The new investment framework and supported housing Jake Eliot, Policy Officer SHiP Conference 2011 Friday 4 February

1. The new investment framework and supported housing Jake Eliot, Policy Officer SHiP Conference 2011 Friday 4 February

2. Summary • The Spending Review and context • Quick look at the new framework • Issues for supported housing • Localism Bill and tenure reform • Discussion

3. A brave new world? Financial context: cut the deficit the new investment framework Ideological position: social housing seen as stagnant culture of dependency Local leadership tenancy and allocation reform regulatory reform

4. CSR: The headlines Housing: NAHP 60% cash cut: £4.5 billion (including existing commitments, mortgage rescue, empty homes, places of change and G&TSs) over next 4 years ‘flexibility’ to fill the capital hole new ‘Affordable Rent’ tenure at up to 80% of market rent (on a proportion of re-lets and new build) in return for an agreement on new supply. • 19% cut across departmental and capital budgets • CLG: largest cut – departmental budget by 51%, capital spending by 74%

5. The new funding model • Government argue a limited capital pot can provide 150,000 new affordable homes • But... future supply is extremely sensitive, • proportion of re-lets at new tenure • market rent levels – LHA and housing benefit caps • ....New model will not generate capacity everywhere

6. Quick look at affordability in SE

7. Old model vs new model

8. Some big questions about supported housing • Level of flexibility? What about service charges? • Where does the model work? • What’s the ‘market rate’ for supported housing? • In local relationships, who’s making the case for supported and specialist? • Interaction with welfare reform? • Will near market rents be affordable or create work disincentives?

9. Key issues for development • How to deliver range of solutions and value for money for grant • High risk of revenue model • Challenge of timescales

10. The major stumbling block:rents and benefits • Rent risks – need confirmation of high level principle between CLG/DWP that is covered and not subject to further review after sign-off • £500 p.w. (£26k p.a.) benefits cap for larger families as proposed by the Universal Credit • If this cap remains it will limit the supply of larger homes, particularly in high value areas. HCA/CLG in discussion with DWP.

11. Radical reform needs real flexibility • Certainty on benefits • Enabling rents and service charges • Sensible partner engagement • Product flexibility • Operational control for housing associations

12. Other potential solutions • Non-grant development models • Equity release through asset management • Better or different investment partnerships? • Health or social services • Consortia with developing associations

13. Where do we go from here? • End of Jan/early Feb - HCA publish prospectus • Feb to end of March – bids invited from providers • April to May – assessment of bids • Early to mid June – ‘National mediation’ • Mid June – HCA Board/Ministerial sign-off • Late June – contracts signed.

14. Agreeing investment packages • Need tight proposals for first eighteen months of programme • Critical to have local authorities on board – particularly to deliver supported and specialist • Know the risks of engaging…. • ….and the risks of not engaging

15. Wait, did someone say ‘Localism’?

16. Flexible Tenancies and tenancy strategies • Flexible tenancies of at least 2 years • Limited succession rights • Local Authorities not obliged to have open waiting lists • Local authorities will have a strategic tenancy policies • More tenant transfers outside allocation system to improve mobility

17. Keep in touch Jake Eliot Policy Officer 020 7067 1084 Jake.eliot@housing.org.uk www.housing.org.uk/careandsupport