3rd February 2017
- The Housing Support Enabling Unit (the Unit)
The Housing Support Enabling Unit assists providers of housing support and supported housing across Scotland in the voluntary and independent sectors. The Unit was set up in 2004 just 9 months after the Supporting People Programme was launched and the separation of housing support costs from housing costs had taken place. The Unit has worked with organisations as they prepared for and helped shape the way service regulation came into force; workforce regulation was developed; policy on personalisation and self-directed supportwas developed and local authorities developed commissioning and procurement practices (eg the model SP contract). Since 2011 the Unit has contributed to various consultations that have been undertaken about the future shape of the benefits system with regard to supported housing.
The Unit has discussed the planned changes to the benefits system with providers across Scotland and various concerns have been expressed about the proposal to apply the Local Housing Allowance to supported housing. Whilst the commitment to maintain funding levels in 2019/20 through a new top up fund is to be welcomed, there are nevertheless risks involved in creating a new system which involves a move away from individual entitlement to benefit. This poses a risk for both services and for individual tenants as there is currently no guarantee about how the new top up funding will be developed or allocated. We do, however, welcome the opportunity to set out these concerns and address some of the issues set out in this Inquiry.
- General points
Before addressing the specific questions set out in the Inquiry we would like to make a few general points about supported housing and the benefits system:
- The cost of providing housing may be higher where tenants have support needs regardless of how that support is provided and regardless of the extent to which the landlord is involved in managing that support either on an individual or service basiseg mainstream housing with equipment for people with disabilities; former sheltered housing that is no longer provides support; mainstream housing which includes an ‘extra’ bedroom for equipment or a carer. The LHA cap poses a problem for the last 2 of these examples and the Universal Credit system renders service charges relating to the maintenance / servicing of equipment and adaptations in a person’s home ineligible for housing credit. It is important that the continuing viability of housing options for people with support needs is considered beyond what we currently consider to be supported accommodation.
- People who need financial support for their housing costs should be able to obtain that assistance regardless of the fact they may be disabled, face mental health problems, face homelessness, face domestic violence, learning disabilities or addiction and their housing costs may be higher as a result.
- The sustainability and range of housing options available to meet the needs of some of the most vulnerable people in our society must not be diminished by these changes particularly given that the policy intention is to be cost neutral.
- Any changes in the way that supported housing is funded through the benefits system should be undertaken at a pace which allows a smooth transition to the new arrangements to minimise the risk to vulnerable tenants and the services they use. Whilst we appreciate the decision to delay implementation from 2018 to 2019 we remain concerned about the planned timescale to both design and implement the changes anticipated.
- Whilst we understand that Ministers have had concerns about the quality and outcomes of supported accommodation in the past we would like to highlight that support services are regulated in Scotland through the Care Inspectorate which providesaccessible information about the quality of support being provided. In addition, the Scottish Government has funded the Unit to develop an outcomes system specifically for housing support and supported housing services. This outcomes system, Better Futures, has now been in operation for 5 years and is growing in its use. It provides an ideal means for local authorities and providers to share information about the way people plan and achieve personalised outcomes and move through services. We question the merit of creating a new funding system when greater rigour could be introduced to the existing system. Whilst there is not always a dedicated support service associated with supported housing, in many cases there is and greater use could be made of available information about quality and outcomes.
- We understand that the definition of supported housing may be extended to include private sector landlords. In Scotland there are a number of well-respected private sector providers of supported housing that struggle under the current LHA cap arrangements. We suggest that attempts be made to estimate the amount of funding that such providers may need to call on from any new top up fund because at present the benefit system does not reflect such costs. It would be helpful to have clarification about whether the 1 bedroom LHA rate (rather than the shared accommodation LHA rate) would be used for private sector supported accommodation as is planned for other types of supported housing.
- Responses to the questions set out in the Inquiry
Whether separate funding models are needed for:
- Refuges and other short-term supported housing services
- Sheltered housing services for the elderly (those services would require a higher cap)
The reason why short term supported accommodation is particularly at risk is the roll out of the Universal Credit system rather than simply the introduction of the LHA cap. Under UC the cost of short stays in supported accommodation will be difficult to recover because of the lengthy assessment period and lack of entitlement to assistance with a few days / weeks rent. Rather than creating a new funding programme for this sort of supported accommodation, the UC system could be adapted to cover shorter rental periods for those services. Once set up with the necessary identifiers the UC system could deal with claims from these addresses appropriately with no need to establish a system particularly for short term supported accommodation.
If this approach were taken the LHA cap would still present challenges for short term supported accommodation as shortfalls would still arise but this could potentially be dealt with through the overall ‘top up fund’ rather than through a separate system.
The term ‘sheltered housing’ covers a wide range of services from extra care services to those catering for low level support needs and increasingly services which no longer have a direct relationship with support provision but which nevertheless cater for older people who choose to live in specially designed accommodation. The costs vary considerably and therefore we do not think a higher cap for sheltered housing would be as helpful as a higher cap for supported housing more generally. A higher cap could be designed to achieve 2 things:
- cater for a wide range of additional housing costs associated with supported housing
- even out the regional differences in LHA rates which do not reflect differences in housing costs in supported housing
How the localised funding pot for supported housing will work, including:
- How it will be ring-fenced
- Which factors should be used to determine local allocations
In Scotland we understand that the top up fund will be devolved to the Scottish Government and we look forward to engaging with it as decisions are made about how the fund will be managed.
How existing supported and sheltered housing tenants will be protected following their transfer in April 2019
The pace of change is challenging but it is important to dispel the current uncertainty as soon as possible in order to sustain existing services. As leases come up for renewal or services require investment in terms of maintenance and refurbishment landlords need to make decisions on the basis of longer term financial security if the risk to existing capacity is to be minimised in the run up to implementation of the changes. Similarly, as landlords go about re-letting spaces that become available they need to be able to provide information about charges and costs accurately in relationship to the benefits system. Prospective tenants of longer term supported accommodation will feel uncertain about taking on a new tenancy at this stage and this alone could put services at risk of closure.
Many tenants in longer term supported accommodation moved in on the basis it would be their home for life. The plan to introduce the LHA cap to all UC and HB claimants in supported housing from April 2019 puts many tenants in a difficult position as they took on their tenancies on the basis that if they needed it to, the benefits system would provide them with sufficient financial assistance for them to stay in the accommodation. These tenants require some re-assurance before April 2019 about any changes and how they will be affected. A commitment should be made to those living in supported housing in line with the Secretary of State’s recent statement that ‘the sector continues to be funded at the same level it would have otherwise been in 2019/20’.[i] This would help to ensure a smooth transition.
Whilst the Scottish Government may ultimately be best placed to relay this commitment to individuals the role of the UK Government in determining the amount of ‘top up’ fund that will be devolved to Scotland is fundamental. We have a concern that the ‘top up’ fund should be calculated on the basis of actual spend through the benefits system rather than using average or notional costings.
The effects of uncertainty about the new funding model on tenants and development in the supported housing sector
First of all, we would like to acknowledge the scale of the challenge the new funding model presents landlords. Although the term ‘top up’ suggests that a small amount of shortfall we are discovering that some organisations are anticipating a very significant shortfall. One housing association working with people with learning disabilities has estimated that 33% of the current rent payments through HB will be at risk. Another supported housing service working with people who are homeless estimates that 30% of its overall turnover would be at risk. The implications for public bodies are stark. One supported housing provider working with veterans estimates that its current costs for providing accommodation based services costs less than the cost of Bed and Breakfast used by the local authority to accommodation people facing homelessness. Currently 100% of the tenants of that supported accommodation service would face a substantial shortfall in assistance to pay the rent if the changes were introduced now. If such services are to close the impact will be felt immediately by some of the most vulnerable people in our society and there is no obvious alternative housing option for them. As one provider pointed out to us, the changes to the benefits system for supported housing feel counter intuitive given the wider policy to promote better health and social care outcomes through partnership working. The voluntary and social rented sectors play a vital part in supporting that work but their role is being put at risk.
Whether the new system should be piloted before its full implementation
Yes, we do think that any new system should be piloted to offer an opportunity to ensure minimum disruption to tenants of supported housing and to ensure that any unintended consequences can be dealt with before full roll out. The timescale for introducing the changes for supported housing should be reviewed. We agree with the Scottish Federation of Housing Associations that a better option would be to leave the current system in place until 2022 when full UC roll out and the migration of working age legacy benefits has taken place. This would provide more time to pilot the changes and to ensure a smooth transition.
Whether the new system will resolve the shortfall in supported housing placements over the long term
One of the merits of the current system is that additional capacity is accommodated through individual entitlement. The new ‘top up’ fund will be the vehicle for ensuring sufficient funding is available for additional capacity. As such, the ‘top up’ fund needs to factor in an element for growth year on year.
Whether the new system will ensure that the varied rate of the LHA cap will not adversely affect tenants and providers in low-value parts of the country
The use of the 1 bedroom LHA rate, as opposed to the Shared Accommodation Rate, in supported housing is to be welcomed. In some cases this will mean that rent/service charge levels are below the LHA cap.
We remain concerned, however, that the use of the LHA as a cap will result in unequal entitlement on an individual level which will not relate to actual rent/service charge levels. The 1 bedroom LHA rate in Aberdeen, for example, is £127.25 per week whereas in Dundee and Angus it is £79.24 per week. This variation is not reflected in the costs associated with providing supported housing such as maintenance and servicing of equipment associated with communal areas.
Providers of supported housing working in various areas tend to adopt a single rent setting policy which does not distinguish between areas on the basis of the private rented market. As things stand tenants in those areas where the LHA rate is lower look set to be more reliant on the new ‘top up fund’ to help cover their rent. As stated above, our preference is for the LHA cap used for supported housing to be raised across all areas so as to minimise reliance on a new source of funding.
What alternatives there are to the LHA cap, such as a supported housing cap and a sheltered housing cap
Our preference is to maintain / adapt the current systems so that the benefits system (whether UC or HB ) covers actual rents/service charge for supported housing. This would require a means of identifying claimants living in supported housing and some modification to the UC system to calculate entitlement based on actual charges rather than on the basis of a cap.
Whilst not our preferred option, a higher supported housing cap would be preferable to the creation of a new system of funding which moves away from individual entitlement.
Whether housing benefit acts as a disincentive to work
We understand concerns that people in homeless supported housing face higher than average rent/service charges and therefore find it harder to take on work. The introduction of a less severe benefit taper for those in supported housing would be one way of dealing with this.
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[i] Housing Benefit and Universal Credit: written statement – HCWS273, 21 November 2016