The government has acknowledged that a ‘one-size-fits-all’ approach won’t work for the funding of supported housing
It comes after PM Theresa May told PMQs last week that the LHA cap would no longer apply to supported housing, or the wider social sector.
Outlining a new approach, the government acknowledged that local areas don’t have sufficient control or oversight of provision – with it “not always possible” to ensure value for money for tenants or the taxpayer.
The government revealed its ‘fit for the future’ funding model today (31 October) which aims to address concerns raised by the social housing sector and other key stakeholders.
Sheltered housing and extra care will continue to be funded in the welfare system.
Brought forward is a flexible funding approach that features:
- A ‘Sheltered Rent’ scheme from April 2020
- Short-term supported housing having a new ring-fenced grant available to councils in England
- The amount of short term supported housing grant funding set on the basis of current projections of future need – in Wales and Scotland, an equivalent amount will be provided for those administrations to decide on allocation
- Improved local planning for supported housing and commissioning across service areas with proposals for a National Statement of Expectation to underpin the new funding regime.
In further clarification on the ‘sheltered rent’ – government describes it as “a type of social rent that recognises the vital role that these homes play in supporting older and vulnerable people”.
It added that the new rent model “acknowledges the higher costs of these types of housing compared to general needs housing.
“This will see gross eligible rent (rent inclusive of eligible service charges) regulated by the social housing regulator.
“We will set appropriate rates for sheltered and extra care housing costs, established in consultation with the sector.”
DCLG minister Marcus Jones said the “important and necessary” changes would take time to implement – warning that it was “crucial” support provided is not interrupted or put in doubt.
“Which is why these changes will now commence from April 2020 rather than April 2019. It is our aim through making these changes to provide funding security to providers by allowing them to make long term investment decisions and therefore secure future supply,” he said.
Jones said government had also considered the role of refuges and requests from some of the sector to nationalise the funding and commissioning of this.
He cited the government’s Violence Against Women and Girls (VAWG) Strategy saying a local approach would ensure the best outcomes for vulnerable renters in crisis and emergency supported housing – with local authorities best placed to understand and meet local requirements, and to take a holistic view on both housing and support provision.
Lord Porter, Chairman of the Local Government Association, added: “Today’s announcement demonstrates that the Government rightly sees councils as crucial when it comes to providing supported housing for some of their most vulnerable residents.
“Ensuring that no cap will be applied to housing benefit, and that funding will be kept at current levels for short-term accommodation, is a hugely positive first step towards putting all supported housing on a more secure footing.
“Councils are champions of vulnerable people. Whether it’s elderly people in sheltered accommodation, people with learning and developmental disabilities, or people who face homelessness, councils need the resources to be able to make sure that they are adequately protected and housed.
“We look forward to seeing further detail of these proposals, and working with government to make sure that local authorities are able to meet the needs of some of the most vulnerable people in their communities.”
David Orr, Chief Executive of the National Housing Federation, said: “Today’s announcement, and the removal of the LHA cap, represent a very welcome and significant shift from the Government and show they recognise the value and importance of supported and sheltered housing.
“I am confident the new system outlined by the Government today addresses concerns about the long-term stability of funding for most schemes. This, coupled with assurances about levels of funding and a new timetable of 2020, will give housing associations the certainty they need to keep providing and building these homes.
“The Government has provided assurances that automatic entitlement will remain in place for people in short-term services, however we do need to consider the implications of a system where housing costs are paid through a local authority grant.
“We want to work with the Government to ensure users and providers are confident that the entitlement to payment is secure for the long term.
“There is still much at stake in the detail of the consultation and we look forward to working with the Government to get this right.”