A cross-party report from MPs today urged the Government to scrap plans to base housing benefit funding for vulnerable people living in supported housing on private sector rents.
They said that if the proposals go ahead as planned, they could lead to a serious shortfall in the availability of specialist housing for vulnerable people, including the homeless, frail elderly, victims of domestic violence and those with disabilities.
Members of two powerful cross-party committees – The Work and Pensions and the Communities and Local Government Committees – warned in a joint report that it would be inappropriate to use so-called Local Housing Allowance (LHA) rates to determine benefit levels for these residents.
As the level of LHA is based on the local private rented market, it bears no relation to the actual cost of supported housing and rents charged – and in many areas of the country would fall well short, leaving tens of thousands of tenants to rely on top-up funding awarded at the discretion of local councils.
As part of the inquiry that resulted in today’s report, Riverside gave evidence at Westminster, and raised concerns that the proposals as they stand will lead to a postcode lottery of funding.
John Glenton, Riverside’s Executive Director of Care and Support, who presented to the Committees, said: “We welcome today’s report, which recognises the damaging impact that introducing Local Housing Allowance caps to supported housing will cause.
“It’s clear that MPs from all parties understand the proposals will create a postcode lottery of funding, affecting elderly and vulnerable people. In areas where LHA rates are lower, such as the North, providers will struggle to build much-needed supported housing. In fact, some existing schemes would be at risk of closure.
“Supported housing is a vital and cost-effective alternative to people relying on already stretched social care and health services. The Government’s proposal would leave tens of thousands of vulnerable people facing uncertainty about how they are going to meet their basic housing costs.
“Whilst we support the Government’s aim to put supported housing on a sustainable long-term footing, this is not the way to do it. We welcome the committees’ practical alternative funding proposal, a Supported Housing Allowance. This wouldn’t cost the Government a penny more. It’s too important to get this wrong.”
More than 700,000 people in the UK benefit from supported housing, which allows vulnerable people to live as safely and independently as possible.
Helen Hayes MP, Co-Chair of the inquiry and member of the Communities and Local Government Committee, said: “The proposals have caused considerable concern. Supported housing providers are reconsidering investment plans, shortfalls in the levels of service are expected to get substantially worse and vulnerable tenants are anxious that they may no longer have the guarantee of a home for life.
“Ministers must intervene immediately by scrapping the proposed Local Housing Allowance reform. The sector needs a far more suitable funding system that recognises the consistent cost of provision across the country and provides long term reliability.”
Richard Graham MP, Co-Chair of the inquiry and member of the Work and Pensions Committee, said: “Supported housing is deeply valued by those who live in it and contributes enormously to their independence and wellbeing. We support the Government’s aims to reform funding for this vital sector to ensure quality and value for money, protect and boost supply, and provide greater local control.
“But we are concerned that the proposals, as they stand, are unlikely to achieve these objectives. Our recommendations seek to improve the Government’s plans and ensure it delivers on our common goal of a sustainable, long-term funding solution for supported housing.”
The Government acknowledges that supported housing saves in the region of £3.5 billion per year, through lower costs for the NHS, social care and criminal justice systems.
The system is facing considerable demand, with a reported 17,000 shortfall in supported housing places; a figure that could double within the next three years without Government intervention.