Thursday, 17 April 2014

A lack of support

Support services for vulnerable people face a double hit as councils raid an already depleted Supporting People budget to cushion cuts in other departments. Emily Twinch investigates the effect on service providers and those who rely on them.

Supported housing budgets have taken something of a bashing in the past couple of years - but nothing like the onslaught they now face.

October’s comprehensive spending review heralded a cut to the Supporting People budget of 11.5 per cent to £6 billion over the four years to 2014/15. The cut was less than service providers had feared and was even accompanied by a reassuring phrase in a Treasury paper: ‘Funding for services that support the most vulnerable in society will be relatively protected.’

Any comfort providers derived from that Treasury pledge, however, is now likely to have turned as cold as the December weather.

Cold comfort

Despite its assurance, the government has little control over the Supporting People programme, under which local authorities decide how to spend the money they receive and are responsible for commissioning services.

As Inside Housing revealed last week, these cash-strapped councils are now looking to make savage cuts to their supported housing pots - a power they gained last April when the government lifted the ring fence on the SP budget.

Nottinghamshire Council, for example, could see its SP funding shrink by 67 per cent, from £22.5 million to £7.5 million next year. Rochdale Council, meanwhile, is looking at a cut of 30 per cent from £15.9 million in 2009/10 to £11.2 million in 2013/14, and Somerset 18 per cent from £16.5 million this year to £13.5 million in 2011/12. So how bad will this get and what will the cuts mean for providers?

Susan Storrar, director of support at Witney-based housing association Advance Housing & Support, says that the 40 councils it works with are looking at cuts ranging from 10 to 67 per cent. The association is now trying to find ways to provide supported housing services for less money.
‘What we can’t do is provide services that don’t cover their own costs, she says. ‘A lot of providers are thinking about whether they will agree to something or simply say no.’

Cuts will lead to extra pressure for housing departments, Ms Storrar adds. ‘If you stop getting support there’s a risk that will increase the chance of you falling into crisis and your tenancy breaking down. The people that will clear that up will be housing officers.’

Kevin Tunnard, director of operations at Richmond Fellowship, says some of the 50 authorities it works with want to re-negotiate contracts before they have run their course.

So far the fellowship has been asked to make cuts of up to 10 per cent, he adds. This means the housing association will have to reduce the help it can offer to clients.

Jobs at risk

About £10 million of Richmond’s £32 million turnover comes from the SP programme and most of its income is spent on staff wages. Cuts could therefore equate to job losses.

‘A 40 per cent cut could mean about 400 people would leave their jobs [from around 700 employees],’ Mr Tunnard says. ‘What we would do in the event of a significant cut is look at flexible ways of delivering the service and try and do it in a more creative way, and challenge ourselves.’
But Mr Tunnard adds ‘there is a limit to how much you can do that’.

Stoke-on-Trent provider Brighter Futures also relies on SP for a third of its £6.5 million turnover. Neil Morland, director of growth at the housing association, says some of the councils it works with are looking at cuts of up to 30 per cent.

Brighter Futures hopes to offset the cuts by income raised elsewhere, such as from tenants’ rents and primary care trust contracts.

The voluntary sector

Voluntary organisations that rely on SP funding as a stable source of income will be worst hit, Mr Morland says. ‘For some organisations 10 per cent is going to be too much for them. [A] 40 per cent reduction?

For many, that’s going to make it unviable for them.

‘The third sector has never been cash rich. I think what Supporting People did was provide some [financial] stability.’

Andrew Redfern, chief executive of Nottingham-based charity Framework, says that if the council’s proposed cut of 67 per cent went ahead in Nottinghamshire the charity would have to close services that help 4,000 people each year in the county. The charity receives £6.4 million of its £23.5 million turnover from Nottinghamshire Council’s SP budget.

‘If Nottinghamshire doesn’t fund us, there will be no services in Nottinghamshire,’ he says. ‘We are concerned about going back to the situation where there were only services in the city [of Nottingham] and not the rest of the county.

‘The city council will be unhappy about meeting the need for services of people from outside.’

Jeremy Swain, chief executive of homelessness charity Thames Reach, which relies on SP for 56 per cent of its £22 million income, does not believe that all providers are doomed. He agrees, however, that the cuts mean smaller providers will struggle. ‘Every organisation faces losing services,’ he adds.

Providers will have to balance any lost income with job losses, Mr Swain says. ‘The important thing is, you lose income but also expenditure. You no longer pay the staff - you make them redundant’.

There is some sympathy for councils in the sector. Jeremy Gray, chief executive of the 500-bed facility South London YMCA, said: ‘I think councils recognise the value of Supporting People but they are under such incredible pressure they are really having to take very difficult decisions.’

More proposals for cuts are likely to emerge in the coming weeks as local authorities find out their individual budgetary settlements from the Communities and Local Government department. From what has already been proposed, the outlook for SP services and the vulnerable people they help looks as bleak as the winter skies.

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