PROCEDURE NOTE
To:
All Registered Social
Landlords (RSLs)
Subject:
Scottish Water payments for
infrastructure requirements in
affordable housing
developments
Issued by:
Investment Division
Ref No: CSGN 2008/03
Page:
1/3
Issued:
March 2008
This procedure note is for all RSLs and gives details of how Communities Scotland
will treat Scottish Water funding in relation to applications for Housing Association
Grant (HAG) funding.
If you have any questions about this procedure note you should contact the grant
provider. The grant provider is Communities Scotland or, in the cases of Glasgow
and Edinburgh, the local authority
This procedure note can be downloaded from Communities Scotland website
www.communitiesscotland.gov.uk or copies can be obtained from Reception,
Communities Scotland, Thistle House, 91 Haymarket Terrace, Edinburgh, EH12 5HE
(Tel. 0131 313 0044).
Introduction
1.
This procedure note is primarily for Registered Social Landlords (RSLs). It
relates to the costs incurred in providing water connections and sewers to new
housing developments that are HAG funded, and to the funding made available
by Scottish Water to offset these costs.
2.
The purpose of this procedure note is to make clear how Communities Scotland
will treat Scottish Water funding in relation to applications for HAG funding.
Background
3.
Scottish Water has an obligation under the Water (Scotland) Act 1980 and the
Sewerage (Scotland) Act 1968 to take its water mains and sewers to a point
that will allow customers to connect to Scottish Water’s network, at a
reasonable cost to the customer. However, these Acts only require Scottish
Water to make a connection if it is practicable to do so at a ‘reasonable cost’.
4.
The level of what is a reasonable cost is determined by regulations put in place
by the Scottish Government. These are detailed in SSI 2006/10: The Provision
of Water and Sewerage Services (Reasonable Costs) (Scotland) Regulations
2006 (www.opsi.gov.uk/legislation/scotland/ssi2006/20060120.htm). These
regulations also give details of what elements of a new connection are eligible
for a contribution and the maximum value of this contribution.
5.
Scottish Water is required to pay the cost of any Part 2 (the water mains and
sewers that connect developments to the trunk mains and sewers) and Part 3
(the bulk infrastructure, such as trunk mains and sewers) work needed to make
a connection, or to make a reasonable cost contribution, which ever is lower.
Further details on the level of reasonable cost contributions are given on
Scottish Waters website: www.scottishwater.co.uk.
6.
In recent years the actual cost of connection to Scottish Water’s infrastructure
has risen significantly due to a number of factors, including SEPA requirements
and insufficient existing infrastructure. This has meant that the reasonable cost
contributions made by Scottish Water are no longer sufficient to meet
connection costs. In recognition of this, a baseline resource transfer has been
made to the Affordable Housing Investment Programme (AHIP) to assist
developers of subsidised affordable housing in meeting these costs.
7.
This funding is separate from Scottish Water’s reasonable cost contributions.
Communities Scotland will administer and allocate this money as part of the
AHIP, and it will be used to help fund infrastructure connection costs that are
not met by the reasonable cost contributions made by Scottish Water.
Maximum cost contributions from Scottish Water funding
8.
It has been agreed that Communities Scotland will meet costs over and above
the Scottish Water maximum contribution of £2,814 per unit to cover
infrastructure connection costs from the money provided by Scottish Water,
assuming these meet value for money criteria. This will be assessed on a
case-by-case basis.
9.
If there are any variations in the maximum contribution made from Scottish
Water funding, this procedure note will be updated appropriately.
Allocation of funds to individual projects and HAG procedures
10. In any project proposal made to Communities Scotland for HAG funding, the
costs incurred by the RSL/developer in making a connection to local
infrastructure will be assessed to ensure that they are grant eligible. Costs will
be taken from the HAG Tender Return. Details of the HAG Tender Return are
given in CSGN: 2008/02
11. When making an application for HAG funding, RSLs should assume that the
‘cost contribution’ from Scottish Water will be the maximum of £2,814 per unit.
Where an RSL does not use this figure, it must be able to provide Communities
Scotland with documentary evidence that these costs have already been
accounted for or are lower than the agreed maximum.
12. The cost contribution from Scottish Water should be detailed at Appendix 1,
part 6 of HAG Tender Report/Application. This will be deducted from the
overall HAG requirement.
13. If, once a project has completed, an RSL can demonstrate that the costs for
water and sewerage infrastructure requirements were less than the agreed
maximum ‘cost contribution’, an adjustment to the grant can be made at HAG
Completion stage.