Housing: Spending Review

Baroness Neuberger Excerpts

Thursday 4th November 2010 Lords Chamber

[Baroness Neuberger]

My Lords, I, too, congratulate the noble Baroness, Lady Hollis, on securing this debate at such a good time. Despite sitting opposite her, I must say that I agree with much, if not all, of what she had to say. I also declare an interest as the chairman for just under two years of One Housing Group, which provides housing, supported housing and general housing for poorer people, largely in London and Berkshire.

I have three short points to make. First, how in the new regime that has just been announced can we ensure that spending on housing the most vulnerable people is protected? Could we, for instance, exempt from the caps on housing benefit families and formerly homeless single people in London or elsewhere when they need to remain in their home because of their need for support? That support might come either informally, from family and friends, or indeed from statutory services. When it comes to support, what will central government do to help ensure that local authorities do not raid the local Supporting People settlement to pay for other programmes. Many local authorities suggest that their members and executives will disregard the national settlement for Supporting People and reduce spending in this area by anything up to 25 per cent; it is not ring-fenced.

We need to ensure that access to care and support for the most vulnerable does not become a postcode lottery. If we do not succeed, the costs will be borne, as many speakers have already said, by Justice, the National Health Service and social services. I have for many years been a keen advocate of supported housing, and we know that it can save many of those services considerable amounts of money. This proposed new system will make supported housing much more difficult to fund. Take the example of young people leaving care. If the local housing benefit cap is applied, many housing associations will have to reduce their rents and will never be able to build another scheme for very vulnerable young people without additional subsidy. It cannot make sense to apply the LHA route to supported housing for vulnerable young people and others in need of support. These are just the young people whom we are trying to support to stand on their own two feet and get into work. This is hard enough for young people anyway, and these particular young people will have had a very rough ride. We want to help them to be independent, yet cutting support from them now will make that more unlikely.

There is a strong argument for all supported housing to be exempt from the caps on LHA. Residential care or health alternatives are hugely more expensive than any form of supported housing. It seems to me that the Government should welcome the opportunity to make radical efficiencies in care by having a significant building programme aiming towards the new 150,000 target, if that is reachable, which also allows services to come out of the more expensive health and care sector into supported housing.

Secondly, as my noble friend Lord Brooke of Sutton Mandeville, said, we need affordable homes in London. I learnt at the knee of my father, who used to work for his noble kinsman in housing and local government, about housing issues when I was living in a flat under controlled rent as a child. He is absolutely right about that need. People working unsocial hours, including many who work in your Lordships' House, and those who work shifts, or whatever, need to live nearer to their workplace. Will the Minister assure the House that there will be a serious second look at the situation in London and that, at the very minimum, some transitional arrangements will be put in place? What has been proposed thus far just will not work.

Thirdly, I do not think that anyone else has made this point about the banks, but I know that others will have experienced it. Many registered social landlords are collapsing their structures to save money so that they can spend more on housing for vulnerable people. This requires renegotiating bank loans at no real extra cost to the banks, other than administrative. Yet, time and again, I have heard from other RSL chairs and chief executives that the banks, often largely owned by the nation, are trying to charge large amounts of money for rescheduling loans. My own RSL has no longer got such an issue, but many others have.

Banks are also being reluctant to fund mortgages on shared ownership schemes, which is one way of getting people who do not have much money into home ownership. These are clearly of less risk to the banks than most standard mortgages. However, anecdotally I am told, they are regarding them as sub-prime, when the mortgage is on the whole property and the RSL owns 60 or 70 per cent of it. This means that a lot of people who could otherwise get into owning their own property cannot do so. Will the Minister assure the House that the Government will take a close interest in this area?

I believe that supported housing is the way to support the most vulnerable people in this country. I hope that the Minister will assure us that the Government will look again at what these financial arrangements will mean for the most vulnerable and at what the consequences will be for costs for health and social care.