Supported Housing

Helen Hayes Excerpts

Thursday 18th January 2018 Westminster Hall

[Helen Hayes (Dulwich and West Norwood) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I am pleased to speak in this debate as co-chair of the joint inquiry into the future of supported housing. It was a pleasure to work with the hon. Member for Gloucester (Richard Graham) and members of both Select Committees on the inquiry. It was a privilege to co-chair the inquiry on a part of the housing sector that makes a significant difference to the lives of those who rely on it.

The inquiry heard extensive evidence from residents in supported housing in formal oral evidence sessions, informal evidence sessions and visits and as written evidence. I have also visited several supported housing settings, both in my constituency and further afield, to speak to residents and providers about their experiences on the ground.

Supported housing enables a wide range of residents who face particular challenges in life to live independently and with dignity, and it enables them to access the support they need. It delivers substantial savings to the public sector, which are estimated to be £3.5 billion each year. Without supported housing, many residents would end up more reliant on the NHS at a much greater cost, or in some cases in the criminal justice system.

The Government’s approach to supported housing over the past two years has thrown the sector into disarray. The initial announcement that the local housing allowance cap will apply to supported housing, followed by a year of uncertainty, caused providers to put 85% of planned new schemes on hold. Many providers stated that they feared that they would have to withdraw from the supported housing sector altogether because the funding simply would not stack up. Our inquiry clearly demonstrated the financial impact that the LHA cap would have on the sector. In particular, it highlighted the fact that the calculation of LHA, in relation to private sector rents for general needs housing in local housing market areas, made no sense at all for the funding of supported housing. There is no direct or necessary relationship between private sector rents in a given area and the cost of delivering supported housing.

I am pleased that the Government accepted that argument and announced last year both that the LHA cap would not apply to any type of supported housing, and that a new type of sheltered rent would be introduced to cover the cost of sheltered housing. I have spoken to several providers since that announcement, and although it is welcome, they have many questions about the details of the proposal. They are anxious to know how the formula for sheltered rent will work, which schemes will be deemed to be sheltered housing, whether there will be a separate sheltered rent rate for extra care housing, and what provision there will be for sheltered rent to increase to keep pace with inflation and increasing demands. I hope that the Minister is able to answer some of those questions today.

I want to focus on two remaining areas of the inquiry report and the Government’s response. The first is the Government’s refusal to accept the inquiry’s recommendation to establish a national network of domestic violence refuges. Refuges are unique in the supported housing sector because to a large extent they serve women from outside the local authority area in which they are situated. The current system relies on local authorities’ mutual recognition of the need for refuge provision and their willingness to fund provision that they know will not generally be used by local women.

The cuts to local government funding over the past seven years have put that arrangement under great strain. Many councils feel that they have no choice but to make cuts to their provision, which is creating a postcode lottery in many areas of the country. For example, there are no longer any domestic violence refuges in the county of Cumbria. Having looked carefully at the evidence provided by Women’s Aid and others, the inquiry reached the view that the postcode lottery could be addressed only if the Government committed to establish a national network. Full devolution of funding to local authorities risks having the opposite effect. I therefore ask the Minister to reconsider the Government’s rejection of that recommendation and to commit to working with Women’s Aid to establish a national network of refuges to guarantee a place for every woman and child across the country who needs one.

[Frank Field]

That links to the point made by the hon. Member for Gloucester (Richard Graham). It is possible that the local initiatives that he praised so much will continue to operate, but they need funding. They are not dependent on local funding. Such measures often do not work unless they are supported strongly locally, but the funding is key.

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[Helen Hayes]

I agree entirely with the sentiment that my hon. Friend expresses. We need to guarantee even, appropriate provision across the country. That is the problem we seek to solve, and so far there is no evidence that the Government’s response addresses that concern in any way.

The second area I want to focus on is the funding of short-term supported housing. The inquiry report said:

“The Government is right to consider an alternative funding mechanism for very short-term accommodation, given the emergency nature of that provision and the inability of Universal Credit to reflect short-term changes in circumstance. The Government should consider a system of grants paid to local authorities so they are able to commission emergency accommodation in their areas.”

That recommendation is clear. We were talking about emergency provision and the specific problems of universal credit, and we were seeking to avoid a situation in which providers end up chasing arrears arising from the universal credit claims process in relation to residents who no longer live in their provision. I was therefore very surprised that the Government chose to define short-term supported housing as housing provision for up to two years. I have spent considerable time since the Government’s response was published speaking to a range of supported housing providers, and it is clear that the announcement raises more questions than it answers, and that there are very serious concerns about its implications.

I want to raise some of those concerns about the Government’s approach to short-term supported housing with the Minister today. First, the implication of the Government’s announcement is that short-term supported housing will move from being mainly demand-led, because eligibility for funding follows the individual resident, to a local authority commissioning model. That huge change raises many questions about the basis for commissioning. What guarantees will there be in relation to the range of provision that any given local authority will have to commission? What is to stop a local authority, for example, choosing to commission supported housing for people with disabilities but not for ex-offenders or people with addictions, despite there being a need for all types of supported housing in their area?

Secondly, once the supported housing has been commissioned, how will the local authority or the provider assess the eligibility for individual places, and who will have responsibility for that decision-making process and for reviewing decisions that go wrong and providing redress? There is a recognised shortage of supported housing across all types of provision, and in that situation decisions about eligibility can be difficult. How will the application and assessment process work for short-term supported housing under a commissioning model?

Thirdly, I am concerned about the level of funding and the lack of a mechanism for increasing funding. As I understand it, the proposal is for grants to be made to local authorities based on the housing benefit spend on short-term supported housing in the area. That will not capture the costs of support and specialist buildings, and it embeds the current shortage of supported housing into the funding system. It is not clear that, under that model, the Government will ever address the shortage or be able to keep pace with the increasing demands across many types of supported housing.

Fourthly, many providers of supported housing have expressed concern that the commissioning model will lead to an erosion of the housing rights of supported housing residents: since residents will not be paying rent, they will not have a tenancy, and that leaves open the possibility of an individual’s place in supported housing being taken away because someone with a greater need comes along, or because the relationship with staff at a particular scheme breaks down. There is no contractual basis to ensure the tenant’s rights. Supported housing residents are often among the most vulnerable people in our communities, and if the Government change the way in which their housing is funded they must make clear how their rights will be protected and guaranteed.

Finally, many providers have told me that they believe a fundamental problem with the definition of supported housing is as housing for up to two years. Many of the best-supported housing providers work in a resident-focused way, so residents may live in their scheme for as long as they need. The same scheme may include residents who are there for one or two years, and others who are there for much longer. It may not be apparent at the outset how long an individual tenant will need to live in that particular provision. So the definition inevitably creates the problem of a cliff edge—the clock will start ticking at the start of the two years and, irrespective of how individual residents are doing, they and their family will know that at the end of two years they will face a crunch point in the funding of their home.

Providers of supported housing for people with mental health needs, including Rethink Mental Illness, have highlighted the particular challenges that the two years will present for people with mental ill health, whose recovery often relies on minimising sources of anxiety and creating an environment of stability. The risk is that, for many of those residents, a two-year cliff edge could itself make their health worse and set back recovery.

Those are not trivial concerns. The Government have proposed a major change to the funding model for supported housing of up to two years, without fleshing out any details. The result is that, following the two years of uncertainty that the Government have already thrust on the supported housing sector, providers are left with many questions and grave concerns about their ability to sustain the homes they provide to some of our most vulnerable residents.

I therefore hope that the Minister will take this opportunity to clarify the many unanswered questions, to listen to the concerns of the supported housing sector, and to produce a funding framework that will guarantee the provision we currently have and provide for an increase in supply to address shortfalls and cope with increasing demands. I end where I started. Supported housing is extraordinarily good value for money, and it is highly valued by those who rely on it. It is simply a false economy for the Government not to fund supported housing properly.

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[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.

[Helen Hayes]

On the point about the longevity of the ring fence, the Minister must surely recognise that the ring fence is only as secure as the Government of the day’s commitment to it. Even if the ring fence is somehow established in legislation, it can be overturned at the will of a subsequent Government. Could she please address the point, which is of grave concern across the sector, that a ring fence is not a secure way of assuring long-term funding for the sector?

[Mrs Wheeler]

I thank the hon. Lady for that intervention. I must stress again that no Government will put in place anything beyond a spending review period. It is not right or proper to do so. That is normal business.

[Helen Hayes]

I thank the Minister for giving way again, but she simply makes the point that the ring fence provides no long-term assurance to the sector. Does she agree that it is inherently a short to medium-term measure, and that the sector cannot therefore be guaranteed that the ring fence will be there for the long term, as she indicates is her intention?

[Mrs Wheeler]

I am afraid that the hon. Lady misunderstands me, because the long term will be ring-fenced with local authorities. The whole point about this is that we want to grow the supply of sheltered and supported housing accommodation, because the Government consider it very important in looking after the most vulnerable people in society in future. In the same vein, I reassure hon. Members that the amount of grant funding for this part of the sector to 2020 will continue to take account of the costs of provision, and growth of future provision.

Better oversight and value for money are an important part of our reforms. The Joint Committee was keen that there should be a set of national standards. We are consulting on a national statement of expectation, which will set out what we want good supported housing to look like.

We will work with local government on how it plans future provision in England as it assesses current and future need. Before implementation, we will issue more detailed guidance, to support local authorities in monitoring this provision in their area. We are carrying out a full new burdens assessment to identify how much additional administrative budget local authorities will need to deliver the new funding approach. We are working closely with local authorities and the Local Government Association to do that.

Under the short-term model, all funded provision will be commissioned by the local authority. This means providers will need to meet local authority quality standards. Furthermore, under the new model for sheltered and extra care, the social housing regulator will monitor compliance with this new system. We are empowering tenants by obliging providers to publish breakdowns of their service charges. Where tenants feel that these are unreasonable, they can take action. We also continue to work with the sector to identify ways to drive up standards, improve outcomes and share best practice.

I have mentioned a number of areas where our conclusions coincide with those of the Committee, but one recommendation on which we are not aligned is that on the creation of a bespoke model for refuges. We recognise how important that is, but we believe that a local approach will ensure the best outcome for domestic abuse services. This is because local authorities are best placed to understand their residents’ needs.