Future funding for supported housing?

Future funding for supported housing? What are the risks?

Current Income Streams • As with general needs • Rent (for the bricks and mortar) • Service charges (Grounds maintenance; communal electricity costs; lift maintenance; door entry systems) • Additional service costs in sheltered/supported housing (for communal lounges, laundries, kitchens, etc.) • Additional housing management/maintenance costs • Housing Related Support (previously Supporting People) • Care costs where required • Right to Buy?

Funding the housing costs in future Universal Credit • Ministers have long since accepted that supported housing bricks and mortar costs need to be addressed outside universal credit. (Exempt/specified accommodation) • Awaiting overdue DWP Report re the future of supported housing funding – which was commissioned to consider how the sector would be funded once housing benefit was subsumed into Universal Credit

Reducing the welfare benefits bill • Two key Government announcements - initially • Reduction in social rents of 1% a year for the next 4 years from April 2016 • Social housing rents to be capped at LHA levels (affecting tenancies from April 2016 but not hitting tenants/providers until April 2018 • After sector protests – 1% rent reduction deferred by 1-year and LHA cap with only affect tenancies after April 2017 • Both changes intending to buy time pending the long-awaited DWP report.

Potential impact of Government announcements • Rent reduction of 1% a year (as against CPI + 1%) - reduced revenue income/impact on any new development • LHA – in Mole Valley would mean cap of £84.84 a week for single rooms (including service charges) and £173.41 for 1-beds • NHF research has indicated that swathes of supported housing across the UK would close if this was implemented • Development has come to a grinding halt

Housing related support and care costs • Surrey County Council Revenue Support Grant slashed over next two years – far more drastic cuts than SCC had anticipated • Currently in negotiations with all providers to achieve savings • Housing Related Support vulnerable as not a statutory duty • Value of prevention is recognised

National Housing Federation Task & Finish Group • Established to consider future model for supported housing • Government have indicated that they will listen to providers and that they are supportive of the sector • DWP Review will not now be published until July, after the Referendum • However, the Minister has indicated that the £4 billion housing benefit bill for supported housing is a concern

National, local or a mix?

Value for money • DWP – are not challenging importance of supported housing but believe the full costs should not be picked up by the benefits bill • Need to demonstrate benefits to other departments – health/local government • Supporting People budget not ringfenced since April 2009 – many LA’s have slashed funding • This has led to cost shifting to service charge element of housing benefit, to greater or lesser extent across the country • Intensive housing management/concierge

The Government need some control mechanisms • Early NHF discussions • Need for transparency • Need to flush out cost shifting and to identify need for alternative, sustainable funding streams • Why do some services cost more than others, ostensibly for the same thing? • Should the control be local or national – and the pro’s and cons of each • Schedule of rates of costs? • Demonstration of invest to save across departments

Right to Buy • A part of the Housing & Planning Bill currently passing through Parliament • Government hopes it will pass by Queens Speech on May 18th – ambitious! • NHF agreement with Government – full compensation for housing associations • Qualifying tenancies? Qualifying time as tenant? • Stock holding local authorities to foot bill • Every housing association tenant to have the right to purchase a home at Right to Buy level discounts, subject to the overall availability of funding for the scheme. But ……..

For the Grange? The presumption is that housing associations would sell the tenant the property in which they live. • Housing associations would have discretion not to sell, for example where it is adapted for special needs tenants. In that event, housing associations would offer tenants the opportunity to use their discount to buy an alternative home from either their own or another association’s stock. • The Government would compensate the housing association for the discount offered to the tenant and housing associations would retain the sales receipt to enable them to reinvest in the delivery of new homes. • Housing associations would be able to use sales proceeds to deliver new supply and would have flexibility to replace rented homes with other tenures such as shared ownership.

Possible talking points for The Grange • Existing rent and service charge levels vis-à-vis LHA • Quantifying the service charge over and above general needs • Are there any housing management/maintenance cost that would justify higher core rent? • Apportionment of costs over care/HRS – is there duplication that can be teased out to assist Surrey (control better than imposition)! • Cost shifting to housing benefit may be a very short-term solution but unlikely to be sustainable • Meanwhile – the uncertainty of business planning/viability/impairment/cocktail of cuts • An approach to Right to Buy

Future funding for supported housing?