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Ministers plan to extend an exemption for supported housing from the ‘Local Housing Allowance cap’ as they seek a long-term solution to the problem.
Inside Housing can reveal the Department for Work and Pensions (DWP) is expected to announce a ‘medium-term’ solution to the benefit change, to shore up housing association confidence and unfreeze stalled developments.
Housing associations welcomed the concession but warned it was not enough to persuade them to continue to invest in frozen schemes.
Nick Horne, chief executive of Knightstone, said: “Bluntly, what we want to see is a clear, sustainable solution that provides clarity to all providers of supported housing.”
From April 2018, housing benefit in social housing tenancies that begin in 2016 will be capped at private sector - Local Housing Allowance (LHA) - rates.
After supported housing providers warned that this will lead to the closure of schemes, a one-year exemption was announced in March.
Now, following further fierce lobbying by housing associations, ministers plan to offer full exemption to supported housing units to protect them from the cut, which would run until a long-term solution is devised.
Ministers are already working up plans for this solution, but it will take time to design and implement. Last month, the National Housing Federation proposed stronger regulation for supported housing and full funding.
In the meantime, the DWP wants to ensure schemes put on hold by the uncertainty can be unfrozen, as the longer exemption will encourage associations that the intention is not to slash supported housing funding. A DWP spokesperson said: “We will announce further detail in due course.”
The DWP had previously suggested boosted Discretionary Housing Payments may help pay for supported homes, but it is understood this is no longer being considered. It is unclear whether the exemption would be open-ended or for a fixed term.
Bruce Moore, chief executive of Housing & Care 21, welcomed the move as “sensible”.
Despite the current political turmoil following the vote to leave the EU, parliament has a small period of time to make the announcement before the summer recess on 21 July.
The National Housing Federation this week launched a campaign, Starts At Home, to call for the protection of supported housing.