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When the Bough Breaks...

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Some time ago I wrote a blog under the headline: "The baby on the parish steps". At the time of writing I knew that I would shortly be penning this piece.

In that article I highlighted my concerns that future funding for supported accommodation would be separated from the universal credit system and delegated to local authorities. There was talk of a working party to consider how best to proceed but I suspected that a decision had in fact already been made. Sadly it had. The answer to a parliamentary written question, asked on my behalf by my constituency MP Jason McCartney on 29 October 2012 summarised the government's position:

"We are exploring the feasibility of a localised funding system with the Department of Communities and Local Government and the devolved administrations. We are convinced that local knowledge is essential to help identify this often diverse group, build effective relationships with providers and ensure that resources are targeted effectively at those who need it while ensuring that any financial scrutiny is well directed."

On the face of it no one can argue with the sense of that decision. The range of needs met through supported housing is indeed diverse and the challenges vary across the country. Leaving the task of allocating resources to local authorities makes sense.

That, however, is not what concerns me. The last time a funding responsibility was shifted from the housing benefit system to a local authority devolved budget was through the Transitional Housing Benefit Scheme which, once and for all, settled the funding for supported accommodation. Right? Well my tongue is firmly in my cheek as I write this. Under Labour, the Transitional Housing Benefit Scheme provided for three years while the full cost of supported housing could be established via the housing benefit system. It was to form the budgetary framework for ring-fencing 'supporting people' grants. I remember it well because I was there. The service element was separated from the rent while the property element remained the responsibility of the housing benefit system.

It was a well motivated scheme which fell far short of its objectives - establishing a budgetary framework of around £1.8bn (in 2003) which was far too high for the government to contemplate. As a result, take-up across the country was patchy. Those authorities with more traditional residential services did not have the tenancy base to participate in the Transitional Housing Benefit Scheme and risked receiving no 'supporting people' budget at all. Those with more developed services used their large tenancy base and familiarity with income generating techniques to drive their supporting people budgetary requirements, but pushed the budgetary envelope beyond sustainability. Ultimately the government acted to moderate the budgets and, in doing so, removed the ring-fence that protected them. In many cases the local authority then subsumed the budget into the overall social services spend which is now subject to the same cuts that blight all of our services. Each year the funding envelope gets smaller.

The fact that the part of the rent that was retained within the housing benefit system remained high, because the costs of providing specialist housing are high, meant that Regulation 11 (the exemption that allowed for high rents for people with special needs living in RSL or voluntary sector housing) had to be retained. This regulation cannot be incorporated into the very inflexible universal credit regulations that gives rise to this latest of funding shifts.

Good intentions

I still think that the intention behind this latest of government measures on supported accommodation is good. It makes sense and, if done properly, could provide a balance between meeting locally defined needs within a fiscally responsible, national cost framework.

I refer to a national cost framework because we are referring to the diverting of what is currently part of a DWP benefit. Local authorities administer the benefit on the part of government.

That national cost framework has to recognise the current and future trends, which the Conservative government of the 90s failed to do in the case of care for the elderly but without the unfettered budget building and patchy take-up that were the hallmarks of Labour's Transitional Housing Benefit Scheme. These trends include:

  • Increasing repatriation from out-of-borough placements to tenancy models within the district
  • Moving from group living to individual tenancies
  • Increasing self-directed care and its associated housing requirements
  • Meeting the needs of a growing number of people living with aging carers
  • Dealing with an insurmountable homelessness problem
  • A rising number of refugees

Mapping future housing need

In the pursuit of launching our Real Estate Investment Trust we have carried out extensive research across the country into the future requirements for specialist supported housing. In our view, specialist supported accommodation is property which has been built bespoke to cater for an individual with complex needs, or one that been adapted or managed in a way that the costs cannot be contained within reference rent levels.

This type of accommodation is expensive to develop and requires intensive management from housing associations. Our research indicates that we will need a lot of it, but it also tells us that the spend will "top out" in about four years - the time during which local authorities will need to achieve projected cuts.

One solution could be to cap the budget based on a predictions made by local authorities on future supported accommodation need. The risk, of course, is that some authorities will over-state their requirements and that others might decide not to participate as happened with the Transitional Housing Benefit Scheme.

A second option is for the government to do nothing and revisit the situation in four years time when it would be safe to cap the budget based on the prevailing spend. It would require a measure which adds to universal credit regulations which, in my view, should divert claimants that meet the qualifying criteria through to 'special regulations': the part retained from the existing regulations which allow Regulation 11 to operate.

Those claims should be determined, as they are now, by the chief housing benefit officer. They should be subject to the current appeal process and, if successful, see the incorporation of the allowed rent into the new budgetary arrangement. The budget should be kept "live" in this way for the four year period and then capped.

This approach allows the flexibility that services require to meet future need. It achieves the government's objectives of utilising local knowledge to inform local priorities and, thanks to the healthy tension that exists between landlords and housing benefit officers, it enables delivery with fiscal responsibility.

With a host of upper tier decisions defining the required elements which constitute supported housing provision as guidance, and the district auditors oversight to provide safeguards we can give this complex issue the time and respect it requires. We could finally get it right albeit not as quickly as the government might want. The fact that the 1987 regulations have been amended more times than I can remember pays testimony to what happens when insufficient time is spent and thought is given to solving some of society's most complex issues.