Efficiency Challenge Fund

The Efficiency Challenge Fund is a key component of the Government’s drive for greater efficiency in public procurement, in response to the Gershon review.  Specifically, it has been designed by DCLG (formerly ODPM) to enable social landlords achieve real efficiency gains in the procurement of capital works in refurbishment and renewal, with a particular emphasis on the ‘Decent Homes’ programme.

The fund underpins a two-fold strategy:

• Facilitating the formation of robust and effective procurement consortia
• Promoting best practice in procurement, with particular emphasis on collaborative working, to enable consortia and others to operate effectively in the market place.

The fund is available in two phases:

• An initial  grant to assist any aspiring consortium to undertake the necessary groundwork for creating the consortium vehicle, in particular, to prepare a robust and realistic business plan.  This covers 75% of the cash cost of the preparatory work and is payable on production of the business plan.  It will not normally exceed £100,000
• A subsequent grant  to help cover the cost of setting up the consortium and implementing the business plan.  This is drawn down against milestones identified in the business plan  as savings are realised.  It will depend upon specific circumstances and not normally exceed £300,000 

To secure a business planning grant the applicants must prepare a feasibility study that demonstrates a realistic prospect of:

• Forming an appropriately structured consortium arrangement with an effective approach to procurement
• Generating worthwhile efficiency gains, beginning to be realised in the short term and building over time.

Guidance on preparing the feasibility study is available from NCA Housing Bidding Guidance August 07 (PDF)

This should be read in conjunction with the NCA Housing Guidance on Feasibility Study (PDF) which refers to the  NCA Housing Feasibility Study Proforma.  This is an excel template which should be used for submitting your feasibility study.

 

Implementation grants are offered on the basis of an acceptable business plan.  Guidelines for business planning will be made available to applicants at the relevant stage of the process.

The NCA administers the Efficiency Challenge Fund on behalf of DCLG; grants are paid out by DCLG.