Supported Housing
Debate between Jess Phillips and Peter Aldous
Peter Aldous
I agree. It is important not to look at a specific type of housing in silos, because all types of housing are interrelated: we cause a problem in one, and it has a negative spin-off effect in another.
The prospect of the local housing allowance cap being applied to residents in supported housing after the one-year delay is causing considerable unease and concern in the sector. With housing benefit set to be abolished as part of the roll-out of universal credit, it is appropriate for the Government to review the future funding of supported housing. However, feedback from the National Housing Federation reveals that the threat of a crude LHA cap is having a detrimental effect.
Some 24% of supported housing providers have told the NHF that all their supported and sheltered housing units are at risk of becoming unviable and of closing. It is estimated that 156,000 units of existing supported and sheltered housing would become unviable and at risk of closure; that is 41% of all existing schemes. There would also be an impact on future development, with an estimated 9,270 units in the pipeline not being developed. That represents 80% of the total existing development pipeline and includes more than 8,000 specialist homes for older people and people with disabilities which were announced in last year’s comprehensive spending review.
The cap undermines several pieces of legislation introduced by the last Government. The introduction of specified accommodation in 2014 establishes a precedent of treating supported housing differently from other forms of social housing. In addition to being eligible for higher rates of housing benefit, specified accommodation has been removed from the current universal credit arrangements, and it is also exempt from the benefit cap. Failure to recognise this unique status when applying the cap is not only inconsistent with previous policy, but it also places at severe risk the step Government have already taken to protect housing for the most disadvantaged. It also threatens one of the Government’s own flagship policies, the transforming care programme, which relies on supported accommodation being available in the community.
In 2014 a rental agreement was approved by the Homes and Communities Agency that allowed registered social landlords to increase their rents by inflation plus 1% annually for the next 10 years. The purpose of the agreement was to provide RSLs with a stable base from which to invest in their services, including the provision of new supported housing. By capping social rents, the Government have removed this stability, making it virtually impossible for providers of supported housing to plan future developments. For those who have already invested in new schemes, the cap will also jeopardise their ability to meet the existing financial returns of current investments.
Jess Phillips (Birmingham, Yardley) (Lab)
The hon. Gentleman is making a powerful and learned speech. People often get things wrong in debates on housing benefit. I have completed many Government documents to set up new housing schemes specifically for victims of domestic violence. The Government have signed off on funding for such projects based on the current housing benefit rates, and they are now putting their own work in jeopardy.
Peter Aldous
I am grateful to the hon. Lady for that intervention, which provides a clear illustration of the point that I am making.
Inside Housing’s snap survey found that 95% of supported housing providers will be forced to wind up some or all of their schemes. HB Villages wants to invest in new developments. It requires no public grant, but the investment can only be made if returns from future rents are protected through continued rent exemption. I fully appreciate that Lord Freud’s review must be comprehensive and based on as much evidence as possible. It will also be important not to rush it, if we are to arrive at a sustainable long-term funding solution. However, an early assurance from the Government—perhaps from the Minister tonight—that the cap will not apply to supported housing will remove the uncertainty that currently hangs over the sector.
In framing their proposals for the funding of supported housing, it is vital that the Government have in mind the needs of those charities, housing associations and social investors already active and doing great work in the sector as well as those looking to get involved. There is an enormous amount of goodwill and capital waiting in the wings. If the right framework is put in place, those organisations, charities and investors will step up to the plate and carry out projects. In doing so, they will bring significant benefits to the lives of many.