You won’t have had a Briefing for a while. But non-Brexit policy agendas have climbed up the UK and national governments’ agendas as a consequence of the forthcoming General Election. We thought it would be useful to take stock of where we are with the future funding of supported housing and related issues and to publish our own ‘Supported Housing Manifesto’.
We should use the opportunity to influence the future shape of supported housing funding and wider policy as we believe there will soon be both scope and necessity for significant policy initiatives across the range of UK and national government policy.
The purposes of this Briefing are to:
- Summarise the ‘future funding of supported housing’ position
- Identify the need for a ‘Value Generation’ approach in the administration of public funding, including funding for supported housing and to use a case study (Housing Proactive Plus) to illustrate it
- Set out revised definitions of ‘supported housing’, based on intensity of need not timescale
- Argue for the introduction of “Supported Housing Rent’ as part of Universal Credit
- Identify a basis for the regulation and oversight of supported housing
- Set out how enhanced Housing Benefit and Intensive Housing Management and Maintenance can work for social landlords/providers with tenants who have additional needs
A Summary of the Current Funding Position for Supported Housing
You may well recall there have been two UK Government consultations on the future funding of sheltered and Extracare housing and so-called ‘short-term supported housing’ (2017) a Joint DWP/DCLG (as was) Select Committee Inquiry (in 2017) and an interim UK government response in April 2018.
The bulk of the UK government’s proposals relate to England only with a very significant exception of Housing Benefit as it affects supported housing. Housing Benefit remains a non-devolved issue.
By way of summary we find ourselves in the following position.
- The UK government has given a commitment to leave funding for the housing costs of supported housing within the welfare system
- Local authorities in England are expected to comply with a National Statement of Expectation (see page 44 onwards) for supported housing.
- The UK government agrees there is a need for the regulation and oversight of supported housing.
- Within the 2 Consultations are definitions of supported housing, which we find problematic
- The UK government wants to see a review of the relationship between housing and support.
- The continuing rollout of Universal Credit begs the question of how funding for the additional housing costs of supported housing will be administered, given that the UK government has committed to keeping those costs within the welfare system.
However, there has been very little development of this position, at least publicly, for over a year. So, we need to consider how we move forward.
Those of you familiar with our thinking will know we believe that public finance should be administered according to Value Generation principles, which are as follows:
- What are the outcomes for people?
- What’s the cost-benefit to the public purse?
- What’s the wider social/community benefit?
In measuring value, we believe that the 1st and 3rd of these 3 principles should not be expressed in terms of financial value; they’re qualitative benefits. The 2nd should, of course, be measured in terms of financial value.
Most SROI models seem to be forced to measure everything in financial terms, which puts us in danger of seeing the cost of everything and the value of nothing. It’s a by-product of the ‘cost control’ approach to the administration of public finance which, combined with segmented commissioning structures, leads us to an expensive system designed to manage budgetary constraints at the expense of meeting need.
At this time of UK constitutional change/paradigm shift, we should see and take the opportunity to restructure how we administer public money in this context, how we commission supported housing, by way of integrated commissioning infrastructure and pooled budgets. Structural progress is being made in Scotland on this.
We also need to establish new values to underpin the administration of public finance and we propose the Value Generation principles above as a basis for a regulation and oversight regime, which we develop further below.
Value Generation principles don’t just apply to how people or organisations administer public money. It applies to how Support Solutions as an organisation provides services.
It should also be used as a means of assessing whether a product or service you’re considering generates value for supported housing.
Here’s a brief case study showing how Housing Proactive Plus generates value for supported housing. The outcomes are much wider than just having a valuable service for nil, or very minimal, cost as you will see here (opens a separate browser window).
Definitions of Supported Housing
Our previous briefings by way of responses to the UK government’s consultations on the future funding of supported housing have challenged the UK government’s definitions of supported housing which are as follows:
- Short-term supported housing
- Long-term supported housing
- Sheltered & Extracare housing
There was no consultation on the future funding of so-called Long-term supported housing and the UK government doesn’t intend to have one.
Putting aside Sheltered & Extracare housing for the moment our concerns relate primarily to the fact that the definitions of supported housing relate to duration of stay not intensity of need. This is a reflection of an inbuilt ‘cost control’ bias built into the administration of public finance. Controlling costs in this context doesn’t save money, it just generates more avoidable cost elsewhere, often as a consequence of failing to invest in preventative services such as supported housing.
We’re aware that the DWP & MHCLG may be open to redefining ‘supported housing’, at least that’s what they said when asked a question directly by the author at a conference a year or so ago.
Instead of defining supported housing type according to duration of stay, which often doesn’t relate to the duration of someone’s needs, supported housing type should be primarily defined by the nature and intensity of its need as follows:
Immediate Access Accommodation: where people go because they need accommodating in an emergency. This would include direct access homeless hostels, women’s and other refuges, housing first accommodation and temporary accommodation where the person has an additional need. This what the UK government has termed ‘short-term supported housing’. It originally proposed to devolve the funding for this to local authorities but subsequently committed to fund it through the welfare system
Immediate Access Accommodation allows a landlord/provider agency the time to undertake an assessment of peoples’ needs. It will often be the case that after the assessment the person will require what we have termed ‘Intermediate Supported Housing’ (see below). Intermediate and/or intensive services may be provided in the same building as the immediate access services were provided if this is appropriate (for example, refuges, housing first services.)
Rent parameters (see ‘Supported Housing rent’ below) should be established at local/regional commissioning level. In the case of Immediate Access Accommodation, its payment can be time limited for the mutually agreed duration of a needs assessment by the housing provider.
Intermediate Supported Housing: supported housing that provides for a level of need up to, but not including, the services provided within what we currently term ‘specialised supported housing’ (i.e. where people would otherwise need to be in hospital or registered residential care).
It includes all types of supported, sheltered and extra care housing irrespective of who the landlord is and its legal status, provided that they are properly overseen and regulated by the commissioning authority under the National Statement of Expectation in England and whatever regulatory standards national governments apply elsewhere in the UK.
There isn’t a maximum duration of stay in intermediate supported housing. The purpose of funding it through the welfare system, with top up from the statutory sector to meet costs beyond the scope of Supported Housing Rent (see below), is to reduce or eliminate intensity and level of need so that people can move on to different housing if that’s the appropriate thing for them to do.
It should be borne in mind that Community/Tenancy Sustainment can fall into this ‘intermediate’ category. It’s not about the building, or the legal identity of the landlord, subject to regulatory compliance, it’s about where the need is, and its intensity and how best to meet it.
Intensive Supported Housing: is broadly the same as ‘Specialised Supported Housing’ (see p.4 of the hyperlinked document for a definition) except that it should also include public capital funding as required. As it stands, Specialised Supported Housing is by definition privately capital funded. It is also a definition that applies in England only, but there is no reason why such a model shouldn’t be considered by devolved governments to suit national priorities.
People living in Specialised Supported Housing would otherwise be in hospital or registered care by definition and the same would be the case for Intensive Supported Housing. This might include people with severe learning disabilities, physical disabilities or permanent mental health needs who require intensive levels of services of varying types for their whole lives.
It will also include people with acute or permanent mental health needs, people with severe addictions and other complex needs, which are treatable such that their stay in intensive supported housing is for the duration of the need. Services are commissioned and funded based on the assumption that the Supported Housing Rent (see below) and top-up funding being used in this case is to reduce or eliminate intensity of need.
Tenancy/Community Sustainment: a huge amount of additional housing need exists in so-called ‘general needs’ housing. It is frequently the case that people can be inexpensively assisted to remain in their own homes with the provision of additional housing (and other) services direct to them. The most obvious examples of this are domiciliary care, floating support and tenancy sustainment services, the latter often being eligible for enhanced Housing Benefit.
Enhanced Housing Benefit, however, is not payable where people with additional housing needs are not, in effect, housed by a social landlord. Put another way: a person’s entitlement to enhanced Housing Benefit to meet their additional housing needs is dependent on the legal identity of their landlord. This is clearly perverse, as we have said many times before. Provided the landlord, and provider of additional housing services, if different, is regulated and overseen by local/regional commissioning authorities (see ‘Regulation & Oversight’) and operates to Value Generation principles then their legal identity should be irrelevant.
Anybody with additional housing needs, irrespective of their landlord, (if they have one) who is entitled to Universal Credit should also be entitled to an additional housing component, which we call Supported Housing Rent, at the appropriate level.
Supported Housing Rent
Readers of our briefings may recall I proposed the concept of ‘Supported Housing Rent’ as a mechanism to cover the costs of peoples’ additional housing needs while still in supported housing. By ‘additional housing needs’ I mean the those for which the cost is eligible to be covered by enhanced Housing Benefit, which funds Intensive Housing Management.
There has been an ‘interim’ system in place within Universal Credit to administer Housing Benefit to fund the eligible additional housing costs of supported housing. This was something announced by Lord Freud in 2012 when he said that people in Exempt Accommodation would have the housing component of their Universal Credit administered separately under the existing Exempt Accommodation rules by the local Housing Benefit team. As a consequence, the rent component would not be capped, the tenant is protected from bedroom tax (Spare Room Subsidy) and the Benefit Cap as a consequence.
My view is that this ‘interim’ system should become an integrated part of Universal Credit & Pension Credit for supported and sheltered housing. In other words, when a Universal Credit claimant or someone on their behalf, ticks the box on the Universal Credit claim form that says ‘I live in supported housing’ then Supported Housing Rent becomes payable.
However, we should be careful. When the UK government stated that funding for the housing costs of supported housing would be within the welfare system, the implication was that Lord Freud’s ‘interim system’ would remain in place and that Housing Benefit would continue to exist. Plainly, Housing Benefit won’t continue to exist as a separate infrastructure from Universal Credit; it’s one of the 6 welfare benefits that Universal Credit is meant to absorb. We believe that Supported Housing Rent should be an integrated part of Universal Credit and Pension Credit.
Supported Housing Rent would cover the housing costs of supported housing up to but not including ‘support’. Remember that the UK government wants to review the relationship between housing and support, so here’s an opportunity to establish the scope of the Supported Housing Rent, i.e. what it covers, which we believe should equate to what is known as Enhanced/Intensive Housing Management and Enhanced Housing Maintenance.
Supported Housing Rent should acknowledge that the traditional regulated rent structures for social housing simply do not work for most supported housing in most areas. The 10% tolerance on core rent is routinely insufficient to cover enhanced management and maintenance costs.
Part of structuring an enhanced rent and service charge schedule involves apportioning costs that should logically sit within the core rent part of the rent structure into other parts of the rents such as the service charge, in order not to breach a regulatory requirement. This makes nonsense of both the traditional rent structure and the regulatory requirements around core rent restrictions.
The ‘core cost’ element of Supported Housing Rent should be based on the true cost of acquiring, constructing, developing and managing a building in the area in which it’s located.
‘Social Rent’ for social housing is based on calculation parameters that include the relative value of the property, average local pay rates and bedroom capacity. This wouldn’t work for supported housing, at least those parameters wouldn’t, but a formula-based approach would. It is important to fully recover the actual ‘core cost’ component of the rent, including private capital repayment where private capital is used, in line with locally or (in England) regionally agreed parameters.
The development of supported housing is a collaborative venture between the statutory sector commissioners, providers of services and landlords, private funders where they’re involved and sometimes the people who’ll live in it and/or their advocates. The statutory sector throughout the UK has an obligation, implied or stated, to manage and shape the supported housing ‘market’ in its area. ‘Core cost/core rent’ parameters should be locally or regionally established based on the actual cost of acquiring/developing and maintaining the buildings in question. This principle would apply to all types of supported housing. Tenancy/community sustainment ‘core rent’ costs might still sit within the existing 10% leeway parameters to reflect additional needs costs. These existing core rent parameters should not apply to other forms of supported housing.
The ‘core rent’ component of Supported Housing Rent will be locally/regionally variable in the same sense that the cost of land and property is locally/regionally variable. It’s a full cost recovery model.
This is not a recipe for adding unnecessary costs into Supported Housing Rent. No regulatory capping of ‘core rent’ local parameters will apply provided that the supported housing in question is approved by the regulation and oversight regime and that it is commissioned and provided on the basis of Value Generation principles, which have their own internal ‘value for money’ mechanism anyway.
The ‘additional housing needs’ component of Supported Housing Rent should be based on the intensity of additional housing need at a prescribed local or regional rate.
Additional housing needs costs would depend on the intensity of additional need (not its duration) and the reasonable cost of meeting them. There could be 4 levels based on supported housing type (see below). The levels are not fixed and may overlap. The management costs of tenancy sustainment are higher per person in supported housing, but additional services are usually less intensively applied.
This could equate to 4 levels of Supported Housing Rent, all of which relate to the true costs of providing for genuine eligible need, based on the following revised definitions of supported housing that we propose (see more about these definitions above):
- Immediate access accommodation
- Intermediate supported housing
- Intensive supported housing
- Tenancy/community sustainment
It is important to agree what needs/eligible tasks Supported Housing Rent covers and, as previously noted this should form part of the UK government’s proposed review of the relationship between housing and support, whilst keeping supported housing funding within the welfare system.
Regulation and Oversight
Much has been made recently, quite rightly, of the need for regulation and oversight of supported housing. This need is absolute, especially given the increase in Specialised Supported Housing development (what we would term ‘Intensive Supported Housing’) within which intensive levels of need exist.
It’s unfortunate in our view that this agenda seems to have been led by a preoccupation with so-called ‘high cost housing’. Supported housing of all types is more expensive by virtue of what it is. If we act according to the principles of Value Generation and of matching resources to needs, then whatever supported housing costs it’s cheaper and better than any alternative.
In cases where people have claimed enhanced Housing Benefit but not applied it to the purposes for which it was intended or have wilfully claimed more than the needs they meet require; such people or organisations as a principle, should be deemed to have contravened any reasonable regulatory standards.
Which brings me back to the question of how regulation and oversight of supported housing should be structured.
It will come as no surprise when I say that the quality of supported housing should be measured in Value Generation terms. It would help if commissioning in England (and, we would venture to suggest, Wales) is structured in a similar way to the merged Health and Social Care Partnership Boards in Scotland with pooled budgets. Also, in England, it would help if commissioning was regionally organised as well as being integrated in both funding and commissioning terms. Again, we put forward Value Generation as being the operative principles for the administration of public finance, in this case revenue for supported housing of all types.
The actual framework for measuring the value/quality of supported housing should be developed by the academic sector and implemented by an independent national agency, existing or new. When I say ‘national’ I mean different approaches within the four constituent nations of the UK may well apply. Although there will likely be common elements too.
Within the supported housing sector, as currently defined, which often implies social organisations, there are a number of existing regulators. For example, the various national regulators for housing associations/RPs, the Charity Commission for charities in England and Wales and the OSCR in Scotland (some charities are Registered Providers too), the Financial Services Authority for industrial and Provident Societies (that’s most voluntary agencies that aren’t registered charities)and the CQC to the extent that supported housing has domiciliary care provided.
What all of these regulators have in common is a very incomplete grasp of supported housing but little else, and certainly not the wherewithal to competently oversee and regulate it.
Any regulation and oversight of supported housing should be based on Value Generation principles, its basis of ‘measurement’ should be devised by an objective, competent body such as a university with established social policy research competence, and it should be implemented by an independent agency with no financial interest in the outcome of its findings and no financial or other relationship with provider agencies, the commissioners or providers of supported housing services.
Intensive Housing Management and Maintenance
One of the key issues for the future funding of supported housing is the mechanism for funding additional housing needs. We’ve made clear our view for some time that it should be an integrated part of the Universal Credit system known as Supported Housing Rent.
The UK government has said that the funding of supported housing will remain within the welfare system. In the circumstances it seems pragmatic to retain the existing (September 2012) ‘transitional’ arrangements as a permanent feature of Universal Credit in the form of Supported Housing Rent.
Universal Credit, like Housing Benefit, is a personal claim. We think it is better that public money should be devolved as close to the people to whom it applies so it sits better in the welfare system than within a public sector funding pot.
The focus on Intensive Housing Management has primarily been about the funding of staff to provide HB eligible services to social tenants with additional needs. However, registered providers in particular should also consider Intensive Housing Maintenance cost recovery.
Any historical comparison of maintenance cost data between ‘general needs’ and supported housing of any type will give a revealing insight into the increased levels of maintenance required by supported housing. This is partly a consequence of the cost of maintaining what are sometimes specialised buildings, and partly a consequence of peoples’ additional needs.
Social landlords are entitled to recover the additional maintenance costs of any form of supported housing through HB-eligible enhanced maintenance charges, subject to compliance with current regulation. This includes day to day/responsive maintenance, cyclical maintenance and major repairs sinking funds.
It is important that providers of supported housing are able to ensure that their Intensive Housing Management and Maintenance costs are properly funded for two reasons:
- Supported housing services shouldn’t be underfunded, obviously
- If at some point in the future Housing Benefit ceases to exist with the roll-out of Universal Credit, then supported housing providers will need by that point to have established both the value and the reasonable cost of what they do by way of Intensive Housing Management and Maintenance.
Put another way if you’re a social landlord or provider of supported housing and you haven’t looked at either or both of your Intensive Housing Management and Maintenance costs and services, then you really should. It is a technically complex area within which we have unrivalled expertise. Please contact us as we don’t charge unless we successfully establish an increased level of HB revenue, and we don’t submit enhanced HB claims that are not reasonable and well-founded.
If and when the Intensive Housing Management and maintenance funding regime changes (it’s currently enhanced Housing Benefit) it will be important to have a demonstrated what it genuinely and reasonably costs you to provide the supported housing services that tenants need.
The time is right, in fact long overdue, to put forward a basis for funding, defining, regulating and overseeing supported housing. That approach should be based on a new set of values and ways of measuring the outcomes we achieve for people with additional needs. We call this approach Value Generation. We are in a time of political and perhaps constitutional paradigm shift and we should take the opportunity to demand structural change in the way that public finance is administered.
Our concern is supported housing. We believe that supported housing,and other services have not been well served by the UK government’s historical preoccupation with cost control, which is at the expense of services for people with additional needs and at the expense of the public purse.
Revenue for the additional housing needs component of supported housing should be integrated into the housing component of Universal/Pension Credit, as ‘Supported Housing Rent’, on a full cost recovery basis.
Supported/Sheltered housing services should be redefined according to intensity of need, not funding timescale.
There is an urgent need for the regulation and oversight of supported housing to be independently developed, based on Value Generation principles.
Social landlords should consider Intensive Housing Management and Maintenance cost recovery via enhanced Housing Benefit. In so doing, they should consider financial protection for self-funders via a Relief Fund (talk to us) and the need for local authorities to fully recover from the DWP, wherever possible, any enhanced Housing Benefit they pay to social landlords who house tenants with additional needs.
In considering commercial services and propositions for supported housing, we should consider whether they generate value, as per our Housing Proactive case study.