Notice

Social Housing Decarbonisation Fund Wave 2.1: Guidance on payments (updated section 6.3 of competition guidance)

Updated 2 October 2023

Applies to England

This amended payment process will begin, on a transitionary basis, from 14 November 2023. It supersedes section 6.3 (Conditions of Payment) of the Social Housing Decarbonisation Fund Wave 2.1: Competition Guidance Notes and Annex 11 of the Grant Funding Agreement.

This guidance applies to all Grant Recipients who have signed a GFA with the Department for Energy Security and Net Zero (formerly BEIS) under Wave 2.1 of the Social Housing Decarbonisation Fund.

1. Payment Process

1. On the 10th working day of month 0, the Grant Recipient will be required to:

a. Submit their delivery report, including an up-to-date financial forecast report for the project. This forecast should be based on previously received payments and their knowledge of spend incurred to date.

The forecast should show overall spend and the proportion being requested as grant funding, recognising that grant spend should be in line with the provision in the Grant Funding Agreement (GFA). Note that spend in this context is spend incurred – Grant Recipients do not need to wait for the work to be invoiced or paid before it can be claimed for.

b. Submit a grant drawdown request for month +2 equal to the amount forecasted for that month in the monthly report.

2. Grant Recipients will be paid by the end of month +2, in line with the grant drawdown request.

3. If the grant drawdown request for month +2 is not submitted by the 10th working day of month 0, the Department cannot guarantee payment by the end of the month +2.

2. Reconciliation process

Reconciliation Exercise

1. Three times a year, the Grant Recipient will be required to submit a transaction list of the actual Eligible Expenditure that has been incurred to date.

2. This transaction list should contain a list of liabilities that the Grant Recipient has made in relation to delivery of Wave 2.1, including to consortium partners and as part of any work on their own stock.

3. Based on the reconciliation, the forecast for the remainder of the project will need to be updated in line with the process outlined above.

4. In line with Section 4 of the GFA, if at the end of the relevant Reconciliation Exercise there are Unspent Monies or Residual Grant Monies, the Grant Recipient shall, at the discretion of the Authority, repay such Unspent Monies to the Authority no later than 30 days of the Authority’s request for repayment.

Evidence check

1. At the end of every Reconciliation Exercise, the Authority and third parties working on its behalf, will conduct an evidence check.

2. A sample of evidence of spend incurred, for example invoices, time sheets, purchase orders will be requested from the Grant Recipient, who will have 5 working days to provide the evidence to be checked. The Authority, and any third parties working on its behalf, will work proactively with the Grant Recipient during this time.

3. To assist this process, alongside any checks required by the Grant Recipient’s own governance, we require all information pertaining to costs incurred during the project are recorded and evidenced.

4. The Authority reserves the right to request a full evidence check at any point during delivery and will work proactively with the Grant Recipient to carry this out in appropriate timescales.

3. Grant Funding Agreement

Payments will be only made by the Authority after the Grant Funding Agreement (GFA), Grant Offer Letter (GOL), and associated agreements have been signed between the Grant Recipient and the Authority. Grant Recipients must satisfy the due diligence, financial and organisational checks required prior to receiving public funds.

Additional information

1. The processes outlined in this Annex (Annex 11) will be reviewed after 8 and 18 months as a minimum and may be reviewed more frequently if required.

2. On project completion, Grant Recipients may need to show evidence of payments made for costs incurred but not paid during previous reconciliation periods.

3. The Grant Recipient must update financial forecasts each month to ensure that they are accurate and up to date. They will also need to confirm expected in-year financial spend by the end of January in each FY to enable the Authority to manage spend across financial years.

4. In the Grant Funding Agreement the Department has specified that we cannot guarantee that other approaches outside of the agreed grant funding split across financial years would be supported. DESNZ will reserve the right to reduce the overall grant funding amount given where projects underspend in any given financial year.

The Authority reserves the right to pause or reduce payments subject to poor delivery performance. This will be based on an assessment by the Delivery Partner based on the monthly reporting data and other performance indicators and will be signed off by the Authority. The Grant Recipient is expected to work with the Delivery Partner and relevant consortium partners to resolve issues.