Affordable Housing Supply Programme (AHSP): process and procedures MHDGN 2023/01

This Guidance Note supersedes MHDGN 2022/02 and is for local authorities and registered social landlords. It details the process for planning the delivery of the majority of grant-funded homes through the Affordable Housing Supply Programme.


Annex G: Continuous improvement programme

Given the scale of investment in the Affordable Housing Supply Programme it is essential to demonstrate that delivery is as efficient and effective as possible in order to maximise the number of affordable homes that can be provided.  As such, as a condition of grant:

  • RSLs will require to participate in (a) a procurement improvement programme every two years and (b) a programme which assesses value for money in affordable housing projects in the case of new build developments (regardless of the procurement route), and
  • local authorities will require to participate in a programme which assesses value for money in affordable housing projects in the case of new build developments (again, regardless of the procurement route). 

RSLs and local authorities will therefore require to identify and work with providers that can deliver the required content of each programme, as set out below. [1]

Procurement improvement programme

The procurement improvement programme will contain the following features:

  • A period of support to assist RSLs to understand their procurement duties and current level of performance, leading to an assessment after that support has concluded which will include the undernoted elements:
  • whether the RSL’s leadership and governance arrangements recognise the importance of strong procurement capability (for example, responsibilities are clearly defined and appropriate procurement policies and procedures have been issued and are adhered to)
  • whether the approach to procurement is aligned with the RSL’s overall strategic objectives (for example, in terms of financial, economic, social and environmental objectives)
  • whether the RSL has sufficient resources in place to deliver the desired approach to procurement, as well as the necessary skills and training to ensure that both capacity and capability are being addressed
  • whether procurement performance is monitored to check that it is improving and that the RSL is using effective procurement as part of its wider efforts to secure best value for money
  • whether the RSL has appropriate controls in place to manage risks (for example, a clear scheme of delegation with appropriate separation of duties, evidence of risk management, counter fraud measures and policy on gifts and hospitality)
  • whether the RSL has a clear understanding of where it spends its money and the markets from which it purchases, together with different approaches to procurement to achieve the best outcomes from those markets
  • whether the RSL has appropriate arrangements in place to manage contracts and suppliers to ensure that contract obligations are met and any potential benefits are captured as well as ensuring that there is strong contract compliance across the organisation with minimum maverick (off-contract) spend, and
  • whether reliable systems are in place to ensure purchases are received and paid for properly and efficiently.
  • The programme will be based on (a) the principles of benchmarking of procurement capability within the housing sector and (b) the development and sharing of best practice.  Accordingly:
  • participation must be accessible to all applicable RSLs
  • RSLs participating in the programme must be actively involved in reviewing the findings and, where appropriate, refining the detailed content of the programme, and
  • the programme’s results must be capable of simple aggregation with those of any other providers of the programme in order to allow a sector-wide evaluation of procurement capability to be assessed.
  • Annual reports must be produced which contain anonymised findings showing (a) areas of high performance and areas where improvement is needed (b) progress against improvement opportunities identified in previous reports and (c) key trends over time.  The provider of the programme must submit these reports to the Scottish Ministers within three months of the end of each financial year.

Value for money in new build affordable housing programme

The value for money in new build affordable housing programme will contain the following features:

  • A value for money assessment of all new build affordable housing projects delivered through the Affordable Housing Supply Programme based on data relating to cost, quality and time – with the ‘quality’ element of the assessment including technical measures (such as the energy efficiency of the homes), compliance with Housing for Varying Needs standards, and any accreditations and awards given to projects.  Data on individual projects will require to be input into a value for money assessment within 90 business days of each project having been certified as complete by the project architect/ supervising officer and having been approved by the local authority for occupation, and this data should only be available for other organisations to view once corresponding official statistics on housing completions have been published.
  • An assessment of customer satisfaction in all new build affordable housing projects delivered through the Affordable Housing Supply Programme, which must be carried out within nine months to 15 months of all of the homes having been occupied.  The provider of the programme should approach all householders to take part in this assessment, and should use its all reasonable endeavours to achieve at least a 40% response rate.
  • The programme will be based on the principles of benchmarking, shared best practice and continuous improvement.  Accordingly:
  • participation must be accessible to all RSLs and local authorities which are delivering new build affordable housing through the Affordable Housing Supply Programme
  • RSLs and local authorities must be actively involved in reviewing the findings and, where appropriate, refining the detailed content of the programme, and
  • the programme’s results must be capable of simple aggregation with those of any other providers of the programme in order to allow a sector-wide evaluation of value for money to be assessed.
  • Annual reports must be produced which contain anonymised findings showing (a) areas of high performance and areas where improvement is needed (b) progress against improvement opportunities identified in previous reports and (c) key trends over time.  The provider of the programme must submit these reports to the Scottish Ministers within three months of the end of each financial year.
 

[1] Local authorities delivering projects which are not new build, local authority arms-lengths external organisations, and RSL subsidiaries will not be required to participate in a programme of continuous improvement. 

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