Are we losing supported housing by accident?

Did you know that over half of all housing associations provide at least some housing with care or support?

David Orr

By David Orr, Chief Executive of the National Housing Federation

10 December 2015

The housing sector has a long and proud history of supporting people with learning disabilities, women fleeing domestic violence, people who are recovering from drug or alcohol dependency, homeless ex-service people, young people making their way after a childhood spent in and out of care homes, people with mental health needs, frail older people who need support to continue to live engaged lives in the community – or to put it another way everyone who, at some time in their lives, needs a bit of help.

It’s almost impossible to imagine the consequences if these services were to stop. The most recent comprehensive study assessed that the saving to the state delivered by supported housing is in excess of £600m a year. That’s worth having of course. But the human cost of the loss of supported housing would be profound. There would be a big rise in the number of vulnerable people living on the streets. Ageing parents of vulnerable adult children would put their own health at risk to try to care for their children at home. Many older people would be isolated and unable to cope. Many women and children would be at greater risk of violence and abuse. As a society, we clearly don’t want this to happen.

There is, though, a real danger that many supported housing projects will collapse, not because of any poor management or bad decision making or inefficiency but almost by accident. All of these projects need sufficient income to be able to cover the costs of providing both a home and the support and care that goes with it. This income is usually based on the rent that they charge, very often supported by all of us through housing benefit paid to people who are unable to work.

That’s the kind of decision wealthy, civilised countries make – to support people in crisis to get back on their feet or give people an alternative to living an institution. And it is at risk as a result of decisions made by the Government whose consequences have not been properly thought through.

Earlier this year in the Summer Budget the Chancellor announced that all housing association and council rents would be cut by 1% per annum for 4 years. This is a huge challenge for those providing general needs homes but much more difficult to manage for those providing support. We have been arguing since then that there should be an exemption to the rent cuts for what is inelegantly known in the jargon as ‘specified’ housing – housing specified by DWP as providing some kinds of care or support. We remain hopeful that this will be accepted but there is a real danger that it won’t. If it is not, it will not just lead to a marginal cut in some of the services provided. It will lead to some projects closing.

As if this isn’t enough, we now have a decision in the Spending Review that Housing Benefit for social housing should be capped at the same level as private sector. Seems fair enough? Well perhaps – if there was a Local Housing Allowance for supported housing in the private rented sector. But of course there is not. Buy to let landlords don’t provide supported housing. That’s what housing associations, councils and voluntary organisations do. This seemingly minor, technical amendment could lead to virtually all supported housing for people under 35 to disappear. And how about extra care for older people? This table shows the impact for one housing association in three extra care schemes:

Local Housing Allowance per calendar month Rent and service charge (currently tenants can claim housing benefit to cover these costs) Shortfall per month
£392.77 £498.84 £106.07
£392.77 £518.39 £125.62
£373.66 £461.56 £87.90

How on earth can these costs be met without the continuation of a benefits system that properly reflects the cost of providing them?

The Government asserts that it is not its intention that supported housing should be affected in this way. The Autumn Statement suggests that local discretionary housing payments (DHPs) might be used to ensure local decisions can be made to plug the gap. This is, frankly, pie in the sky. Even if more money is put in these already overstretched DHPs how can a provider plan finances with any certainty on support which is short term and discretionary? There is money for new supported housing to be built in the Spending Review – but no money to allow the people who need it to afford to live in it. It won’t work. There are housing associations now who can’t sign contracts for new extra care schemes as they have no assurance that the rent that tenants will be able to pay will cover the cost.

We are told that it is not the intention of the Government to cause this problem for housing association running supported housing. If that is indeed the case it can resolve the problem immediately and easily. All it needs to do is agree that ‘specified housing’ is exempt from the rent cut and exempt from the local housing allowance limit. This decision must be made and it must be made quickly. If it does not happen, the consequences for tens of thousands of our most vulnerable fellow citizens are too awful to contemplate.

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