The term “supported housing” covers long-term traditional sheltered housing and extra care provision – accommodation where people with learning or physical disabilities may live for long periods, or provision that people with mental health problems rely on. It also includes very short-term accommodation, often for homeless people who have nowhere else to go and need a roof over their heads, but who will eventually move on to more long-term accommodation.
The Government’s intention is to change the funding arrangements for such accommodation from their now rather infamous decision to link payments to the local housing allowance. No one could begin to defend relating the costs of supported housing in any way to those of renting in the private sector, because the differences in local housing allowance rates were so extreme and bore no relation to the costs of providing supported housing in different parts of the country. At least we have got there now.
Someone in the Treasury must have said, “You mean you pay all this money to these housing providers – you just pay what they ask for? They ask for the rent, you pay over the housing benefit and there is not really any control. We need to anchor the payments to something or other, so let’s come up with a local housing allowance. That’ll do – it’ll provide an anchor so that the providers cannot simply write cheques to themselves.”
Let us not forget, however, that 85% of new development of supported housing in this country was put on hold. We wasted months – indeed, a couple of years – while nothing happened. Although we may be in a better place now than at the beginning, we have still had two years when, despite the urgent need for more supported housing in this country, nothing has happened on 85% of the schemes that were in train. Everyone has said, “Wait a minute. We can’t go ahead because of the uncertainty. We can’t borrow the money because of the uncertainty. We can’t develop the schemes that we all know are needed, because the Government got the initial proposals completely and absolutely wrong.” Organisations such as St Mungo’s that came to give evidence to the Communities and Local Government Committee before the joint inquiry was set up said: “If this carries on, not only will we not develop new accommodation; we will pull out of what we have, because we cannot make it pay.”
The first issue is longer-term provision. To some extent, the Government response separates sheltered and extra care housing from long-term supported housing. Slightly different regulatory regimes are proposed for those two sorts of housing, but in essence they will both be funded through the welfare system.
The Government’s response is helpful. It is an awful lot better than what we started with. It is clearly right, as we heard overwhelmingly in the evidence we received, that paying for supported housing should be linked to housing benefit, or to the housing element of universal credit when it comes in. But we need is a little more explanation and clarification of the wording. The word “control” is used several times, including a reference to “enhanced cost controls and oversight, ensuring value for money for the taxpayer”.
Of course, everyone recognises that the Government’s job is to ensure value for money for the taxpayer, but what does that phrase actually mean? Does it mean that in the future there will be an effort to bear down on the amount of housing benefit that is paid, to reduce the amount and say, “Well, we paid you the 100% that you requested for housing benefit last year, but next year it’s only going to be 95%, because we expect you to start squeezing the costs that are applicable to this scheme”? Who exercises the controls? Will there be a system with criteria, or will things simply be done on an ad hoc basis for individual schemes?
It would be really helpful in the cases of sheltered and extra care housing, and of long-term supported housing, for which slightly different regulatory regimes are being proposed, but necessarily the words “cost control” come into both of them, if some further explanation could be given about precisely how those cost controls will operate.
There is a more fundamental problem with the issue of short-term accommodation. The Government certainly have difficulties with it.
Everyone knows that there have been problems with universal credit in the first few weeks. However, I do not think that anyone thinks that the problems with universal credit are likely to last for two years. Do Ministers think that? Is that why the “short-term” arrangements last for two years under the Government’s proposals—because they do not think that universal credit can be sorted out in two years?
It was very clear when the two Committees produced their joint report on this subject that they were thinking of accommodation where people literally could not get their universal credit sorted out within a matter of days or very few weeks. The period of around 12 weeks is probably reasonable; that is the period that most providers are looking at. It is “emergency” accommodation—accommodation for people who have not got a roof over their head; they live there for a very short period. Everyone accepts that that sort of accommodation needs a different funding model. There is no justification at all in the Government’s response as to why there is that sudden extension from what had been looked at as “very short-term”, “emergency” accommodation for up to 12 weeks to accommodation that is for up to two years.
There is a need for more clarification and certainty about the long-term funding arrangements linked to housing benefit. However, most providers think there is an awful lot more certainty about those arrangements than there is about some unspecified, ring-fenced grant that can be changed at the stroke of a Chancellor’s pen at any time in the future.
This issue is not only about funding for the future but about the nature of the funding and what it says, because if the funding is related to the welfare system—to housing benefit or the housing element of universal credit—essentially it is the accommodation of an individual that is funded. That individual has a relationship with the payment for their unit of accommodation. They are entitled to that accommodation, and they make a payment from their housing benefit or their element of universal credit for the cost of that accommodation. It is a tenancy relationship between the provider and the individual.
As part of the Government’s welfare reform to give responsibility to the individual in such circumstances, I would have thought that that tenancy relationship would have appealed to Ministers. However, the Government are now saying that, with a ring-fenced grant to local authorities, it will not be the individual who receives the money to pay—through the welfare system—for the rent on their property. It will actually be the institution that gets funded. So the Government are moving from an individual system, whereby money goes with the individual as part of their tenancy, to an institutional system, where the money goes to the institution itself.
Does that move fit in with the Government’s welfare reform agenda? It is difficult to see that it does. It is also difficult to see how we are moving towards a system of personal and individual responsibility, with individuals responsible for their own accommodation, when the Government are saying, completely counter to that, “We will have a new system where we actually fund the institution, which will mean that the individual will not be given a relationship with their accommodation and the money they pay towards it.”
Ministers have to think again about this issue. On both counts, the organisations and the providers are saying, “This really gives us so much uncertainty that we’re not comfortable, and our lenders are not comfortable. It will actually stop new provision in the future.” And we go back to the issue of the individual paying rent for their property and having that rent paid through the welfare system, as opposed to a ring-fenced grant for local authorities that institutionalises the whole system in a way that cuts off the tenant-landlord relationship. That is really quite important; I do not think that that element has really been thought through.
Clive Betts is chair of the communities and local government select committee. This article is an edited version of a Westminster Hall speech.