It is no secret that government plans to introduce a cap on supported housing funding risk costing housing providers millions of pounds and will jeopardise existing and future schemes.
At East Thames our research shows the proposed cap would leave an annual funding shortfall of just under £1m across our 135 supported housing schemes in London and the South East.
Along with a host of other supported housing providers, we made the scale of the potential impact abundantly clear in our responses to a recent government consultation on the issue.
While the aggregate impact of the proposed changes to the current system is very important, for me, however, it is at the level of the individual when what is at stake here really hits home.
Vera is one of our residents in an extra care scheme in Waltham Forest. She is 89 years old, suffers with dementia and relies on the support our skilled staff are able to provide in order to live a relatively independent life. At present Vera is supported through housing benefit to pay her rent and service charges.
Under the government’s plans, Vera will face a weekly shortfall of £51.70 in housing benefit.
Although the government is proposing to introduce a localised top-up payment, which in theory should cover the shortfall, it will come with additional administrative costs and cannot be guaranteed long-term.
As a result, there is a real risk that Vera could quickly run up arrears totalling thousands of pounds, unless something gives. Ultimately this could lead to people like Vera having to move and it’s likely that this would be a move into residential care at a much greater cost to the tax payer, and more importantly to Vera’s independence. This makes no sense to anyone.
In some instances, we will be able to absorb income losses.
But only in a very few. We are not in business to make large profits and run a very tight ship, accordingly.
The likely impact of the proposed government supported housing cap is a much-reduced service and will bring new developments aimed at supporting people in Vera’s situation to a halt.
This clearly is not a desirable outcome for anyone – not us, not the tax payer and certainly not for Vera and the thousands of people like her who are supported by housing providers across the country.
Last year, East Thames merged with L&Q and from April this year we’re creating L&Q Living, a brand new care and support subsidiary providing homes and support to more than 6,600 older and vulnerable adults across London and the South East.
Our aim is to grow the service, extending our support to even more people like Vera. To do this we need sustainable and reliable funding, but we know we also need to offer the tax payer value for money.
We feel there is an alternative approach that would allow the government and housing providers to find a path that can be followed by both parties.
Under our approach, housing providers would remain able to deliver effective services, and the tax payer would receive greater value for money and have greater transparency over costs to ensure this continued to be the case.
A cap that fits
The first point to make is that a cap based on the local private rented sector is not suitable for supported housing, where costs for housing vulnerable and older people are much higher.
A cap specifically for supported housing would ensure funding better meets the needs of supported housing residents and would offer the taxpayer better value for money.
In our view this can best be achieved in one of two ways:
- One nationally set cap that reflects the higher costs of providing supported housing, such as increased management and maintenance, with bolt on elements for costs such as furniture, communal areas and security measures.
- Three nationally set caps that reflect the varying costs of different types of supported housing: low level support (e.g. sheltered schemes), medium level support (e.g. supported living schemes), and high level support (e.g. Extra Care schemes or housing for those with complex needs)
Both approaches retain the security of housing benefit as they continue to be demand-led and to expand to meet actual need rather than being part of a fixed top-up pot.
By removing the need for two streams (housing benefit/universal credit plus the top up payments) they also reduce the administrative burden and make the process simpler to understand, helping residents retain their peace of mind.
The advantage of a nationally set cap with a bolt on system is that this enables us to provide a tailored service that meets the specific needs of our client groups.
This is particularly important for more innovative schemes which house residents with multiple needs, such as Beverly Lewis House, our scheme for women with learning disabilities who are fleeing abuse.
It also provides greater transparency to the tax payer, with costs clearly linked to the housing services provided at each scheme. The bolt-ons would be calculated as either a percentage rental increase or a fixed amount for a specific feature, such communal spaces, security etc.
A three-cap system has similar benefits. It enables us to continue to serve high-need residents while ensuring that lower-need accommodation is also cost-efficient.
Both approaches provide greater transparency, enable us to retain funding levels, and deliver savings on administrative costs compared with current proposals.
Importantly, however, it would ensure East Thames and the hundreds of other committed housing providers like us, are able to continue providing essential housing support services.
Vera and thousands like her hope our plea is heard.
First published in Social Housing Magazine on Friday 24 February 2017.