Supported Housing

Clive Betts 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.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I thank the hon. Gentleman for giving way; he is making an excellent point about an excellent report. May I give him one example of where we need to see more short-term accommodation and where we need the certainty of the financial models that he is talking about? A lot of homeless people suffering from terminal illness have a right to accommodation, but when local authorities and others get together to provide that accommodation, it is exactly the sort of accommodation that he has been talking about. That accommodation, which is so needed in many communities, will not be provided unless this problem is sorted out.

[Mr Betts]

Yes, I think that is absolutely right and again we are back to the point that providers of new accommodation need some certainty, because when they go to borrowers the borrowers say, “Where is the funding stream for the future?”; borrowers want to see that funding stream. That is exactly what St Mungo’s is saying—it will not be able to raise the funds under this proposal that the Government are currently putting forward.

I do not really know why there has suddenly been this extension to two years. There is no justification for it, so I will just ask the Minister, who I accept is new in her post, to have a really good think about it. I know there is still some of the consultation period left—I think it extends next Tuesday—so there is time to rethink and get this right.

I also say to the Minister that this issue is not only about funding for the future but about the nature of the funding and what it says, because if the funding is related to the welfare system—to housing benefit or the housing element of universal credit—essentially it is the accommodation of an individual that is funded. That individual has a relationship with the payment for their unit of accommodation. They are entitled to that accommodation, and they make a payment from their housing benefit or their element of universal credit for the cost of that accommodation. It is a tenancy relationship between the provider and the individual.

As part of the Government’s welfare reform to give responsibility to the individual in such circumstances, I would have thought that that tenancy relationship would have appealed to Ministers. However, the Government are now saying that, with a ring-fenced grant to local authorities, it will not be the individual who receives the money to pay—through the welfare system—for the rent on their property. It will actually be the institution that gets funded. So the Government are moving from an individual system, whereby money goes with the individual as part of their tenancy, to an institutional system, where the money goes to the institution itself.

Does that move fit in with the Government’s welfare reform agenda? It is difficult to see that it does. It is also difficult to see how we are moving towards a system of personal and individual responsibility, with individuals responsible for their own accommodation, when the Government are saying, completely counter to that, “We will have a new system where we actually fund the institution, which will mean that the individual will not be given a relationship with their accommodation and the money they pay towards it.”

Ministers have to think again about this issue. On both counts, the organisations and the providers are saying, “This really gives us so much uncertainty that we’re not comfortable, and our lenders are not comfortable. It will actually stop new provision in the future.” And we go back to the issue of the individual paying rent for their property and having that rent paid through the welfare system, as opposed to a ring-fenced grant for local authorities that institutionalises the whole system in a way that cuts off the tenant-landlord relationship. That is really quite important; I do not think that that element has really been thought through, because it really is quite important.

I will raise just one other issue, as I know lots of colleagues want to speak. Again, it is an issue that I do not think Ministers have really addressed, which is the refuges for women and children. The joint report makes a very sensible recommendation about having a “national network” of refuges. Basically, however, the Government’s response was, “It should all be done at local level”.

Generally I am a localist; I think the Minister knows that. I believe that local authorities by and large are best placed to make decisions for their areas. Local councillors living in the areas they represent know what is good for those areas better than Ministers sitting behind desks in Whitehall offices.

Women’s refuges are a different issue. By and large, supported housing deals with the problems, needs and accommodation requirements of people who live in an area, and in those cases it is right that they remain in that area and are accommodated and housed there. For women fleeing domestic violence, the situation is almost exactly the opposite. If anything, they want to get out of the area where that violence has occurred to somewhere completely different so that the perpetrator does not know where they are. It is important that we see the issue on a more national scale, so that we have places for people to go that are almost certainly not in the area where the violence has happened. I read the Government’s response, and I did not understand why they turned down our recommendation, because it seemed sensible. The recommendation was completely at odds with the rest of the report, in that the provision for that sort of circumstance is different from the other kinds of supported accommodation covered by the report. Will the Minister in her new position have a think about that?

There was overwhelming evidence to the Joint Committee on women’s refuges, but the Government said, “No, we think it is all better done at the local level.” There was no clear justification for turning the recommendation down and thinking it could all be done at the local level. Have they done any impact assessment of whether that would lead to the comprehensive network of provision that everyone wants to see?

I have raised three key issues to which I hope the Minister will respond. They are important if we are to get things right. In the end, getting the funding right means getting the provision in place and maintaining it, as well as ensuring that we get the appropriate new provision for the future.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Mrs Heather Wheeler)]

It is an absolute pleasure to serve under your chairmanship, Sir Graham. I thank everyone for their contribution; this has been a very wide-ranging conversation. I congratulate the right hon. Member for Birkenhead (Frank Field) and the hon. Member for Sheffield South East (Mr Betts) on securing this incredibly important debate on supported housing and on the work done on the issue by their Committees and, in particular, the Joint Committee.

May I start by saying how pleased I am to have been appointed the Minister responsible for housing and homelessness? I declare an interest, as my husband is a councillor on my local council, South Derbyshire District Council. I also extend my heartfelt thanks to my hon. Friend the Member for Nuneaton (Mr Jones) for his work on this very important issue, and wish him well in his new role.

Working towards a fair and equitable society is a priority for this Government and will be my priority. Supported housing plays a critical role in that. I know that from my own area, which has an excellent domestic abuse refuge, a wonderful older people’s housing village and specialist move-on accommodation for young people. We embrace such housing in South Derbyshire, and I am sure that many other places around the country do as well.

I am sure we all agree that supported housing is an invaluable lifeline for some of the most vulnerable people in our society. It helps many people to lead independent lives or to turn their lives around, and is a vital service for a country that works for all. Across England, more than 700,000 people live in supported housing at any one time. They range from vulnerable older people to individuals with learning disabilities and physical impairments, those at risk of domestic abuse, people who are homeless and many others. It is also an investment that brings savings to other parts of the public sector, such as health and social care.

It is imperative that we continue to support the most vulnerable in society and, as the Joint Committee identified, that we have a sustainable supported housing sector that is fit for the future. I am committed to ensuring that the funding model that underpins supported housing protects and boosts supply, and that it delivers positive outcomes and a good quality of life for those who depend on it.

As hon. Members will be aware, we published the “Funding Supported Housing” policy statement on 31 October. We have worked closely with providers of supported housing on our proposals and continue to do so. The recommendations made by the Communities and Local Government and Work and Pensions Committees were especially important to that. Our new funding approach has real benefits, many of which, I am pleased to confirm, align with the Joint Committee’s report. I remind hon. Members that we confirmed in the policy statement that we would not apply local housing allowance rates to tenants in supported housing or the wider social rented sector. In line with the Committee’s recommendation, we also announced that we would introduce the new approach from April 2020, rather than April 2019. That will ensure that vital support provided to vulnerable people is not interrupted or put in doubt, and that local government has time to implement the reforms. The Government remain committed to boosting the supply of supported housing—I am delighted to say that a second time.

Our announced model can be considered to meet different people’s needs in three respects. First, we will introduce a sheltered rent, for sheltered housing, within the welfare system. I am pleased to say that that is akin to the supported housing allowance recommended by the Committee. It is a type of social rent that will cap the amount that sheltered providers can charge for gross rent, including eligible service charges. We will work closely with the sector to set the 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. Again, we are ensuring that the service is there, at the right level.

Secondly, we said that long-term supported housing, such as permanent housing for people with learning or physical disabilities or long-term mental ill health, would remain in the welfare system. We will work with the sector to develop greater cost control. That is important; the public would expect us to do that.

Thirdly, we have taken on board the Select Committees’ recommendation that there should be a locally administered grant system for short-term accommodation. That will be introduced from April 2020. 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.

[Mr Betts]

I think that there is a misunderstanding—shall I put it that way, Sir Graham? The Government have not taken on board the Select Committees’ recommendation, because the term “short term” has been moved. The recommendation actually talks about a mechanism for “very short-term accommodation”, the “emergency nature” of that provision and links to universal credit. That is not what the Government now propose.

[Mrs Wheeler]

I thank the hon. Gentleman for that intervention. I am happy to give him clarity and succour. The short-term supported housing will be funded at current levels in 2020-21 through the ring-fenced local grant funding, and funding will continue to take account of the costs of provision and projected future need. I have to state the obvious: budgets are not set for years beyond spending review settlements. Housing costs will be funded directly by local authorities through the ring-fenced grant. I know that the sector has concerns about the longevity of the ring fence, so I want to reiterate that we are committed to retaining that for the long term, as the Joint Committee also recommended.

--- Later in debate ---

[Mr Betts]

This has been a wide-ranging, well informed debate. It is a great credit to my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) and the hon. Member for Gloucester (Richard Graham) that they produced a report that not only commanded the complete support of two Select Committees, but has wider support across the House and outside it, among providers and others. That has been absolutely clear.

At the beginning, I asked the Minister to address three fundamental issues. There is still a bit more work to do on how the cost controls over longer-term housing will be applied, and I am sure that we will continue to explore that. We have a difference on women’s refuges. It is not so much a matter of people choosing to go outside the area; they are often forced outside the area to a place where they have no local connection. That issue needs to be addressed nationally, and we need further discussion and debate on those matters of concern.

I come back to the issue of short-term accommodation. As I said, I had a briefing from St Mungo’s this morning and a phone call with Riverside, which has produced a joint briefing with the YMCA and the Salvation Army. The hon. Member for Waveney (Peter Aldous) rightly read out an even longer list of providers with concerns—a very long list. The Government have generally misunderstood or misinterpreted—at this stage I will say unintentionally—the recommendation about emergency accommodation. The words in the report were “very short-term accommodation”, but the Government have applied that to all accommodation of less than two years, which is not right and not what the recommendation actually states. The National Housing Federation has been talking to all its members and puts the matter succinctly:

“The definition of short-term services in the consultation paper is very wide and this should be tightened so that it is clear that the local system covers short-term emergency accommodation where people stay for a period of weeks rather than months.”

Were the Government to say, “We’re changing the definition so that accommodation funded through the benefit system is extended to include all accommodation, except that for very short-term emergencies of up to 12 weeks, and that very short-term emergency accommodation will be funded through the ring-fenced grant”, we would give fairly unanimous support straightaway. I ask the Minister to go back and look again at that particular issue. It is of real concern to providers, and I think that the Government have simply got it wrong. There is no reason to take accommodation of a year, 18 months or even six months out of the welfare system. Short-term emergency accommodation should be the only accommodation funded by the ring-fenced grant. If the Minister would at least listen to that, take it away and consider it, and perhaps make the change, we could get a much better funding system.

[Mrs Wheeler]

I thank the hon. Gentleman for that, and am very glad he is putting that on the record, because it is important that we all talk about the same thing. We listened carefully to the views of the sector in the previous consultation and through the sector task and finish groups, which said that on balance, this timeframe reflects the nature of support provided and an individual’s journey and outcomes. We are, however, absolutely clear that we continue to listen, and will consider feedback in the current consultation. I hope that puts his mind at rest.

[Mr Betts]

It is helpful that the Minister is still listening. I obviously do not know who is on the task and finish group, but I do know the number of providers that are clearly raising concerns; the National Housing Federation encapsulated in one sentence, which I read out. If the Minister listens to that, reflects and makes the change that has been suggested, we will have a much better system—a system that the providers, in the widest sense, will be happy with, and that will encourage the new investment that we all want.

[Sir Graham Brady (in the Chair)]

Before I put the question, I remind all Members that colleagues should be referred to not by name, but by constituency, and that they should be addressed in the third person. I did not want to break anybody’s flow during their speech, but I hope that is helpful.

Question put and agreed to.

Resolved,

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.