The Government has awarded £778m of SHDF grant to a range of local authority and registered providers. With delivery expected to begin in May this year, grant recipients have two weeks left to enter into their Grant Funding Agreements with the Department of Energy Security and Net Zero (DESNZ). There are number of important upcoming deadlines for both direct grant recipients and partners receiving funds as part of a consortium.
A key difference from SHDF Wave 1 is that funding will no longer be granted via an MOU, rather a number of legally binding agreements and arrangements need to be in place in the next few weeks. We set out the top five hurdles that prospective grant recipients will need to clear before drawdown – are you ready?
1. Grant Funding Agreement
In order for the first payment to be made on time, the Grant Funding Agreement (GFA) and Grant Offer Letter needs to be signed and returned to government by 28 April. Although DESNZ is unlikely to allow significant negotiations there are important conditions of funding that recipients need to be aware of and flow down to their delivery arrangements and (if applicable) consortium partners.
Timescales are even tighter if entry into the GFA requires your board or cabinet's approval.
2. Data Sharing Agreement
DESNZ will monitor and evaluate the delivery of SHDF Wave 2.1 works by way of data collected and provided to it by Grant Recipients on a monthly basis. The Grant Funding Agreement (GFA) and Data Sharing Agreement (DSA) set out the Grant Recipient's obligations for collecting and transferring data to DESNZ, which will include some personal data. On a practical level, this will require a Grant Recipient to have in place the appropriate systems and processes to ensure it can collect all the information DESNZ requires, whether from contractors, consortium members, and possibly even residents, in a timely manner to share with DESNZ while maintaining compliance with data protection legislation. As independent data controllers, Grant Recipients (and each consortium member, if applicable) will be responsible to data subjects for the processing and sharing of personal data within the context of the SHDF programme, and may need to update their data privacy notices, policies and procedures to reflect this.
3. Subsidy control analysis
DESNZ has indicated that it is a condition of funding that grant recipients are responsible for ensuring there is a subsidy control analysis is in place in respect of the SHDF Wave 2.1 funding. The relevant exemption and rules which apply will depend on a number of factors such as the types of dwellings comprised in your bid, level and nature of your funding arrangements and types of work undertaken. Do you understand which rules apply and are you confident that you know how to comply with these? Evidence of this is required by DESNZ.
4. Consortium Arrangements
The Grant Offer Letter from DESNZ states that it is the lead partner's responsibility to ensure that its consortium partners fully comply with the requirements of the Grant Funding Agreement and sets out a number of specific provisions that need to be flowed down into a legally binding collaboration agreement. The provision of Grant is conditional upon such an agreement being in place which means that in order to meet DESNZ's timetable this collaboration agreement must be signed by all parties by 10 May at the latest.
If you are a member of a consortium the collaboration agreement will likely be prepared by your lead applicant but you will need to review this to ensure that the operational processes and levels of liability contemplated are workable and approved by your decision-making channels.
5. Delivering the works
The GFA requires the funded activities to commence within 2 – 6 weeks of the date of the GFA. Timescales are tight and grant recipients need to ensure that the delivery contracts properly flow down specific obligations set out in the GFA and DSA that relate to the delivery of the works. Contract documents need careful review and alignment, and landlords shouldn't assume that existing contract documents are sufficient (even if used for previous SHDF waves). Landlords should take specialist advice on the flow down of GFA and DSA obligations.
