To:
From:
Re:
Date:
Cllr. Astaire, Cabinet Member for Business
Ben Denton, Strategic Director, Housing Regeneration & Property
Rosemarie MacQueen, Strategic Director, Built Environment
HELP Enterprise
3rd May 2013
1. Summary
This paper requests £150,000 from the Civic Enterprise fund which will secure £1.6m of external
funds to establish the HELP Enterprise project with immediate effect..
HELP Enterprise is a partnership that has been developed over the last 12 months between
Vital Regeneration, Dolphin Square Foundation and WCC to support households in temporary
accommodation to set up their own businesses. A detailed feasibility report was produced in
April 2012 which provides a robust operational model.
The project involves innovative elements including a micro-equity investment scheme and a
housing offer. It also connects very well with Better City Better Lives and the Enterprise Spaces
Strategy for renewal neighbourhoods.
With the external funding now secure and the project ready to proceed, we are seeking
agreement to release £150,000 of Civic Enterprise funding over 3 years.
2. Core elements of the scheme
Working with homeless households in temporary accommodation (TA) Vital Regeneration will
support residents through advice and training to set up their own micro businesses. Vital
Regeneration will provide finance (investment and grant) to assist in the first few years of
trading. This will include start-up grants and equity investments for those that can demonstrate a
scalable business model after 12 months trading. A small number of properties will be
purchased by DSF and co financed with WCC to be available to those who choose to move out
of temporary accommodation and into intermediate housing with affordable rent. The impact of
this will be evaluated as part of the project and
3. Background
Vital Regeneration were commissioned by DSF to undertake a feasibility study to establish
whether an integrated housing and enterprise model could provide a route for households in TA
to set up their own micro business.
Research and consultation with HELP clients and stakeholders found that there were a
significant number of clients with an appetite for setting up micro businesses as a route away
from benefits and into better housing. These households currently face a number of barriers and
challenges, including affordable and secure accommodation.
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Micro-enterprises are small businesses that cost little to start-up. They are particularly
advantageous for people who find it difficult to access the formal job market.
Vital Regeneration produced a detailed feasibility report (attached) setting out these key findings
in addition to a detailed analysis of micro enterprises and an operational plan for delivering an
innovative enterprise project in Westminster.
4. Service offer to clients
Vital Regeneration will expect to achieve the following outputs within the first 3 years:
•
•
•
•
•
•
Support 180 clients with advice
Establish over 100 new businesses
Assist over 40 individuals to earn enough to afford intermediate housing
Move 20 clients into paid employment
5 households will be offered intermediate homes in Westminster, moving from
temporary accommodation and off the council’s waiting list
See a modest return from investment in micro-enterprises.
HELP Enterprise will provide intensive business advice, support and training to help people
develop, launch and grow their micro-enterprises.
5. Funding
Capital
WCC will invest £375,000 from the Affordable Housing Fund matched with £1.2m from DSF to
acquire properties in the City which will be offered to a selection of participants. This investment
allows DSF to contribute £240,000 to the operating costs of the project.
The investment is at equivalent rates to other housing schemes funded by the Affordable
Housing Fund and WCC will retain equity in the properties which are acquired. This project will
deliver savings to the council’s temporary accommodation budget as well as wider savings to
the public purse.
Operating costs
The operating costs for three years are estimated to be £620,000. Vital Regeneration have
agreed to fund £230,000 of the costs.
The funding proposal is set out below.
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2013
2014
2015
Total
Capital
DSF
£1,200,000
0
0
£1,200,000
WCC
£ 375,000
0
0
£ 375,000
£1,575,000
£1,575,000
Revenue
DSF
£96,000
£96,000
£48,000
£240,000
WCC Civic Enterprise
£60,000
£60,000
£30,000
£150,000
£230,000
£230,000
£308,000
£620,000
Vital Regeneration
.
£156,000
£156,000
WCC and DSF are asked to commit 80% of their revenue funding to cover the first two years of
running the project. It is proposed that a review is undertaken in the second year of operation
(Sept – Dec 2014) and that the remaining 20% of funding for year 3 will be released if Vital
Regeneration are successfully achieving year 2 targets and have secured the £230,000
required.
6. How Civic Enterprise funding will work
It is proposed that CEF of £150,000 would be split between grant funding and a commercial
investment with a return (revenue share) from the latter coming back to WCC.
The proposal is that the split would be 100% grant in year one moving to 50% grant and 50%
investment in year 2, ending up with 100% investment in year 3. This would give an overall mix
of £90,000 grant and £60,000 commercial investment.
It is proposed that the return on investment is a 25% share of revenues achieved from 2016
onwards as detailed in appendix 1.
The total revenue cost of the project for a 3 year period is £620,000 of which CEF is contributing
£150,000. More than £200,000 of the total £620,000 project cost is passport-ed directly to
clients as grants and business investments with the remainder being operational costs to deliver
the project.
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7. Innovation / contribution to Better City Better Lives
This project is an innovative scheme focused on supporting households who face significant
barriers to employment and provides real opportunities for them to use their skills to improve
their economic prospects and health and well being, and that of their household.
HELP Enterprise brings together a partnership between three agencies, each of whom could
deliver their strand of activity separately. It is an opportunity to bring the work of the agencies
together to deliver a project with more synergy and an integrated offer to homeless households
delivering better outcomes - of self-employment and the potential of a new home. An investment
is being made in both bricks and mortar and in the individual by providing economic and
housing opportunities which supports them to become independent and self-sufficient.
It also builds on the financial capabilities of each partner and uses the funding commitments to
lever in additional funding to Westminster.
HELP Enterprise is closely aligned to the aspirations set out in Better City, Better Lives. By
enabling Westminster residents to set up their own enterprises it will ensure that these are
embedded in and connected with local communities. It creates a ladder of opportunity for
households in temporary accommodation to achieve their full potential and in doing so will
create a more enterprising city
8. Attractions of the scheme for WCC
The scheme has a number of attractions for the City Council broadly summarised below:

Aligns with government policy to incentivise work, encourages economic independence
and diminishing reliance on welfare benefits

Supports enterprise and local economy focusing on micro businesses which may not
have been funded to date – car washing, hairdressing etc

Realises savings in the TA budget by moving a cohort out of TA

It links and rewards economic activity to housing

Supports a number of wider objectives of Better City Better Lives and of the Housing
Renewal Strategy

If successful could be rolled out as part of the employment and enterprise offer on
renewal estates

Offers significant benefits to the client – innovative offer improving health, well being and
economic prosperity which is particularly attractive to households for whom traditional
employment routes may not be suitable.

Attracts leverage – from DSF & from VR corporate sponsors
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
Investment is at equivalent rates to other housing schemes

Retain equity in properties which are acquired.
9. Next steps
In order to move the project forward a decision on funding is required. This proposal will be
incorporated into a paper to Cabinet Member for Business.
A tri-partite legal agreement will be drawn up between all parties setting out obligations and
associated funding.
Once all the funding is in place and the legal agreement have been signed the project will be
launched, with Vital Regeneration recruiting to posts and initiating work with clients, and DSF
acquiring properties in an agreed location.
A review of the project will be undertaken towards the end of year 2. The remaining 20% of
funding for year 3 will be released if Vital Regeneration are successfully achieving year 2 targets
and have additional funding in place to go forward. If the project is successful this review will
also explore how to scale up the project to work with a greater number of clients and deliver
more outcomes.
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Appendix 1.
HELP ENTERPRISE 2013 - Civic Enterprise Fund (CEF) terms
CEF Outgoings
Grant funding
Commercial investment
CEF total outgoings
2013
60,000
60,000
2014
2015
30,000
30,000
30,000
60,000
30,000
CEF Returns
Forecast revenue share (25%) from Vital Investment Vehicle
Total
90,000
60,000
150,000
2016
2,937
2017
6,005
2018
9,212
2019
15,499
2020
22,069
2021
28,935
2022
39,047
2023
49,613
Total
173,317
Total predicted financial return on investment from equity
11,746
share
24,020
(ref: P46 of HELP Enterprise Feasibility Study)
36,847
61,996
88,277
115,741
156,187
198,452
693,266
NOTES:
Total CEF contribution represents c25% of total income (£150K of £565K)
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