5 things we learned from the government’s response on supported housing regulation

The aim is to reduce duplication of regulation while also keeping the exemptions narrow enough to stop loopholes being created.

The government has adapted the exemption for Ofsted-registered accommodation so that supported housing schemes for young people aged up to 25, where at least one bed is Ofsted-regulated, will be exempt.

It has also added a number of additional services to the list of exemptions, including low-cost older person’s regulated provision for people aged over 55, along with almshouses. The government said these providers are already regulated by the Regulator of Social Housing and that historically “there has been no evidence of rogue provision in this part of the sector”.

Domestic abuse services that are commissioned will also be exempt, as well as accommodation managed by a local authority in England where support is commissioned directly by the local authority or a public body. 

2. Clarity on licence holders and commissioned services

The legislation sets out that a supported housing licence holder must be the person “managing or in control” of the supported exempt accommodation.

But providers raised concerns about where responsibility would lie for holding a licence, since supported housing is often delivered by a number of different organisations. For example, a managing agent may manage the property on a landlord’s behalf.

In its response, the government said that organisations can agree between themselves who is best to hold the licence, and that this can be discussed with the licensing authority if in doubt. The government indicated that in many cases the managing agent will be the most appropriate person if they have control of the day-to-day running of a property.

The regulations will now also make clear that commissioned services – those where there is already oversight of the support service – will not be required to comply with the National Supported Housing Standards licensing condition.

Other changes have been made to make the licensing regime simpler for providers. Initially, the government proposed that providers would need to apply for a licence for each scheme, defined as a property address. Sector responses were overwhelmingly against this, highlighting that it could unfairly impact dispersed schemes across multiple properties.

Ministers have therefore opted to amend this proposal so providers will need only one licence to cover all relevant support housing within a licence district.

3. More stringent ‘fit and proper person test’

As part of the licensing regime, the government will introduce a ‘fit and proper person test’ (FPPT) to ensure those managing supported exempt accommodation are suitable, reputable and capable of providing safe housing. 

The consultation initially proposed basing this on the test in HMO licensing. But the government has now changed this approach following feedback that highlighted how important the FPPT is in protecting residents.

The test will now align with similar tests used by the Care Quality Commission and Ofsted in relation to supported accommodation. 

It will be expanded to include not just the licence holder, but also the board of directors. For providers with residents who have particularly high support needs, the FPPT will be enhanced. 

The government will also introduce a new licensing condition around service managers. Respondents to the consultation said those in charge of the day-to-day running of a service should also be named as part of the licence application to ensure accountability.

Licence holders will therefore need to assure themselves that their service managers have the “character, capacity, appropriate experience and skills to undertake the role”. But the government said this should not prejudice those with lived experience from becoming service managers, including those with a criminal record.

4. Changes to the National Supported Housing Standards

Respondents from all parts of the sector were strongly supportive of the government’s proposed National Standards for Supported Housing. 

However, some raised concerns about how to evidence the standards, particularly since support and housing are often delivered by separate organisations. Some said that splitting the responsibility between the support provider and the housing provider would be “operationally challenging”.

The government has decided to make changes to the standards in order to address this. It means the standards can be met in full by the support provider, rather than sharing this responsibility with the housing provider.

Other changes include removing the requirement to have the same support worker and instead requiring that residents have consistency of support. The government has removed the ‘responsible person’ standard as it simply duplicates the new service manager suitability test.

The standards will now also apply to supervision rather than only support, and this has been reflected in the wording throughout. 

5. Housing benefit and wider issues

The Supported Housing (Regulatory Oversight) Act is intended to tackle a minority of providers that exploit the system by accessing high levels of rent from housing benefit but offer little or no support to residents. 

Stakeholders were asked whether housing benefit should be linked to the licensing regime, using it as a lever to drive up quality. The consultation found that 70% of respondents agreed with this proposal.

Given the strong support, housing benefit regulations will therefore be amended to link the new licensing regime to entitlement. This will help to ensure that taxpayers’ money is paid only to providers that meet required supported housing standards. 

However, respondents from the sector identified several risks associated with this, including residents being evicted or financially disadvantaged by the measures.

On the risk of eviction, the government said local authorities will take a “risk-based approach to licensing” and will play a key role in rehousing residents where needed. The introduction of supported housing strategies will also help local authorities to understand local need, the government said.

It had considered going further by defining care, support and supervision in the housing benefit regulations. But consultation feedback on this measure was mixed, and the government decided against introducing new definitions or thresholds until after the licensing regime has come into effect in England. 

Some respondents also wanted to see wider housing benefit reform before any link to licensing is enforced. The Welfare Reform Act 2012 committed to abolishing housing benefit, but the government pointed out that many residents in supported housing will remain in receipt of it for many years to come. Work is underway to decide the best way to provide support for these residents. 

Another big concern the sector has raised is around subsidy loss. Many respondents to the consultation argued that local authorities should receive 100% subsidy for all housing benefit awards where the provider is licensed.

The government’s response said this is not within scope of the consultation, but recognised that subsidy loss is a significant issue for some local authorities and providers. Any future decisions on subsidy rules will be part of wider consideration of how best to provide housing support to those on housing benefit.

Finally, the consultation had also sought views on whether the government should introduce a new planning use class for supported housing. Given the range of views on this – with local authorities generally supportive and providers feeling it might stifle supply – the government will not make any planning changes. This position will be kept under review.