The Fair Funding Review 2.0: consultation

The Ministry of Housing, Communities and Local Government’s Fair Funding Review 2.0 consultation sought views on the government’s proposed approach to local authority funding reform through the Local Government Finance Settlement from 2026-27. We've now submitted a response to the consultation on behalf of the sector, focussing on the implications for supported housing.

In our response to the consultation, we highlighted the funding crisis affecting supported housing, and why we must make sure supported housing is invested in. Although the Spending Review in June 2025 gave a very welcome boost to social housing supply through the £39bn investment in the Affordable Homes Programme and the commitment to a longer-term rent settlement, supported housing funding remains in crisis.

Funding to commission supported housing has significantly reduced since 2010 – 75% was cut between 2010-11 and 2019-20 from £1.3bn to £320m. The government’s own research shows there is significant unmet demand for supported housing. The NHF have long been calling for more revenue and capital funding to protect and grow this vital part of the housing system. 

Housing associations provide 75% of supported housing, and the government’s proposals for local authority funding have significant implications for the way supported housing is funded. We welcome the ambition, set out in the consultation, to reform the local government finance system and allocate funding based on an updated assessment of local needs and revenue. We also welcome the commitment to multi-year financial settlements which give local authorities greater certainty to plan. However, we have some comments on the need to ensure investment in supported housing. These include: 

• The level of need for supported housing and housing-related support should be an important part of the local needs assessment framework, and funding for supported housing should be clearly identified. 
• Local needs assessment frameworks should include the need for supported housing, including managing demand and delivering prevention, alongside guidance that supported housing must be commissioned. 
• Funding for supported housing must be clearly identifiable in the Homelessness and Rough Sleeping Grant, Public Health Grant and Children, Families and Youth Grant. 
• The proposed funding formulae for individual services should include supported housing, to ensure vital services are commissioned. 

NHF members can read the full response using the links below. If you have any questions about the consultation or our response, please get in touch with us using the details below. 

NHF members can login to download the full response.