Supported Housing

Nicholas Brown Excerpts

Tuesday 12th April 2016 Westminster Hall

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

I beg to move,

That this House has considered the future funding of supported housing.

It is a pleasure to serve under your chairmanship, Mr Hollobone. The House was told by the new Secretary of State for Work and Pensions on 21 March 2016 that the Government

“have no further plans to make welfare savings beyond the very substantial savings legislated for by Parliament two weeks ago, which we will now focus on implementing.”—[Official Report, 21 March 2016; Vol. 607, c. 1268.]

That assurance to the whole House was repeated the following day by the Chancellor of the Exchequer.

The purpose of this debate is to remind the Government of the consequences of imposing the local housing allowance on supported housing. The proposals will definitely be a further cut in welfare provision. The local housing allowance was introduced in order to cap the housing benefit given to private landlords. The cap is locally set, and it limits the amount of housing benefit to a figure based on the lowest 30% of the rental market in each local authority. In Newcastle upon Tyne, the city that I have the honour and privilege of representing in this place, it would mean a cap of £90 a week on housing benefit for a one-bedroom flat or £60 a week for a room in shared accommodation—£60 a week is the benefit offered to anyone under 35 years old who is single and has no dependants. It is a quirk of the system that supported housing in more prosperous boroughs is less badly hit by the measure because private sector rental levels, on which the calculation is based, are higher.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

My right hon. Friend mentions prosperous boroughs, and the London Borough of Ealing would, on paper, count as one of them. Does he agree that it is a scandal that, even in my constituency, groups such as YMCA West London are being hit? One of my very early engagements as an MP was with my hon. Friend the Member for Ealing North (Stephen Pound). We went to look at YMCA West London’s refurbished hostel in south Ealing. After the summer Budget and the 1% cut in social rents, YMCA West London wrote to me and said that, because it had used all its cash reserves to refurbish the hostel on a business plan that assumed future rental levels, it was looking at staff cuts, service reductions or possible closure. Is that not a scandal?

[Mr Brown]

I agree wholeheartedly with my hon. Friend. Perhaps I should have said “relatively prosperous.” The distinction will be clear to people in the north-east of England, but perhaps less so to her constituents. She raises another important point, which is the uncertainty hanging over the arrangements, and I will have more to say about that later.

Returning to the Government’s intention, the changes introduced in the autumn statement extended the cap into the social sector, in line with the provisions that already pertained in the private rented sector, which means that the rate paid to private renters on housing benefit will apply to the social sector, too. The measure will apply to new tenancy agreements signed after 1 April 2016, with the rate changing on 1 April 2018.

[Mr Stewart Jackson (Peterborough) (Con)]

The right hon. Gentleman will know that, during the Report stage of the Welfare Reform and Work Act 2016, Members on both sides of the House encouraged Ministers to introduce the moratorium—the 12-month review—on these specific housing developments, which gives us, on a bipartisan basis, an opportunity to consider the work being undertaken by specialist housing providers and to try to find consensus to offset what were originally envisaged to be quite draconian changes.

[Mr Brown]

I would like to find a consensual way through this, but maybe the Government should have thought about these matters before applying the measure to social housing. If they propose reform, they should think about what the reform should be and then introduce it, rather than introducing it in such a heavy-handed way and then saying, “Maybe we’ve gone too far. We had better have a review.” Like the hon. Gentleman, I would be fascinated to know what the review has come up with, because it is due about now. In fact, I think the Minister said it was due in March 2016.

[Dawn Butler (Brent Central) (Lab)]

My right hon. Friend is being generous with his time. Does he agree that the Government should have given due consideration to those people who suffer from mental illness and who will be affected by these “draconian” cuts, as the hon. Member for Peterborough (Mr Jackson) put it, to their housing benefit?

[Mr Brown]

I certainly agree, and I intend to go through a range of people who are affected by the measure. When I was researching for this debate, I found that the list was far more extensive than I originally thought. The measure is projected to save the Exchequer £120 million in 2018-19, rising to £225 million by 2020-21. The Government have said that they will delay the imposition of the cap on supported housing for one year, and they are currently reviewing the application of the cut to such housing. They have said that the review will

“provide a foundation to support further decisions on protections for the supported housing sector in the long term.”

Perhaps the Minister will explain what that means and tell us when the review will report, because we are all interested.

The uncertainty is damaging enough. Supported housing is a type of social housing that includes a care element. It allows those who cannot live by themselves without care to live independently with a support worker and with dignity in a place to call their own. Due to the very nature of supported housing—including a care element—it is more expensive, and thus a cap limiting weekly rent to as little as £60 will mean that much of it is unaffordable. In essence, the most vulnerable, those who need care in order to live, will have their housing benefit cut. Supported housing for vulnerable adults and young people who need help to live independently can include housing for people with learning difficulties, social problems or mental health issues; vulnerable older people; women fleeing violence; people with physical disabilities; and servicemen and women. Surely if anyone is especially entitled to our consideration, support and affection, it must be those groups, and particularly ex-service personnel.

The Byker Community Trust in my constituency runs supported housing for veterans of the armed forces. The trust has low rents because it is a relatively young stock transfer organisation. Comparatively, it is one of the cheapest in Newcastle upon Tyne. However, the rents for veterans will significantly exceed the local housing allowance cap. Veterans in supported housing in the Byker Community Trust will have a shortfall of £32.50 a week if they are over 35 years old. If they are under 35 years old, they will need to find an extra £63.48 a week to cover the cost. The Army values the provision, and indeed it has supported its introduction. One veteran told me that

“the army does everything for you when you are service personnel, adjusting to civilian life was difficult.”

He did not know what he would do without the project.

Supported housing includes housing for young single people who are at risk of sleeping rough, begging in the streets and spending what little money they have on legal highs. Uncared for, they need the constructive intervention of adults. Supported housing is an appropriate and proportionate way of responding to those problems, which are covered by a range of Government agencies.

Tyne Housing in my constituency has a site in Newcastle East at St Silas’s church. It provides supported housing and day services for vulnerable and isolated people. The housing is provided mainly through single-person flats and supportive workshops to help people lead a full and fulfilling life. That specialist housing project is exactly the type of provision that will be hit by the cap. The project’s leaders tell me that as a result of the Government’s changes, the project will have to close; it is as straightforward as that. Those affected are vulnerable and need our help, but if the Government proceed with the cap as proposed, they will fail those people. The local cap on funding for supported housing could have huge repercussions. The National Housing Federation has released figures estimating that 82,000 specialist homes will be threatened with closure, just under half of all supported housing in England. That will leave an estimated 50,000 vulnerable tenants who are unable to work without support.

The uncertainty is having an immediate impact. Services coming up for re-tender are at risk of closure, irrespective of the outcome of the review, simply because the providers cannot make a potentially unfunded commitment in respect of what might happen beyond 2018. The National Housing Federation has said that 2,400 planned new homes have already been scrapped as a result of the cap, and almost a quarter of supported housing providers, 24%, told the NHF that all their supported and sheltered units are at risk of becoming unviable and closing if the cap is implemented.

The cut will cause serious problems for providers in Newcastle and the north-east. Changing Lives Housing Trust is a national registered charity based in Newcastle that provides specialist support services throughout England to thousands of vulnerable people and their families. It provides support to homeless people, recovering addicts and ex-offenders, as well as providing specialist women’s and family services. The charity has estimated that the cap will lead to an annual shortfall of £2 million in funding for its services.

Isos Housing, which manages more than 17,000 homes across the north-east, calculates that 700 of its 900 supported housing tenants will be affected by the cut, losing an average of £80 a week. Home Group, another major provider in the north-east, estimates that 223 services covering some 3,945 beds will become unviable if the proposals are implemented.

The Government seem to be aware of the problem, hence the review, but I hope that this debate will prove a useful chance and platform for the Minister to tell us where the policy is going. The Government policy, as announced, will have a number of unintended consequences. The most obvious question is where will those vulnerable people go when supported housing is no longer affordable? What alternatives do they face? The likelihood of suffering and exploitation is obvious. The immediate concern is a rise in homelessness and its consequences. Some people may end up with the police or in national health service emergency provision, such as accident and emergency; others may find themselves exploited without housing support or accommodated in unsuitable housing.

Home Group’s average accommodation costs for someone with learning disabilities are £13,500 per bed space per year, or £260 a week. In its challenging behaviour and learning disabilities costing statement the National Institute for Health and Care Excellence estimates that NHS inpatient care for people with learning disabilities costs between £96,000 and £197,000 per person per year. The average hospital day bed costs about £300. By comparison, a night in a prison cell costs £418, and an ambulance call-out averages about £250. The difference in cost between supported housing and NHS care is huge. Ultimately, the taxpayer is better off with supported housing.

Home Group estimates from the Department of Work and Pensions’ own figures that the cost implications of losing supported housing could be as much as £2.5 billion. I ask the House to consider that—a cost of £2.5 billion in unintended consequences, spread across different Departments but falling pretty heavily on the Department of Health, for an attempted saving of £225 million. We ought to pause and rethink. Supported housing is money well spent and proportionate to the range of problems that it addresses. It is a relatively small expense that, if cut, could cause great misery to the most vulnerable and great cost to the taxpayer. The answer is to exempt supported housing from the proposed cuts.

I have two extra points to raise with the Minister. The Government should say what their proposals are for the future of supported housing under universal credit. I hope that the answer is something better than, “We are giving local authorities a small grant to try to do what they can for themselves, but they’ll have the power to do it themselves”—not the money, of course; just the responsibility. I hope that he can say something more comforting than that. Perhaps he will be able to tell us what funding structures will exist to fund supported housing when housing benefit is abolished under the universal credit structures proposed for 2018. Can he update us on that?

If the Minister cannot give us the full policy, can he at least update us on the findings from the review, which we are all expecting and which he promised in March? The promise has now mulched into “in the spring”, but in any event the review is imminent. Perhaps now would be a good time for him to tell us how he intends to avoid the hardship that I have outlined, and how he feels he can best give assurance to an important sector desperately in need of it.

[Several hon. Members rose—]

--- Later in debate ---

[Mr Nicholas Brown]

Mr Hollobone, you have presided over a very disciplined debate with a clear purpose: to question the effectiveness of the policies the Government are pursuing and alert the Minister to what I hope are the unintended consequences of the policy as we understand it.

I thank my hon. Friends the Members for Easington (Grahame M. Morris), for York Central (Rachael Maskell), for Wirral West (Margaret Greenwood), for Dulwich and West Norwood (Helen Hayes) and for Brent Central (Dawn Butler) for expressing the Labour party’s point of view. I also thank the two Scottish National party Members who have taken part in this short debate, the hon. Members for Linlithgow and East Falkirk (Martyn Day) and for Kilmarnock and Loudoun (Alan Brown), the latter of whom spoke from the Front Bench. We all had essentially the same point to make: what is proposed is cruel, stupid and expensive.

Even the two Conservative Members who spoke, the hon. Members for Peterborough (Mr Jackson) and for Waveney (Peter Aldous), made the point—correctly—that this is a cross-departmental issue and it is wrong to try to tackle it by focusing only on the Department for Work and Pensions and the Department for Communities and Local Government. If things go wrong, the consequences will be far more broadly felt than at just those two Departments, with effects on the budgets of all sorts of other Departments—certainly including the Home Office and the Department of Health on top of the two I just mentioned.

The Minister gave us a partial answer on when the all-important report is expected: “March” and “spring” have now become “shortly”. I welcome that. I think we will be returning to this matter again when the report is in the public domain. There is still a question mark over what is to happen when universal credit is introduced. The Minister was not able to deal with that today, and I accept that he is a Minister at DCLG rather than DWP, but nevertheless it is a vital question, not only for those who rely on the provision but for those who are bidding for the contracts to make the provision. It is very difficult for the latter to bid for a contract without knowing what the funding arrangements will be post 2018.

Finally, I do not recognise the £4 billion figure that the Minister used at the start of his address. Perhaps I misheard him, but it sounded to me as though he said that supported housing costs £4 billion. I think a number of us will want to pursue that further. I thank everyone who participated in the debate, including the Minister. I can confidently say that we will be returning to this matter again.

Question put and agreed to.

Resolved,

That this House has considered the future funding of supported housing.