Long-term supported housing will continue to be funded through the social security system, the government has announced, while it has also scrapped plans to cap housing benefit payments, which caused huge concerns across the sector over the last two years.
Former chancellor George Osborne announced two years ago in his autumn statement that no-one living in social housing would be entitled to housing benefit higher than those in private sector accommodation.
Critics warned that this took no account of the cost of providing care and support services for tenants – there are currently about 650,000 supported homes across Britain – including many working-age disabled people.
Social care and housing experts warned that the move would have “disastrous” consequences, and Osborne’s announcement appears to have had a serious impact on investment in new supported housing schemes.
The National Housing Federation has said that 85 per cent of all building plans for new supported, sheltered or extra care housing over the last two years had been halted by the government’s plans.
Prime minister Theresa May announced last week that the government would not after all be capping housing benefit payments for those in supported housing or the wider social housing sector.
And the government has this week published two new consultation documents, as well as a policy statement that confirms that long-term supported housing will continue to be paid through the social security system.
The government’s previous plan, announced last year, had been for any top-up funding above normal levels of housing benefit to be devolved to local authorities.
Despite the government U-turn, shadow housing secretary John Healey warned last week that ministers were still lining up cuts to supported housing of more than half a billion pounds from April 2020, which would mean “a funding cliff edge for existing supported housing”.
Ministers said this week that while long-term supported housing would continue to be funded through the social security system, short-term and emergency supported housing – including accommodation for those escaping domestic violence or with substance misuse problems – would be funded through a ring-fenced grant to local authorities in England, with the Scottish and Welsh governments given “an equivalent amount” of funding.
The government has now launched two consultations*, one on how it will fund this short-term supported housing, and another on how it will fund sheltered and extra care accommodation.
Much of the social care and housing sector welcomed the government’s announcement this week, but warned that it needed to ensure that both long-term and short-term supported accommodation was adequately funded.
Sue Bott (pictured), deputy chief executive of Disability Rights UK, expressed caution.
She said she believed the government “had little choice” but to make the announcement “given the chaos that had been created by the uncertainty” it had previously caused.
She warned that the two consultations showed that the proposal to restrict the amount of housing benefit that could be paid for supported housing “has not gone away”.
She said: “The consultation is about funding models, which indicates the government are not thinking about continuing with the present system.
“Given the government’s track record on supporting disabled people, it’s right to be cautious.”
The National Housing Federation (NHF) – which represents housing associations – said the announcement of a new approach to supported housing was “hugely welcome”.
David Orr, NHF’s chief executive, said: “The government has looked in detail at the consequences and listened to the voices of both users and providers of supported housing.
“It has come to the sensible decision that the local housing allowance cap should have no part in determining how supported housing is funded and actual rents of those in supported housing should continue to be met.”
Local government minister Marcus Jones said this week’s announcement would provide the supported housing sector with “the certainty of funding they need to get building new homes”.
Caroline Dinenage, the minister for family support, housing and child maintenance in the Department for Work and Pensions, said: “We value the important role supported housing plays and that’s why we have worked closely with providers and listened to their feedback to come up with solutions that will safeguard its future and improve support for those that need a home that is safe and secure.”
*The two consultations will run until 23 January 2018