On the edge
Providers of supported housing in Bristol claim the city authority is putting organisations out of business as it attempts to save money on the soaring costs of exempt accommodation. Simon Brandon investigates the allegations and the impact on vulnerable people.
A hike of 1,600 per cent in a local authority’s costs over just five years will always set alarm bells ringing.
Last year, Bristol Council found itself in exactly that position when it looked at how much it was paying out to house tenants living in supported housing in the city.
In 2004/05 it spent £147,000 on payments to tenants living in homes that - because supported accommodation is more expensive to provide - were exempt from normal caps on local housing allowance (see box, below: Exempt accommodation explained). But by 2011/12 the cost had leapt to £2.5 million.
The jump clearly had to be investigated. But the council’s response has provoked fury from supported accommodation providers in the city, at least two of which have had to close their doors in the past year as a result of what they claim is a concerted effort by the council to save money by putting organisations like theirs out of business.
‘They picked off providers one by one,’ says Sue Lampard, the council’s Supporting People commissioner between 2002 and 2009 and founder of All Nations Housing, a 180-bedroom supported accommodation provider that she claims is now close to insolvency after the council cut its housing benefit last year.
‘It was very much a blanket approach. They set out to prove exempt providers were crap. That was the agenda,’ Ms Lampard adds.
So what has been happening in Bristol - and what impact has it had on providers of supported accommodation in the city?
Bristol Council is quick to deny that it has set out to cut costs at any price. A council spokesperson says it has ‘no “policy” on exempt accommodation’, and that there has been no change in how it applies government guidelines on how to process exempt housing benefit claims, which it says it treats ‘individually [and] case-by-case’.
Nevertheless Ms Lampard is convinced that around April last year - a date corroborated by other providers in Bristol - the council began a wholesale review of exempt providers on an organisation-by-organisation basis in an attempt to save money.
What Ms Lampard and others see as the council’s heavy-handed approach to reducing its spending in this area has, they allege, hurt good providers alongside poor, put some of the city’s most vulnerable people at risk, and - in nakedly financial terms - prioritised short-term savings over long-term financial strategy.
When Bristol’s revenue and benefits service decided All Nations was not providing care and support to any of its tenants, and therefore did not qualify for exemption from normal housing benefit caps, based on an inspection of around 20 tenant case files according to Ms Lampard, it cut its local housing allowance levels overnight, ‘putting 180-odd people at risk of homelessness’, she adds.
The amount of benefit claimed depends on the tenant, but it can be three or four times the LHA-mandated amount - currently £64.62 for a shared room in Bristol.
‘The council just stopped [All Nations’] money without any impact assessment,’ Ms Lampard, who left All Nations in 2010, but has been asked by the organisation to help put their appeal together, says. ‘I have never seen the benefits team move faster.’
The Bristol Council spokesperson says its benefits service rejected the individual claims for exempt accommodation funding made by All Nations and that it did not carry out an impact assessment as this was not required. ‘The decision would have been effective immediately, although in practice it would have taken a month to have an impact before those individual claims reverted to the lower LHA,’ he adds.
No one on either side of the argument would dispute that there are sub-standard providers of supported accommodation operating in the city. Inside Housing was unable to speak to All Nations directly, but Ms Lampard is the first to admit that a review of the sector was necessary ‘because there are some very poor providers [in Bristol]’.
But it would also appear that some valuable services have been placed at risk - or have even closed - by the cuts. This is the case of one organisation that was being praised for the quality of its services by the council while at the same time facing significant problems because of a payment cut.
Pilot Supported Accommodation opened its doors in February 2011. It provided move-on accommodation to 12 tenants with often complex support needs at any one time who might otherwise have remained stuck in what its co-founder and trustee Andrew Baker, a chartered accountant who has worked with vulnerable people in the city for 30 years, calls ‘the revolving door’, falling in and out of prison or mental health institutions.
Within a month Pilot had earned praise for its work from Bristol Council’s criminal justice intervention team. In a testimonial letter, a member of the team spoke of the progress made at Pilot by one of her clients with particularly complex needs: he had recently been released from prison and is described in the letter as a ‘chaotic drug user’.
‘[The client] cannot say enough good things about the staff, the housing and all other aspects of the programme,’ the council’s drugs worker states in their letter. ‘I am very impressed in the change in him… I have other clients who I look forward to referring to this programme.’
Five months later, however, Pilot closed down. Despite what Mr Baker describes as ‘very supportive’ noises from the council during pre-launch discussions, Bristol’s revenues and benefits service challenged Pilot’s first and only claim for exempt supported housing benefit, not once but four times - and each time on different grounds.
Initially the council claimed Pilot was not a voluntary organisation. When that was easily disproved, Bristol decided Pilot was not providing care and support; then, that the support provided was not necessary. And when those were challenged, it levelled a charge of contrivance. That means the benefit claim was made with the sole intention of abusing the system, and when a local authority takes that step it is able to stop all payments immediately.
Pilot’s income and expenditure calculations for March and April 2011 show that it had expected to receive £218 per week per tenant. It actually received around £65 per week - 70 per cent less.
‘It was quite devastating,’ says Mr Baker. ‘Pilot was having superb success at taking some damaged people and moving them forward. It was a terrific organisation.’
This pattern of rejecting a claim under each of the grounds open to the council in turn is recognised by at least one other provider, which, like several others spoken to for this article, wished to remain anonymous.
In July, starved of the housing benefit Mr Baker says had been earlier assured by the council, Pilot went out of business. Some of its tenants were moved on to other providers; others moved into normal accommodation, for which Mr Baker believes they may not have been ready.
‘A number of claims from Pilot supported accommodation are subject to an appeal so we would not be able to comment on these,’ says a spokesperson for Bristol Council, who points out that all tenants have the right to appeal to an independent benefits tribunal. But the delay in the appeals process - they can take up to two years to be heard - means providers have to find the funding themselves until the tribunal makes its decision. While it waited for its appeal to be heard and its tenants’ housing benefit to be refunded, Pilot simply ran out of money. Its appeal is due to go before the tribunal later this year.
It is, however, undeniable that Bristol’s exempt accommodation costs did shoot up. So what has been causing the hike?
The council believes a number of factors may be involved. These include, it suggests, consultants advising providers on how to maximise their claims, as well as the repurposing of bed and breakfast accommodation following the government’s appeal to local authorities to use alternative emergency accommodation, meaning that B&Bs are increasingly being categorised as exempt.
Bristol Council also believes it is being taken for a ride. In its response to the government’s housing benefit reform consultation last year, the local authority wrote: ‘The current [exempt accommodation] system is open to exploitation… [and] we have experience of this in Bristol’.
How the system might be exploited is not made clear. But its own figures show that the majority of its decisions regarding exempt accommodation claims in 2011/12 went against the providers. Of 429 exempt accommodation units - containing more than 1,000 tenants - that made claims during that period, the council signed off in full on just 42. It found 133 were not exempt; 226 were exempt but had their rents restricted, because the council believed they were overcharging; and 16 claims were decided by the council to be contrived, which means the claim is judged to be an attempt to abuse the housing benefit system.
One organisation, presumably Pilot, went out of business while Bristol was considering its status. Of those rejected claims, 72 have so far been appealed and none have got to tribunal yet, although the council expects some cases will be heard ‘soon’.
The council denies there is any ‘prior presumption’ of incompetence or nefariousness on the part of providers. Its response to the government consultation suggests otherwise: ‘Some of these services probably do provide real support,’ it concedes at one point.
‘I worked with the local authority for a very long time,’ says Ms Lampard. ‘There is great fear and paranoia about the private sector. Without a doubt.’
The council, of course, has a duty to protect its ratepayers from unnecessary expenditure.
‘We remain committed to helping those who are in need according to individual circumstances but we also have a duty to protect the public purse,’ says Anthony Negus, Bristol’s cabinet member for housing, property and regeneration.
But the council’s critics argue that the fallout from supported accommodation closures will cost the public purse a great deal more in the future.
‘[Bristol] have lost some willing providers [and] significant amounts of shared accommodation, and there are additional pressures on everything else,’ says Ms Lampard. ‘There are even more people turning up at homeless centres.
‘There is a huge need [for supported housing], and if that isn’t addressed then we will see people developing other problems such as mental health issues and drug addiction. Bristol, as always, is dealing with the cure, not prevention.’
Mr Baker is just as severe in his judgement. ‘If someone is mentally ill and in hospital, or is in prison, that doesn’t matter to the council because it doesn’t affect their budget,’ he says. ‘The fact that saving a pound here costs 10 pounds out of another budget doesn’t concern them.’
So what can organisations do to protect themselves?
Mark Rodgers, an adviser at MR Associates, who specialises in housing benefit law - and who has settled more than 1,200 individual exempt accommodation claims with Bristol Council on behalf of providers - advises exempt providers to ensure they have no weak spots. ‘It is imperative and essential that that all organisations carefully record the care, support or supervision services that they are providing to their tenants,’ he says.
Bristol says it is business as usual but there are now fewer beds in specialised supported accommodation for some of the city’s most vulnerable residents. Those people will not go away, and neither will the burden - one way or another - their situations present to society.
Exempt accommodation explained
Normal benefit is capped at a level set by an area’s rent officer - the local housing allowance, in other words.
But the cost of accommodating someone in supported housing can be much higher, and the ‘exempt accommodation’ category ensures those costs are not constrained by LHA rent levels.
As the Housing Benefit and Council Tax Benefit Regulations 2006 state, exempt accommodation refers to that which is ‘provided by … a registered charity or voluntary association where that body, or a person acting on its behalf, also provides the claimant with care, support or supervision’.
Crucially, this extra housing benefit doesn’t cover care or support: it only covers the increased costs of accommodation. These can include added management costs, for example, or the increased costs of security or wear and tear that might be incurred when housing tenants with chaotic lifestyles and complex needs.