DWP Consultation Proposals: The Use of Housing Benefit in Sheltered & Supported Housing”
Please note that this is our response to the 2011 Consultation. If you’re looking for our response to the ‘Future Funding of Supported Housing’ Consultation 2017, please click here.
Support Solutions’ Response
This Consultation Response should be read in conjunction with the DWP Consultation Proposals of the Future of HB for Sheltered & Supported Housing which can be found here.You may also find it helpful to read our article on Intensive Housing Management & the DWP HB Proposals.
We have constructed this response by firstly examining the statements and assumptions made in the Consultation document from pages 6-23 and commenting on some of the assumptions made in it before responding in detail to the 16 Consultation questions on pages 24-25. We will use the same numbering in commenting on the assumptions and the questions as are used in the Consultation itself. Text in italics is wording taken from the Consultation itself. Support Solutions’ responses are in non-italic text.
We have a number of questions to put to the DWP which are fundamental to the implementation of these proposals:
- Does the DWP & local authorities (which have a critical role in implementing parts of these proposals), understand that using the service charge elements of housing revenue (currently Housing Benefit) to fund the preventative services delivered within supported and sheltered housing is hugely cost-effective and that failing to do so will lead to huge increases in statutory interventions which are far more expensive? The total UK HB budget annually is £21bn of which approximately 3.3%-6% is spent on supported housing. It seems to us to be counterproductive to focus such significant time and effort on rationalising a small amount of expenditure the bulk of which (the service charge element) has a significant social return on investment.
- To the extent to which these Proposals have a relationship with the development of Universal Credit, has the DWP considered making a distinction between people who are vulnerable and people who are not within the arrangements for the administration of Universal Credit? Administering Universal Credit centrally will not work for vulnerable people and this is likely to increase pressure and cost on statutory services as a consequence. Welfare payments for vulnerable people should be properly targeted towards prevention and enablement (and thus provide a social return on investment) and will need to be administered locally, not centrally. There should be a clearer definition of “vulnerability”.
- Local authorities are under huge pressure to cut costs and a consequence of public sector funding retrenchment. Does the DWP understand that local authorities are likely to be more concerned to fund their own infrastructure and services, especially statutory services, than to invest in preventative services managed by non-statutory providers? This will impact significantly on the non-LHA component payable to unregistered providers of longer-term services.
- The focus of these proposals is on cost, not value. If the focus was on value then money would be saved as a consequence of the fact that there is a social return on investment (i.e. financial value) in respect to the service charge element of HB payable to supported housing.
- This Consultation affects England, Scotland and Wales. What thought has been given to the exercise of devolved powers within Scotland and Wales within these Consultation Proposals? Whilst the DWP has a UK wide remit the implementation of any regulations that stem from it will be conditioned in part by devolved Governments. These proposals do not seem to acknowledge this.
- “These rules are commonly seen as being beneficial to customers with specific needs. The targeting of this extra help is contingent on landlords providing the care or support the tenant needs. However, in practice nowadays, fewer landlords are actually involved in providing for these needs with the promotion of choice for individuals in deciding who should provide the care or support they need.”
We believe that the theory set out in this assumption is not necessarily borne out in practice. Whilst we believe that customers should benefit from personal choice and control over money many local authorities continue to rely directly or indirectly on the landlord (which may also be a support provider) to provide care and support through Framework Contracts and other locally managed processes. In so doing they use “managed” personal budgets. Where it is proposed that payments for care and support are made directly to customers this should be done on the basis of needs and risk assessments undertaken jointly between the customer and potential care and support providers, whether or not they are also the customer’s landlord. This may mean in many cases that such payments are made directly to the provider until such time as it is mutually agreed that it is prudent for the customer to have increasing, or complete, control over these payments. Clearly, for some customers this may be immediate, or almost immediate. For others it will take more time or may never happen as a consequence of choice, risk or capacity. We should be mindful that access to resources should be conditional on the ability to manage them effectively, albeit with support to do so where necessary. The adoption of a “one size fits all” approach is naïve, for example, it might be appropriate for someone in sheltered housing to have immediate and direct control of resources. Would the same be said of someone with an active substance misuse need? Direct payment of personal budgets should not necessarily be the starting point; it should be the ultimate objective however.
- “Those who commonly need lower levels of personal care and support to help them remain in the community, which is often provided in more communal and easily recognisable types of accommodation such as hostels, refuges, Foyers and purpose-built sheltered housing.”
Customers in hostels, refuges and foyers commonly require more intensive levels of personal care and support, not lower levels, albeit often for shorter periods of time. Residents in sheltered housing may well currently require lower levels of support and care, however, this may well change as sheltered housing models change and evolve into more supportive environments which increase the scope of their services to meet the needs and choices of customers who wish to stay put due to their age and as they become more dependent.
- “It is important to be clear that these reforms are not looking to cut expenditure in this sector but to better direct it. In the face of rising expenditure in this area, it is important to find the right balance between protecting reasonable rents and providing effective expenditure control for the tax payer. Consequently any changes will need to be cost neutral overall.”
Despite the laudable intentions it is, in our view, certain that these proposals will not be cost neutral. Local authorities may well not understand the cost-benefit of prevention, especially where public finances at local level are severely restricted and local authorities are likely to want to support their own infrastructure and services with reduced resources at the expense of non-statutory providers. It is important to provide “effective expenditure control for the tax payer”; however, there is no evidence to suggest that the cost-benefit of preventative intervention is understood by many local authorities. To the extent to which there has been “rising expenditure in this area” it has occurred as a consequence of the reducing expenditure through Supporting People funding so that overall expenditure for prevention probably hasn’t increased. On the contrary, it may well have been reduced.
It has been shown through studies such as the Cap Gemini report into the cost benefit of the Supporting People programme that investment in the sorts of services funded through Supporting People and enhanced Housing Benefit has a return on investment of approximately £3.41 for every £1.60 spent through reduced demand on statutory services. Reductions in levels of investment in prevention, which are highly likely where local authorities make financial allocation decisions in a climate of public finance retrenchment and without the specialist knowledge of providers, will lead to significant increases in demand on statutory services at significant additional cost. We see this assumption of cost-neutrality as being fundamentally flawed. Furthermore, the statement “In the face of rising expenditure in this area, it is important to find the right balance between protecting reasonable rents and providing effective expenditure control for the tax payer” fails to acknowledge that the bulk of HB paid to supported housing providers delivers a substantial social return on investment and constitutes only 3.3%-6% of the total HB budget. This is a major error in the assumptions behind these proposals.
- “Housing Benefit is paid to either the individual or the landlord. Money paid for support and personal care has traditionally been paid to the organisation providing it, which may be the landlord. However, this is changing with funding increasingly being paid directly to the individual enabling them to take control of how their personal care and support is provided.”
We accept and support the notion that money for support and care should be paid to the individual, subject to needs and risk assessments. However, we believe that it is misleading to suggest that this is becoming the norm. We reiterate our view that the management of a personal budget or personal financial allocation as proposed under this Consultation can only be achieved as a consequence of a managed partnership between customers and providers based on capacity, choice and risk. One size will not fit all. We believe that it is very dangerous to base such fundamental change on a theoretical view of personalisation rather than what is actually happening on the ground. The Consultation does not acknowledge that approaches to the management of Personalisation are also different within devolved Governments in Scotland and Wales and between English local authorities.
- “While this review is not looking to reduce costs we cannot ignore the current economic climate and our commitment to ensure that the tax payer is getting value for money. There is a need for a transparent, fair and consistent approach that achieves the right balance between costs and services funded by Housing Benefit, and those more appropriate to other Government funding streams.”
We agree that the tax payer should get value for money. We do not agree that these proposals will achieve this; in fact we believe the opposite will be true. A failure to invest in prevention will result in a need to invest far more in emergency intervention. Furthermore, the service charge elements of HB paid to supported housing providers delivers a substantial social return on investment and it is counterintuitive and counterproductive to cut investment which has a return in both financial and social terms. We would accept this argument if the “other Government funding streams” referred to above were clearly identified and understood at national and local level as being necessary and sufficient to fund prevention which is cost-effective. (As we understand it at least some of these “other Government funding streams” are applicable only to England as part of the Health & Social Care Bill). There is no evidence to suggest that this understanding exists, other than within the housing support and social care provider sector, the role of which will be peripheral within these proposed arrangements. This seems to be at odds with the UK Government’s stated intentions, as suggested in the Comprehensive Spending Review, to enhance the role of this sector as part of the Big Society agenda in England.
- “The detail of the exact funding arrangements would have to be determined but we propose that decisions on the level of any extra help that an individual may need toward their rent would be made locally. Where the decision making process sits within local authorities may depend on their local arrangement of social services and housing departments. Some local authorities may wish to collaborate given the small numbers involved.”
We are concerned that many local authorities may not possess a detailed understanding of the cost-benefit and return on investment of preventative non-statutory services, an awareness of realistic service costs or the will to prioritise such services in a climate of economic stringency and a backdrop of public sector reform and retrenchment. Furthermore, there is a need for clarity and consistency over which part of the local authority the decision making process sits within. Many providers have contractual arrangements with a number of local authorities; it would be problematic and bureaucratic for them to have to manage a variety of different systems, relationships and perspectives depending on the local authority they are working with. It would also lead to a fragmented system. We believe that these decisions should be locally based but should be administratively consistent.
- “While our proposals assume that help with the higher costs of providing supported housing should remain within Housing Benefit, is there a case for paying standard Housing Benefit and separating out the additional help altogether and administer it locally in the same way as Personal Budgets? Funding could then be allocated and added to the ‘pot’ of money available to the individual to decide where and how it should be spent. This might reduce the number of assessments of the individual’s needs and requirements that have to be made. Or is this a step too far that might in fact jeopardise an individual’s ability to find suitable accommodation and their required care within a total budget.”
We believe, with regret, that this is “a step too far that might in fact jeopardise an individual’s ability to find suitable accommodation and their required care within a total budget.” It may also jeopardise the Provider sector’s viability and therefore impact on the availability of suitable accommodation with support and/or social care. Where local authorities have discretion over the funding of non-statutory services they will prioritise statutory services in order to protect themselves from legal challenge. This question also seems not to acknowledge different approaches to Personalisation on the part of devolved Governments.
- “Another area we want to consider is the level of service charges in this sector. Over recent years local authorities have raised concerns over the level of increases in the service charges of these providers. Rent levels in the social rented sector are regulated, but this is not the same for their service charges where guidance is provided. Our research has shown some evidence that service charges have begun to rise for Registered Social Landlords and Registered Providers, although overall rents still tend to be lower than for other providers.”
It may be true that service charge levels have risen and this is very much reflective of reductions in funding streams such as Supporting People. Increases in service charges are a means by which providers have prudently reallocated the unmet cost of intensive housing management via an existing regulatory framework in order to derive cost benefit to public investment and significant improvements in quality of life and levels of independence for some of society’s most vulnerable people. Any changes to service charge arrangements must acknowledge the need to fund prevention.
It is imperative that the regulations that govern service charges remain constant. It is extremely important that providers of supported housing are able to recover service charges to meet the costs associated with providing the accommodation related services as established within this response. This is especially so for Registered Providers given the restrictions on the level of rent that they can charge. Registered Providers are subject to the rent restructuring regime as introduced by the Housing Corporation in 2001, which enforces the provider to base their rent on a formula with the intention to reach a ‘target rent’.
The Tenant Services Authority (TSA) now regulates and monitors registered providers with regard to governance, financial viability customer services etc. All registered providers have to comply with rent restructuring policy that was introduced in 2001 with the intention of converging all social housing lettings, i.e. Housing Association and Local Authority rented housing stock. Unfortunately supported housing was included within this policy as it wasn’t recognised at the time that the cost of supported housing was significantly in excess of general needs housing. Supported housing cannot be seen as providing ‘normal’ social housing lettings because to enter a supported housing service you have to meet the eligibility criteria of that service and require intensive housing management, housing related support or social care. An individual or family on a low income would not meet those criteria on the sole basis of them having low income. Supported housing does therefore not constitute a ‘normal’ social housing letting therefore it should not have been included in the compliance with the rent restructuring policy, even with the unrealistically low 10% tolerance level introduced as an afterthought. Neither should it be included within the Affordable Homes Framework as it is unrealistic to restrict supported housing rents to 80% of market rents. As supported housing is included in the rent restructuring policy the rents are restricted to a formula that is also applicable to general needs accommodation in the same locality. We know that supported housing costs significantly more to maintain, repair and manage due to the staff to tenant ratio requirement, the vulnerability of the tenant group and the need to support tenancy sustainment. It is therefore imperative that the ability to recover actual and transparent housing related costs via service charges remains available.
It has been established via research that there are a significant number of service charge descriptions applied across the sector. However, we believe that a large majority of the service charge descriptions actually refer to the same service albeit described differently by the landlord. Support Solutions believes that the DWP should communicate with the sector and its representatives with regard to reviewing service charges rather than just discussing this with the DCLG as we are unsure as to how this department has sufficient experience of the detailed technicalities of service charges and their cost-prevention benefits.
Conventional supported housing
Question 1: What types of supported housing are available and how do you suggest they should be identified and grouped?
As established in the consultation there are several types of supported housing, which are labelled ‘conventional supported housing’. This includes hostel provision for young people with chaotic lifestyles, young people leaving care, teenage parents, single homeless people with support needs, people with substance misuse problems, ex-offenders, people with mental health problems, people with learning disabilities, refuges and other services for women fleeing domestic violence, foyers, smaller group homes with shared common areas and sheltered accommodation. Sheltered accommodation is usually provided by Registered Providers and the level of gross rental and service charges are generally consistently lower than that levied at the more intensive conventional supported housing services identified above. These more intensive services, although often short-term, cost significantly more to run although their impact brings significant financial and social return on investment and improvements in the quality of life of vulnerable people and the communities in which they live. The proposed funding formula for these services seems not to acknowledge their actual and varying costs. A failure to meet these costs will increase the financial and operational burden on front line statutory services such as the NHS, Social Services and the criminal justice system.
Support Solutions believe that you cannot group particular services based on their tenant group as the level of gross rent and service charges is dependent on the intensity of the service provided, which in turn is dependent on the nature of the particular tenant group at any one time and the locality and the requirements of the commissioners of the support service. It may, however, be appropriate to categorise services according to the duration of resident “vulnerability”. For example, people with significant long-term/permanent needs such as those with learning disabilities, long-term mental health needs, older people and people with sensory or physical disabilities. Then people with significant short-term needs, for example, women experiencing domestic violence, people with shorter-term mental health needs, homeless people, ex-offenders, people with substance misuse needs, young people leaving care, teenage parents and other people requiring short-term intervention. The distinction is between schemes which accommodate and support people who are and always will be vulnerable on one hand and people who are vulnerable at the point at which they enter a supported housing service but who have the capacity to become self-sufficient on the other.
Question 2: Should there be different geographical rates for each type of mainstream supported housing, such as hostels, sheltered housing or refuges or should a single rate be applied?
Support Solutions believes that it is the level of service provided and required that should primarily determine the level of cost not geographical area, although the rate should be adjusted to reflect local socio-economic factors. We strongly believe that a single rate would not work and would undoubtedly result in the closure of significant amounts of conventional supported housing and therefore increase homelessness and the requirement for costly statutory interventions. One size will not fit all. The services established as conventional supported housing in our lengthy experience tend to be the most expensive services given the intensity of the housing service provision and the level of vulnerability and housing need experienced by the tenants of these services. Where the landlords of these services are not registered providers such services do not benefit from any public subsidy therefore the cost of the accommodation will be more expensive as the loan repayments/lease fees that form part of the gross rent will be higher than those incurred by registered providers.
Question 3: What types of additional activities or resources are typical of supported housing and how should these be quantified into a weekly amount per unit?
There are significant additional activities and resources provided and incurred in “conventional supported housing”. The provision of human resource is perhaps the largest and most costly additional resource. This human resource and the additional activities would include the following activities, which are not exhaustive;
a. Night security
b. Concierge/access control
c. Intensive housing management (additional housing management functions than that would be provided in general needs accommodation/social housing and more frequent ordinary housing management functions due to higher turnover and the vulnerable nature of the tenant group)
d. Heating, lighting, repairing and decorating shared and communal areas
e. Provision of furniture, equipment, white goods due to the vulnerable nature of tenant group and the lack of belongings
f. Servicing and maintenance of equipment and plant including water testing
g. Provision, maintenance and servicing of CCTV, door entry and other security systems due to the vulnerability of the tenant group
h. Cleaning/housekeeper staff to clean shared and common areas
i. Heavier wear and tear on the fabric of the dwelling and fixtures and fittings which require more intensive repairs and maintenance and decoration
These additional activities and resources should be quantified according to their actual cost. All providers should be required to fully justify their costs with both quantitative and qualitative data as currently required under the Exempt Accommodation rules.
Question 4: Should an amount for the additional help be worked out using a flat rate addition representing typical additional costs or should a different method be used? Please tell us what you think are the advantages of your preferred option.
A flat rate addition for support costs will not work for reasons set out earlier given the variation in service provision/need and the requirement to recover higher loan repayments/lease fees. A flat rate top up would inevitably result in service closures and an increase in homelessness and costly statutory interventions. There is no evidence to show that local authorities would understand the service components and associated costs of such services or the cost benefits associated with them (see the Cap Gemini report into the cost benefit of Supporting People which shows that, on average, for every £1.60 spent on a preventative enabling service £3.41 is saved through reduced demand on statutory services). This will be of particular concern where local authorities feel the need to make savings, which may appear attractive in the short-term, but will actually cost significantly more and threaten the viability of prevention. We feel that investment should be made in the preventative fence at the top of the cliff, not in rushing ambulances to the bottom in response to a failure to invest in the cost benefit of prevention. Not only is prevention cheaper, it is also better than “cure”. Only sheltered accommodation and low intensity conventional supported housing would survive on this basis. Support Solutions’ preferred option, should a top-up/cap be applied, would be to ensure that the top-up/cap be high enough to meet the additional costs for all type of services and property and that it should be calculated on a “actual costs” basis. We understand that there may be concern that the high level of top-up available may be open to manipulation by some landlords; however, this could be resolved by the requirement to furnish management accounts at the anniversary of agreement each year and/or to produce payroll and job descriptions to evidence the housing management costs and needs. We believe that a flat rate will not work and fails to reflect the diversity of need and provision within “conventional supported housing”.
The advantages of our preferred option are that it has a social return on investment, it has an audit trail and it reflects the true costs of providing the services.
Specialist individual housing
Question 5: What types of supported housing would fall into this group and how do you suggest they should be identified?
We believe that claimants residing in supported housing who hold an assured shorthold tenancy or full assured tenancy could assist the definition of services for people with longer term housing needs.
Question 6: What types of higher housing costs are typical of this type of supported housing that are over and above adaptations or specialist equipment, which have funding sources elsewhere and how should these be quantified?
As the number of tenants residing in a single dwelling tends to be smaller in longer term supported housing services the cost of the property is allocated across fewer people and is therefore more expensive. As acknowledged in the consultation document at paragraphs 29-30 the property provided is often of higher quality than general needs in more expensive areas due to the requirement to be close to amenities. There will also be a requirement for more intensive repairs, replacements and management due to the vulnerability of the tenants in this group. Some or all of the additional activities and resources as identified in paragraph 3 of this response are also applicable to this type of supported housing.
Question 7: Would the additional help for those with very individual housing needs be better met from separate funding administered by local authorities, expert in providing housing and/or care in the community?
Specific responsibility for administering the additional help is should be locally based and administered in a consistent way from one local authority to another. There is a need for clear legislation, regulations or guidance that establishes the arrangements for payments and the eligibility for assistance with housing costs. There should be a requirement on local authorities to demonstrate how they have funded these needs. It is imperative that the regulations are maintained and/or revised to ensure that the administrating authority/body has specific guidance and instruction on how they can assist and to what level. The levels of assistance be protected and there should be an independent appeals process along the lines of the Tribunal and Social Services Commissioners system. It should not be assumed that all local authorities will feel able to provide adequate resources for preventative and other non-statutory services at a time of public sector funding retrenchment hence the need for central Government to audit this expenditure and the social return on investment that it delivers.
Question 8: Which tier of local government should have responsibility for deciding how extra help should be allocated? And, which department within a local authority do you think is best placed to manage the allocation of this funding?
The consultation establishes that Housing Benefit for supported housing can be costly for local authorities. However it would be significantly more costly for other areas of the local authority such as homelessness and for the wider statutory budgets such as NHS and criminal justice if housing revenue for preventative services is restricted. Furthermore where such services are managed by Registered Providers, the local authorities benefit from more advantageous subsidy payments from the DWP which are a cost-effective way of funding prevention and relieving pressure on statutory services. To the extent to which these proposals lead to the abolition of the existing subsidy rules is the extent to which the will turn a social return on investment into additional operational and cost pressure on front line statutory services. It would be most helpful if individuals and teams with direct experience of the Supporting People programme within local authorities were charged with these responsibilities subject to the scope of the legislation, regulations or guidance we refer to in response to Question 7 of this Consultation. Furthermore, this should be done within a joint commissioning framework to include the NHS, Social Services and the criminal justice system. In Shire Counties, lower tier authorities (District & Borough Councils) should have the responsibility for administration subject to adequate levels of funding from their 1st tier partners.
Question 9: Should a different method be used? If so please explain.
Support Solutions believes that the existing method of payment of Housing Benefit is fundamentally the most appropriate method to meet the additional housing costs incurred in supported housing. There is no doubt that the regulations require overview and amendment for the reasons set out in the consultation in recognition of the change in the environment of and approach to commissioning and providing supported housing. The level of fundamental changes that are proposed within the consultation will inevitably cause significant difficulty to some providers of supported housing and more importantly the tenants of those providers. Support Solutions believe that the regulations should be amended in a more technical way to ensure that the cost to the public purse does not increase yet the cost of providing supported housing is met fully. Changes to the definition of the Housing Benefit interpretation regulations as set out in regulation 2 of the Housing Benefit Regulation 2006 with regard to the definition of a ‘voluntary organisation’ would result in significant reductions in decision-making processes and therefore costly administration. The same can be said of changes to the definition of “exempt accommodation”. Less fundamental and easier to implement yet resulting in a more desirable outcome, e.g. investing in preventative services and reducing the need for costly statutory interventions such as homelessness, pressure on the criminal justice system and NHS (GPs and hospital admissions).
Question 10: How can funding be made sufficiently flexible to changing caseloads and demands without being unlimited or increasing unit costs compared to the existing system?
It is imperative that funding is not cash limited and remains flexible where new housing services are required or where there may be an increase in housing service costs. E.g. a 20% increase in utility costs for communal areas, an increase in salaries and/or a retrospective recognition that the charges were not calculated accurately at the commencement of the service further to the analysis of financial accounts and experience of service delivery. As established previously this can be regulated by the provision of management accounts, provision of quotes for new equipment and the provision of job descriptions and salary allocations. Any increases or reductions can be rectified at year end via the subsidy claim as is this case at present. Clearly there needs to be a regulation and monitoring of expenditure of housing assistance as this is required to ensure that the system is not abused. Although this may incur small local or regional resource costs for administration it is imperative that this approach is adopted to ensure the continuity of supported housing services and to maintain and enhance the current social return on investment. Any standard fixed rate will result in service closures and result in an increase in homelessness and costly statutory interventions.
Question 11: Is there a case for considering housing costs more fundamentally within a wider context by having the additional costs associated with supported housing taken out of Housing Benefit altogether and administered locally in the same way as Personal Budgets?
At present this would not work as there is no standard approach to the way Personal Budgets are assessed and awarded and, despite the best intentions of all, it is hard to separate the rollout of Personal and Individual Budgets from the perceived need to make savings at local level. This doesn’t mean to say that this couldn’t work in future subject to evaluating the rollout of personalised services and budgets and subject to the checks and balances we refer to in our introduction to this response. What is key to this is the recognition that personalisation should provide choice and control to vulnerable people without threatening the viability of agencies which have expertise in providing personalised services. Whilst agreeing with the notion of Direct Payment as the ideal outcome, we reiterate that this will not work as an absolute principle applicable to everyone. “Independence” is actually a meaningless term as we are all interdependent, regardless of whether we are vulnerable. These proposals must acknowledge the interdependence between customers, support providers and funders. The Consultation does not acknowledge the complexities of this requirement.
There is an evident mismatch between the assumptions underpinning this question, and other parts of these proposals, and what is actually happening at local level wherein Personalisation is increasingly a local authority managed process whereby local authorities use managed personal budgets to commission services through Framework and other contracts without any significant involvement by personal budget holders who don’t actually “hold” their budget at all.
Question 12: Would this sort of approach only be appropriate for those that live in more specialised or adapted properties?
Local authority control of personalised funds in the context of public sector financial retrenchment is a recipe for cost “savings” at the expense of proper levels of service and at the expense of increased pressure on statutory services. This is the case irrespective of the level of service specialism. There needs to be a focus on value where there is a social return on investment, not on cost. Support Solutions suggests that housing costs could be paid to individuals who are already in receipt of Personal Budgets or those who may move onto receiving Personal Budgets in the future. However, direct payment to vulnerable people should not be the starting point. The starting point should be direct payment to the provider of housing and/or support and social care with the intention of moving to direct payment to the individual subject to needs and risk assessment.
Supported housing of registered providers and social landlords
Question 13: Should the supported housing of registered providers be treated in the same way, for Housing Benefit purposes, as their mainstream housing?
No. Where tenant vulnerability is an issue payment of housing benefit should be made directly to the landlord until such time as it is clear, on the basis of needs and risk assessment, that an individual tenant is able to manage his or her own finances. Furthermore, the cost base for supported housing is substantially different from that of general needs/mainstream housing. The service charge elements of Housing Benefit paid to supported housing gives a social return on investment which doesn’t happen with mainstream housing. We would go further and strongly suggest that welfare payments including Housing Benefit for vulnerable people, for example those in supported housing should be administered locally even when Universal Credit has been implemented and is administered centrally.
Question 14: What do you think of the proposed categorisation of supported housing; is there a sound basis for treating these three types of supported housing differently? (Registered providers, those who can be identified by their accommodation type and those with more intense, individual needs)
Support Solutions believes that these categorisations will lead to a “managing down” of levels of preventative investment at the expense of statutory services, the Exchequer and the tax payer. We can see no positive argument for such an arrangement and we believe that the most effective system would be for all providers, irrespective of type and of service provided, to be required to justify their costs annually. This should be within the context of a system where proven social return on investment at local level attracts central Government funding as per the Scottish Government’s approach.
Question 15: Is the process of rent-officer referral sufficient to ensure that only ‘reasonable’ supported accommodation costs are met in the registered provider sector? Are there ways in which the rent referral process could be improved?
It is imperative that the rent officer referral option is safeguarded by an independent appeals process. A significant concern is that a particular administering authority/body may not have a good understanding or experience of the cost of supported housing provided by registered providers and may therefore simply refer the rent to the Rent Service if they deem the charges as unreasonably high, especially if these or other proposals remove the current subsidy rules. There must be an independent appeals process that the claimant and landlord can access to challenge any decision from a local administering authority or the Rent Service. It has been proposed that the Rent Service should take into account the market for comparable services of supported housing rather than just the general needs market. This is welcomed and is very important however this process would need to be very carefully constructed. The Rent Service would need to assess the type of housing services provided when making valuations having regard to comparable services as the rent being referred may include concierge/access control services or handyman/intensive housing management services. The Rent Service must only be able to compare with supported housing that provides the same level of services. There will also be some supported housing dwellings that have public subsidy attached such as Homes and Communities Agency Grant or Local Authority Grant and others that don’t. This would also have to be taken into account when making the comparison as this would potentially lead to unfair comparisons and subsequently unfair restrictions.
There is the dangerous potential within the proposals as they stand for local authorities to “manage down” the gross rent levels of supported housing managed by Registered Providers by deeming them to be excessive by comparison to the restricted (and predominantly unviable) levels proposed for non-registered providers. This would amount to short-term cash savings at the expense of preventative services to vulnerable people and a much larger increase in costs associated with much increased demand on statutory services. Furthermore, Registered Providers and the financial institutions which fund them may withdraw from any investment and involvement in such services.
Question 16: How do you think the new rules should be introduced?
Any new rules should reflect a preoccupation with value and not cost. They should look to ensure that funding is targeted to supported housing which delivers a provable social return on investment. We suggest that any proposed changes following consultation should be piloted in certain areas prior to rolling out the changes nationally to ensure that the systems and procedures are stress tested and that lessons can be learned prior to implementation. This is very important given the fundamental changes that have been initially proposed.
We believe that the 3 year Transitional Housing Benefit (THB) system which was in place in preparation for the implementation of Supporting People in 2003 would be an effective model as it allowed supported housing schemes time to prepare for change. A piecemeal approach to change wherein a lapse in an individual claim triggers a change to new arrangements would contribute significant revenue uncertainty to supported housing schemes which are simultaneously having to grapple with reduced levels of Supporting People funding and a paradigm shift in changes to the funding of housing, support and social care.