Riverside’s response to the Government’s consultation on housing costs for sheltered housing and extra care accommodation

Riverside is one of the largest charitable housing association groups in the country, owning and managing over 53,000 homes across England and Scotland. We are a significant provider of supported housing, delivering homes and services to over 10,000 customers across 872 schemes. Of these 223 schemes are sheltered housing and 15 are extra care.

We welcome the Government’s consultation on the Funding of Supported Housing and acknowledge that in bringing forward the current proposals, it has listened to sector concerns about the arbitrary capping of benefits to meet housing costs. We support the principles of the proposals on housing costs for sheltered and extra care accommodation, however their ability to meet the Government’s objectives will depend upon the detailed design of the Sheltered Rent scheme. We urge the Government to work with providers, sector representatives and the Regulator of Social Housing to complete the scheme design at pace.

We propose that Government:

  • Establishes definitions of sheltered (or supported housing for older people) and extra care housing which are broad and outcome based, acknowledging the complexity of the existing spectrum of specialist housing for older people and the fact that innovation will continue to drive change. We believe that this approach is appropriate given that the oversight of the new regime will be the responsibility of the Regulator of Social Housing, whose overall framework is founded on ‘co-regulation’.
  • Establishes two benchmarks – one for sheltered housing and a higher one for extra care housing. As suggested in para 43 of the consultation document, these benchmarks should be applied to eligible service charges only (the £X figure in the formula), given that core rents are already controlled through the formula rent regime.
  • Sets the initial level of the two benchmarks at levels above the vast majority of existing service charges, identified through research on the distribution of current eligible service charges across the sector. For example this could be at the 95th percentile of the current distribution. This would ensure that the regulatory focus is on tackling ‘outliers’.
  • Clarifies that existing provision will sit outside the Sheltered Rent regime even where service charges are higher than benchmarks. This is important to provide confidence for providers to bring forward investment in new and existing provision, including pipeline schemes which are currently ‘on hold’.
  • Requires the regulator to review Sheltered Rents annually, with benchmarks pegged to wider maximum permitted increases for social and affordable rents set by the Regulator of Social Housing. From 2020 this would mean that the benchmarks would increase by CPI + 1% for five years.
  • Ensures that the Regulator of Social Housing takes a ‘comply or explain’ approach to their oversight of the regime. This means that providers would be required to disclose service charges which are above the benchmark(s), explaining the reasons on a scheme by scheme basis. The regulator would then have a range of powers to deal with these schemes.
  • Issues a new direction to the Regulator of Social Housing setting out the detail of this new framework (following consultation), with the regulator reflecting changes in a new rent standard supported by appropriate amendments to ‘Regulating the Standards’.

We believe that building these proposals into the detailed design of the regime will help Government achieve its objectives by:

  • Enabling a people-focused approach, with providers well placed to respond to growing demand for greater supply and better services.
  • Providing funding certainty to providers as they invest in new and existing supply to meet the needs of an ageing population, by giving assurance over long-term income streams.
  • Creating a simple, flexible and deliverable model which encourages innovation, recognising that demand for provision and services changes over time.
  • Securing value for money, by requiring providers to identify and justify high-cost outliers, whilst continuing to operate within the highly accountable variable service charge regime.

We very much welcome the Government’s proposal to include sheltered and extra care housing within the scope of the National Statement of Expectation, which will shape the way in which local authorities and their partners assess need, and then plan and monitor provision. Local authorities must be resourced through central government grant funding to undertake these new duties, and should deploy consistent methodologies in assessing need. In establishing partnership arrangements, local authorities should be required to include providers and their representatives as key stakeholders.

To find out more, you can read the full consultation here.