potentially not exhibiting evidence based/realistic costs) in particular likely to be considered.

60. If you are part of a consortium, are cost caps averaged for the consortium or individual partners homes? (added 29 September 2022)

Spend levels are to be averaged across consortia when determining whether the cost caps have been complied with, rather than individual partners. For all consortia members, it is expected that the grant funding for retrofit works applied for (along with associated co-funding) will be that required to achieve the performance outcomes for SHDF Wave 2.1 (EPC Band C, with appropriate consideration of 90kwh/m2/year, bearing in mind reasonableness and cost effectiveness). All individual consortia members should abide by the principles of the SHDF guidance, including that of delivering value for money retrofits.

For clarity, it is not expected that this ability to average across the consortia would be exploited by one member to use a far greater level of grant funding than the cost cap to reach a more ambitious performance target (e.g. EPC A), as long as the consortia as a whole was within the cost cap levels due to lower spend from other members.

61. Can building works to prepare for installation – for example removal of failed cavity wall insulation – also be classified as a capital cost, rather than the administration and ancillary (A&A) cost suggested in the guidance? (added 29 September 2022)

BEIS would expect this to be treated as an A&A cost if using SHDF grant funding towards it. If an applicant needed to treat this as a capital cost for internal accounting purposes, then they would need to use only their own funding to do so (i.e. no SHDF grant funding for this purpose), and this funding should not be included as part of the co-funding contribution in the SHDF Wave 2.1 application. Consequently, this means that if treating removal of failed cavity wall/loft insulation as a capital cost (rather than A&A), the costs for this purpose should not be included anywhere in the costs outlined in the application form supplementary tables or in the value for money section of the application form. In this case, the fact that the retrofit approach includes removal of failed cavity wall/loft insulation should still be referenced as appropriate elsewhere in the application form - for instance, when outlining and justifying the retrofit approach, factoring time taken to remove failed cavity wall/loft insulation in to the project plan, etc.

Scaled cost caps by wall type

62. What properties can utilise the solid wall cost cap?

Any home that i not classed as ‘cavity’ in the SAP wall type categorisation may use the solid wall cost cap if appropriate to do so. This includes brick, stone (granite, sandstone or whinstone), timber, system build, or curtain walls. Applications wishing to utilise the solid wall cap will be required to justify why they are doing so. As with any application, value for money proposals will be required. The level of funding applied for should be dependent on the cost of improving the stock to the SHDF performance outcomes and should not be dependent on the maximum level of grant funding for retrofit works available. On a by exception basis, some homes that are not ‘solid walled’ may be eligible for the higher cost caps, where the specifics of the archetype requires a treatment more aligned with the solid wall cost cap (e.g. cavity wall homes with cavities so thin that they cannot be filled, and thus requiring solid wall insulation). BEIS anticipates a very small number of homes will fall into this category, and strong justification is required in such cases.

63. What about properties that have a mix of cavity and solid walls?

We would anticipate that these homes would be eligible for the solid wall cap. Applications should justify this use of the cap.

64. We have some properties in our stock that have been recommended partial external wall insulation by our retrofit team and I wanted to ask if a partial insulation measure would be fully funded if it were to improve the SAP and energy efficiency of a property?

Yes – partial insulation would be eligible for SHDF Wave 2.1 funding as long as works meet the performance requirements, and are in alignment with other areas of the SHDF guidance e.g. PAS 2035.

65. What level of evidence is required to justify the use of the solid walled cost cap?

For homes that fall within the definitions of brick, stone (granite, sandstone or whinstone), timber, system build, or curtain walled homes, statement of these wall types along with why the cavity cap is not appropriate for the specific homes will be sufficient justification. For other homes wishing to utilise the solid wall cost cap (e.g. homes with cavities that are too thin to fill), a clear statement of why they cannot be appropriately treated with cavity wall insulation will be required.

66. What evidence is required for properties that are not solid walled but for which the higher solid wall cost cap is being claimed? Are BEIS able to offer guidance on what is deemed to be acceptable? (added 29 September 2022)

On a by exception basis, some homes that are not ‘solid walled’ may be eligible for the higher solid wall cost cap, where the specifics of the archetype requires a treatment more aligned with the solid wall cost cap (e.g. cavity wall homes with cavities so thin that they cannot be filled, and thus requiring solid wall insulation). BEIS anticipates a very small number of homes will fall into this category, and strong justification is required in such cases. The cost of measures exceeding the cavity wall cost cap outlined above (e.g. spending £12k to retrofit a cavity wall EPC D home) is not a sufficient justification for utilising the higher solid wall cap.

Landlords who believe the specifics of the archetype they will be applying with justify use of the higher cap should provide written justification in response to question 2.5 of the application form.

67. The guidance states that “walls are classified as cavity, brick, stone (granite, sandstone, or whinstone), timber, system build or curtain wall, in alignment with the SAP categorisations. Brick, stone (granite, sandstone or whinstone), timber, system build, or curtain can be considered as solid walled for the purposes of the cost caps if appropriate to do so.”

In terms of the guidance is there any more detail on ‘if appropriate to do so’ for classing timber frame homes as a ‘solid wall’? (added 29 September 2022)

BEIS expects applicants to put forward value for money applications, without unnecessarily maximising cost caps, and without unnecessarily utilising higher caps/spend levels than appropriate.

Brick, stone (granite, sandstone or whinstone), timber, system build, or curtain can be considered as solid walled for the purposes of the cost caps if appropriate to do so. Whether appropriate to do so will be dependent upon the retrofit required to be carried out – if a home within one of these wall types has cavity walls and it is technically possible to fill the cavities, the cavity wall cap will likely be more appropriate. For social homes that fall within the definitions of brick, stone (granite, sandstone or whinstone), timber, system build, or curtain walled homes, BEIS recognises that it is unlikely to be the case in many cases that it is technically possible to fill cavity walls (if indeed the properties do have cavity walls) – so statement of these wall types along with written justification in response to question 2.5 on the application form of why the cavity cap is not appropriate for the specific homes will be sufficient justification.

Additional low carbon heating cost cap off gas grid

68. How do cost caps work for homes on the gas grid that wish to install low carbon heating?

If retrofitting a cavity wall EPC D home that costs £6k (£3k grant funding+£3k co-funding) to reach EPC C with appropriate 90kwh/m2/year consideration, a landlord can use the additional £2k grant funding within the £5k cost cap towards cost of LCH. This would need to be matched by an additional £2k co-funding. Any extra spend to complete the retrofit would be required to come from additional co-funding. The retrofit must comply with the key principles outlined in section 2.10.1 of the competition guidance document.

69. If a home is connected to the gas grid but is electrically heated, is it eligible for additional low carbon heat cost caps (i.e. is it treated as an ‘off grid’ home)?

For the purposes of SHDF Wave 2.1, an off gas grid home is defined as one that does not use mains gas for heating purposes.

70. I have a small block of flats where 1 is on gas and the others have storage heaters. I would like to install heat pumps to the whole block. Would SHDF consider this as an infill measure to include the flat on gas with the heating?

The homes using electric storage heaters classify as off gas grid homes – and are therefore able to utilise the cost cap structure for off gas grid homes in Table 1, section 2.11.2 of the competition guidance. The one home that uses mains gas for heating would fall under the on gas grid cost cap structure – see table 2 in guidance.

71. Can I use the energy efficiency cost cap as well as the low carbon heating cost cap for a low carbon heating solution off gas grid?

The primary source of funding for low carbon heating off grid will be through the low carbon heating grant funding, and it is expected that in most cases this will be sufficient to fund installation of low carbon heating alongside associated co-funding. However, if necessary, bids will also be able to use some of the energy efficiency grant funding for installation. This must not compromise the delivery of appropriate energy efficiency measures, and should represent value for money.

72. If looking to install solar PV in an off grid home, would it class as an energy efficiency measure or a low carbon heating measure? (added 29 September 2022)

Solar PV would class as an energy efficiency measure.

Administration & Ancillary costs

73. Can I spend more than 15% of total project costs on Administration & Ancillary costs (A&A)?

Grant funding on A&A must be less than 15% of total grant funding - the expectation is that A&A spend should make up less than 15% of total costs. There is not scope to increase this proportion of grant funding used on A&A; however, in exceptional circumstances there may be scope for landlords to use slightly more than 15% of overall project costs for A&A purposes through spending slightly greater than 15% of the co-funding contribution on A&A. Note that this approach is not encouraged in general. Administration and ancillary costs are expected to be as low as possible, and BEIS will be assessing applications on value for money grounds, including requiring justification of costs.

74. Would SHDF Wave 2.1 funding cover cost of the removal of gas supply from properties if the move to a heat pump takes place?

Yes, the remedial aspect of administration and ancillary costs covers those elements vital to the retrofit of social homes that arise through reasons other than landlord neglect. This would encompass the removal of gas supply from properties, but this would need to comply with the expectations and requirements on A&A spend (see section 2.11.3 of the competition guidance). Any inclusion of spend on remedial works would need to be proportionate – with value for money on measures delivered being a key driver of SHDF funding award.

75. We have some blocks that have benefited from previous cavity wall insulation and the majority of the properties are at EPC C. However, we know that the building insulation and fabric is failing. Will SHDF Wave 2.1 allow the insulation to be removed and a new EPC to be completed at that stage (we expect them to be EPC E) and then to develop the retrofit plan? (updated 29 September 2022)

The remedial aspect of A&A costs covers those elements vital to the retrofit of social homes that arise through reasons other than landlord neglect. This would encompass the removal of failed cavity wall insulation, but this would need to comply with the expectations and requirements on A&A spend (see section 2.11.3 of the competition guidance). Any inclusion of spend on remedial works would need to be proportionate – with value for money on measures delivered being a key driver of SHDF funding award.

Unless being included on an infill basis (see section 2.5.1 of the competition guidance on ‘Homes at EPC C or above’), if a home is EPC C or above according to a valid EPC, then it cannot be included in an application unless either an EPC assessment is carried out showing that it is below EPC C, or a retrofit assessment is carried out and as part of the retrofit assessment process the property is evidenced to be below EPC C. Acceptable evidence as part of the retrofit assessment process must be based on government approved SAP 2012 or SAP 10.2 software. This would have to be evidenced at the point of application.

BEIS would not expect that the default replacement for the removed cavity wall insulation would be external wall insulation – unless cavity wall insulation is not technically possible for the archetype.

All installs need to be in alignment with PAS 2035/2030:2019.

76. Can administration and ancillary costs be used to train both in house and contractor retrofit coordinators to deliver the project? (added 2 August 2022)

In house training of Retrofit Co-ordinators could be included as an administration and ancillary cost. We would not expect SHDF funding to be used to train external retrofit co-ordinators.

77. A&A costs account for removal of failed cavity wall insulation - what about failed External Wall Insulation (EWI) (i.e. peeling off and buckling), on a home starting below EPC C? (added 29 September 2022)

This is a clearly visible issue, and BEIS would therefore expect that landlords would have addressed this as part of their stock maintenance. It is therefore not eligible for SHDF funding, or to be included as part of the co-funding contribution. Landlords may address this through their own money outside of the co-funding contribution.

If EWI needs to be removed for safety reasons as supported by the Building Safety Fund, then landlords may wish to consider blending SHDF Wave 2.1 funding with Building Safety Fund funding.

78. From the guidance: “Due to the scale and size of the projects, Applicants are expected to have administration and ancillary (A&A) costs associated with the delivery of the project. A&A costs are expected to be as low as possible, with a requirement that grant funding for A&A comprises less than 15% of total grant funding (with total grant funding including both grant funding for capital costs for retrofit works and grant funding for A&A). We expect that total costs for A&A (grant funding for A&A + co-funding for A&A) will comprise less than 15% of the total project costs (total grant funding + total co-funding, including both capital costs for retrofit works and A&A costs)..”

Could you please provide a worked example on A&A costs in relation to grant and total costs? (added 29 September 2022)

Suppose that the total eligible cost (total grant funding + total co-funding, including both capital costs for retrofit works and A&A costs) of a project is £10 million, and this is made up of £9 million of capital costs for retrofit works and £1 million of A&A costs.

A&A costs (£1 million) make up 10% of total project costs (£10 million) – this would be within the 15% expectation on A&A as a proportion of total project costs outlined by the guidance.

Suppose also that the £10 million total project costs were to be made up of £5 million grant funding and £5 million co-funding (i.e. 50% co-funding).

Suppose that £4.5 million of the grant funding was for capital costs for retrofit works, and £0.5 million for A&A costs – with the remainder of the project costs (£4.5 million capital costs for retrofit works, £0.5 million A&A costs) to be covered by co-funding. In this example, A&A grant funding (£0.5 million) would make up 10% of the total grant funding (£5 million) – and this would be within the 15% requirement on A&A grant funding as a proportion of total grant funding outlined by the guidance.

However, were the same project to have its £5 million grant funding made up of £4 million for capital costs for retrofit works and £1 million for A&A costs, with the remainder of the project costs (£5 million capital costs for retrofit works, £0 A&A costs) to be covered by co-funding, then A&A grant funding (£1 million) would make up 20% of the total grant funding (£5 million). This would not be permissible, as 20% is greater than the 15% requirement on A&A grant funding as a proportion of total grant funding outlined by the guidance.

Please note - any grant funding for capital costs for retrofit works will be required to comply with the cost caps outlined in the guidance. Cost caps are exclusive of administration and ancillary costs. The above example assumes the bid does not include a request for the optional support for digitalisation (as outlined in section 5 of the guidance). If digitalisation were to be included in a bid, it would fall under capital spend. Digitalisation funding is in addition to the cost cap levels outlined in the guidance, and spend for digitalisation should be included in the dedicated digitalisation table (Table 16) in the application form supplementary tables (i.e. applicants should not include digitalisation costs in spend levels on capital costs for retrofit works in Tables 13 and 14 when determining whether a project is compliant with the cost caps. Digitalisation costs should also not be included in Table 11). If digitalisation spend were to be included, it could comprise up to 2% of capital spend per bid, or a maximum of £600k per bid (including grant and co-funding), whichever is smallest.  All projects will be expected to exhibit value for money, as outlined in the guidance, FAQs and application form.

The guidance text for Table 15 of the supplementary tables to the application form outlines what costs are included in both the A&A and co-funding % calculations – the above example assumes that no costs for this project fall outside the scope of these calculations.

Digitalisation

79. Is it compulsory to include digitalisation? Will it make the bid more attractive?

It is not compulsory to include digitalisation and a bid will not be negatively affected for not doing so.

80. Digitalisation attracts annual costs. Is this likely to be covered for a number of years or is it solely for install?

BEIS will not cover ongoing annual costs for digitalisation.

81. Will the digitalisation funding also need to be co funded?

Digitalisation is an eligible cost, and 50% of eligible costs need to be provided by landlords.

82. Is the 2% digitalisation funding additional to the Capital spend limits and A&A requirements?

Yes, this would be a capital cost, which would be separate from the cost cap limits.

83. Can we apply for funding under the digitalisation area for SAP based modelling software?

Routine stock modelling, using modelled expected data for archetypes has a valuable role within retrofit. However, the data processing of modelled data is excluded from this definition of the digitalisation of retrofit.

84. The guidance states that: “digitalisation funding applicants will be required to share data” – what levels of time and resource commitments would be required to supply this information? (added 29 September 2022)

It is recognised that in the earlier stages of enabling Digitalisation of Retrofit there will be additional requirements on those applicants receiving digitalisation funding. For example this may include additional anonymised data collection at a property level rather than aggregated property data, benefits data which may include detailed labour and capital costs  additional data sharing consents, reporting, lessons learned workshops and work to develop new processes as well as the cost of the technology required for the area(s) of digitalisation being applied for.  Those applicants planning to bid for digitalisation funding should work with suppliers and providers at the earliest opportunity to understand the likely costs and supplier requirements including additional administration costs.

Delivery and grant funding spend

85. Delivery up to 30 September 2025 may not be long enough for the project I am planning, and there is no room for contingency. How can I ensure that the project can carry on despite potential delays? Will projects be able to go past 30 September 2025, and what will be the process? (updated 29 September 2022)

The delivery window for SHDF Wave 2.1 will go up to 30 September 2025. Projects must spend all their grant funding by 31 March 2025. Projects are expected to deliver within this timeframe, and all applications should be based on these timelines.

Projects can utilise the offer to use co-funding upfront to kick off their projects at SHDF Wave 2.1 competition launch. ‘Competition launch’ means the date on which the final set of competition and grant documents will be published.

Any changes to the agreed project scope will be subject to the change control process.

These principles will be reflected in the Grant Funding Agreement.

86. What is the required split between grant funding and co-funding throughout the project? (updated 29 September 2022)

BEIS generally expects projects to fund activities by equal parts grant funding and co-funding throughout delivery. Projects must plan for this outcome.

Projects running to 30 September 2025 will be utilising only co-funding in the last 6 months of delivery, and so small deviations from the equal parts principle may occur.

Projects must uphold their co-funding commitment. Evidence that the required level of co-funding has been secured within the Lead Applicant’s organisation will be collected at application stage. Projects will need to evidence their continued commitment to the agreed co-funding throughout delivery. Failure of projects to contribute the overall agreed level of co-funding will result in a reduction in grant funding and clawback where necessary, or potential termination of the agreement.

87. What will be the process in managing my project if I am not able to spend grant funding allocated in the financial year? What are the flexibilities around this?

BEIS expects projects to spend their baselined, agreed grant funding amount in each financial year. Projects must spend all their grant funding by 31 March 2025.

Where there is expected or actual underspend against this baseline in any financial year, projects should make BEIS aware of this eventuality as early as possible and submit a change request which will go through the change control process. There is no guarantee that a project’s grant funding can be moved between financial years.

88. The guidance specifies that projects can receive a one-off upfront payment at the start of the project where there is ‘explicit need’. How do you define this and who is eligible?

Projects that can provide a clear reason as to why an upfront payment will materially improve the delivery of their project in time, cost and/or quality will be eligible for this payment. BEIS takes on risk by giving upfront payments and therefore there needs to be a corresponding identifiable benefit to justify the provision of funding. BEIS will assess the need for this on a case-by-case basis.

BEIS views the lack of early cash flow in an organisation as an example of explicit need, however BEIS is open to any case for upfront funding and will look at each request on a case-by-case basis to determine whether the upfront payment can be provided. BEIS will follow the ‘Managing Public Money’ guidelines in all instances when making these decisions.

89. Which documents need to be signed by successful Lead Applicants before grant funding payments will be made? Can I start work on my project ahead of all documents being signed? (updated 29 September 2022)

Lead Applicants will need to sign their Grant Offer Letter and Grant Funding Agreement (with all associated documents including the Data Sharing Agreement) before grant funding payments can be made. This is to ensure that all projects are operating on a level playing field and have formally signed up to the scheme terms and conditions before receiving funding.

Projects may start work ahead of these documents being signed using co-funding and at their own risk.

BEIS is making every effort to give Lead Applicants early sight of the Grant Funding Agreement and Data Sharing Agreement, so they can review the generic documents and ask for any clarifications well in advance of execution. The GFA, GOL and DSA draft templates can be found on the SHDF Wave 2.1 webpage and signature of these documents is expected in February/March 2023 (subject to changing timelines).

90. The guidance and GFA say projects should plan for 40/60 grant funding split over FY23/24 and FY24/25, and also that grant and co-funding should be spent in roughly equal measure throughout delivery. Will I be marked down or not awarded funding if I am not able to plan for this split? What are the flexibilities and process? (added 2 August 2022)

Project grant funding spend should be aligned to the SHDF spend profile of 40/60 over FY23/24 and FY24/25. BEIS expects that co-funding and grant funding are spent in roughly equal measure throughout delivery, however from April 2025 onwards only co-funding can be used, and projects have the option to utilise co-funding at their own risk in the period from competition launch to GFA signature.

Each successful project will have a percentage of grant spend agreed for FY23/24 and FY24/25 based on their application and any subsequent discussion with BEIS. These figures will then be added to Annex 6 of the GFA for each individual project.

Where projects are not able to spend the grant funding agreed for each financial year, requested changes to the agreed project scope will be subject to the change control process. BEIS will reserve the right to reduce the overall grant funding amount given where projects underspend in any given financial year.

91. What is the expectation for the ‘contractor’ table in the application form? Most LAs/RPs would not have procured a contractor at bidding stage. (added 29 September 2022)

The grant applicant should disclose information of suppliers already contracted, if supply chains are already in place. If no suppliers have yet been contracted, the grant applicant should disclose information of the type of suppliers planned to be contracted in line with the commercial and procurement strategy of the project.

92. What are the differences between the Wave 2 and Wave 1 Data Sharing Agreement, and are there any elements I should be particularly aware of? (added 29 September 2022)

BEIS has adjusted the DSA to reflect changes in the Wave 2 scheme rules/guidance.

The most significant change since Wave 1 is that BEIS will no longer seek consent for data collection in relation to wider BEIS evaluation activities. BEIS will contact installers and tenants to take part in a scheme evaluation for Wave 2 in reliance on public task instead of consent. This will reduce the need for BEIS to possess identifiable data and reduce a significant burden on SHDF grant recipients.

SHDF Wave 2 will collect Smeters data. BEIS’ smart meter contractor will send an invitation letter and recruitment materials via post or online to relevant households in SHDF Wave 2.1 to collect delivery data.

BEIS has also reduced the retention period for data on the scheme, aligning to business needs.

93. The guidance says projects should aim to plan for 40/60 grant funding split over FY23/24 and FY24/25. Will I be marked down or not awarded funding if I am not able to plan for this split? What are the flexibilities and process? (added 29 September 2022)

Project grant funding spend should aim to be aligned to the SHDF spend profile of 40/60 over FY23/24 and FY24/25. BEIS will allow for some flexibility to projects on a case-by-case basis where there, and applicants should provide as accurate, sensible, and deliverable a forecast as possible. However, Applicants are also encouraged to think about how to start delivering as early as possible to make full use of the delivery window.

Once a grant funding amount for each financial year is agreed with successful projects, projects that spend below the agreed grant funding split may have their total grant award reduced to reflect this underspend. However, BEIS will aim to act on a best endeavours basis to secure the full grant funding for underspending projects, and each project will be looked at on a case-by-case basis.

These principles will be reflected in the Grant Funding Agreement.

94. If my project is delayed, will I be able to just use grant funding in years 1 and 2? (added 29 September 2022)

Projects are expected to uphold their co-funding commitment, and BEIS will need to have confidence throughout delivery that this will be the case. This is expected to be demonstrated through funding activities in equal parts grant funding and co-funding throughout delivery.

Where projects anticipate they will utilise the longer delivery window out to September 2025, with only co-funding used after March 2025, it is acknowledged that equal parts co-funding and grant funding will not be possible at every stage of the project. Any co-funding spent in the period from the beginning of April to end September 2025 must be proportional to 6 months of delivery of the overall project. BEIS anticipates this value would be around 20% of project cost but is open to considering slightly higher levels of spend during this period if necessary for successful delivery of the specifics of the project.

Project performance will be assessed on a case-by-case basis and where changes are required, projects will be required to go through the Change Control process. Where there is significant underspend, including in co-funding, BEIS may require projects to reduce their scope (and thereby reduce grant funding in line with cost caps) or terminate.

95. Could you please clarify the timeline for being able to claim our upfront spending costs as co-funding?

If I have an invoice for this cost dated after competition opens would this be sufficient for it to be included towards the co-funding contribution? (added 29 September 2022)

Eligible costs that are incurred from the date of competition launch can be counted towards the co-funding requirement of the project should the project be successful in grant award. The invoice on such eligible costs would need to be dated after the competition launches to count towards the co-funding contribution.

These eligible costs would include necessary costs for delivery relating to PAS that were incurred over this time period (e.g. any retrofit assessments, airtightness tests and ventilation checks carried out at this stage) on homes that end up being retrofitted through SHDF.

BEIS does not take on any risk or liability for funds spent in this period, including if a project is not successful in competition.

Activities that are necessary pre-requisites for writing a high quality bid cannot be claimed, including work to understand the eligibility of stock such as EPC assessments or modelling. This principle is designed to incentivise early project kick off and utilisation of the time between competition launch and GFA signature.

Section 2.11.3 of the guidance lists a number of eligible costs (both capital and administration and ancillary) for SHDF. Applicants with questions about eligible costs should review this section of the guidance in particular.

Where there is an explicit need for upfront funding (i.e. funding ahead of works being completed) projects may request to receive this up to 10% of the grant or £1m (whichever is lower). If BEIS approve this request, the agreed funding will be released upon signature of the GFA.

96. Where does the timeline allow for a formal procurement to take place so cost certainty can be gained? The timeline to conduct a FaT tender for works is not practical in the timeframe given. Under Public Contracts Regulations we will be required to conduct a formal procurement. (added 29 September 2022)

The cost breakdown for the project is covered by Question 4.2 of the SHDF Wave 2.1, which provides guidance on how the costs should be justified.

It is not anticipated that all projects will have existing contracts in place and procurement will need to take place after notification of award. I this case, it is critical that the bidder outlines their approach to procurement in Question 3.7 of the Application Form and how cost variances will be managed in Question 3.5.

97. How does the requirement to only use co-funding in the final 6 months of delivery work on a 50% funding model? Do applicants need to get a balance of funding so that less match/co-funding is spent up until March 2025, then balanced out to 50% with spend from then up to 30th September 2025? Or would any spend March 2025-September 2025 be entirely from the applicant, over and above the minimum 50% co-funding? How would total spend for a project be evidenced for the final funding payment if the project is still ongoing? (added 29 September 2022)

Where projects anticipate they will utilise the longer delivery window out to September 2025, with only co-funding used after March 2025, it is acknowledged that equal parts co-funding and grant funding will not be possible at every stage of the project. Any co-funding spent in the period from the beginning of April to end September 2025 must be proportional to 6 months of delivery of the overall project. BEIS anticipates this value would be around 20% of project cost but is open to considering slightly higher levels of spend during this period if necessary for successful delivery of the specifics of the project.

It is expected that all grant funding will be spent by March 2025 and the remaining profile of spend is consistent with the approach detailed above.

At the end of the project, evidence will need to be provided to BEIS to demonstrate the co-funding requirement, of a minimum 50% of total spend has been met.

98. How should the 40%/60% ratio be factored into planning works for the bid? How is it to be explained to contractors who may either be asked to hold off on works, or asked to wait for payment until the following financial year? (added 29 September 2022)

Project grant funding spend should aim to be aligned to the SHDF spend profile of 40/60 over FY23/24 and FY24/25. BEIS will allow for some flexibility to projects on a case-by-case basis where there, and applicants should provide as accurate, sensible, and deliverable a forecast as possible. However, Applicants are also encouraged to think about how to start delivering as early as possible to make full use of the delivery window.

Projects are expected to uphold their co-funding commitment, and BEIS will need to have confidence throughout delivery that this will be the case. This is expected to be demonstrated through funding activities in equal parts grant funding and co-funding throughout delivery. BEIS recognises that the co-funding contribution may be able to be spent more flexibility to meet the needs of delivery and as in the case of the 40/60 split, will be considered on a case-by-case basis.

99. “lead applicants that underspend…may not receive this underspent grant in the following financial year” – should these works that aren’t completed just be dropped if funding is not available to pay for them? What about if there is overspend in FY23/24, due to the planning process completing quicker than expected for example? (added 29 September 2022)

Once a grant funding amount for each financial year is agreed with successful projects, projects that spend below the agreed grant funding split may have their total grant award reduced to reflect this underspend. However, BEIS will aim to act on a best endeavours basis to secure the full grant funding for underspending projects, and each project will be looked at on a case-by-case basis.

100. Can you confirm that all ‘eligible costs’ do include paying contractor invoices for retrofit works included in our bid? Accepting that we do this at our risk if the bid is unsuccessful. (added 29 September 2022)

Eligible costs that are incurred from the date of competition launch can be counted towards the co-funding requirement of the project (the costs cannot be ‘claimed back’).

Section 2.11.3 of the guidance lists a number of eligible costs (both capital and administration and ancillary) for SHDF. Applicants with questions about eligible costs should review this section of the guidance in particular.

However, please note any costs that are necessary for producing a high quality bid to the SHDF fund do not count as project costs and aren’t eligible, and so cannot be counted towards co-funding.

101. ‘eligible costs incurred between the launch of the Wave 2.1 competition and the signing of the GFA may be counted towards a project’s co-funding requirement” – would this spend be eligible for SHDF wave 2.1 funding on the spend directly, or just discount spend post-GFA signing in the delivery of the project elsewhere? Should any spend that is planned before signing of the GFA (and therefore at risk) be accounted for separately in a bid proposal? (added 29 September 2022)

Eligible spend incurred before spending the GFA will be considered towards the minimum 50% co-funding contribution of the bidder. It therefore should be accounted for when demonstrating g co-funding contribution at application stage and will need to be evidenced during delivery to show that committed funds were spent.

102. What will payment KPIs be? And how will they vary for partners within a consortium that may be at different stages? (added 29 September 2022)

Details on payment processes can be found in the updated Guidance document in section 6.3.

103. What are the conditions of payment? (added 29 September 2022)

Details on payment processes can be found in the updated Guidance document in section 6.3.

104. How flexible is the deadline of 31st March 2025 for the grant money to be spent? (added 29 September 2022)

All grant funding must be spent by March 2025. Projects may utilise a longer delivery window out to September 2025, with only co-funding used after March 2025.

Any co-funding spent in the period from the beginning of April to end September 2025 must be proportional to 6 months of delivery of the overall project. BEIS anticipates this value would be around 20% of project cost but is open to considering slightly higher levels of spend during this period if necessary for successful delivery of the specifics of the project.

105. If applying as a consortium, what are the rules for the 40%/60% split within the whole consortium? (added 29 September 2022)

Project grant funding spend should aim to be aligned to the SHDF spend profile of 40/60 over FY23/24 and FY24/25. BEIS will allow for some flexibility to projects on a case-by-case basis where there, and applicants should provide as accurate, sensible, and deliverable a forecast as possible.

This split is considered at the consortia level.

106. Can contractor retentions be claimed for under the bid value, and if so, how would that fit within the required claim windows? (added 29 September 2022)

No, contractor retentions cannot be claimed for.

107. Where does the timeline allow for a formal procurement to take place so cost certainty can be gained? The timeline to conduct a FaT tender for works is not practical in the timeframe given. Under Public Contracts Regulations we will be required to conduct a formal procurement. (added 29 September 2022)

Costs for the project, both levels and justification, are to be covered in the value for money section of the SHDF Wave 2.1 application form. Guidance is provided on how the costs should be justified in question 4.2, including the requirement to engage with suppliers on costs.

It is not anticipated that all projects will have existing contracts in place prior to bidding, and procurement may need to take place after notification of award. It is critical that the bidder outlines their approach to procurement in Question 3.7 of the application form, as well as how cost variances will be managed in Question 3.5.

Application process

108. Will there be multiple tranches of funding within the SHDF Wave 2 process?

As part of the 2021 Spending Review process, £800 million of additional funding was secured by the SHDF. The Wave 2.1 competition will look to allocate as much of this funding as possible to upgrade the social housing stock in England currently below EPC C up to that standard.

109. As a registered provider can we submit 2 bids, one for our own stock, and one as a lead support for smaller entities as part of a consortia? (added 29 September 2022)

Yes, multiple bids from one applicant are permitted provided the same properties are not included in multiple bids.

110. Lead applicant region: Some guidance would be appreciated on definitions of regions when completing the application form. (added 29 September 2022)

Please use ONS Geography – Boundaries for regions in England link to check which region an area falls under.

Modelling at bid stage

111. Does the principle on bill decreases take into account the general increase in fuel bills, for example installing an air source heat pump might not deliver a huge bill saving just due to the increasing cost of electricity? Can I use methods such as actual bills to evidence a bill reduction to strengthen my application?

Evidence of bill decrease should be based upon modelling via Full SAP, or PHPP as an alternative. The modelling methodology used needs to be the same before as after retrofit – for instance, if using SAP 2012 before retrofit then this also needs to be used post retrofit. BEIS requires homes to reach EPC C, and modelled evidence needs to be provided to support this. Any further evidence beyond modelled improvement to EPC C (e.g. submission of actual current bills with estimates based on future bills post retrofit) will not further benefit an application compared to the bill improvements evidenced through modelling.

112. Can the PHPP modelling tool be used as an alternative to SAP?

Yes PHPP is a recognized tool for domestic energy model in PAS2035 in assessing and designing your retrofit projects however for compliance with the SHDF Wave 2.1 funding you will need to demonstrate that the dwellings that have been retrofitted now meet an EPC C rating.

113. Do all properties in a bid need to have PAS2035 medium term plans registered on Trustmark (or equivalent), or can we base a bid around a representative sample of properties and then carry out missing PAS2035 surveys after award, but before work starts? Do I need to do individual airtightness tests?

The guidance with the PAS2035 standard provides some discretion in taking samples at different stages within the process e.g. 7.1 Risk assessment process:

7.1.1 The Retrofit Coordinator shall ensure that a retrofit risk assessment is undertaken of each dwelling or dwelling type within the project that is subject to retrofit.

An example of this in practical terms for is the PAS 2035 compliance for Path C projects, it would be acceptable to carry out sample air pressure tests on a dwelling of each type in a building, both at assessment and post-completion.

However, the overall strategy for this would be developed the Retrofit Coordinator, who needs to come to an informed view on whether any set of sample results is adequate, based on the information in the retrofit assessments, the measures proposed and the consistency of the results in the sample. The strategy may differ between pre and post retrofit testing.

114. What EPC data do we use if RdSAP data is considered not desirable. It was mentioned earlier that guidance will be issued about how we measure the ratings of our buildings. What will that look like? What measure can we use to benchmark the homes?

It is recommended that Full SAP is used as the acceptable modelling methodology as it would demonstrate the applicant fully understands the technical challenge they are undertaking. PHPP would alternatively be an acceptable method of modelling the design intent.

Whilst recognising that RdSAP can be used for PAS 2035 dwellings, we would prefer a higher level of modelling and more accurate level of energy demand estimation than RdSAP for the purposes of setting performance targets for this project, in alignment with the PAS 2035 standard (preferably Full SAP software).

It is acceptable to use recent EPC certificates combined with stock analysis at the application stage of the proposal.

115. How do you propose we measure or model bills? Should SAP calculations be used or should we make estimates based on Ofgem energy price caps? (added 29 September 2022)

Evidence of bill decrease should be based upon modelling via SAP, RdSAP or PHPP as an alternative. The modelling methodology used needs to be the same before as after retrofit – for instance, if using SAP 2012 before retrofit then this also needs to be used post retrofit. Applicants should show starting SAP score and modelled end SAP score for every archetype where low carbon heating is proposed. This does not replace the requirements for dwelling assessments under PAS2035.

116. If there is a property with known failed cavity/loft insulation what should the start EPC score be? Do you take the EPC score of the property assuming the insulation is not present? (added 29 September 2022)

The focus of SHDF funding is social homes below EPC C. To be eligible for inclusion in an application for SHDF funding (except for on an infill basis), any social home with a valid EPC currently at or above EPC C would need, at the point of application, to have either an updated EPC assessment to prove that it was below EPC C, or it would need to be proved to be below EPC C as part of the retrofit assessment process. Acceptable evidence as part of the retrofit assessment process must be based on government approved SAP 2012 or SAP 10.2 software.

Therefore, in the case of a home at or above EPC C with failed cavity/loft insulation, it is likely to be the case that either the insulation will need to be removed pre-application and evidence be provided in the application that the home was now below EPC C as in the above paragraph, or the home would not be able to be included in an application.

If a social home starting below EPC C had failed cavity/loft insulation and was to be included in an SHDF Wave 2.1 application, with the failed insulation proposed to be removed and replaced as part of the application, applicants may if they wish to outline how this removal would alter the starting SAP score of their home. Any such approach would have to be clearly outlined in response to question 2.1b) of the application form, and would be anticipated to at a minimum include the starting SAP score, the number of SAP points from the measure in question, and the starting SAP score of the home without the presence of the measure.

117. Is there a certain proportion of homes that applicants have to have full information of starting condition on in the bid, compared to the use of ‘gap data’? (added 29 September 2022)

BEIS are expecting the data used to identify stock for retrofitting to be of a high quality. As outlined in question 2.1b), the starting point for the starting conditions of homes is expected to be SAP, RdSAP or PHPP. It is acceptable to use recent EPC certificates combined with stock analysis at the application stage of the proposal. At application stage, some applicants may wish to also consider other information, such as in person surveys and full retrofit assessments, to provide additional confidence on the starting condition of homes.

In response to question 2.1b), detail should be provided on the proportion of stock in the bid covered by the methodology used to provide data on the starting condition of homes, and the proportion of stock in the bid where assumptions have been made on starting condition based on data from similar properties (i.e. gap data). An assessment should be made of how the proportion of gap data included impacts the overall quality and accuracy of bid data.  It is recognised that there is a balance between high quality data and the resources required to collate data sets at bid stage. It will be for each applicant to decide on this overall balance with the higher scoring answers likely to provide additional confidence on the real-world condition of properties, beyond just the use of SAP/RdSAP/PHPP and any stock modelling that may have been done.

If a home is EPC C or above according to a valid EPC, then it cannot be included in an application unless either an EPC assessment is carried out showing that it is below EPC C, or a retrofit assessment is carried out and as part of the retrofit assessment process the property is evidenced to be below EPC C. Acceptable evidence as part of the retrofit assessment process must be based on government approved SAP 2012 or SAP 10.2 software. This would have to be evidenced at the point of application.

118. We wish to apply with a tower block with combustible EWI on (confirmed by building surveyor’s report). The EWI needs to be removed (Building Safety Funding has been secured and the intent is to blend the funding). At present around a third of the properties are EPC C.  The rest are EPC D or below. Without the EWI, the homes would be at EPC D or below.

The EWI will not be removed before bid submission – given the special case of combining with building safety funding, can we make assumptions on the starting condition of the homes without EWI even though they are above EPC C to avoid violating the infill criteria? (added 29 September 2022)

To allow for efficiencies when working alongside the building safety fund, such an approach would be acceptable.

At application stage, evidence would have to be provided of the securing of funding from the Building Safety Fund for removal of this EWI.

The approach taken to showing the impact of the EWI removal on starting SAP score would have to be clearly outlined in response to question 2.1b) (and associated annex) of the application form, and would be anticipated to at a minimum include the starting SAP score, the number of SAP points from the EWI, and the starting SAP score of the home without the presence of the EWI.

Consortia bids

119. In consortia bids, do all consortia members need to sign the Grant Funding Agreement, or just the Lead Applicant?

The Grant Funding Agreement will be signed solely between the Lead Applicant and BEIS for consortium applications. BEIS expects the Lead Applicant to ensure necessary agreements between consortium members are in place. These agreements should ensure the overall funded activities within the GFA are deliverable, and that all consortium members understand the terms and conditions attached to receiving BEIS funding.

120. Does BEIS have any expectations on how the Lead Applicant should manage consortia members?

BEIS understands that consortia are formed for a variety of important reasons and so seeks to give as much flexibility as possible to consortia that BEIS has confidence can deliver on the funded works. However, there are several aspects to consortia management that are essential for the smooth operation of the SHDF scheme and BEIS requires these aspects to be evidenced at application stage and demonstrated throughout delivery. Please refer to section 8.2 of the competition guidance for these elements.

121. The competition guidance states that all grant funding for SHDF Wave 2.1 projects must be transferred and spent by the Grant Recipient by 31st March 2025. If I am in a consortium, does ‘Grant Recipient’ apply to just the Lead Applicant, or all consortium Applicants?

The term Grant Recipient applies to the Lead Applicant in a consortium, and BEIS in most cases will only interact with the Lead Applicant regarding finance and payments. All grant funding for consortia must be transferred and spent by 31 March 2025, and since BEIS will only transfer funds for works already completed, this rule will logically apply to all consortia members. Consortium members will need to evidence their spend to the consortium Lead Applicant, who will in turn evidence this spend to BEIS and receive the corresponding payment.

122. What will be the requirements for consortia when signing the Grant Offer Letter? (added 2 August 2022)

The Consortium Lead is responsible for ensuring the consortium and all its members comply with the terms, conditions and requirements of the Grant Funding Agreement. The GFA will be contingent on all consortium members entering into a legally binding agreement (a “Collaboration Agreement”) which at least confirms all consortium members have read the GFA and associated documents, and agree to the requirements within it. BEIS will have the right to request and receive information and evidence demonstrating that consortium members are complying with the GFA, and BEIS will reserve the right to request repayment of the Grant from any individual consortium member where it is reasonable to do so.

123. Does the lead consortium member need to be in the same region as the homes I plan to treat? If I plan to treat homes across multiple regions, do I need multiple consortia leads? (added 28 September 2022)

No, bids can be spread across multiple regions.  Consortia may benefit from partnering for a variety of reasons, including treating the same archetypes, following similar retrofit approaches,  or being geographically similar.

Payments process

124. Why has SHDF moved away from using Section 31 for payments? (added 28 October 2022)

Primarily, moving away from Section 31 allows BEIS to give funding to organisations that are not Local Authorities, facilitating participation from more social housing providers. The funding is also based on actual spend rather than provided upfront, in line with best practice for managing public money.

125. Why has the payments process been changed from the original guidance? (added 28 October 2022)

Engagement with the sector highlighted several challenges with the original payment process, including a high level of administration and facilitating cash flow to support delivery. The updated payment process has been developed in order to find a pragmatic approach that works for all parties involved, balancing administration requirements, cash flow and best practice for managing public money.

126. What happens if I don’t submit a grant drawdown request by the 10th working day of the month? (added 28 October 2022)

If grant drawdown requests are not submitted on time, BEIS cannot guarantee payment by the end of the month. The payment could be delayed until the end of the following month.

127. Do I have to submit a grant drawdown request every month? (added 28 October 2022)

No, but we would expect the financial forecast to reflect if there is no grant spend in a month. No payment will be made if a grant drawdown request is not received.

128. How do I reforecast the spend profile? (added 28 October 2022)

You will have the opportunity to reforecast your spend for the remainder of the project on a monthly basis. The forecast should reflect previously received payments and your expected spend for the coming months. The grant spend profile should always add up to the total grant funding agreed in the Grant Offer Letter (or the new total agreed through the project change request process).