Long term funding agreement with housing associations haven’t delivered benefits beyond normal procurement, evaluation finds

The use of long-term “strategic partnerships” between Homes England and major housing associations has not delivered significant additional value, according to an official evaluation of the government’s 2016-21 affordable housing programme.

Homes England first launched its Strategic Partnerships procurement strategy with housing associations in 2018, under which it was supposed to agree to longer term funding deals and greater delivery flexibility for the partners, in return for them meeting broader targets, such as around MMC and design.

The report, commissioned by the Department for Levelling Up, Housing and Communities and carried out by consultant SQW, found that “the level of ‘added value’ generated through the SP [strategic partnerships] model has been modest” and that “the creation of a more ‘strategic’ relationship has not largely been realised”.

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The partnerships have had a marginal impact on supporting the use of MMC, the report found

The evaluation of the £4.2bn Homes England programme, which it said had only completed 27% of the total homes by March 2021, also said that it had had a “limited effect on supporting the use of MMC” – one of the goals of the strategic partnerships approach – and that overall there was “limited success in realising the ‘added value’ element of the SP model”.

However, Homes England said the partnerships had provided “important benefits”.

Strategic partnerships are ultimately targeted to deliver 42,000 homes under the 2016-21 programme.

The evaluation said that where grant recipients that worked through the other principal method of grant distribution, continuous market engagement (CME), were “largely positive on systems and processes”, around half of those working in strategic partnerships did not think the system worked well.

In addition, it said that the anticipated ‘flexibility’ of the SP model, which was a key driver of becoming a “strategic” partner for many, according to the report, did not materialise, with “the requirements [not] perceived as materially different than under scheme-by-scheme bidding”.

However, it did find that the strategic partnerships model was recognised by “most” partners as having “influenced the scale at which they have delivered, or are committed to delivering, new affordable homes, with the certainty of funding and size of settlement through the SP supporting the scaling up of development programmes”.

Both Homes England and the Greater London authority took on and expanded the use of strategic partnerships in the later £11.5bn 2021-26 affordable housing programme, with Homes England in 2021 saying that its “current strategic partnerships have transformed the way we work with housing associations and proved a successful mechanism for scaling up the delivery of affordable housing”.

A spokesperson for Homes England said strategic partnerships model had “a number of important benefits” and had contributed to the delivery of at least 130,000 new affordable homes and will deliver more through the Affordable Homes Programme 2021-26.