Supported Housing

Andy Slaughter Excerpts

Thursday 18th January 2018 Westminster Hall

[Mr Clive Betts (Sheffield South East) (Lab)]

I beg to move,

That this House has considered the First Joint Report of the Work and Pensions Committee and the Communities and Local Government Committee, Future of supported housing, HC 867, Session 2016-17, and the Government response, Cm 9522.

It is a great pleasure to introduce this debate. I welcome the Minister to her place. This is her first opportunity to respond to a debate on the issue, and we look forward to her customary approach to local government matters—I am getting in early before she is taken over by her civil servants and told what to do. She certainly has a long track record with local government matters, having been a councillor, chair of the all-party group on local government and a member of the Select Committee on Communities and Local Government.

I also place on record the Committee’s thanks to the former Minister, the hon. Member for Nuneaton (Mr Jones), who appeared before us to answer questions on supported housing and, more recently, on homelessness. He certainly listened to the Committee on many occasions and responded positively to us; I will say a little more in due course about how positive his response was to our report. I used to tease him a little by saying that his primary job was trying to save the Department for Work and Pensions from itself when it ventured into housing matters and made policy that subsequently unravelled rather badly, having posed serious problems for much of the housing sector on the way.

The joint report is the result of our two Select Committees getting together to address this very important issue. Anyone who reads the Government response will see the wide range of accommodation that is covered by the term “supported housing”, from long-term traditional sheltered housing and extra care provision to what are essentially people’s homes—accommodation where people with learning or physical disabilities may live for long periods, or provision that people with mental health problems rely on. It also includes very short-term accommodation, often for homeless people who have nowhere else to go and need a roof over their heads, but who will eventually move on to more long-term accommodation. The report also covers the very important issue of how to provide accommodation for women fleeing domestic violence.

We probably would not be here this afternoon were it not for the Government’s intention to change the funding arrangements for such accommodation back in 2015 and 2016, and their now rather infamous decision to link payments to the local housing allowance. At least the Minister can relax this afternoon, because she does not have to defend the indefensible, unlike the Ministers who gave evidence to our inquiry. No one could begin to defend relating the costs of supported housing in any way to those of renting in the private sector, because the differences in local housing allowance rates were so extreme and bore no relation to the costs of providing supported housing in different parts of the country. At least we have got there now. At some point, the penny dropped for Ministers and civil servants and they extracted themselves from the impossible position that they had got into. That was certainly a great benefit of the inquiry. I pay credit to my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) and the hon. Member for Gloucester (Richard Graham), who jointly chaired it, for putting Ministers on the spot and making them so uncomfortable that in the Government response they have extracted themselves from that impossible position.

I think I can see how it all came about. Someone in the Treasury must have said, “You mean you pay all this money to these housing providers—you just pay what they ask for? They ask for the rent, you pay over the housing benefit and there is not really any control. We need to anchor the payments to something or other, so let’s come up with a local housing allowance. That’ll do—it’ll provide an anchor so that the providers cannot simply write cheques to themselves.” I am sure that that is how we got into that position, but at least we are not there any more.

Let us not forget, however, that 85% of new development of supported housing in this country was put on hold. We wasted months—indeed, a couple of years—while nothing happened. Although we may be in a better place now than at the beginning, we have still had two years when, despite the urgent need for more supported housing in this country, nothing has happened on 85% of the schemes that were in train. Everyone has said, “Wait a minute. We can’t go ahead because of the uncertainty. We can’t borrow the money because of the uncertainty. We can’t develop the schemes that we all know are needed, because the Government got the initial proposals completely and absolutely wrong.” We should not forget that; indeed, it was worse than that. Organisations such as St Mungo’s that came to give evidence to the Communities and Local Government Committee before the joint inquiry was set up said: “If this carries on, not only will we not develop new accommodation; we will pull out of what we have, because we cannot make it pay.”

[Andy Slaughter (Hammersmith) (Lab)]

My hon. Friend is right to highlight St Mungo’s, which used to be based in my constituency and has done a lot of projects there. It is under a continuing threat: because there is still an intention to rely on local authority grants to fund short-term housing, there is not only insecurity but hostels will have to close.

[Mr Betts]

My hon. Friend is absolutely right: there is an underlying problem. St Mungo’s representatives came to see me this morning and spoke on behalf of a number of providers about the difficulties that still exist, despite the Government’s proposals and the fact that we have got away from LHA rates, as a first move in the direction of sanity. At least that has been clarified, but we should not forget the problems that have occurred in the past two years.

I think the report is excellent. It deals with more than just funding issues; it looks at the role that local authorities play in provision in their area; at how to get people from supported housing into more permanent mainstream housing; and at enabling people to get into work while they are in supported housing. It includes a lot of good recommendations, but I will focus on three key funding issues. I would like some clarification and some certainty from the Minister about where things are going, at least in the medium term. I hope I can also persuade her to think again about two key issues in which the Government have not quite got to the right place.

The first issue is longer-term provision. To some extent, the Government response separates sheltered and extra care housing from long-term supported housing. I accept that slightly different regulatory regimes are proposed for those two sorts of housing, but in essence they will both be funded through the welfare system, as the Government response says. Their funding arrangements look similar, if not identical, so I shall address them together.

I think the Government response is helpful. It is an awful lot better than what we started with. It is clearly right, as we heard overwhelmingly in the evidence we received, that paying for supported housing should be linked to housing benefit, or to the housing element of universal credit when it comes in. What I want from the Minister is a little more explanation and clarification of the wording. The word “control” is used several times, including a reference to

“enhanced cost controls and oversight, ensuring value for money for the taxpayer”.

Of course, everyone recognises that the Government’s job is to ensure value for money for the taxpayer, but what does that phrase actually mean? Does it mean that in the future there will be an effort to bear down on the amount of housing benefit that is paid, to reduce the amount and say, “Well, we paid you the 100% that you requested for housing benefit last year, but next year it’s only going to be 95%, because we expect you to start squeezing the costs that are applicable to this scheme”? Who exercises the controls? Will there be a system with criteria, or will things simply be done on an ad hoc basis for individual schemes?

It would be really helpful in the cases of sheltered and extra care housing, and of long-term supported housing, for which slightly different regulatory regimes are being proposed, but necessarily the words “cost control” come into both of them, if some further explanation could be given about precisely how those cost controls will operate. Who will operate them? Will it be something that is done for three or four years ahead, or will it be something on an annual basis and, if so, how? Such an explanation would be helpful, not merely for our satisfaction here. We come back to this issue of long-term investment. We want more providers to come in with proposals, to get more places and more schemes, but they will only do that if they can satisfy the people they are borrowing money from that there is a long-term future for such schemes and that the money can be paid back. So it is absolutely crucial that we get that right. I am not making a criticism of the proposal as such; instead, I am seeking clarification about how these schemes will operate. So, can we have a bit more certainty about they will operate for the providers in the future? I think we are getting there; we are on the same page, but we want to be clearer about what longer-term arrangements are actually written on the page.

I will come on to something about which I think there is a more fundamental problem, which is the issue with short-term accommodation. I think the term itself causes some difficulties; the Government certainly have difficulties with it. Paragraph 19 of the “Conclusions and recommendations” in this excellent joint report says—I am sure that the Minister has read that paragraph several times already, but I will read it for her again—that

“The Government is right to consider an alternative funding mechanism for very short-term accommodation”.

I will stop reading there, because there is an important word in that sentence. It refers to “very” short-term accommodation. Paragraph 19 continues, “given the emergency nature”—again, those words are important—

“of that provision and the inability of Universal Credit to reflect short-term changes in circumstance.”

I think that that is a given; everyone knows that there have been problems with universal credit in the first few weeks. However, I do not think that anyone thinks that the problems with universal credit are likely to last for two years, do they? Do Ministers think that? Is that why the “short-term” arrangements last for two years under the Government’s proposals—because they do not think that universal credit can be sorted out in two years? I do not know. However, if the Minister thinks so, she is even more pessimistic about universal credit than most of the rest of us are. Anyway, that is the issue.

It was very clear when the two Committees produced their joint report on this subject that they were thinking of accommodation where people literally could not get their universal credit sorted out within a matter of days or very few weeks. I think the period of around 12 weeks is probably reasonable; I think that is the period that most providers are looking at. It is “emergency” accommodation—accommodation for people who have not got a roof over their head; they live there for a very short period. I think everyone accepts that that sort of accommodation needs a different funding model. The problem is that recommendation 19 is being used by Ministers to justify having a completely different funding model for any accommodation that is provided for up to two years, and there is no justification at all in the Government’s response as to why there is that sudden extension from what had been looked at as “very short-term”, “emergency” accommodation for up to 12 weeks to accommodation that is for up to two years.

People from St Mungo’s came to see me this morning and they spoke on behalf of the Riverside Foundation, YMCA and the Salvation Army, which provide around a quarter of so-called “short-term supported housing” units in this country. They said that that extension gives an element of uncertainty to their funding that really causes them major difficulties. St Mungo’s said that 98% of the accommodation it provides will be covered by this ring-fenced grant to local authorities, about which there is absolutely no certainty at all.

I raised the concerns about the need for more clarification and certainty about the long-term funding arrangements linked to housing benefit. However, I think that most providers think there is an awful lot more certainty about those arrangements than there is about some unspecified, ring-fenced grant that can be changed at the stroke of a Chancellor’s pen at any time in the future.