Future Funding of Specialist Supported Housing – Out of the Frying Pan and into the Fire

The government has announced today the future funding arrangements for specialist supported housing. This follows the announcement last Wednesday by the Prime Minister that the government will not be imposing a cap on charges at Local Housing Allowance levels. That decision was widely welcomed.

I am extremely worried about what has been announced regarding the funding for short-term supported housing.  It will be funded through a new ring-fenced grant to local authorities in England.

What has been announced today has the potential to be even worse for specialist supported housing.

It has the advantage of avoiding arrears mounting up if residents have to wait six weeks for universal credit to be paid. That particular problem is the creation of the government itself.

The grant will be a finite pot and while it might initially reflect the current spend on specialist supported housing, its value will be eroded in double quick time by administering authorities taking out their costs.

More significantly, it is highly unlikely that either the pot or grants paid to providers will be increased by CPI plus 1%.

If the national supported housing grant is to be ring-fenced, and absolutely it should be, how long will it be before the ring fence is removed?

The government has form on this. We used to have the Supporting People programme, but the value of this fund was eroded for the very reasons referred to above, and when the ring fence was removed, the programme dissolved into thin air.

As providers, we dealt with this creatively, using our knowledge of housing benefit regulations to maximise service charge income. Service charges reflect the actual costs of delivering a service to residents. But if no rent is being charged, and if there is no service charge element to reflect actual costs, we will nothing to fall back on.

As Mrs May hinted last Wednesday, the government clearly wants to cap the cost of service charges eligible for housing benefit, and this seems like a good opportunity while everyone is looking the wrong way and celebrating the abandonment of the LHA cap.

Unless the government guarantees the value of the ring fenced some will be maintained, that the ring fence itself will remain, and that the of the funding will increase by CPI plus 1% each year, then it will certainly be a case of out of the frying pan and into the fire.

The government is consulting on its proposals and BHT will be responding in due course.

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