The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
Mr Speaker, I wish you and fellow Members a very merry Christmas. I thank you for the opportunity to update the House on our plans for a new funding model for supported housing. This update follows an earlier debate on this issue on 25 October and responds to the recent resolution of the House.
We all agree that supported housing is an invaluable lifeline for some of the most vulnerable people in our society, which is why this Government are determined to ensure that the funding model that underpins supported housing protects and boosts the supply of such housing and delivers a good quality of life for the people who depend on it. The House will be aware that we set out our plans in a written ministerial statement on 31 October, in which we confirmed that we will not apply the local housing allowance rates to tenants in supported housing or the wider social rented sector, and that we will introduce this new approach from April 2020, rather than April 2019, to ensure that vital support provided to vulnerable people is not interrupted or, indeed, put in doubt.
We said that funding for housing costs for sheltered and extra-care housing will stay in the welfare system and that we will introduce a sheltered rent for sheltered and extra-care housing—a type of social rent that will cap the amount that providers of such housing can charge for gross rent. We will work closely with the sector to set those limits at an appropriate level and, more generally, to protect provision and new supply. We will bring in existing supply at existing levels of rent and service charges.
We also said that long-term supported housing, such as permanent housing for people with learning or physical disabilities, or long-term mental ill health, will remain in the welfare system and that we will look to work with the sector to develop greater cost control. All short-term provision currently funded by the welfare system will continue to be funded at the same level by local authorities in 2020. Housing costs will be funded directly by local authorities through a ring-fenced grant—that ring fence will remain in the long term. The amount of grant funding will continue to take account of the costs of provision and of the required growth in supply.
There are real advantages to this new approach. By retaining funding in the welfare system for longer-term supported housing and sheltered housing, we are giving the sector, in the words of Home Group,
“the certainty we need to get on and build more homes.”
Home Group has not hesitated to act, and it has already given the go-ahead for £50 million of capital investment in three new supported housing schemes. So the sector is feeling optimistic about the future, which can only be good news for supported and sheltered housing tenants. For short-term accommodation, we are proposing a new and separate model to take account of the particular needs it presents. All short-term provision—for example, hostels and women’s refuges—currently funded by the welfare system will continue to be funded at the same level by local authorities in 2020.
As noted in the recent Budget 2017 documents, there will be a transfer of funds from welfare spending to my Department from 2020-21. The right hon. Member for Wentworth and Dearne (John Healey) voiced his concerns on 25 October over future funding levels for supported housing after 2020. I would like to reassure him that the amount of grant funding for this part of the sector after 2020 will continue to take account of the costs of provision and the growth of future provision. I recognise that there are also concerns about how new arrangements for local authorities to directly fund short-term accommodation will work. Again, I want to make it clear that our aim, in making these changes, is to allow residents to be able to keep and find work without having to worry about meeting their housing costs at a particularly difficult time in their lives.
The changes will also help people to move on without carrying a legacy of rent arrears and debt, and ease the administrative burden for providers who will no longer need to collect rents and service charges from residents. Councils have a strong interest, too, in sustainable short-term accommodation that meets local needs. The new model gives them a bigger role in commissioning short-term accommodation, as well as in strategic planning for supported housing—the Local Government Association has welcomed that. This strong local focus runs right through our plans, encouraging greater engagement at a local level, with quality, positive outcomes for residents at the forefront.
So we have set out the framework for funding reforms that provides the certainty, stronger oversight, cost control and, most vitally, the focus on good outcomes for tenants that is needed to boost housing supply in this incredibly diverse sector. Having done that, we are now working closely with the sector on the detail. We are formally consulting on “sheltered rent” and on the short-term funding model. The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Gosport (Caroline Dinenage), the Under-Secretary of State for the Home Department, my hon. Friend the Member for Louth and Horncastle (Victoria Atkins), and I have each also met sector representatives. I am pleased to say that the overall response has been positive, but we acknowledge some of the concerns that have been expressed and will continue to work with local authorities, providers and tenants to get this right. The people who live in supported housing—vulnerable older people, people with learning and physical disabilities, women and children fleeing horrific domestic abuse, and the homeless—deserve no less.
Before I conclude my statement, I would like to thank all those people who are working to deliver sheltered and supported housing across our nation during this festive period. I would like to thank them for their hard work and all that they do to support the most vulnerable people in society. I commend this statement to the House.
John Healey (Wentworth and Dearne) (Lab)
I join the Minister in paying tribute to all those working on the frontline, particularly those helping the homeless over this Christmas period. I also thank him for the early copy of his statement.
Although I fail to see anything fresh in this oral statement, I nevertheless welcome it, because this House has played a big part over the past two years in getting the Government to reverse their previous plans on supported housing. Individual Members on both sides of the House have spoken strongly, as have charities and housing associations, to warn of the folly and flaws in the funding changes. The Joint Select Committee report has laid a cross-party basis for the Government rethink. Labour has led three Opposition day debates and, as the Minister says, this statement, “responds to the resolution of the House” on the last of those.
In that Labour debate on 25 October, I warned that the devil is always in the detail and in the funding. I am sad to say that today’s statement does nothing to help clear up concerns on both fronts. On funding, the Minister has repeated the same flawed promise, saying, “All short-term provision currently funded by the welfare system will continue to be funded at the same level by local authorities in 2020.” That is only a commitment for 2020; there is no pledge beyond that, even though the Red Book last month showed that the Treasury has inked in cuts of half a billion pounds in 2021-22. Will he clear up this problem today by confirming there will be no cut in funding in the second or subsequent years?
The Minister moved on to say in this statement that, “grant funding for this part of the sector after 2020 will continue to take account of the costs of provision and the growth of future provision”. This is precisely the problem: it will be Ministers who make grant decisions on funding for the future and Ministers who will say they have taken account of costs and growth. Unlike the welcome move to keep other types of supported housing in the welfare system, this will no longer be needs-led and no longer based on the right to help with housing costs for individuals. That is why St Mungo’s and others say that with these plans
“it is unlikely that providers would be able to secure loans to develop new services or be able to reassure regulators that providing short-term supported housing is financially viable in the long term”.
So what changes will he make to the plans to provide reassurance on this?
On detail, the Minister has dispelled none of the confusion about how the new system will work in practice. The plan is to keep a resident’s entitlement to housing benefit, but services with the new grant will not charge rent and will not draw down or cash in that entitlement. So what happens if a service does not receive a grant? Can its residents receive housing benefit? If a service has grant for some but not for all residents, can some still get housing benefit? Will he consider cutting the current two-year definition of “short term” down to 12 weeks, which will deal with some of the big problems in universal credit, and then make people eligible to claim housing benefit? Finally, what will he do to make sure such organisations that do not currently deal with local authorities and do not, for instance, get Supporting People funding, do not fall through the gaps in the new system?
In future years, students will be given this as a case study in disastrous Government decision making. This is the third policy rewrite in the two years since George Osborne made the crude policy decision to give the Treasury big cost savings, and the Government still have not got it right. So will the Minister accept that the Government must work further with Parliament and the housing sector to meet the terms of the resolution and sort out a good long-term system for the future and funding of supported housing?
Mr Jones
This is the season of good will to all men and women, and the right hon. Gentleman set off in his remarks so well, but then was not too festive in his spirit. He mentioned short-term accommodation and asked what would happen post-2020. If he looks, he will see that there is clearly a transfer from the Department for Work and Pensions to the Department for Communities and Local Government to cover the cost of short-term supported housing going forward. We are absolutely clear, and we will come forward with further plans following the consultation, on how we will assess future provision, how we will deal with that and what we will need to make sure that the providers have a sustainable position going forward to reflect inflation.
The tenants will not lose the ability to get help with housing costs, and we fully expect that when the system comes into effect people will be in a position to have the help and support they need. We do not expect that people will have the opportunity to claim housing benefit for the same service at that point, but there are deficiencies in the current system that the right hon. Gentleman just does not acknowledge, such as on the position of women who go into a refuge in terms of their being able to work—I mentioned that in my original statement. Sometimes these women cannot claim housing benefit in that position and so cannot work.
I reassure the right hon. Gentleman that we are working closely with the sector. He asked about several aspects of how the policy will work with respect to local authorities. We are putting in place a strong statement of expectations and strong conditions for the ring-fenced grant.
With respect to the right hon. Gentleman’s point about the two-year definition for short-term supported accommodation, I can tell him that we asked a working group, which included providers from across the sector, to look at the issue. Although it was not absolutely clear, the working group came up with the two-year period as a sort of minority verdict. That is why we have followed the path that we have.
I reassure the House that the Government are absolutely committed to protecting the most vulnerable. We are absolutely confident that by working with the sector we can get this right.
Several hon. Members rose—
Mr Speaker
Order. This is an extremely important matter and I am keen to accommodate colleagues’ interest in it. However, I should remind the House of what I said earlier, namely that two heavily subscribed debates are due to take place under the auspices of the Backbench Business Committee when this exchange has been concluded. It would be good if contributions did not expand to fill the time available. What we are looking for here is a short question and a short reply. The former will be brilliantly exemplified, as always, by the author of the textbook on the matter, Sir Desmond Swayne.
Sir Desmond Swayne (New Forest West) (Con)
Will account be taken of the security measures that are proper for refuges that deal with people fleeing domestic violence?
Deidre Brock (Edinburgh North and Leith) (SNP)
I welcome the introduction of the sheltered rent principle; it seems the right thing to do. Nevertheless, it is not too difficult to pinpoint why the Government have come in for criticism over the paying of the housing costs of the most disadvantaged members of our society. Will the Minister guarantee that there will be no penny pinching and that the extra-care housing costs will be met in full by central Government, without quibble or caveat? That is just a straight-up-and-down responsibility of a modern Government. The costs of and responsibility for delivery cannot just be passed on to local government, charities or housing providers.
I encourage the Minister to drop the mantra that the provision of housing support is about getting people into work. The provision of housing support is about helping people with their housing. Making sure that people are in decent housing is an honourable aim in itself; it does not need additional aims.
There was an explicit commitment in the October policy paper to additional funding for Scotland and Wales as a result of the implementation of this policy. Will the Minister tell us whether that remains the intention? If so, what is the indicative sum in each case?
Lastly, it is very welcome that there will be some security of supply for support for people to get back into housing and hopefully to move on to managing their own houses, but will the Minister tell us whether the Government intend to provide additional resources for the outreach and street work that helps to find the people in need in the first place?
Mr Jones
On the hon. Lady’s last point, we are talking today about the housing costs, rather than the support costs that she mentioned.
Sheltered rent will also cover extra-care housing. I assure the hon. Lady that this policy is not at all about penny pinching.
The hon. Lady asked about work. The point I was making was about women’s refuges. Often, women who are being abused and are subject to domestic violence have reasonable jobs, but unless they give up those jobs, they will not qualify for housing benefit. I cannot see how that is right at all. Also, 70% of people in supported housing are older people, so in reality we do not expect them to work. I hope that clarifies that point.
I also wish to clarify that we are working with the devolved Governments in Scotland and Wales on all aspects of the policy and will confirm the funding for Scotland and Wales in due course.
Mr Philip Hollobone (Kettering) (Con)
What is being done to highlight and promote the best examples of supported housing and to condemn and call out the worst?
Mr Jones
My hon. Friend makes a good point, and that is one of the reasons for reform. There are some appalling examples of supported housing, but because there are no checks and balances in the housing benefit system, people get away with providing that appalling housing and get paid the same as another provider who provides a good-quality service. We will work with the Local Government Association and the sector to put in place strong conditions to make sure that best practice is followed everywhere.
Helen Hayes (Dulwich and West Norwood) (Lab)
Will the Minister clarify how funding domestic violence refuge provision at the same level as today will address the shortfall in provision throughout the country? Between 2010 and 2014, 17% of refuges closed, and every day around 90 women and their children are being turned away from refuge provision throughout the country. Without an increase in the funding for refuge provision and the establishment of a national network, the Government will fail to guarantee that every woman and child fleeing domestic abuse can be kept safe in a refuge.
Mr Jones
The hon. Lady makes a good point. Every woman should be protected and have a safe place to go. There are more bed spaces than there were in 2010, but she has a good point, and early next year we will do a full audit to see what provision is like throughout the country. That will allow us to see where the gaps and challenges are, because we want to make sure that women are safe.
Peter Aldous (Waveney) (Con)
I commend the Minister for the great deal of work he has done in this complicated policy area. Will he assure me that he will continue to liaise closely with the sector to address two particular issues: first, short-term emergency accommodation; and secondly, the need to stimulate much-needed new development?
Mr Jones
I thank my hon. Friend for his kind words and commend him for the hard work that he has put in on this issue. He asked about short-term emergency accommodation and new supply. On both fronts, we will be working closely with the sector to make sure that there is progress. It is already happening—the Home Group has confirmed that it will spend another £50 million on supported housing—but we want to make sure that the £400 million we have set aside for capital funding goes out to build good-quality supported housing, building on the other 27,000 supported-housing units we have built since 2011.
Tom Brake (Carshalton and Wallington) (LD)
Will the Minister commit to an annual review of the arrangements to see whether the investment that he says is going to come does in fact come? Will he confirm when the Government will have a long-term, sustainable plan for the sector?
Jeremy Lefroy (Stafford) (Con)
Will my hon. Friend meet me, North Staffordshire YMCA and Staffordshire Women’s Aid to discuss some of their concerns about the proposals for short-term supported housing?
Mr Jones
My hon. Friend is a strong campaigner for the people of Stafford and Staffordshire. I would certainly be glad to meet him and his local YMCA and Women’s Aid to talk about short-term accommodation. I have already had meetings with several Members from all parties to discuss this issue, and I am happy to do so again.
Kate Green (Stretford and Urmston) (Lab)
I share the concerns of my right hon. Friend the Member for Wentworth and Dearne (John Healey) about moving away from a demand-led system for people in need of short-term supported housing. Will the Minister say what will happen if a local authority has no allocation left to meet the needs of vulnerable individuals? Will central Government underwrite the costs that might be faced in those circumstances?
Mr Jones
This policy is about getting the system right, and we have until 2020 to do that. We need to make sure that our assessment of needs in particular areas is right. Areas will have to set out a clear plan to say what the future need in their area will be. We will work with them on that because we are absolutely clear that we want people to have access to the various types of short-term supported accommodation.
Bob Blackman (Harrow East) (Con)
I commend my hon. Friend on the action that he has taken so far. By definition, people in supported housing are vulnerable, but far too often we concentrate on what they cannot do, rather than on what they can do. One problem that people face is the need to fill in complicated forms to ask for the money to which they are entitled. During the transitional phase, will the Minister look into streamlining the process to take away some of the anxiety of people in supported housing, so that they can fulfil the real potential of what they can do in society?
Mr Jones
As usual, my hon. Friend hits the nail on the head. He is absolutely right that, at a time when people are in crisis in their lives, form filling and bureaucracy are not the first things on their minds. He is also right that most of these people have a significant amount of potential. With our new system, we will take that form filling and bureaucracy out of the way, so that we can support people when and where they need it.
Nic Dakin (Scunthorpe) (Lab)
Homelessness and housing insecurity have been on the rise in the past two years’ muddle. Are we confident now that the Government’s statements today will actually put in place the security that is needed to tackle what the hon. Member for Waveney (Peter Aldous) says are short-term needs and longer-term investment issues?
Mr Jones
I am certainly confident that we can achieve that in short-term supported housing. I am also confident that the other measures that the Government are taking, having supported the Homelessness Reduction Act 2017 of my hon. Friend the Member for Harrow East (Bob Blackman) and the various other programmes including Housing First that we are looking to pilot, will make a significant difference to tackling the difficult problem of homelessness that we all want to see dealt with.
Michael Tomlinson (Mid Dorset and North Poole) (Con)
I recently visited supported accommodation in my constituency—Waverley House in Wimborne, a Bournemouth Churches property—and saw the excellent work that was going on there, supporting the most vulnerable young people. Will the Minister commit to continuing to encourage and support this vital sector?
Mr Jones
I absolutely will. I just want to reassure the short-term providers in my hon. Friend’s constituency that we are continuing to work with the sector. We are listening to some of the concerns. It is quite obvious that, when we meet the short-term providers and explain the full extent of what we are looking to do, they are reasonably warm to what we are saying. They also say to us that we have to get it right. We must convince them, for example, of the ring fences for the long term, and we are certainly seeking to do that.
Graham P. Jones
The Minister claims that he wants to help the young vulnerable homeless, yet in my constituency the Crossroads hostel for homeless young people is funded by the Salvation Army, the local housing allowance and Lancashire County Council. This Government are butchering Lancashire County Council’s budgets. How can he reassure me that Crossroads will stay open?
Mr Jones
Earlier this year, we gave councils access to another £9.25 billion for adult social care. I take the point that the hon. Gentleman makes about the organisations in his constituency that run short-term support for homeless people. I commend them for what they are doing. If he wants to bring them to meet me to raise their concerns, he is very welcome to do so.