Thursday, 19 January 2017

Cap would force 95% to wind up schemes

Ninety five per cent of supported housing providers would be forced to wind up housing schemes for the most vulnerable if a planned benefits cut went ahead, an exclusive survey has revealed.

An Inside Housing snap survey of 82 providers, which own a collective 120,000 units of supported housing, lays bare the impact of capping housing benefit at Local Housing Allowance (LHA) levels for the first time.

It shows 27% of providers believe all their schemes would be left financially unviable, while 40% said most of their schemes would go under in the survey conducted this week.

A further 28% of providers said at least some of their schemes would be unviable, with only 5% saying all of their schemes could survive.

Housing leaders are currently frantically lobbying the government to confirm an exemption for supported and sheltered housing from the benefit changes which kick in from April 2018.  

Rents in supported housing are typically well above LHA levels – which reflect the lowest 30% of private sector rents in an area – and tenants of these schemes would be left facing huge arrears if benefit was capped.

Responding to the survey, which was conducted anonymously, one provider said: “[The LHA cap] would be disastrous for the sector as a whole and more importantly for vulnerable adults. Development would halt and there would be widespread closure of schemes.”

The 82 providers said they had a combined 5,691 new units of supported housing currently under development. However 18% said they had frozen this development and more than a third – 34% – said they are considering doing so while they wait on news of an exemption.

The cut, which was first announced in the Autumn Statement, will apply to all new tenancies granted from April this year when it comes into effect in 2018.  

Because of this, 12% of respondents said they would no longer accept benefit claimants to supported housing schemes from April if an exemption is not confirmed by then, and 16% said they would be reluctant to.

The government has offered £70m additional Discretionary Housing Payments for two years from 2018 to cover the shortfall, which providers warn is insufficient.

UPDATE: at 10.19am 21.01.16

Housing associations met with local government minister Marcus Jones and civil servants yesterday at a meeting set up by the National Housing Federation (NHF) to press the case for an exemption for supported housing from the welfare cut.

David Orr, chief executive of the NHF, said: “Ministers and civil servants heard about the profound impact these changes will have on housing associations’ ability to provide supported housing for society’s most vulnerable people.”


“It [the proposed cap] is absolutely catastrophic. Discretionary Housing Payments and cross-subsidy go nowhere near addressing this. Our service will close down if this isn’t reversed.”

“Supported housing will be hit so hard that we may be forced to exit that market completely in the future. If other small-scale providers are facing the same challenges this could have significant impacts on the most vulnerable in society.”

“I am not sure how much this is understood by our health and social care partners to whom supported housing is a crucial part of the wider health and care agenda, and the huge impact it will have on their strategic plans.”

If the [housing benefit] cap applies to your supported housing, what is the most accurate statement?
 Percentage No. of landlords
All of our schemes would be unviable    26.7%20
Most of our schemes would be unviable 40%30
Some of our schemes would be unviable  28%21
None of our schemes would be unviable 5.3%4
If schemes become unviable, what is your most likely response?
Schemes will have to close       17.6%13
Schemes will be converted to general needs  12.2%9
A combination of these   55.4%41
Other          14.9%11
Which statement most accurately describes your approach to development of care and supported housing?
We have frozen development entirely until there is news on an exemption   18.4%14
We are considering freezing development until there is news on an exemption34.21%26
There is no impact on our current development 19.74%15


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