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Coping with the cap

After a year of rumours, promises and fears, Simon Brandon asks what the future will look like for supported housing once the new funding mechanism kicks in

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COPING WITH THE CAP 643px

As the saying goes, the future isn’t what it used to be - and for supported housing providers in England, that should have been good news.

In September, work and pensions secretary Damian Green reassured providers the world was not going to end after all. While the Local Housing Allowance (LHA) cap on housing benefit would be extended to supported housing from April 2019, the government would, Mr Green announced, make extra cash available to make up the shortfall.

Sense of déjà vu

This new funding model - based on a ringfenced top-up fund to be distributed by local authorities - “will ensure that the sector continues to be funded at current levels”, Mr Green promised in a written statement to parliament.

It sounds clear enough. But rather than illuminate the future funding landscape, this announcement has left many providers no less uncertain and more pessimistic than they already were - and has even provoked a sense of murky déjà vu.

The Supporting People regime, implemented in 2003, was a similar model in which local authorities were given control of a ringfenced pot of money to spend on care and support. It was a “very successful programme”, at least until the ringfence was removed in 2009, according to Philippa Jones, chief executive of Bromford Group, a landlord with 2,200 supported housing units.

By 2012, according to a parliamentary research paper, Supporting People funding had been withdrawn entirely from 305 services across 152 local authorities - a fact that does not inspire confidence in the permanence of the current proposals.

“None of us have got any confidence that a ringfence imposed now will be in place for the long term,” says Ms Jones. “It doesn’t give you the confidence to borrow money and build more of this much-needed provision.”

Bruce Moore, chief executive of 19,000-home Housing & Care 21, has a similarly long memory. “The ringfence will diminish over time,” he says. “Everyone knows that, despite the assurances that are given.”

And that ringfence will be crucial in keeping supported schemes open, says Andrew Redfern, chief executive of Framework Housing Association, which provides supported housing to people with a range of complex needs.

“We have to demand and expect that there will be a cast-iron ringfence, otherwise there is no way the system can work,” he says. “You can’t provide supported housing for people with mental health problems, drug and alcohol problems, or people with complex needs, on a rent level restricted by the LHA cap. Either the gap continues to be funded from the local pot, or they close.”

In fact it looks as though there could well be less supported housing in five years’ time as a consequence of the mooted changes, regardless of the ringfence’s permeability. Several providers told Inside Housing they were rethinking their supported housing development programmes in light of the ongoing uncertainty; some have cancelled projects altogether.

“We had a site lined up in Aylesbury but the more we thought about it, and the more we contemplated the future, there wasn’t enough certainty going forward to warrant us taking that risk,” says David Bogle, chief executive of 5,300-home Hightown Housing Association, based in Hertfordshire.

Magenta Living, a landlord based in the Wirral, recently completed its first supported housing development of 100 units; its second may be some time coming. “In light of the government’s announcement we will be reviewing our plans for any future similar developments moving forward,” says a spokesperson.

There are fears, too, that sheltered housing - housing for tenants with lower levels of need - in particular could suffer as a result of the changes.

“If sheltered housing doesn’t get some kind of exemption or special deal, I would say that in five years’ time the sheltered housing landscape will look very different,” says Michael Voges, executive director at Associated Retirement Community Operators.

Even with a ringfence in place, the argument goes, cash-strapped councils will be tempted to channel funding towards those with greater support needs.

“There is such pressure elsewhere in the system for local authorities to just meet their statutory responsibilities that there will be no room for funding anything else,” says Sue Ramsden, policy leader at the National Housing Federation.

Mr Moore is less circumspect. “As the [financial] pressures mount, the low-level services will be the first to be squeezed out,” he says. “A lot of retirement housing will go. We will be closing down properties rather than keeping them. This will result in the closure of schemes.”

Increasing need

Not everyone is gnashing their teeth, however. The supported housing development programme at North Star Housing Group - a 3,000-home landlord with 444 supported housing units - is “in hiatus” while the funding dust settles, says chief executive Angela Lockwood, but she says her aim is to grow its supported housing programme, and to do it by looking at new funding models.

“In five years’ time the demand for supported housing won’t have diminished - in fact need will increase, especially around dementia,” Ms Lockwood argues.

She cites a North Star supported housing scheme for women with complex support needs that is funded by a group of public sector budgets, rather than purely with housing benefit.

“Around the table were health, probation, police, housing associations and social care people from the local authority,’” she says. “That’s a bit of a blueprint going forward.”

Or, to paraphrase another saying, perhaps the best way to predict the future is to create your own.

Statistics source: the government’s Supported Accommodation Review

In numbers

650,000
Rough number of supported housing units in the UK, of which 550,000 are in England

29%
Percentage of supported housing occupied by working-age people with a range of support needs

71%
Percentage of supported housing occupied by older people

£4.12bn
Annual housing benefit cost of supported housing

£2.05bn
Cost of additional spend on care and support services

 


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