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At Thirteen, we’ve been providing this kind of housing to local residents for over 30 years. Our supported and sheltered homes allow people with a huge range of needs to live independently in various settings, from warden call bungalows, to specially designed apartments with 24hr care and support onsite. Making sure that people have access to accommodation that’s right for them not only improves quality of life for them and their families, but it also takes pressure off essential public services, including the NHS and Local Authority Health and Adult Social Care teams.
Government plans to change the way supported housing is funded meaning from April 2019, residents receiving housing benefit will only be eligible for the maximum Local Housing Allowance (LHA). Under the new proposal, the rest of the cost of their accommodation would be paid from a ‘top-up fund’, managed by Local Authority support commissioners.
Supported housing does need a tailored solution to ensure that the provision of these critical services continues into the future - the fact that the government recognises this is definitely positive. However, we don’t believe the proposal that they have put forward will help to deliver this objective, for a few key reasons.
1. The true cost of supported housing isn’t in the support
Supported and sheltered housing is more expensive to deliver than its general needs counterpart, however the key difference in the cost of supported housing associated with the fabric of the building. This type of accommodation often requires essential works like lift maintenance, servicing of fire alarms, emergency lighting, communal area heating and lighting, grounds maintenance, cleaning and carpeting of communal parts. The costs for this are recovered by service charges, which are paid for through housing benefit and although the maximum LHA will cover the basic rent for many of our properties, it will not cover the service charges. The shortfall will need to be covered by the top-up fund, administered by Local Authority commissioners.
The current proposal aims for funding through the top-up to ensure outcomes for customers in support settings, which commissioners are well equipped to measure. However, the majority of the costs that the fund will need to cover aren’t associated with support, and naturally, it’s not possible to assess lift maintenance or grass cutting through support outcomes for customers. Housing providers already have strict governance in place to ensure that the delivery of these contracts represent value for money for tenants (and by virtue of housing benefit as the prime funding source, the tax payer) and we are required to demonstrate this to Local Authorities and to the Homes and Communities Agency (HCA) as our regulator. Placing a responsibility on commissioners to assess these services is unnecessary duplication of effort - it places additional administrative burden on them and undermines the validity of regulatory measures with the HCA.
2. The LHA creates a postcode lottery
LHA is determined by calculating the 30th percentile value of market rent in a particular area. The regional disparity between LHA levels means a sheltered flat in Kilburn, central London falls easily within the limit of the maximum LHA for that area, and yet the same flat in central Middlesbrough would not, as can be seen in the example below (figures rounded).
|Provider||Category||Type||Rent||Service Charge||LHA Rate||Difference|
|London Borough of Camden||Sheltered||1b Flat||£183||Unspecified (affordable rent)||£261||+£77 pw|
|Thirteen Group||Sheltered||1b Flat||£73||£49||£84||-£37pw|
Although the LHA covers the basic rent on the Middlesbrough flat, it fails to cover the service charges at all. This is because Teesside has a more depressed private housing sector, where market rent and social rent are much closer and the 30th percentile value is very low, as opposed to London, where the private market rates are so high that some social housing providers could increase their total rents by as much as 50% and still stay within the maximum LHA.
If the top-up fund is not sufficient, or not apportioned so that areas can access a share appropriate to their needs, vulnerable residents will be left with significant shortfalls in their housing benefit. This is through no fault of their own, and isn’t within their control – it’s purely down to where they live. This kind of discrimination on the grounds of location is hugely unfair and it will put people’s homes at risk.
3. It gives no certainty for the future
To deliver any service, we must know that it can be paid for. Certainty of funding allows us to plan for the future, in terms of both the viability of existing services, and what we will need to develop to ensure housing needs in the region are met. At the moment, there is no certainty - only a skeletal structure of the proposed arrangements.
Without guaranteed funding, it will be almost impossible to access the capital required to develop new schemes and under LHA, some providers will be drawn to develop new services only in areas of high LHA value, where they know the costs will be met.
We also risk current services becoming impossible to maintain if funding is not locked in. Consequent closure of supported housing schemes will have an extremely detrimental effect, both on the people that live there, and on the public services that will be required to meet their needs, including the NHS and residential care. In the Tees Valley, some organisations have already pulled out of support provision due to the reduction of the Supporting People fund, and application of LHA is likely to only make this worse.
How do we fix it?
The simplest solution is to leave housing-related costs within the remit of Housing Benefit, and recognise that schemes are assessed on value for money already and that trying to split the costs of supported housing around the LHA is likely to cost more than it saves.
If it must be split, we suggest that the LHA level for supported housing should be increased, to acknowledge the higher cost of the accommodation type and ensure service charges as well as rent are covered across the UK. The remaining top-up fund can then be used to cover costs of support provision, which can be measured through client outcomes, as the government wishes.
It’s essential that the government’s response addresses the issues that we and many other housing providers, support agencies and charities have raised in recent consultations, and that we work together to develop a solution that works for everyone. We know there is an increasing need for this kind of housing in the Tees Valley, and it begs the question that if supported and sheltered housing disappears due to insufficient funding, where will those who need it go?