East Potential | Foyers

Funding

Foyer projects can be challenging to fund, because they involve a mixture of uses. For each new project, we draw on East Thames’ expertise in the area, as well as remaining open to new possibilities.

Capital Funding

Controlling cost
Foyers can potentially be expensive projects, for a number of reasons.

To work effectively, they have to be built on prime sites in central locations.
To contribute to local regeneration and the self-worth of foyer residents, they should ideally be well-designed, landmark buildings.
To keep revenue spending low, they have to be constructed using high quality materials that will limit future maintenance costs.
To keep rents low, they have to be entirely grant funded.
They are mixed-use buildings.

Against these factors, we have been highly successful in finding ways to reduce costs without compromising on size or quality.

For example, the use of modular construction methods at both Harlow and Redbridge foyers brought both projects back on budget when costs threatened to escalate – shaving £1m off the budget at Redbridge and delivering a 13.4% saving against traditional methods at Harlow.

At both sites, construction times were also significantly reduced.

Funding mix
Housing Corporation grant funding usually provides 90% of the capital funding, which pays for the residential and associated elements of the development.

To fund the non-residential areas, the remaining 10% has to come from other grant funders.

We look to a number of regeneration funding programmes via the Regional Development Agencies, as well as approaching charitable trusts.

For example, at Harlow, as well as the Housing Corporation, funders included:

Harlow Council, which provided the land for £1 under a Section 106 agreement with the developer of the rest of the site
the National Lottery
English Partnerships
East of England Development Agency
an anonymous donation of £20,000 to cover the cost of aerated shower heads to reduce energy consumption.

Revenue Funding

Rents and service charges

The main source of income for a foyer is its rents and service charges.

Foyer rents need to be affordable for young people entering employment, so this source of revenue will typically only cover housing management costs.

To achieve rents at this low level, our foyers have to be developed entirely with grant funding.

Foyer service charges cover the cost of providing and maintaining communal facilities, as well as utility bills for each unit.

Social services

Some young people, if they are not eligible for Housing Benefit, will have their rent and service charges met by social services.

This funding may also cover the Supporting People element of the cost of providing a foyer place.

Supporting People

A significant level of foyer revenue funding comes from the local authority’s Supporting People budget. Supporting People charges are calculated as:

a percentage of each staff member’s time, plus
15% for the direct local costs associated with their post, plus
10% of the indirect and central costs of providing their post, plus
an adjustment designed to ensure costs are covered when units are vacant.

We have found 100 units to be the optimum size in terms of running costs. This is because every foyer needs a core number of staff, so staffing levels do not rise or reduce proportionately for larger and smaller foyers.

Commercial space

Office space rented to partner organisations generates a regular income that can be used towards the day-to-day running costs of the foyer.

Grant funding

To meet the costs that are not covered by Supporting People funding, foyers have to secure grant funding from additional sources. A foyer’s long-term sustainability will depend, in part, on our continued success in this area. To date, we have attracted funding from a range of sources, including:

The Association of London Government
The Foyer Federation
the regional Learning and Skills Councils
Government programmes for young people
local authorities
charitable and business organisations
regeneration and European funding.

Adding value

Our foyers also benefit from:

East Potential’s ground-breaking Time for Youth programme, which works with young offenders and those at risk of offending.
East Living’s Mental Health Floating Support service which offers advice, counselling and support.
The use of Gift-Aided, tax-free, charitable donations from East Thames Group.