Supported Housing

Ed Davey Excerpts

Thursday 18th January 2018 Westminster Hall

[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 ---

[Richard Graham]

I am grateful for that intervention, because clearly the two-year issue is one aspect of this matter. However, I think the wider issue is probably around the definition of “short term”, as has been mentioned. I had an interesting briefing from representatives of Rethink Mental Illness, who said that they

“warmly welcome the decision not to proceed with the LHA cap, and to place long-term supported housing funding on a sustainable footing.”

However, they went on to raise

“concerns about some of the proposals for ‘short-term’ supported housing”,

which I think is normally defined as being under two years. That seems to be the issue that worries Rethink Mental Illness and other mental health organisations. Rethink Mental Illness has issued a joint letter with nine other organisations, aiming to tie down a little the definitions of “short term” and “very short term”. I hope that the Minister can shed some light on that, but we will all have to bear in mind that the consultation closes on, I think, 23 January. It will be difficult for the Government to say too much in advance of that, so I assume that the main purpose of today’s debate is for us to get our points in before the Government’s response to the consultation, which will no doubt include some of these points from charities.

[Sir Edward Davey]

On that key point, those in the Treasury always want to control everything and to ring-fence funds, so that nothing more can be used. However, if the funds run out, the need of the people whom we are talking about is still there. We need to get that point over to Treasury Ministers, and I am sure that the Minister would wish to do that, so this is supportive of her case to the Treasury. It seems to me that expenditure should be demand-led, not Treasury-capped and controlled. The idea that we would exclude people who are among the most vulnerable in our society because the money had run out seems to me absurd and wrong.

[Richard Graham]

The right hon. Gentleman makes his point with his usual passion. I will not offer a lecture to the Treasury on how they should provide and quantify the amounts of money for particular parts of the supported housing provision that the Government are looking at reshaping. At this stage, we are trying to register our concerns, as he has done, on aspects of the supported housing report that we feel are not yet reflected in the Government’s position. We are also trying to encourage the Government, when looking at the response to the consultation, in which all these points will no doubt come up, to think widely—this is the great advantage of having the Minister in her new role—about what the Minister knows from her experience, and what I and other Members will share today from our experiences, about what works best on the ground.

That brings me to my last main point, which is about domestic violence refuges. Two really good points have been made. The first, made by the hon. Member for Sheffield South East, is that domestic violence refuges are slightly different because in many cases the individuals want to be out of the area—not just the parish, as my friend, the right hon. Member for Birkenhead, mentioned, but quite often outside the constituency in which the violence happened. However, they will not all want to go to the same constituency, of course; they will want to move to different places, not least depending on where they have family links.

I can easily recall a woman fleeing from stalking in my constituency who wanted to be very far away, not only because of her fear of the individual who had stalked her, but because she wanted to go with her young children to where her mother was, to receive that additional family support. The issue is not just one of national funding, or having a national network, but of access, and how that works practically. If somebody fleeing domestic violence wants to move, for the sake of argument, from Gloucester to Birkenhead to take advantages of family links there, how will that work in practice? I can imagine that such access could be difficult.

I know the new Minister has experience of domestic violence refuges; I think I am right in saying that she helped to set one up in her constituency. That side of the argument is about the importance of localisation, as the hon. Member for Sheffield South mentioned. These things are very often best done on the ground by people who know how to do them. Bishop Rachel of Gloucester, in her new role, has very much championed a refuge that the diocese has effectively provided in the centre of our city. That is a really good example of a local initiative that I certainly would not want ruled out as a result of a very top-down approach, led by the man or woman in Whitehall who knows best.