The NHF has surveys HAs about the provision of new supported housing. plans to provide supported, sheltered and extra care accommodation have had to slash plans to build new homes, down from 8,800 to 1,350 units, according to a new survey by the National Housing Federation (NHF).
A Green Paper, expected to detail the proposals, is delayed until autumn
The NHF figures show 69 housing associations – which together deliver a third of supported and sheltered homes in England – responded to the survey.
Supported housing services are said to save the taxpayer some £3.5bn in NHS costs.
To the NHF, the government’s indecision has left residents and housing associations with little certainty about their future income, leaving boards to take tough decisions like:
- 71 new schemes, representing 2,185 homes, postponed
- 19 new developments, totalling 803 homes, cancelled
- 22 existing supported schemes and three sheltered schemes, amounting to 132 homes, facing closure.
The main factors for these closures and delays relate to the uncertainty about the government’s proposed funding model and the withdrawal of funding for support services.
Where schemes are going ahead, two key reasons were cited; 24% estimate the local cap on housing benefits would be high enough in their area to cover their costs, followed by 18% who believe their shortfall would be offset by sufficient government funding.
The five-year cumulative cost to the taxpayer of failing to make up the existing shortfall of these specialist homes is estimated at £2.72bn.
Associations made a strong case for an alternative model that addresses concerns about how the money will be allocated and how long it will be available for.
Here are some insightful comments from the NHF and 24 housing below:
“David Orr, chief executive at the National Housing Federation, said: “These findings really bring it home: changes to supported housing funding are stopping building for the most vulnerable.
“Housing associations know first-hand that the proposed funding model will not work – a view backed by a joint select committee – and yet government has failed to heed warnings.
“With social care in crisis, the role supported housing plays in alleviating pressures on the NHS is ever more important.
“These changes have not even come in yet and they have taken 7,000 homes for vulnerable people out of the pipeline.
“The proposed changes in funding bear no relation to the real cost of providing this type of housing. It is time government put supported housing on a secure and sustainable footing.”
John Glenton, Riverside’s executive director of care and support, who gave evidence at Westminster on the issue, said: “Landlords like us have strong partnerships with local authorities, and are poised to begin developing much-needed additional supported housing.
“While this uncertainty over funding continues, a question mark hangs over development plans which would support some of society’s most vulnerable people.
“Along with other landlords, we urge the government to resolve this quickly.”
Case studies
Riverside is among social housing providers with developments on hold as uncertainty over the funding for supported housing continues.
A scheme for homeless veterans in Colchester, Essex, and an extra care scheme in Rochdale, Greater Manchester, are currently stalled.
Riverside’s Homeless Veterans Scheme – Colchester
This scheme, comprising 50 supported housing units for homeless veterans, is currently on hold due to the uncertainty over revenue funding.
The annual shortfall for people living in a one-bed flat with high levels of support would be around £116 a week and almost £76 for those living in a flat offering a move-on facility.
The table below shows the current projected impact of the Local Housing Allowance cap (the lowest levels of rent in the private rented sector) for each tenant:
Scheme details |
LHA weekly cap |
Proposed Target Rent + service charge |
Shortfall of approx. per week |
1 bed flat (with high levels of support) |
£104 |
£220 |
£116 |
1 bed flat (with move-on facility) |
£104 |
£180 |
£76 |
Despite council support for the scheme, the local authority is not in a position to commit to funding the gap.
The annual shortfall in rent in the first year of operation would be £260,000 representing 49% of total rental and service charge income.
Riverside received a £4.5m capital allocation from the Veterans Accommodation Fund administered by the Ministry of Defence.
The service has also received internal approval for significant additional subsidy from Riverside.
Riverside’s Keswick Close Extra Care – Middleton, Rochdale
Keswick Close is also on hold, as the majority of tenants are likely to be benefit-dependent in this low-income area.
Local residential care costs range between £400 and £1000 per week.
The imposition of caps means that tenants will face a shortfall in housing benefit representing over 25% of rent and service charges in the case of a one-bed flat and 18% in the case of a two-bed as illustrated below:
Scheme details |
LHA weekly cap |
Proposed Target Rent Riverside + service charge |
Shortfall of approx. per week |
1 bed flat |
£102 |
£136 |
£34 |
2 bed flat |
£120 |
£146 |
£26 |
Without additional funding, tenants will struggle to make up this shortfall from their own incomes, and so the scheme would simply not be viable.
Keswick Close is a planned extra care scheme, which will comprise 101 homes, a mix of one and two-bedroom apartments and bungalows.
The scheme is supported by +£3m public investment through the HCA.
Just over a year ago, the government announced details of its proposal for the future of supported housing.
- The government wants to cap benefit for everyone living in supported and sheltered housing to the LHA rate from 2019
- The LHA varies widely throughout the country, creating a real ‘postcode lottery’ of support. Where it is low, the gap between the amount paid through universal credit and the actual rent will be high. Tenants in those areas will struggle to make ends meet
- The LHA is a reflection of the cost of renting a home in the private rented sector. It bears no relationship to the cost of providing specialist supported housing.
- At the same time, money will be transferred to local authorities to allow them to fund the additional costs
- But there is presently no indication of what that mechanism might be, when it will be developed and what it will look like, giving housing associations very little assurance about whether they will actually receive this funding
- The local top-up funds will be cash-limited and discretionary so there is no guarantee that a service will receive the top-up money
- Providers have been subject to a yearly 1% rent reduction since April 2017 for three years, apart from refuges
- For housing associations, this represents a significant loss of income, which has had a significant impact on their capacity to build new homes. “