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Majority of charity’s supported housing under threat from LHA cap
More than 90% of shelters run by one of England’s major homelessness charities face a risk from the government’s proposed supported housing funding changes, analysis has revealed.
Analysis by Frontier Economics found that if the freeze on Local Housing Allowance (LHA) rates continues into 2020/21 and there is no top-up funding available, 91% of The Salvation Army’s homes would cost more to run than there is funding to cover them. This would mean the charity would be forced to raise income elsewhere.
The charity provides 5% of supported housing for 6,000 homeless people across Britain. Many of these people have alcohol or drug addictions or mental health conditions and some are ex-prisoners.
The Salvation Army is calling on the government to delay applying LHA rates to supported housing until April 2022 to allow time for a new solution to be found that “accurately reflects the true costs of safe and secure supported housing”, a spokesperson said.
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This follows a National Housing Federation survey published last week which found that 85% of supported housing had been pulled by housing providers because of uncertainty over the LHA cap.
The Frontier Economics analysis, seen exclusively by Inside Housing, found that supported housing residents in its units would require an average top-up of around £78 per person per week to allow the charity to continue running its service at the current level.
However this varies across regions: £128 per week is required in the North West, while London residents would require little or no top-up.
The charity conceded that the government plans to include top-up funding in its new policy but has concerns about it being administered by councils on a discretionary basis.
The charity said supported housing does not operate in isolation and it is concerned about the reform’s knock-on impact on other services such as the NHS.
Mitch Menagh, territorial director of homelessness services at The Salvation Army, said: “Sadly we cannot operate our service on the basis of discretionary ‘top-up’ funding, which offers our residents very little financial security.
“This change in funding would mean that we cannot effectively budget for the future and it also means that our service users would not be guaranteed the support they need for what are often extremely complex needs.”
