5 Milestones

5.1 Introduction

5.1.1 Milestones were introduced in the NAHP 06-08. The progress of each scheme will be monitored against a series of milestones as detailed below. Milestones consist of the milestone event and the date that event is forecast to take place. Not all milestones are mandatory for all schemes, and the number of milestones will depend of the type of scheme being developed

5.1.2 A milestone is an event during the development of a scheme for which the Agency requires the RSL to forecast an achievement date. Milestones have two functions:

1. to monitor performance (i.e. the RSLs reliability in predicting scheme progress)
2. to trigger liability to pay Grant, which may be discharged by either payment of Grant during that financial year, or raising a year-end accrual.

5.1.3 There are therefore two sets of dates for each Milestone –

1. the Forecast date (allows the Homes and Communities Agency to compare with the Achieved date to asses the reliability of the RSLs predictions, and
2. the Liability date (which, in conjunction with the Achieved date determines whether a liability to pay Grant exists or not.

5.1.4 The Agency uses a defined set of milestones, shown in the table below. All products bid for will have at least one milestone to forecast.

Milestones	Relevant products	Triggers Payment?	Creates countable output?
Acquisition of land	All (exc. Open Market HomeBuy, Social HomeBuy & off the Shelf purchases	No	No
Planning Permission	All (exc. Open Market HomeBuy, Social HomeBuy & off the Shelf purchases	No	No
Start on site	All (exc. Open Market HomeBuy, Social HomeBuy & off the Shelf purchases	60% of grant	No
Practical Completion/Final Cost	All	40% of grant (100% for Open Market HomeBuy, Social HomeBuy & off the Shelf purchases	Yes
Occupancy	All (exc. Open Market HomeBuy, Social HomeBuy & off the Shelf purchases	No	No
Exchange of contracts	Open Market HomeBuy and Social HomeBuy	100% of grant (Paid at Final Cost Milestone)	Yes

• Some milestones trigger payments
• Some non-payment milestones are not required for all schemes, depending on the processing route
• Forecast dates for milestones on a scheme are set at Confirmation of Agreement

OMHB and SHB - RSLs should forecast milestones for Exchange of Contracts and Final Cost.  Claim for grant can only be made once an applicant has echnanged contracts.

Off the shelf schemes - RSLs should only forecast the Final cost Milestone as these units should be ready for occupation.

5.2 Definitions

5.2.1 Acquisition of Land

The forecast date for the completion of acquisition contracts.

5.2.2 Planning Permission

There are two types of planning permission – outline and detailed. Outline planning permission gives an indication of permitted development but is normally subject to detailed planning permission being obtained before building can commence. Detailed planning permission must be submitted within 3 years of receiving outline planning permission.

5.2.3 Start on Site

The Start on Site claim of SHG is triggered by the date when the building contractor takes possession of the site or property and the RSL & builder have both signed the building contract. From 01 August 2008 this will generally represent 60% of the allocated grant.

SOS may also occur before an RSL has completed purchase of or acquired a leasehold interest in the site. The RSL will need to have a Building Agreement/Licence in order for it to claim grant.

Please see General - Finance - 3.5 for further information

5.2.4 Practical Completion

This is a payment milestone and occurs when a scheme has been completed in accordance with the terms of the relevant building contract, as being fit for occupation as a residential development, in accordance with NHBC requirements. From 01 August 2008, this will trigger the remaining 40% of the grant (please see Start on Site above). See also General Glossary.

For the purposes of Off the Shelf products the units must be ready for immediate use. Please see General - Scheme Types and Requirements - 3.2.2

5.2.5 Occupancy

This is an additional milestone which is the basis for payment for units built specifically for the New Build HomeBuy Key Worker Living programme 2006-2008.. The milestone is achieved when all units in the scheme have been let or sold to the appropriate target group.

5.2.6 Exchange of contracts

This milestone is only relevant for Open Market HomeBuy, Social HomeBuy and HOLD. It is not the exchange of contracts for the acquisition of land (covered by land acquisition above)

5.3 Milestones Forecasts

5.3.1 Milestone Alerts

5.3.1.2 As schemes progress they will be monitored against the series of milestones. RSLs will therefore be required to record within IMS when the various milestones have been achieved.
 
5.3.1.2 RSLs are expected to update and reforecast milestones as soon as they are aware of any changes. RSLs and Regional Investment Teams will need to monitor schemes to be aware that milestones may be approaching. The RSL is required to confirm to the Region, through email or telehphone, that they on track to achieve the current milestone forecasts, or reforecast
 
5.3.2 Early Achievement of Milestone

5.3.2.1  Early achievement of milestones will not automatically result in RSLs being paid early even if they amend the forecast date within IMS. RSLs will need to consider what impact early achievement may have on later milestones, and could require RSLs to re-forecast some or all future milestones. If the Achievement Date is earlier than the Forecast Date, the Milestone Date can be Accepted, but the liability to pay Grant will not arise until the Grant Liability date. Regional Investment Teams will have the ability to pay grant before the Grant Liability date but only  in exceptional circumstances.

5.3.2.2 Where a RSL meets a payment milestone early and wishes to be paid early, the RSL must enter a scheme re-forecast, asking for both the Forecast date and the Grant Liability date to be brought forward on IMS.  This can be Accepted or Rejected by the Regional Investment Team and is based on individual circumstances.
 
 
5.3.2.3 If the Achievement Date is later than the Forecast Date, but earlier than the Grant Liability date: the Milestone Date can be Accepted and the liability to pay Grant will be automatically triggered by IMS on the Grant Liability Date.  The failure of the RSL to achieve the Milestone by the Forecast Date is recorded in IMS.

5.3.3 Milestone Achieved

5.3.3.1 Where a Forecast date is reached and the RSL certifies that the milestone is achieved in full by that date, the RSL is required to confirm that the scheme information in the system is up to-date. If the information needs updating, the RSL will need to submit a scheme variation to the Regional Investment Team prior to submitting a Milestone achievement. Please see section 6 - Variations

5.3.3.2 The RSL is also required to confirm that the Milestone Forecasts in the system are up-to-date each time a Milestone achievement is submitted.  If the Forecasts need updating, the RSL will need to submit a Milestone reforecast request to the Regional Investment Team before submitting a Milestone achievement.  

5.3.4 Milestone Rejected

5.3.4.1 Where a milestone is rejected the  options which can be followed are:

1. Allow Reforecasting.  The Regional Investment Team  will discuss the reasons for the rejection with the RSL and if the RSL is able to propose a course of action for the scheme which is helpful, the Regional Investment Team will invite the RSL to reforecast the Milestone date. 

This option will be followed if:

1. the RSL commits to any necessary remedial action (exactly what is required will be determined by the reasons for the initial Rejection) ;
2. the Regional Investment Team believes the revised Forecast date will be met; and
3. the revised Forecast and Grant Liability date will meet the assessment criteria used when a request for reforecast in a Milestone is submitted.

2. Scheme Variation See Section 6 - Variations

3.  Terminate Scheme & Replace scheme. The Regional Investment team will discuss with RSL options available to them

5.3.5 Scheme Delay

5.3.5.1 It is Agency policy that if schemes are delayed (in aggregate) by two years or more, the scheme will be Terminated and any Grant previously paid will be reclaimed. Whilst this is the standing policy, Field Directors have authority to agree ,on a case-by-case basis, to Reforecast Milestones which take the delay beyond the two-year period in exceptional cases. RSLs should contact their Regional Investment Team if they consider an exceptional case exists. For further information about pre-2006 schemes please follow the asterisk  

 

5.4 Scheme Replacements 

5.4.1  If the Regional Investment Team indicates that a scheme replacement is appropriate RSLs will be able to substitute schemes from their reserve list. Schemes can be moved from reserve status to active status at any time there is a requirement for a substitute scheme or to create an additional programme.

5.4.2  Scheme Replacement can only be done in consultation with and approval of the Agency, and RSLs will need to consider and address the following issues:

• housing priorities
• scheme type
• impact on targets
• development capacity
• tenure mix
• grant per unit
• delivery profile 

5.4.3 Initially consideration will be given to whether there a match exists on the RSL’s reserve list.  If a match cannot be found on the reserve list, consideration may be given to the suitability of schemes on the RSLs’ ‘Forward’ schemes list.
 
5.4.4 Following the Regional Investment Team's agreement to a Replacement Scheme the RSL will be notified accordingly and will be required to include this in its Partnering Programme Agreement.(PPA)

5.5 Split Schemes

5.5.1  If an RSL is unable to complete a scheme it may, after consultation with the Regional Investment Team, split the scheme into two or more parts. The new schemes will have the same details as the original except that the number of units is divided between the new schemes. The Agency will terminate the old scheme and the RSL will have to submit new bids in IMS
  
5.5.2  RSLs should note that Open Market HomeBuy schemes cannot be split.